Risk Management Case Study - ANMC

You are the director of engineering for the Antonia Novello Medical Center (ANMC) which was originally constructed in 1963. The hospital is a beautiful example of the Spanish Colonial architecture and is listed on the state and federal historic building registers. However the hospital does not meet current seismic standards and by law must be brought up to standards. Asbestos containing materials were used in the original construction and the retrofit design and construction will have to properly abate these materials. ANMC has completed the planning process, identified the general scope of the project and developed a program cost. The scope includes:

• Seismic upgrade, program cost: $15 million • Asbestos abatement, program cost: $5 million • Historic facade restoration: $7-10 million depending on extent of restoration

• Expansion/upgrade of the MRI/CAT Scan imaging center. $3-6 million depending on size of expansion

All of the program cost estimates are based on total design and construction costs (TDCC). The seismic upgrades and asbestos abatement are essential to the project. The facade restoration and imaging center expansion are highly desired by ANMC but not essential; this work could be completed later under a separate project, but that would increase costs.

ANMC currently has an approved bond issue totaling $25 million. In addition, ANMC is trying to get a special $10 million grant from the state. If the State grant is received, ANMC's total budget for the project would be $35 million. However, to receive the state grant, ANMC must be ready to let a construction contract in 18 months. This is a very aggressive schedule. Historically ANMC has used a traditional Design-Bid-Build project delivery method which generally takes 2-3 years to get from the end of the planning phase to the start of construction.

Through extensive meetings with the ANMC board of directors, you have established the following goals for this project, in priority order from highest to lowest:

1. Hire qualified designers and builders who will deliver high quality work 2. Ensure critical seismic upgrades and asbestos abatement are completed 3. Get the state grant 4. Complete as much of the facade restoration and imaging center expansion as funds allow

Your meetings with the ANMC board have narrowed the potential delivery methods to: Design- Bid-Build, Design/Build Best Value, and Design/Build QBS. The board has asked you to bring a final recommendation for the best delivery method to the board meeting next week.