TO: Mayor and City Council
THROUGH: Krishna Namburi, City Manager
FROM: Brian D. Martin, PE, Public Works Director
SUBJECT:
title
Exemption from Competitive Bidding Process and Authorization of an Alternative Contracting Method for the Geren Island Flow Maintenance Project
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Safe, Reliable and Efficient Infrastructure.
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SUMMARY:
summary
The City of Salem Budget and Five-Year Capital Improvement Plan (CIP) allocates funding for the Geren Island Flow Maintenance Project (Project). Staff recommends using the Construction Manager At Risk (CMAR) alternative contracting method for this Project. The CMAR approach involves contractor participation during the design phase, providing critical input on cost, schedule, material procurement, and constructability elements that will improve the design. The CMAR will be selected competitively via a Request for Proposal (RFP) process. Under the CMAR contracting method, a Guaranteed Maximum Price (GMP) is established, committing the contractor to deliver the Project within budget while balancing cost controls with collaborative efforts.
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ISSUE:
Shall City Council, acting as the Local Contract Review Board, adopt Resolution No. 2026-11 in support of an exemption from the competitive bidding process and use of CMAR contracting method for the Geren Island Flow Maintenance Project?
RECOMMENDATION:
recommendation
Adopt Resolution No. 2026-11 is support of an exemption from the competitive bidding process and use of a CMAR contracting method for the Geren Island Flow Maintenance Project.
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FACTS AND FINDINGS:
The full findings for exempting the Project from competitive bidding are attached to Resolution No. 2026-11 (Attachments 1 and 2).
The Project involves alterations to the North Santiam River channel near the intake to the Geren Island Water Treatment Facility (GIWTF), located near Stayton. The scope of work includes removal of gravel and sediment to ensure continued flow to the intake along with stream and habitat improvements designed to provide resiliency and offset the environmental impacts of the work. This work is much more significant than the work performed earlier this spring and will aim to protect water flow to the intake for an extended period of time.
The CMAR form of contracting (also referred to as Construction Manager/General Contractor (CM/GC)) uses an open and competitive RFP process to select a contractor. This is the same delivery method used for the Ozone Treatment Facility and Filter Reconstruction at GIWTF, the Aquifer Storage and Recovery system in South Salem, and the Salem Police Station. The competition will be open to all qualifying proposers, and City staff has already initiated communication with the local construction contracting community regarding the CMAR method. The proposal process will be open and impartial with selection based on scores derived from price, experience, quality, innovation, schedule, and other factors. The process to award subcontracts for all competitively bid construction work will be specified in the CMAR contract and monitored by the City.
Awarding the Project contract under this exemption will likely yield substantial construction cost savings and other benefits to the City and the public. The CMAR method uses a GMP, allowing the City to retain full savings if actual costs fall below the GMP.
Integrating the CMAR contractor into the design process allows early risk identification and promotes collaboration among the City, designers, and the contractor. The Project requires expertise in heavy civil construction and methods to complete work while complying with stringent environmental permit requirements, knowledge best obtained directly from the construction industry. Many design decisions will require immediate feedback on constructability. The traditional design-bid-build method poses a higher risk of increased change orders, schedule impacts, and environmental permit violations for a project of this complexity. Since there are significant costs and risks associated with delay, timely project completion is critical.
When the CMAR team includes the construction contractor participating in design, fewer change orders occur during construction compared to the traditional design-bid-build method. This is due to the CMAR contractor's better understanding of the City's needs and design intent. Additionally, contractor input throughout the design process on constructability and methods to complete the work in compliance with permit requirements significantly reduces the potential for change orders as issues have been proactively addressed, and the risk has been transferred to the CMAR team. Fewer change orders reduce the administrative costs of project management for both the City and the CMAR team.
Change orders are processed at less cost under a GMP because they are less frequent. The design-bid-build method typically results in the contractor charging up to twenty percent markup on construction change orders. The GMP method applies a lower predetermined markup. The experience of the industry is that the markup is in the range of three to seven percent.
The Project entails in-stream work in the North Santiam River upstream of Geren Island to remove sediment and install stream restoration improvements to ensure the continuous delivery of water to the intake for the WTP. Early involvement of the CMAR team will enhance the coordination of contract work sequencing, ensuring it is conducted safely and efficiently.
BACKGROUND:
The Project is a part of Salem’s ongoing efforts to ensure a safe and reliable drinking water supply at the GIWTF. Water for the facility is drawn from a surface water intake located on the north channel of the North Santiam River at Geren Island. Public Works staff actively monitor changes in the deposition of gravel and sediment in the river, which affect the flow in the north channel. In recent years, increased sediment deposition has led to reduced flows in the north channel, necessitating emergency work this past spring to restore proper water levels. The Project includes sediment removal aimed at enhancing flow in the north channel, along with stream and habitat restoration improvements designed to ensure adequate water routing and mitigate the environmental impacts associated with sediment removal. This work provides an interim solution to river flow and will complement future plans to replace the Upper Bennet Dam with an adjustable height weir dam that passes sediments during heavy winter river flows.
The City has allocated $5,026,000 from Utility Rates for the project in the proposed Capital Improvement Plan (CIP) for fiscal years 2027-2031.
Oregon Revised Statutes (ORS) Chapter 279C and the City's Public Contracting Rules (PCR) 9.7 permit the City Council, acting as the Local Contract Review Board, to exempt a public improvement from typical competitive bidding requirements if after a public hearing, they find such an exemption is unlikely to encourage favoritism or diminish competition in the award of public contracts, and will likely result in significant cost savings and other benefits for the City or the public.
Allen Dannen, PE
City Engineer
Attachments:
1. Resolution 2026-11 Geren Island Flow Maintenance Project
2. Exhibit A - Facts and Findings of Geren Island Flow Maintenance Project
3. Council CMAR Presentation Geren Island Flow Maintenance Project