Background

Prague is the capital and largest city in the Czech Republic, as well as the regular seat of its central authorities. It is home to about 1.3 million people. The Supreme Audit Office (SAO) of the Czech Republic (or NKÚ in Czech) is an independent constitutional entity who supervises the management of the state property and of the state budget. The SAO decided to terminate the office building lease from its commercial provider and build its first permanent headquarters reusing a brownfield site in the centre of Prague. “The SAO had strived for a longer time to acquire its own head office that would be worthy of SAO’s status as an independent constitutional institution”.

By having their permanent seat, the SAO aims to better ensure the fulfilment of its legal obligations in the area of security, sustainability and environmental protection.

The building will also host the Parliamentary Library, the Archive of the Chamber of Deputies (part of the Czech Parliament), a depositary capacity for archival documents and collections, as well as appropriate premises for the presentation of those documents to the public.

The concept of the building should tackle:

•Accessibility, flexibility and adaptability of the spaces.
•Floor designed to allow easy access to utilities (power-line communication).
•Modularity with regard to utilities’ control and replacement.

The constructions are ongoing, and will be completed by the end of 2022. The SAO will inaugurate its new headquarters in 2023.

Procurement objectives

The SAO Senior Director of the Administrative Section was appointed project manager for the construction of the new headquarters. A support team from the SAO investment construction department was created to manage the tender procedure, construction processes, and financing, as well as coordinate with necessary stakeholders (including other SAO sections and the Office of the Chamber of Deputies). In the early stage of the project, a feasibility study was conducted and an investment plan was prepared.

From the start, the SAO was driven by the ambition to build a net-zero energy building with the lowest life-cycle costs and the longest service life. Academic experts from the Czech Technical University (CTU) identified and developed a specific method for assessing the building service life and maintenance costs.

The project set high requirements for the effective and economic operation of the building. Pushing for innovation in the Czech procurement context, the SAO decided to use a combination of tools such as FIDIC Yellow Book for Design-Build, and Building Information Modeling (BIM)3 for the evaluation of life cycle costs of the building.

Criteria used

Type of contract:

“This is the first major public contract in the Czech Republic in the field of building construction commissioned under the current international FIDIC standards” as written in the SAO press release on 26 August 2020. The International Federation of Consulting Engineers (FIDIC) has been long renowned for its standard forms of contract for use between employers and contractors on construction projects. The construction contract for the head office was commissioned by the SAO according to the so-called “FIDIC Yellow Book”, which provides conditions of contract for Plant and Design-Build, for Electrical and Mechanical Works and for Building and Engineering Works designed by the contractor. It also includes notes on the preparation of tender documents.

Tenders:

In total, three tenders were published: one for the principal architect, one for the civil engineering company and one for the construction company.

Among the main tasks of each, the principal architect was in charge of the initial design, documentation for the permits, preparation for the interior and the final certificate of the building. The engineer was the mediator between the contracting authority and the supplier, worked as project manager for the design and implementation phase, facility manager and cost manager. As for the contractors, they were responsible for the project documents for various stages of the project using BIM.

The tenders for the architect and the civil engineer company were evaluated based on the most economically advantageous tender: 50 points were given to the quality criterion and 50 points to the cost criterion. Both tenders did not include sustainability award criteria. But quality award criteria were set to assess the experience of the architect with regard to design using Building Information Modelling, as well as according to function and performance, a model called Design-Build that allows focusing on function, rather than on descriptive technical requirements. The quality of the civil engineering company was evaluated based among others on their capacity to provide BIM coordination services.

Before launching the tender for the construction company, two preliminary market consultations were carried out. Over 150 companies were invited to share their views and learn about the complex project and the Design-Build tender.

Instead of having a separate tender for the project and for the construction itself, the tender was for design and build at once, applying the Design-Build concept. The traditional approach for construction projects consists of awarding a designer on one side, and awarding a contractor on the other side. The Design–Build procurement route changes the work sequence. It answers the client’s wishes for a single point of responsibility to reduce risks and overall costs. Although the use of subcontractors to complete more specialized work is common, the Design-Build contractor remains the main contact and primary force behind the work. It is now commonly used in many countries and forms of contracts are widely available.

Technical ability:

The technical specifications included a list of significant construction works and experience working with Design-Build requirements. The construction team had to include a BIM coordinator. The SAO also asked for environmental management measures that the construction company would implement during the performance of the contract. To fulfil this technical specification, bidders were asked for a quality management system in accordance with ISO 9001 series, or a proof of registration by EMAS, or an environmental management certificate issued in accordance with ISO 14001 by an accredited body in the area of the subject of performance of the public contractor.

Award criteria:

Tenders for the construction company were evaluated based on the most economically advantageous tender and quality criteria: a 40% weighting was given to the quality criterion and a 60% to the cost criterion. The quality award criteria consisted of:

•Qualification and experience of the core team members (100 points, weighted 15%), which was divided into:

1. Qualifications and experience of the core team members in the construction of BIM-designed buildings (100 points, weighted 50%)
2. Qualifications and experience of the core team members in the civil construction (100 points, weighted 50%)

•Life cycle costs (LCC) i.e. cost for operating the building and renewing the technical equipment of the building over a period of 30 years using a prescribed methodology (100 points, weighted 25%)

The prescribed methodology for calculating the life-cycle costs (based on the National Calculation Instrument) was developed in cooperation with the Faculty of Civil Engineering from the Czech Technical University (CTU) in Prague. For the purposes of the tender, the life-cycle costs included:

•Cost of operation (energy consumption based on key indicators concerning the surface/envelope of the building and technical equipment of the building, etc.)
•Costs of renovation (13 components)
•Maintenance costs (4 components) of selected devices (such as elevators, jalousie, lights or façade) for 30 years.

Other costs were deemed to be of the same level and hence considered irrelevant for causing difference among the bids or awarding the tender.

Results

The total contract value is € 36,253,900 (ca CZK 820,000,000) (21% VAT included).

Tender for the Principal Architect:

Since the BIM requirement was quite innovative, it was not easy to meet the requirement regarding the experience with BIM projects. Therefore, the SAO required proof of experience with 6 individual segments of BIM. The main difference was whether the contractor had performed only 3D-BIM model, or whether other actors involved in the construction process had also used it.

Tender for the construction company:

For the construction company tender, the contracting authority received in total four bids. One of the bidders, PORR a.s., offered a low tender price. The evaluation committee carried out an assessment and invited the bidder PORR a.s. to justify the exceptionally low bid price. The value of the public contract was estimated to CZK 941,208,180 including VAT, and PORR a.s. offered a price of CZK 818,091,380 including VAT. The evaluation committee subsequently accepted this justification.
The bidder mentioned that the participant’s long experience with the Design-Build method, the professional team of in-house designers or close cooperation with design offices whose professional experience is linked to practical implementation. Also, the favourable prices of the suppliers or the possibility of managing the implementation of the construction using the Design-Build method with the use of the BIM method, are important factors justifying the deviation of 13% compared to the estimated value of the public contract. PORR a.s. confirmed that: a) in the performance of the public contract, it will ensure compliance with the legal obligations, as well as the labour regulations and collective agreements applicable to the employees participating in the performance of the public contract, and that: b) it has not received unlawful public aid.

The CTU Technical experts who developed the LCC methodology, verified the costs calculated by all four bidders. They checked the calculation of electricity consumption for heating, cooling, ventilation, TV preparation and lighting. In addition, they verified the calculation of energy, renovation and maintenance costs of selected structures and equipment. The bid of the participant PORR a.s. was analysed in detail. After completing the technical sheets for the parameters entered, it was found that the values provided by PORR a.s. in the calculations were documented.

All the bidders met the third award criteria about the qualification and experience of the core team members and were awarded full points. Due to its low tender price, PORR a.s. won the tender, even though the company was the second best in terms of life cycle costs criteria.

Environmental and social impacts

Social and environmental benefits were achieved without being part of the award criteria, due to good contract management and communication between the contracting authority, the architect, and construction company.
Environmental benefits were achieved during the construction process:

•Recycled concrete from the previous structures on site (approx. 100 m3)
•Sand from the construction pit used for the construction itself (approx. 8,000 m3)
•Using a concrete facility on the nearby riverbank (with raw materials being transported by water)
•The sustainable construction brought savings of 22,5 tons CO2 (the figure was calculated and provided by the contractor and tackled issues of emissions transport connected to construction materials i.e. difference between transport of gravel from specified storage to the construction site via vehicles or via ships).
•Wireless light-control saved wiring material.

Environmental benefits to be gained as a result of the design phase using BIM:

•The building will consume a very low amount of energy (almost net-zero consumption)
•Smart heating-cooling system using thermo-hydraulic solutions. The system will be supplemented by heat recovery, stored in summer season
•By determining the ratio between the glazed and fixed part of the façade, i.e. between temperature gains and losses, supplemented by external centrally controlled blinds, the light and thermal quality of the indoor environment can be optimised, saving energy, money and reducing the amount of pollutant that would otherwise be produced during energy production.
•Green roofs will benefit the top floors, will bring additional thermal insulation and will also be beneficial for neighbouring buildings.

Benefits for the employees that will be achieved after the end of the construction process:

•Openable windows in offices (unlike the windows in the previous building)
•The furniture will be moved from the previous building
•The Child Care Centre will serve as a benefit for employees with kids and will allow them to easily return back to work after parental leave
•The bike parking will allow the users to charge their electric bikes
•Fitness-centre for the employees shall improve their well-being
•Facilities, which will make it possible for the institutions to easily employ people with disabilities (accessible premises, light-signals of emergency – instead of sirens only).

Benefits for the neighbourhood that will be achieved after the end of the construction process:

•The construction of the SAO headquarters is the final touch of the revitalisation of the area (brownfield
•The area will be walkable and open to the public. There will also be a small park
•The Archive and Library of the Chamber of Deputies will be available for the public
•Catering services within the building might be available for the public as well.

In Czech Republic there is no building standard for public administrative buildings. Therefore, the project was assessed with the private generic certification scheme “Czech SBTool.CZ”, which evaluates buildings and integrates sustainability criteria. The SAO was eligible for the “silver certificate”. Among others, visual (reflectivity of the surface, aesthetic quality of the building), acoustic (noise), thermic comfort (temperature changes, airflow, humidity), use of non-harmful substances, air quality, integration of the building to the neighbourhood/urban structure, garage equipment, devices supporting alternative means of transportation.

Prospects of further innovation and benefits in the future:

•Using elements of “SMART Prague system” (for instance: smart trash bins, optimising routes for waste collection)
•Using BIM in facility management - Fairtrade requirements will be used for purchases of necessary textiles for employees or refreshments in the cafeteria
•Greenery and interior will be maintained or cleaned by social enterprises
•Seniors’ visits in the child-care centre shall help to build bridges between generations.

Lessons learned

•The preparation of the project was delayed for three years. During this time, there were severe changes in prices on the market (some of the increases were quick and sudden). Therefore, the bidders could not meet the estimated value of the first edition of the tender. The first edition of the tender received no bids at all, and it had to be cancelled. After that, the SAO put efforts into finding and securing funds in case of price increases.

•Changes became necessary within the area of the building construction permit. During this adaptation process, the SAO faced some objections from the neighbouring community that led to modifications in the construction permit. For dealing with those successfully, having an expert engineer appears to be an advantage. Continuous communication with the neighbourhood community also contributed to a smoother project management.

•Although the first implementation of BIM may increase the price of the project, it increases transparency and efficiency of the project implementation process. Keeping correct and systemic records and documents of the construction and the building and updating them in real-time is highly relevant for the efficient maintenance of the building, prevention of failures, and long-term outages of utilities.

•The original intention to make bidders present their bids in the BIM form, proved impracticable due to lacking standard and problems with handing over the original format of the BIM. The market was not ready for meeting such a requirement.
•Smart solutions require proper timing, adequate human capacities, allies and smart strategy to overcome barriers and make the project come true. Design-Build model appears to be the right tool, since it:

1. saves time (better coordination of project works and construction works);
2. saves money for project documents because it does not require duplicities nor repetitive actions in individual partial documents;
3. encourages the bidder to the utmost use of their skills, know-how and supports them in finding the most efficient solutions;
4. leads to control of costs by the contractor due to the flat rate.

More information

Contact person: Adam Gromnica, Ministry of Labour and social affairs, Prague, Czech Republic

For related information, please see European GPP criteria for Office Building Design, Construction and Management, and the Technical Background Report (currently under revision).
A handbook on calculating costs and benefits for the use of Building Information Modelling in public tenders is available online.