Stadium Project Schedule Milestones
Governor Green is currently evaluating the procurement and delivery approach for NASED. Consequently, the details in this “Stadium Project Schedule Milestones” section may be subject to change.
Existing Stadium Condition
The NASED project was initiated in response to the long-documented challenges the existing Aloha Stadium has been managing in regard to corrosion and structural integrity, technical obsolescence and general operational efficiency.
Previous studies commissioned by DAGS to assist the State of Hawai‘i documented the existing Aloha Stadium exhibiting signs of aging, code non-compliance, and amenity deficiencies. Updated structural studies concluded the stadium (in 2017) required approximately $300 million in critical health and safety repairs, and an additional $121 million to bring the stadium up to ADA standards and code compliance (in 2017 dollars): “While serving the State and community for the past 44 years, the existing Aloha Stadium is well beyond its practical life as a multi-purpose stadium and requires considerable ongoing investment to keep it in working order, accessible to all users, and safe for the public.”
The culmination of the corrosion and other maintenance issues led the Stadium Authority to cease public events in the stadium’s seating bowl in 2021, effectively requiring that its key tenant, the University of Hawaii, find a different home venue until the new Aloha Stadium is complete.
A new stadium on the Hālawa site will eliminate the deficiencies inherent with the existing facility while providing the community with a much-needed, modern, multi-purpose sports and entertainment venue for many years to come. Additionally, a new stadium would be an improvement over a renovated existing stadium at a lower cost and would be the catalyst for over 4 million sf of ancillary development over a 20+year period.
As time marches on, the degradation of the building continues, leading the State to undertake an aggressive schedule to mitigate any further issues with this existing facility.
All major projects must wrestle with market factors and influences from commodities fluctuations, labor costs, and even trade tariffs. Collectively, this is accounted for as ‘escalation’ costs, which means the actual cost of construction goes up every year, depending on the specific market conditions. Late 2021 and early 2022 saw significant construction escalation across all regions, and Hawaii was not immune, experiencing construction escalation of 20-30%.
Given the fixed State funding, time is of the essence, as any delays to the procurement process will mean that less scope will be afforded and included in the new Aloha Stadium.
How was the 8-month timeframe determined?
The State is responsible for setting the response period for the RFP. In this case, this was done in accordance with industry expectations and consultation with the priority-listed respondents. In their RFQ responses, each respondent was asked to provide feedback on the draft procurement timetable, which then reflected an RFP response period of four months. Feedback received from RFQ responses was that this period was too short and longer timeframes were requested. After the selection of the three priority-listed respondents in 2020, the State engaged each priority-listed respondent and sought further feedback on the RFP response period and, after several discussions, a response period of 8 months was determined. This period of 8 months was determined through a detailed, day-by-day, analysis and scheduling of all key tasks and activities required to deliver a successful RFP.
It is also worth noting that a feature of the procurement process for the Stadium Project is that there is virtually no negotiating period once proposals are submitted. The draft contract documentation will be issued with the RFP. This will be developed during the RFP period and all proposals will be required to conform with the final contract documents. Consequently, the State expects to execute a contract with the Stadium Project developer within 2.5 months of the proposals being submitted.
What are the key tasks and activities during the RFP response period?
During the RFP, each priority-listed respondent is expected to expend significant time and money in developing their proposals. Their key focus areas will be:
- Reviewing and commenting on the contract documents
- Developing a base (concept) design
- Developing a construction methodology and schedule
- Developing a financing package
- Developing a 30-year maintenance strategy and methodology
- Pricing all of the above in a competitive fashion, which includes optimizing the design, construction and maintenance approach to deliver the best value total cost of ownership for the State
In developing their proposals, priority-listed respondents will be actively engaging with the State in a clearly defined and structured manner. The purpose of these collaborative discussions is to assist priority-listed respondents with their understanding of the RFP, which is both voluminous and complex, so that they can produce their best possible proposal.
What are the benefits of having an 8-month RFP period?
While short RFP periods may seem appealing from an initial schedule perspective, they can result in rushed proposals that are ill-conceived or underdeveloped. This is undesirable for all parties and will likely lead to challenging issues in contract delivery. Some of the objectives the State is seeking with the 8-month RFP period for the Stadium Project are:
- Ensuring that each priority-listed respondent has sufficient time to:
- Demonstrate that their proposed stadium design supports the State’s vision of an entertainment district for NASED
- Develop, and then rationalize, optimize and price – in a highly competitive fashion – the best design, construction methodology, maintenance methodology and finance package
- Assess and understand the various site risks (e.g., archaeological, geotechnical, environmental) so that they can develop (and efficiently price) risk mitigation strategies
- Fully understand, comment on, and negotiate the contract documents
- Ensuring the State has sufficient time to:
- Review and comment upon the draft designs, construction methodologies, maintenance methodologies and finance packages of each priority-listed Respondent
- Respond to all requests for clarification arising from the RFP documents
- Review comments on the contract documents and develop updates, including the final version of the contract documents
All of this is designed to get the best possible price for the State in a manner that transfers a sensible amount of risk to the developer. We are looking for a 30+ year contract. Experience tells us that spending months (and $-thousands) in the onset saves us years (and $-millions) in production.
Why haven’t the priority-listed
developers been developing their proposals since being shortlisted?
Developing a proposal requires a significant investment in time, effort, and cost. For the Stadium Project this will be in the millions of dollars. Bidders are typically unwilling to expend these resources unless they know that relevant government approvals are in place (or will be in place). In addition, the State has not been able to issue the RFP (for priority-listed developers to respond to) until the funding has been confirmed. Now that the legislature has appropriated the full funds for NASED, we eagerly await the relevant approvals to issue the RFP.