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Availability Payments and Impact on Design Approach

An Availability Payment is a means of compensating a private concessionaire for its responsibility to design, construct, operate, and maintain a facility for a set period of time.

An Availability Payment is a means of compensating a private concessionaire for its responsibility to design, construct, operate and maintain a facility for a set period of time. These payments are made by the public Agency and based on particular project milestones, including a completion deadline and/or facility performance standards. Performance standards are measured operationally and according to occupant satisfaction. Operational considerations can include room air temperature, cleanliness, and speed of light bulb replacement. Occupant satisfaction measures customer service, performance, the completion of preventative maintenance, testing of equipment, and inspection of space. 

On the Long Beach Courthouse there are no milestone payments associated with construction and the Availability Payments will not commence until occupancy of the space. After occupancy, receipt of the Availability Payment is predicated upon the performance of the facility, which mandates the facility manager is performing all required tasks and the space is in the specified condition. There are detailed key performance indicators by which the condition of the space and performance of the facility manager are measured. Predetermined deductions to the Availability Payment are instituted if key performance indicators are not met or achieved. 

In contrast to traditional Design-Bid-Build delivery, the transactional requirements of the Performance Based Infrastructure (PBI) turnkey approach drive the need for a fully integrated design process involving the architect, engineers, contractor and facility manager. When working with public agencies under more traditional delivery approaches, the objective is almost always to lower first cost. In the case of lowest bid selection, the long term operating and life cycle costs are often driven upward as a result of the selection of shorter lived equipment and less durable materials. Unfortunately, this rarely seems to get factored in by the public sector.

With the risk of long term operations and life cycle costs built in to the transaction structure, choices in mechanical systems and finish materials were driven not by initial cost but by total cost over the entire concession period.

A good example of the types of choices made was the selection of Terrazzo flooring versus carpeting in heavily trafficked corridors. Although a much higher first cost, this material is much more durable and enables the end user to avoid the higher cost of frequent carpet replacement. Another example is the construction of enclosed penthouses on the roof that provide additional protection for the mechanical systems against the marine environment of Long Beach. With guidance from the facility manager, the design team selected hard, durable but easily cleanable wall.

Related Case Study

Long Beach Courthouse

Long Beach, California