Silver Creeks Blog

It seems there are still uncertainties or questions about what a lease-leaseback is and how it can be utilized as a construction project delivery method. Below is an overview of how it works along with the benefits of choosing this contracting option.

First the project owner advertises a Request for Qualifications from general contractors. By obtaining this information, the owner can then select a developer/contractor who is best qualified to develop and build a team to construct their new building. The owner then procures property and leases that property to the developer/contractor who develops the site and builds the structures the owner requires for a Guaranteed Maximum Price (GMP). The owner subsequently leases back the property including the building or buildings constructed from the developer/contractor, and once the lease ends, the owner outright owns the fully developed land.

The concept behind the lease-leaseback contracting method is that it allows the owner to choose the most qualified developer/contractor team for their project. This team immediately appoints an architect, modular builder, and other professionals needed to create a fully integrated process and complete the project for the GMP with little or no pricey change orders.

Here's a few reasons to choose a lease-leaseback:

• Assists the owner with financing / funding their project
• Facilitates the owner - developer / contractor partnership
• Owner has one point of contact
• Project management issues are greatly reduced
• Helps complete projects on time and within budget
• Provides a Guaranteed Maximum Price (GMP)
• Change orders are typically initiated by the owner
• Building additions can be sourced through the lease-leaseback
• A successful contracting method for permanent modular construction.

Are you a school district in need of a few new buildings to replace old ones or need to accommodate enrollment growth? Are you a county, city, town or other public agency within the State of California also in need of new buildings? Did you know that there is a great possibility you can utilize a piggyback contract to purchase or lease these buildings without advertising for bids?

Also known as a Cooperative Purchasing Agreement, a piggyback contract for modular buildings facilitates and expedites the purchase and/or lease of a wide variety of buildings and services. Typically the contract originates from a school district that sent out a request for proposal (RFP) to various modular manufacturers. After carefully reviewing the proposals, verifying all legal documentation, considering the experience and reliability of the manufacturer, and analyzing the costs presented, the school district awards the contract to the lowest responsible bidder. This contract, which is usually granted for a 5-year period with annual renewals, outlines the public entities which are able to participate in its use per the conditions set forth within it. By procuring directly from this contract and piggybacking on its offerings and terms, customers can eliminate the sometimes prolonged and costly bidding process and still have access to quality products at competitive prices.

With our school districts and public agencies continuously seeking ways to save money while still adequately meeting their building requirements, the piggyback contract procurement process is the ideal solution.

Contact us to learn more about this simplified process.