CMGC Construction Manager General Contractor Colorado DOT February

CMGC Construction Manager General Contractor Colorado DOT February , 2012 1

Content • • Definition of CM/GC Contractual relationships Comparison between CM/GC, D-B, and D-B-B Timeline Comparison CM/GC Benefits Risk Theory Costs

What is CMGC? A Project Team consisting of three components: • An Owner • A Contract with a Designer • A Two Phase Contract with a General contractor § Phase one – A “Construction Management” consulting contract to help with design § Phase two – A “General Contracting “ contract to build the project 3

Overview CMGC Contract Structure A Project Team consisting of three components • 1 Owner • 2 A Contract with a Designer • 3 1 A Two Phase Contract with a General contractor § Phase one – A “Construction Management” consulting contract to help with design § Phase two – A “General Contracting “ contract to build the project Owner 3 2 Designer Design Phase CMGC Phase 1: Construction Management One RFP Construction Phase ™ © 2011, All rights reserved, CMGC Institute Phase 2: General Contracting 4

CMGC Process Plan OWNER Design Consultant Contractor OWNER Bid/Explain/ Agree Build Bid Build Contractor ™

Design Team Selection Phase 6

Transition to Construction (Negotiation or Bid) 7

High Level CMGC Process Procurement Design Process with CM Services “GMP Ready” 1. Technical 2. Price GMP Submission Yes GMP Accepted Yes GMP – Guaranteed Maximum Price CM – Construction Manager ™ Construction Contract Awarded to CM No Explain/Agree? No Alternate Delivery of Project 8

Contracting Types FHWA’s EDC Project Delivery Initiatives Design-Bid-Build CMGC Leverage Current process Design-Build 9

CMGC Highlights Key Finding FHWA Utah Peer Exchange 2011: CMGC/CMAR project delivery “is a less radical shift in procurement culture than design-build…” 49 § Owner retains control of the design § Designer is true owner’s representative ™ © 2011, All rights reserved, CMGC Institute 10

Who is Using CMGC/CMAR? § § 58 Research done in 2009 (NCHRP Synthesis 402) • Five states were using CMGC/CMAR – AK, OR, UT, FL, AZ • Six additional States have legislative authority Quick look at current conditions (2011) • Now Using/ working on CMGC/CMAR: MI, CO, CFL, MTO, ME, WFL and NV • EDC follow ups to EFL + 9 others ™ © 2011, All rights reserved, CMGC Institute 11

NCHRP Synthesis 402 Construction Manager-at-Risk Project Delivery for Highway Programs - 2009 New Research 10 -85 -“ A Guidebook for CMGC contracting for Highway projects” – 2012 New Research 15 -46 – “Design. Management Guide for Design-Build and Construction Manager/ General Contractor Projects” - 2013

CMGC is not CM@Risk • The process is not the vertical world of CM@Risk – similar but different • Transportation industry projects are different and require a process of their own § Self-performance requirements are typical § Subcontractor procurement process is different § CMGC relies on best-value selection § GMP timing 13

CMGC is not CMAR With CMAR: 46 § Negotiated prices vs. “BID” § Very little owner involvement during construction § Contractor selection is QBS vs. Best Value § Focus is on Quality vs. Risk and Price ™ © 2011, All rights reserved, CMGC Institute 14

BIG Picture Theories with CMGC • Collaboration • Risk Theory • Schedule • Model to Implement Innovation 15

CMGC Contracting CMGC is an integrated team approach to the planning, design and construction of highway projects.

Contracting Types Compared Risk Theory Lower Risks Design-Bid-Build CMGC Design-Build Total Amount of Risk Contractor Risk Owner Risk Primary bearer of Risk: Owner Shared Contractor Relative Level of Risk Higher Lower Higher Drivers of Risk: Disconnect between design and construction leads to suboptimal design decisions and construction delays. Collaborative design process leads to readily constructible plans, faster construction times, and innovative approaches. ™ © 2011, All rights reserved, CMGC Institute Owner relinquishes control of design and construction to gain speed of delivery

Contracting Types Compared Scheduling/Timeline perspective Faster Schedules CMGC Achieves faster project delivery through increased concurrence of activities Design. Bid-Build Design. Build Selection Designer Design Construction Contractor Owner Pre-design Selection Design-Builder Design Review Owner CMGC Pre-design Owner Designer CM/GC Pre. Des. Construction Design Selection Design Review Design (CM) Construction (GC) ™ © 2011, All rights reserved, CMGC Institute

Model to Implement Innovation 19

Overview Key Benefits of CMGC 1. Constructability 2. Collaborative Design Process 3. Competitive pricing 4. Reduced Risk 5. Relationship Building 6. Speed of Delivery ™ © 2011, All rights reserved, CMGC Institute 20

What does an owner expect? Can all of these be improved? • • Better Designs Better, Faster schedules Lower risk Lower costs § Savings in design § Savings in constructability § Savings in innovation Scope Schedule ™ © 2011, All rights reserved, CMGC Institute Budget 21

Contract Components Project Delivery Method • DBB; CMGC; DB Procurement Procedure • Low Bid; Best Value; Qualifications-based; Sole Source Contract Payment Provision • Lump Sum; Guaranteed Maximum Price; Cost Plus Fee; Cost Reimbursable; Unit Prices • Doug Gransberg Phd. Iowa State. ™ 22

Contract Components Where are we now? Project Delivery Method • DBB; CMGC; DB Procurement Procedure • Low Bid; Best Value; Qualifications-based; Sole Source Contract Payment Provision • Lump Sum; Guaranteed Maximum Price; Cost Plus Fee; Cost Reimbursable; Unit Prices • Doug Gransberg Phd. Iowa State. ™ 23

Contract Components Where is CMGC? Project Delivery Method • DBB; CMGC; DB Procurement Procedure • Low Bid; Best Value; Qualifications-based; Sole Source Contract Payment Provision • Lump Sum; Guaranteed Maximum Price; Cost Plus Fee; Cost Reimbursable; Unit Prices • Doug Gransberg Phd. Iowa State. ™ 24

Evolution of Technical Proposal Scoring Criteria 25

EDC Initiative 61 ™ © 2011, All rights reserved, CMGC Institute 26

FHWA’s Long Term Project Delivery Goals • All contracting agencies should have a project delivery “toolbox” including: – Design-bid-build – Design-build – Construction Manager General Contractor (Construction Manager at-Risk) – Alliance Contracting – Performance Contracting – ID/IQ contracting – Other ™ © 2011, All rights reserved, CMGC Institute

New Zealand Selection Model Dollars Alliance DBB LS DBB Cost+ DBB M&V CMGC D B may be appropriate CM/GC Complexity, Risk, Potential for Innovation, Flexibility Required, Client Involvement, Supply vs Demand, Program Constraint *P 10 -0274: Design Build Contracting using a Competitively Negotiated Design by Eric Scheepbouer ™ 28

CMGC Contract Technical Cost Collaborative Deliverables Plans SHOP DRWG Specs ™ Doug Gransberg, Phd, Iowa State As Builts

What do Owners want from CMGC? Contractors ideas for difficult projects Cost savings Time Savings Interviews with Senior DOT MGRs, Fall 2011, Gransberg - Mc. Minimee ™

What owners want - Innovations to Reduce Total Time CMGC/CM at Risk ABC Design

New Business Model • New paradigm • Lowest construction cost to lowest project cost

What Does industry get from CMGC? • Better Designs – Hard to Quantify – Contractor satisfaction with plans, CO’s • Better schedules- Exceeded expectations • Lower costs – Savings in design- preliminary savings indicated 40% of design costs – Savings in constructability- preliminary savings indicated 8% of total project combination with innovation – Savings in innovation- preliminary savings indicated 8% combination with constructability ™ © 2011, All rights reserved, CMGC Institute

CMGC in Action The Bottom Line Lower Costs CMGC has delivered 15 -16% cost savings and lower change orders for Utah Cost experience for UDOT, based on 18 state projects $330 million dollar program ™ © 2011, All rights reserved, CMGC Institute

36

CMGC Contracting Bottom Line: CMGC is a good option for many transportation projects where the qualifications and cooperation of the contractor are critical to the success of the project.