CM/CG Contracting

Tom Ravn, Mn/DOT Director, Office of Construction and Innovative Contracting

Current Procurement Tools

– Design-bid-build – Design

-build

– Best-Value (design-bid-build) • Pre-qualification • Alternative Technical Concepts – A+B (Cost + Time) – Lane Rental

TH 169 – Saint Peter

Design-Bid-Build

Benefits

– Mn/DOT retains control of the design – Contractors are familiar with the process

Drawbacks

– Limited Innovation – No contractor input – Cost unknown until letting

Design

-build

Benefits

– Innovation – Accelerated project delivery

Drawbacks

– Owner has less control over design – Increase procurement costs to DB teams – Cost unknown until letting

Why New Method?

– Each project is unique – Risk Management • Appropriate risk transfer • Minimize overall project risk – Higher cost certainty earlier in the process • Control “scope creep” • Overall project cost savings Owner DBB Contractor DB

Potential New Methods

CM/GC

– – Construction Manager / General Contractor (CM at-Risk)

ID/IQ

Indefinite Delivery / Indefinite Quantity

What is CM/GC?

Mn/DOT Designer Contractor

Traditional Design

-Build

CM/GC

Benefits of CM/GC

– Combines design-build and design-bid-build – Design • Retain control • Incorporate contractor innovation • Lower design costs – Cost Control • Manage to within budget • Higher cost certainty earlier in the project • Procure commodities earlier • Real-time cost information

Contractor Owner DBB CM/GC Design

-Build

Select

CM/GC

Process (Phase I)

Select Designer P/T Contract With

CM/GC CM/GC

advises on the design NOTE: CMGC does NOT assume design liability

Preconstruction Services

Design-Related

• Design input • Design reviews • Constructability reviews • Assistance shaping scope of work

Cost-Related

• Project estimates • Early award of critical bid packages • Value analysis/ engineering

Preconstruction Services

Schedule-Related

• Prepare project schedules • Construction phasing • Schedule risk analysis/ control

Administrative-Related

• Coordinate w/3 rd parties • Assist in permitting actions

CM/GC

negotiates contract to build the project

Process (Phase II).

Yes

CM/GC

begins construction Negotiation Successful ?

No Low Bid Advertisement

CM/GC Selection

– Phase I • QBS or Best-Value – Experience with construction of similar projects – Estimating experience – Innovation – Phase II • Negotiated price – Guaranteed Maximum Price (GMP) – Fixed Cost (lump sum) – Unit prices – Combination of the above

Phase II Negotiation

– Parties negotiated price

& contract terms

• Minimize overall project risk • Increase DBE participation • Independent cost estimate (3 rd party) – If negotiations fail: • Project goes to traditional design-bid-build • CM/GC can not bid on the project

Outstanding Concerns

– CM/GC Selection Process • Subjective • No-bid contract – Cost Validation • Verify the price is acceptable to withstand public scrutiny • What is the process for approving the price • Will Mn/DOT negotiate in good faith

Implementation Process

– Step 1: Legislation • Current legislation for CM at-Risk – Excludes highway and bridge construction – Not tailored to highway industry • Requires new legislation – Tailored to Mn/DOT

Implementation Process

– Step 2: Develop Process with industry • Identify White Paper Topics • Draft White Papers – Step 3: Develop Manuals/Procedures – Step 4: Identify Projects – Step 5: Develop contracts

When to use CM/GC

– Not for every project – Potential applications: • Innovative construction techniques • Complex staging/traffic control • New materials/construction practices (ABC bridges)

Thank You

• –

Contact Jay Hietpas for more information [email protected]