Transcript Preparing Your Community for the Physician Orders for Life

Large Public Works Projects
and the General Contractor/
Construction Manager (GC/CM)
Procedure:
A New Way to Save Money,
Time and Aggravation
Presenters
Dan Chandler, PE
Principal
Olympic Associates Company
Mark Henderson, AIA
Associate Principal,
Health Care Practice
Callison Architecture
John Lynch, PE
Assistant Director
Washington State
Department of General Administration
Division of Engineering and Architectural Services
Dick Goldsmith
Director,
Legal Services and Health Policy
Association of Washington Public Hospital Districts
Topics
• Setting the stage
– Traditional and alternative
contracting methods
• The GC/CM process
– Statutory requirements
– Contractual arrangements
– Contracting steps
– The Public Hospital District (PHD)
Project Review Board
• “ The good, the bad & the ugly”
– Panel perspectives
Setting the Stage
• Traditional method:
“Design, Bid, Build”
• Alternative method:
GC/CM procedure
Statutory Requirements
• Determine if the project qualifies
for GC/CM procedure
– Value: over $10 million
• Complex scheduling; or
• Operation of existing facility during
construction; or
• Critical involvement of GC/CM during
design phase
– Value: between $5 million and
$10 million
• Authority for 10 demonstration
projects
Statutory Requirements (cont.)
• Submit application to Public
Hospital District (PHD) Project
Review Board for approval
• Obtain preliminary and final
determination from PHD
Commissioners (RCW
39.10.030)
– Public review and comment
Contractual Arrangements
Public Hospital
District
Designer
GC/CM
Sub-contractors
Responsibilities
• GC/CM
– Pre-construction services
– Bidding the work
– Construction services
• PHD
– Design
– Project administration
– Financing
Selecting the GC/CM
• Timing (early in the process)
• Designing and planning
• Request for qualifications (RFQ)
• Pricing
– General conditions
– Fee only
Setting the Price
• Guaranteed Contract Cost (GCC)
– Specified general conditions
– Maximum Allowable construction
cost (MACC)
– % fee X MACC
– GC/CM contingency
– Sales tax
• GCC excludes
– Architect/Engineer (A/E) fee
– Furnishings, fixtures and equipment
(FF&E) costs
– Other costs typically borne by
Owner
Bidding the Job
• GC/CM bids out all work
• Can bid in phases
• Can self-perform up to 30% of
MACC
– Low bid
– Work customarily performed
– Bid opening managed by PHD
– Notice of intent to bid in public
solicitation
Changing the Work and
Owning the Risk
• Change Order
– Owner’s contingency
– Increases GCC
• “Team Change” Funds
– GC/CM contingency
– GCC unchanged
Rewarding Good Work
• Incentive Clauses
– Up to 5% of the MACC (typically
much lower than 5%)
– Paid out of contingencies at end
– Based on good management by
GC/CM
PHD Project Review
Board Approval
• Composition of board
• Duties
• Determinations
• Policies and procedures
Application Information
• Current project total budget
including
– Estimated construction costs
– Costs for professional services,
equipment, and furnishing costs
– Off-site costs
– Contract administration costs
– Other related project costs
• Anticipated project design and
•
construction schedule
Summary of PHD’s construction
activity for the past six years
Application Information (cont.)
• Detailed explanation of why the
PHD believes the use of the
GC/CM procedure is in the public
interest
• Detailed explanation of why the
PHD is qualified to use the
GC/CM procedure, including a
summary of the relevant
experience of the PHD’s
management team
An Owner’s Perspective
• Likes
– Qualified contractors
– Pre-construction services
– Guaranteed MACC
– Team approach
– Management of project
contingencies
– GC/CM’s financial stake
• Dislikes
– Higher owner overhead costs
– More management staff than with
“Design, Bid, Build”
– Higher A/E costs
– Management of project risks
A Project Manager’s
Perspective
• Likes
– Method and project matched
– Necessary management skills
obtained
– RFQ and contract done correctly
– Value of GC/CM in pre-construction
services maximized
– Risks and contingencies managed
• Dislikes
– Incentives can be risky
– Advantages lost if not done well
An Architect’s Perspective
• Likes
– Qualified contractors
– Real value in pre-construction
services
– Teamwork reduces disputes
• Dislikes
– Some increase in A/E workload
– “Inequality” among GC/CMs
Resources
• Washington Health Care
Facilities Authority
John Van Gorkom, Executive Director
P.O. Box 40935
Olympia, WA 98504-0935
(360)753-6185
www.whcfa.wa.gov/
• Office of the Superintendent of
Public Instruction
http://www.k12.wa.us/
SchFacilities/GCCM.aspx
Legal Sources
• Contracting process for GC/CM –
RCW 39.10.061
• Composition, duties,
determinations and application of
PHD Project Review Board –
RCW 39.10.117
• Authorization of demonstration
projects – RCW 39.10.068(1)(b)
Legal Sources
• Public review after PHD Public
Review Board approval – RCW
39.10.030
• Other public works requirements
include:
– Licensed or registered contractors
– RCW Chapter 39.06
– Bonded contractors – RCW
Chapter 39.08
– Payment of prevailing wages –
RCW Chapter 39.12
– Contract retainage – RCW
60.28.011
Questions ?
Comments?
Dan Chandler, PE
[email protected]
206-674-6103
Mark Henderson, AIA
[email protected]
(206) 623-4646
John Lynch, PE
[email protected]
(360) 902-7227
Dick Goldsmith
[email protected]
(206) 216-2528