ConStrUCTION MANAGER AT RISK (cm-r), When and How OCTOBER 2017 - PowerPoint Presentation

ConStrUCTION MANAGER AT RISK (cm-r), When and HowOCTOBER 2017 Facilities Directors Conference Hickory Knob State Park

CM-R A project delivery method in which the Construction Manager acts as a consultant to the Owner during a portion of the design phase (Pre-construction Services) for: Scheduling Cost Estimating Constructability Then, he assumes the risk for construction performance as the equivalent of a general contractor holding all trade subcontracts during the construction phase CM-R must have a General Contractors license and be registered as a Construction Manager with SCLLR

CM-RAdvantages Contractor provides pre-construction services for a fixed fee; AND, a Guaranteed Maximum Price (GMP) for construction services. Contractor perspective and input during design phase provides familiarity with design features. Ability to “fast-track” early components of construction prior to completion of design. CM-R provides a GMP that is “only” exceeded due to Owner changes.

CM-RDisadvantages Two step process to hire CM-R via RFQ and RFP can take three months or more. Qualifications based selection of CM-R utilizes Cost as a small portion of the criteria. Therefore, selected CM-R may not be lowest cost. GMP will have assumptions for “unfinished” design. Disagreements over assumptions. Issuing “too costly” early components may impact the overall GMP of a completed project. Failure to negotiate a GMP results in termination of CM-R and proceeding with Design-Bid-Build process

CM-R Contracting Milestones Agency provides written determination letter to OSE that CM-R is most advantageous. See Chapter 3 of the Manual. Procurement of A/E in accordance with Chapter 4 of the Manual. Utilize the AIA B133 (SCOSE edition) A/E to design to Schematic Phase Site established Programming/Function of spaces established Building configuration confirmed Life safety issues Cost estimate to verify budget Meanwhile……………

CM-RContracting Milestones (cont’d) Procurement of CM-R in accordance with Chapter 11 of the Manual. Utilize AIA A133 (SCOSE Edition) Selection via a two step process, ie . Request for Qualifications and Request for Proposals (RFQ/RFP) Selection Committee for RFQ/RFP process OSE appoints non-voting Chairman (OSE PM) Agency Head selects remainder of voting and non-voting Committee members w/ Chairman concurrence. Technical advisors may be required . Confidentiality & Conflict of Interest Policy (SE-414)

CM-R Contracting Milestones (cont’d) Selection Plan: created by the Agency PM, approved by the Agency head, Committee, and Chairman At a minimum, the Plan should: Describe the property and/or facility to be acquired Explain the solicitation and evaluation of qualifications and proposals by the Committee List the RFQ and RFP evaluation factors and their relative importance (weighting factors) Identify the Chair and members of the Committee Establish milestone dates for completion of the selection process The Plan is never shared with the offerors for CM-R

CM-R Request for Qualifications A pre-qualification process The RFQ is prepared by the Agency PM with the assistance of the Committee Describes the general scope of work Instructs prospective offerors how statements of qualifications are to be organized and submitted. Informs prospective offerors of the evaluation factors and their relative importance. At a minimum, factors are: Past performance Description of CM-R approach to project management Bonding capacity/Financial Stability Related CM-R experience on projects of similar size and scope.

CM-R Request for Qualifications (cont’d) The Invitation for CM-Risk Services (SE-410) advertised in SCBO Provides brief description of project and budget Informs offerors where the RFQ document may be obtained Pre-qualification conference, yes/no, location Submittal due date, location, number of copies Review of the Statement of Qualifications by the Committee produces a listing of most qualified to least qualified Agency solicits proposals from at least the three most qualified firms.

CM-R Request for Proposal P repared by the Agency PM with the assistance of the Committee. May include Schematic documents from the A/E. Instructs the prequalified firms: How proposals are to be organized and submitted . To submit their proposed fee for Preconstruction and Construction Management Fee in a separate sealed envelope. T he factors to be used to evaluate proposals. At a minimum, evaluation factors are: Qualifications of proposed CM-R staff Ability to perform the requirements of the contract History of on-time, on-budget, and on-schedule for CM-R projects Related CM-R experience on projects of similar size and complexity Proposed CM-R Preconstruction and Construction Management fee Other factors required by Committee

CM-RRequest for Proposal (cont’d) Pre-proposal Conference for the pre-qualified firms may be held to clarify the RFP Purpose of conference is not to modify or qualify the terms of the solicitation Agency Project Manager and Chairman conduct the conference Selection Committee should not be in attendance Minutes of the conference are taken

CM-RReceipt of Proposals Agency time-stamps proposals as received, including modifications, and secures until due date Proposals are opened publically by the Agency PM and a witness, however: Proposals are not open to public inspection The contents of the proposals and identity of the offerors are not disclosed If members of the public are in the opening, the proposals are opened and verified in silence.

CM-R Interviews and Ranking Proposals Committee members should review the proposals in comparison with the evaluation criteria prior to interviews At the close of interviews, Committee members will score the evaluation on the SE-415, with the exception of the Cost Proposal criteria Agency PM opens the sealed envelopes and reads aloud the Preconstruction Fee and Construction Management Fee for each offeror Committee members complete the scoring for Cost Proposal, total their scores, break any ties, and submit the SE-415 to the Chair.

CM-RInterviews and Ranking Proposals (cont’d) Chair compiles all scores (SE-415’s) on the CM-R Selection Committee Summary (SE-417) to establish the top ranked firm Consensus of Committee Selection Committee Report & Recommendation Agency PM prepares report to include all data and scoring sheets used to support the Committee’s recommendation to negotiate and award Report is delivered to the Agency Head for review and written approval

CM-R CM-R Negotiations Utilizing the AIA A133 SCOSE Edition, the Agency negotiates with the CM-R: Preconstruction Fee Participation in design progress and design review meetings Review of construction documents Cost estimating (materials, labor, possible savings) Construction Management Fee Expressed as a percentage of the GMP Percentage does not include General Conditions Splitting of savings between the Owner and CM-R Unsuccessful negotiations with the highest ranked offeror allows the Agency to negotiate with the second highest ranked.

CM-RNotice of Intent to Award Decision to award is by Agency Head or governing body following successful negotiations With concurrence by OSE signing the Request of Concurrence in Posting Notice of Intent to Award CM-R Contract (SE-460), the agency may post the Notice of Intent to Award (SE-470). Ten day protest period

CM-RPreconstruction Phase During the remaining design phase the CM-R: Reviews design documents Performs constructability reviews and availability of labor & materials Identifies project sequencing and “early” construction packaging for phased construction Evaluates systems and makes cost-effective recommendations Evaluates budget and makes suggestions Updates schedule and cost estimates Consults with subcontractors

CM-R Guaranteed Maximum Price (GMP) At a time agreed to by the Agency and CM-R, a GMP is submitted to the Agency The GMP includes: Cost of the Work Direct cost for labor & materials, including subcontractor(s) overhead and profit Construction Management Fee CM-R General Conditions Costs associated with establishing and manning a project office CM-R contingency The amount of contingency will reflect to the amount of risk the CN-R is willing to accept and the condition of the design documents Available to contractor to cover increased cost beyond its control, ie . alleviate cost for defective/nonconforming work, increases in subcontracts, acceleration costs, etc Unused contingency is returned to the agency at project completion Cost of Performance and Labor & Material bonds and insurance

CM-RGuaranteed Maximum Price (GMP) (cont’d) Successfully negotiating a GMP results in submitting to OSE: Request for Authority to Execute Exhibit A to CM-R Contract (SE-475) Exhibit A to the AIA A133 SCOSE Edition Change Order to CM-R Contract (SE-480 ) Unsuccessfully negotiating a GMP results in the Agency terminating the CM-R Contract and proceeding with the construction via Design-Bid-Build process

CM-RConstruction Construction of the facility is similar to the process established in Chapter 7 of the Manual Change Orders Change Directives Claims and Disputes Payments to the Contractor (CM-R) Substantial Completion Certificate of Occupancy Final Completion One-year Corrective Work Period

To Summarize:Construction via the CM-R process has been used successfully in SC agenciesThe CM-R process is time consuming for the Agency PM and Committee members CM-R may not be the lowest initial cost method Most agencies feel they received a better product than Design-Bid-Build because of the relationship between Owner, A/E, and CM-R during the final phase of design thru construction