February, 2014

Delivering on Maryland’s

TRANSPORTATION

INVESTMENT Alternative Project Delivery: SHA’s Construction Management at Risk (CMAR) Pilot Jeffrey T. Folden, PE Maryland State Highway Administration

February, 2014

February, 2014

Project Delivery Method

One Size Does not

Fit All…

February, 2014

Project Delivery Method

Definition The process to design and construct the project

Types • Design-Bid-Build (DBB) • Design-Build (DB) • Indefinite Delivery/Indefinite Quantity (ID/IQ) • Public Private Partnerships (P3) • Construction Management at Risk (CMAR)

February, 2014

Construction Management at Risk

Definition A project delivery method where the agency utilizes a two-phase construction contract with a General Contractor to:

1) Provide Preconstruction Services, which may include, but are not limited to, constructability analysis, value analysis, scheduling, site assessments, and cost estimating;

2) Construct the project based on final design plans (or design packages) based upon an agreed Guaranteed Maximum Price (GMP)

February, 2014

Construction Management at Risk

Authority • State – Code of Maryland Regulations (COMAR)

21.05.10

• Federal – Moving Ahead for Progress in the 21st Century (MAP-21) – Construction Manager/General Contractor (CM/GC)

February, 2014

Construction Management at Risk

Reasons for Choosing CMAR • Shorten Project Delivery

• Project Complexity

• Contractor Input During Design

• High Number of Potential Risks/Risk Allocation

• Scope Flexibility/Maximizing Dollars

• Cost Analysis of Multiple Design Options

• Informed Owner Decision Making

February, 2014

7

Shortening Project Delivery

Design-Bid-Build

(DBB)

CMAR

Design-Build

(DB)

Preliminary Design

Detailed/Final Design

Bid Construction

Preliminary Design

Design-Build

Procurement

Detailed/Final Design

Construction

Preliminary Design

CMAR Procurement

Detailed/Final Design

Construction

February, 2014

Risk Allocation

Contractor

Owner

DBB DB CMAR

RIS

K

February, 2014

Construction Management at Risk

Expectations • Meet Project Goals

• Fair Market Price

• At or Below Proposed Price

• Improved Schedule

• Fewer Change Orders

February, 2014

Construction Management at Risk

Benefits • Opportunity to bring on Contractor during design phase

to work as an integrated team to deliver most efficient and cost effective design

• Promotes innovation and collaboration/partnering

• Owner maintains the decision making authority

• Greater cost certainty through GMP and reduction in change orders

• Still allows phased construction similar to Design-Build

• Risk Identification and Management during design

• Owner gets upfront benefit from Value Analysis

February, 2014

Construction Management at Risk

Potential Risks • Transparency – Technical Qualifications and

Approach are Main Elements for Selection

• Cost Validation – “Negotiated” vs. Bid

• Culture – New Process for All (SHA, Consultants, Contractor, Regulatory Agencies, Etc.)

• Risk – Limited Historical Usage for Heavy Highway Construction

February, 2014

Construction Management at Risk

Procurement – COMAR 21.05.10.03

CMAR contracts shall be procured using the Competitive Sealed Proposals Procurement Method as defined in COMAR 21.05.03.

February, 2014

CMAR Procurement

MD 24 Pilot Project • Potential Project Identified – January 2013 • Approved for CMAR – March 2013 • Development of CMAR procurement process/documents – April

2013 – August 2013 • Procurement Schedule

• Industry Informational Meeting Held – July 18, 2013 • Issued Request for Proposals – August 20, 2013 • Technical and Price Proposals Submitted – October 2,

2013 • Notification of Selection – October 23, 2013 • Award – November 22, 2013 • Notice to Proceed – December 23, 2013

February, 2014

CMAR Procurement

MD 24 Pilot Project • One Step Procurement Process

• Request for Proposals (RFP)

• Technical Proposal

• Project Management Team/Capability of Proposer

• Project Approach

• Legal/Financial

• Price Proposal

• Preconstruction Fee (Lump Sum Price)

• Construction cost for only specific items identified

February, 2014

CMAR Procurement

MD 24 Pilot Project • Separate Technical Proposal and Price Proposal

Evaluations

• Adjectival Rating Process

• Best-Value Process – Most Advantageous to State considering both technical factors and price

• Technical Proposal was significantly more important than the Price Proposal.

• Project Award and Notice to Proceed – Design Phase

February, 2014

MD 24 – Section A & Section G

Study in 2003

identified 7

distinct segments

of varying slope

failure. Section A

& Section G were

highest priorities.

February, 2014

MD 24 – Section A & Section G Purpose and Need Improve safety along MD 24 and address roadside safety concerns associated with eroding slopes

Project Objectives • Avoidance and Minimization of impacts to Deer

Creek • Protecting historical, cultural, and endangered

species • Limit disturbance to or enhance rock features

February, 2014

MD 24 – Section A & Section G

February, 2014

MD 24 – Section A & Section G Alternates • Section A – Selected Alternate

• Maintain existing roadway alignment and construct imbricated stone walls

• Section G – Options

• Maintain existing roadway alignment w/ retaining walls

• Shift roadway alignment w/ and w/o retaining walls

February, 2014

MD 24 – Section A & Section G Design Challenges • Stream diversion and dewatering for

construction area. • Temporary stream diversion

requirements/methods • Shortest duration • Height of system • Stability

• Mussel survey and translocation period

February, 2014

CMAR Design Phase

Project Team • Owner – SHA

• Engineer under Contract with Owner – Johnson, Mirmiran & Thompson (JMT)

• Contractor under separate Contract with owner – Corman Construction

• Independent Cost Estimator (ICE) – Infrastructure Technologies (IT)

February, 2014

CMAR Design Phase – Section A

Owner, Designer, and Contractor Collaboration • Project Kick-Off Meeting/Partnering

• Working Team Meetings – Weekly or Bi-Weekly

• Cost Model Development w/ ICE

February, 2014

CMAR Design Phase – Section A

Project Kick-Off/Partnering • Kick-Off Meeting

• Owner, Engineer, Contractor, ICE • All SHA Offices/Divisions • Environmental Agencies (DNR, MDE, USACOE,

USFWS, EPA) • Partnering

• Partnering Keys to Success/Ground Rules • Issue Resolution Process • Action Items

February, 2014

CMAR Design Phase – Section A

Working Team Meetings

• Discuss Issues Identified and Work Through Solutions

• “Over-the-Shoulder” Reviews

• Key Players Involved

February, 2014

CMAR Design Phase – Section A

Cost Model Development w/ ICE • Develop Cost Model for Project

• Opinion of Probable Construction Cost (OPCC)

• Guaranteed Maximum Price (GMP)

• Elements of Cost Model

• Profit and Indirect Overhead Percentage

• Equipment Types and Rates

• Material Sources

• Subcontractor Items of Work

• Risk Agreement and Assignment

• Schedule

February, 2014

CMAR Design Phase – Section A

Cost Model Development w/ ICE • OPCC

• To be submitted at 65% and 90% Design Completion

• Blind Estimate Comparison – ICE is not Revealed

• Report of Items Outside of Tolerance (>10%)

• Reconciliation Meeting to discuss differences in bidding assumptions

February, 2014

CMAR Design Phase – Section A

Once Design is Complete

• Contract documents have been developed collaboratively by team

• Follow typical procedures • DBE goals established for construction

• 2008 Standard Specifications and current SP/SPIs

• GMP - Contractor and ICE will independently price project

February, 2014

CMAR Bidding Phase – Section A

Once GMP is Submitted

• Owner will see both Contractor and ICE prices

• Price Reconciliation Meetings, as needed

• Up to 3 GMP Submittals allowed

• Accept GMP and Award Contract

• Terminate Contract and Bid Project as DBB

February, 2014

CMAR Bidding Phase – Section A

Schedule

• OPCC Submittals – February and March 2014

• Issue Contract Documents – April 2014 • GMP Submittals – 1st Submittal in May

2014 • Pending approved GMP – NTP in July

2014 • Construction Completion Proposed Nov.

2014

February, 2014

CMAR Future

Opportunities • SHA Project Delivery Selection Process –

developing structured approach to determine most appropriate delivery method

• Factors to consider • Delivery Schedule • Project Complexity & Innovation • Level of Design • Cost • Initial Risk Assessment • Industry Interest & Capacity

February, 2014

CMAR Future

Considerations

• Procurement Process – 2 step vs. 1 step

• Price Proposal

• Preconstruction Fee

• CMAR Management Fee (Percentage)

• Specific Bid Items

February, 2014

CMAR Future

Potential Obstacles

• Level of Design + Construction Funding

• Bring on Contractor pre-30% - Schedule may be dynamic

February, 2014

Questions?

Remember…

One Size Does Not

Fit All…