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
• Minimize overall project risk
– Higher cost certainty earlier in the
process
• Control “scope creep”
• Overall project cost savings
Owner
RISK
• Appropriate risk transfer
Contractor
DBB
DB
Potential New Methods
CM/GC
–
Construction Manager / General Contractor
–
(CM at-Risk)
ID/IQ
Indefinite Delivery / Indefinite Quantity
What is CM/GC?
Traditional
Mn/DOT
Design-Build
CM/GC
Designer
Contractor
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
RISK
Owner
DBB
CM/GC
Design-Build
Process (Phase I)
Select
CM/GC
P/T Contract
With CM/GC
Select
Designer
CM/GC
advises on
the design
NOTE: CMGC does NOT assume design liability
Preconstruction Services
Design-Related
Cost-Related
•
•
•
•
• Project estimates
• Early award of critical bid
packages
• Value analysis/ engineering
Design input
Design reviews
Constructability reviews
Assistance shaping scope of
work
Preconstruction Services
Schedule-Related
• Prepare project schedules
• Construction phasing
• Schedule risk analysis/ control
Administrative-Related
• Coordinate w/3rd parties
• Assist in permitting actions
Process (Phase II).
Yes
CM/GC
negotiates
contract to
build the
project
CM/GC
begins
construction
Negotiation
Successful
?
No
Low Bid
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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 (3rd 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
–
Jay.hietpas@state.mn.us