cm/cg contracting tom ravn, mn/dot director, office of construction and innovative contracting

CM/CG Contracting

Tom Ravn, Mn/DOTDirector, Office of Construction and

Innovative Contracting

– Design-bid-build

– Design-build

– Best-Value (design-bid-build)• Pre-qualification• Alternative Technical Concepts

– A+B (Cost + Time)

– Lane Rental

Current Procurement Tools

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

– 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

Why New Method?

RIS

K

DBB DB

Contractor

Owner

CM/GC– Construction Manager / General Contractor

– (CM at-Risk)

Potential New Methods

ID/IQIndefinite Delivery / Indefinite Quantity

What is CM/GC?

Mn/DOT

ContractorDesigner

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

RIS

K

DBB Design-Build

Owner

CM/GC

Contractor

Process (Phase I)

Select CM/GC

Select Designer

CM/GC advises on the design

P/T ContractWith CM/GC

NOTE: CMGC does NOT assume design liability

Design-Related Cost-Related

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

work

• Project estimates• Early award of critical bid

packages• Value analysis/ engineering

Preconstruction Services

Schedule-Related Administrative-Related

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

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

Preconstruction Services

Process (Phase II).

CM/GCnegotiatescontract to build the project

Low BidAdvertisement

CM/GC begins

constructionNegotiation Successful

?

Yes

No

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)

• Contact Jay Hietpas for more information

– Jay.hietpas@state.mn.us

Thank You