construction manager / general contractor cm/gc ... manager / general contractor cm/gc procurement...
TRANSCRIPT
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Construction Manager / General ContractorCM/GC Procurement Case Study
February 2016
Federal Transit AdministrationWendy A. Lee, Regional Counsel, Cambridge, MA
WORLD TRADE CENTER PATH TERMINAL PROJECT
MBTA GREEN LINE EXTENSION PROJECT
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Observations and Lesson Learned
The use of non-traditional contracting methods for major FTA-funded construction projects is on the rise.
• The CM/GC approach is the most innovative but difficult to manage
• Selection of the right Joint Venture, Design, and other consulting teams is critical
• Early involvement of in-house legal counsel
• Requires experienced owner to manage competing interests; significant and continuous involvement of owner
• Need to be willing to terminate agreement if Guaranteed Maximum Price (GMP) not established within the contractual time frame and execute contingency plan
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Green Line Extension (GLX)Light Rail Project
• MBTA
• Extend existing light rail service 4.3 miles
• Executed Full Funding Grant Agreement in January 2015
Project Budget - $2.297B
Required Completion Date –June 29, 2022
• Utilized CM/GC procurement strategy
Engaged White Skanska Kiewit, J.V. in August 2014
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Project Background
World Trade Center (WTC) PATH Terminal Project
• Port Authority of NY & NJ
• Rebuild former WTC PATH Terminal
• Executed Construction Agreement in May 2006
Project Budget - $2.501B
Required Completion Date -April 30, 2012
• Utilized CM/GC procurement strategy
Engage Phoenix Constructors J.V. in January 2006 (Fluor, Skanska, Bovis, Granite)
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WTC PATH Terminal ProjectJustification for CM / GC Approach
A single CM/GC approach would:
• Fast-track project delivery that could save between 10-31 months
• Yield cost of between $95-$243 million
• Produce higher quality work
• Provide a single point of responsibility and control of construction activities
• Establish a guaranteed maximum price (GMP) prior to completion of final design
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WTC PATH Terminal ProjectKnown Challenges and Risks
Highly challenging conditions include:• Aggressive Schedule
• Complex Construction Coordination with 16-acres site
• Scope and Quality of Construction
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VSC
1 LineSubway
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WTA PATH Terminal ProjectWTC Site
Tower 4
Tower 3Tower 2
FreedomTower
Memorial
Route 9A
Chiller Plant
DeutscheBank
PAC Dey StConnector
Oculus
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WTC PATH Terminal ProjectStakeholders
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In September 2008, the PA and CM/GC mutually agreed to terminate the contract
• Design process was delayed due to several factors:
Complexity of the site
Interdependence of each redevelopment project on others
Conflicting and changing demands of multiple stakeholders
Conscious effort by PA to re-examine certain aspects of design to reign in costs and accelerate schedule
• Failure to negotiate a realistic GMP
• Failure to establish comprehensive schedule to meet program milestones
• Market conditions improved thereby softening the construction market
WTC PATH Terminal ProjectProcurement Shift
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WTC PATH Terminal ProjectCost and Schedule Update
Construction Agreement April 25, 2006
Project Budget $2.201B Federal; $2.501B Total
Required Completion Date April 30, 2012
Revised and Restated Construction Agreement September 18, 2012
Project Budget $2.872B Federal; $3.995B Total
Required Completion Date December 17, 2015
Hurricane Sandy October 26‐29, 2012
Current Completion Date December 31, 20169
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WTC PATH Terminal Project
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WTC PATH Terminal Project
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WTC PATH Terminal ProjectExcavation for the Transit Hub
October 2009
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WTC PATH Terminal ProjectSteel Erection Below Grade
May 2012
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WTC PATH Terminal ProjectOculus East Arch Retail Area
August 2012
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WTC PATH Terminal ProjectTransit Hall
August 2012
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WTC PATH Terminal ProjectEast/West Connector
August 2012
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WTC PATH Terminal ProjectTower Cranes in Position to Erect Oculus Steel
May 2013
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WTC PATH Terminal ProjectErection of Oculus Portal Steel
April 2014
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WTC PATH Terminal ProjectOculus Rafter Installation
November 2014
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WTC PATH Terminal ProjectInside the Oculus
August 2015
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WTC PATH Terminal ProjectEnclosure is Almost Complete
December 2015
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WTC PATH Terminal ProjectAerial View
January 2016
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MBTA Green Line Extension ProjectProject Area
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MBTA Green Line Extension ProjectJustification for CM / GC Approach
A single CM/GC approach would:
• Allow owner to maintain ownership of the design
• Integrate contractor into design process to improve constructability, reduce changes and minimize schedule risk
• Reduce construction contingency since pricing not established by contractor until risk items are assigned
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MBTA Green Line Extension ProjectJustification for CM / GC Approach
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MBTA Green Line Extension ProjectProject Delivery Method Advantage/Disadvantage Summary
DBB CM‐GC DBProject‐Level Issues Rating1. Project Size2. Cost3. Schedule4. Schedule Flexibility5. Risk Management6. Risk Allocation7. Sustainability/LEED CertificationAgency‐Level Issues Rating8. Agency Experience9. Staffing Required10. Staff Capability11. Agency Goals and Objectives12. Agency Control of Project13. Third‐Party Agreement(s)Public Policy/Regulatory Issues Rating14. Competition15. DBE Impacts16. Labor Unions17. Federal/State/Local Laws18. FTA/EPA Regulations19. Stakeholder/Community InputLifecylel Issues Rating20. Lifecycle Costs21. MaintainabilityOther Issues Rating22. Construction Claims23. Adversarial Relationships
Most Appropriate Appropriate Least Appropriate
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MBTA Green Line Extension ProjectKnown Challenges and Risks
Massachusetts laws limited use of Construction Management delivery methods to vertical construction
• In 2012, Mass legislature authorized use of CM / GC for the Green Line Extension Project as a pilot project
• Further authorization was provided by the MBTA Board and Massachusetts Office of Inspector General Align
• MBTA had virtually no experience with use of CM /GC for large, complex, horizontal construction project
• Heavy reliance on outside consultants by MBTA project team
• CM/GC required to perform no less than 50% of overall contract value
• No incentive for sharing savings; savings benefited MBTA exclusively
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MBTA Green Line Extension ProjectProject Phasing
Phase 3
Phase 1
Phase 1 Phase 4
Phase 2A
Phase 1
Union Sq
Washington St
Phase 2
Phase 1 – Harvard Street Rail Bridge; Medford Street Rail Bridge; & 21 Water Street Demolition
Phase 2 – Lechmere to Washington Street
Phase 2A – Union Square Branch
Phase 3 – Vehicle Maintenance Facility
Phase 4 – Washington Street to College Avenue
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MBTA Green Line Extension ProjectBaseline vs. Actual/Projected Cost
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
$3,000,000,000
Dec-11 May-13 Sep-14 Jan-16 Jun-17 Oct-18 Mar-20 Jul-21 Dec-22
Baseline
Projected
CM/GC Cancelled
IGMP’s 1‐3, 4a
FFGA Executed
IGMP 4
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MBTA Green Line Extension ProjectProject Redirect
In December 2015, the MBTA terminated its contractual relationship with the CM/GC
• Not financially feasible to proceed with GMP #4 FFGA (60% Design) - $487,306,862 CM/GC - $889,081,221
Established conditions for moving forward with GLX
• Undertaking value engineering and redesign to reduce costs while maintaining functionality
• Developing a re-procurement strategy• Putting in place new project management team• Focusing on other non-federal funding sources
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MBTA Green Line Extension ProjectConceptual Design
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MBTA Green Line Extension ProjectConceptual Design
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MBTA Green Line Extension ProjectConceptual Design
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project
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MBTA Green Line Extension Project