Advancing Professional Construction and Program Management Worldwide

CMAdvisorVolume XXVIII, No. 4 July/August 2009

The next big project, growth area, team member or business alliance: These are the discoveries that will draw hundreds of the industry’s foremost professionals to Orlando, FL in October for CMAA’s 2009 National Conference & Trade Show.

Conference attendees consistently report that networking opportuni-ties – chances to meet owners and peers from all over the country – are the main attraction of CMAA’s flag-ship national event. The 2009 event will provide plenty of opportunities for these vital informal conversations, including meals, receptions, refresh-ment breaks and the festive Industry Recognition Banquet.

For this year, moreover, the association has announced yet another valuable enhancement, two new pre-confer-ence workshops focusing on critical trends in today’s market.

The new programs add an important dimension to the year’s foremost networking and team-building opportunity.

Held on Saturday, October 24, the pre-conference sessions will focus on:

• LEED®, including LEED certifications and CM’s responsibilities related to LEED, presented by Charles Popeck, president of Green Ideas Environ-mental Building Consultants; and

• Scheduling and Delay Analysis, led by Rocco Vespe and Scott Lowe, PE of Trauner Consulting, who have recently delivered a very popular series of CMs TalkLive! webinars on this subject.

Stay tuned to www.cmaanet.org for additional session details as they become available.

The National Conference & Trade Show will be the year’s best chance for owners and CM providers to meet, network, build alliances and explore business opportunities likely to take shape in 2010. It also provides the most comprehensive Professional Development forum of the year.

CMAA Strengthens Flagship Networking Event

Contents 2 Chairman’s Report

3 CMAA News

9 CMAA Foundation

10 Professional Practice Corner

12 Legal Corner

13 Member News

14 Chapter News

15 President’s Report

16 Professional Development Calendar

Pennsylvania Governor Ed Rendell—See Page 4

Career HQ Enhancements UnderwayCMAA has launched a series of enhancements to its online Career Headquarters, designed to make the service more productive for job-seekers and employers alike.

The site allows employers to post job openings that can be viewed by more than 5,000 users, including CMAA members and members of the Project Management Institute (PMI). Job seekers can use the site to view openings, set up search agents and saved searches, sign up for automatic notification of new job postings, and access a variety of career support services and tools.

As part of the job site enhancement, CMAA has been adding valuable new content to the site, including job search tips, resume advice, articles

Continued on page 3

Continued on page 3

Chairman of the Board Thomas W. Bishop, PE URS Corporation

President and Chief Executive Officer Bruce D’Agostino, CAE, FCMAA

Editor John McKeon

Contributing Writers Sarah Black Martha Montague

CMAA is a construction industry association of 5,500 firms and professionals who provide management services to owners who are planning, designing and constructing capital facilities and infrastructure projects.

Our Mission is to Promote and Enhance Leadership, Professionalism and Excellence in Managing the Development and Construction of Projects and Programs.

CMAdvisor, published bi -monthly by CMAA, reports on and follows the industry as a service to its members. Submission of articles, ideas and suggestions is appreciated and encouraged.

7926 Jones Branch Drive, Suite 800 McLean, Virginia 22102-3303 USA Phone: 703.356.2622 Fax: 703.356.6388 Email: info@cmaanet.org Web: www.cmaanet.org

CMAA ©Copyright 2009, ISSN 1084-75327

Reproduction or redistribution in any form is forbidden without written permission of the publisher.

Advertising opportunities are available in CMAdvisor. For information, contact Tom Egly at tom.egly@tgdcom.com.

Chairman’s Report

By Thomas W. Bishop, PE URS Corporation

How will our business environment change in the next five yeas?

What factors that are critical in shaping our success today will become less critical, or even disappear, in that time?

And what should our national association do now to anticipate and prepare for these changes?

Questions like these belong on the agendas of Boards of Directors. Our role, after all, is to provide CMAA staff with strategic guidance, informed by our own experience and expertise. The goal is to be sure our association is always relevant and our programs are always valuable to members.

During our recent Leadership Forum in Scottsdale, the Board participated in a facilitated strategic planning process, led by our chair-elect Gary Cardamone. We began with a detailed discussion of our current environment, then broke into small groups to address specific questions before re-convening to share the results of our group conversations.

The process had a number of interesting outcomes, but I would like to share just a few in this column.

First, it seems clear that in the next five years, credentials will become even more important. CM certification, valuable as it is today, will become criti-cal. In part, this is because something we may take for granted – technical competence – is likely to become scarcer over time as expert practitioners retire and the industry continues to face difficulties in replacing them.

Owners will continue to attach high value to a CM/PM’s track record: Having delivered successful projects and pro-grams of the same type, for the same or similar owners, will continue to count for a great deal. But several new factors will probably take on greater impor-tance in the next five years.

Prime among these is leadership, the ability of the CM/PM to motivate, collaborate and innovate in addition to managing day to day operations.

“On time, on budget” will remain a paramount concern for owners. But increasingly, we will see projects and programs driven by other factors as well. The idea of the “owner” will grow to include the facility’s eventual users, neighbors, the public, and others. It may not be easy to identify all of the “owners” with a stake in project success, but this is one of the ways in which the CM/PM will prove his or her value.

What did this exercise tell us about CMAA’s future? It will help guide our Professional Development offerings, certainly, toward an ever-greater emphasis on leadership. We will also need to expand our scope to address such topics as financing and collaboration more fully.

And certification will remain front- and-center as an important way of responding to owners’ needs for certainty and accountability.

Strategic planning is always an interesting exercise. The difficult part, of course, is to translate the plan into concrete action. This year’s process will shape the creation of our Business Plan and Budget this fall, to be acted on throughout next year.

A Five-Year View for CMAA

It seems clear that in the next five years, credentials will become even more important. CM certification, valuable as it is today, will become critical.

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CMAA News

and videos about careers in Construc-tion Management, and other features.

Currently, the Career HQ has more than 350 resumes on file, with job postings from 18 active employers including Faithful+Gould, Foster CM, the General Services Administration, MTA New York City Transit and the University of Maryland Facilities Management Department.

In the past month the average job post-ing received 323 views and attracted 25 clicks of the “apply” button.

Resumes posted on the site include nearly 90 from seekers of executive management positions, along with 266 looking for Construction Manage-ment jobs, 206 seeking Project Management positions, and a wide range of other categories.

CMAA’s Career Headquarters can be accessed through the association home page by clicking the link in the upper right corner.

With 30 breakout sessions covering a variety of business, technical, and leadership topics, this program will help members stay competitive in this year’s tough market.

Keynote speaker Rich Karlgaard, publisher of Forbes magazine and author of Life 2.0 How People Across America Are Transforming Their Lives by Finding the Where of Their Happiness, will give a presentation designed to help attendees understand “how the 2009–2010 recovery will affect you.”

Karlgaard’s regular Forbes Column, entitled Digital Rules, discusses tech-nology, entrepreneurship, regional and economical development, and the future of business and work. He predicts that the economic recovery is coming sooner than most observes have said, and will discuss which sectors and regions will benefit from current stimulus funding.

The National Conference will also feature a new edition of CMAA’s popular Trade Show, bringing together dozens of lead-ing CM firms and industry vendors.

CMAA Strengthens Flagship Networking Event, Continued from page 1

Career HQ Enhancements Underway, Continued from page 1

SAFETEA-LU Successor Legislation UnveiledRep. James Oberstar (D-MN) chair of the House Transportation and Infrastructure Committee, and Ranking Minority Member John Mica (R-FL) have introduced a new six-year Transportation Authorization Act, intended to be the successor for SAFETEA-LU and to provide both a comprehensive national energy policy and major funding for new surface transportation investment.

CMAA has endorsed the bill, noting in a letter to Chairman Oberstar that:

“One of the stated goals of this legisla-tion is ‘to improve the project delivery process by eliminating duplication in documentation and procedures.’ Another is ‘to facilitate private investment in the national transportation system that furthers the public interest.’ The legisla-tion creates Offices of Expedited Project Delivery within the Federal Highway Administration and the Federal Transit Administration, mandated to ‘improve the project delivery process’ and ‘to expedite the development of projects through the environmental review process, design and construction.’

“Not only does CMAA endorse these goals, but they constitute the funda-mental mission of our association and our membership.”

Secretary of Transportation Ray LaHood called for an 18-month delay in con-sideration of the re-authorization, but both Oberstar and Mica rejected this call, and CMAA said in its letter that such a delay “would be extremely unwise and unwarranted.”

Details about the bill are available on the CMAA website at www.cmaanet.org/issues.

CMAA Delivers SOP Training at SAME Event in GermanyCMAA presented its three-day Stan-dards of Practice course in Frankfurt, Germany in June as part of the first SAME University, a new program presented by the Society of American Military Engineers in cooperation with CMAA and the International Facilities Management Association.

The event’s mission was to provide more convenient professional development opportunities for personnel who can’t easily travel to events in the United States.

Tommy Thomas of TetraTech, who led the SOP course, described it as “a very rewarding class, not only for CMAA and

SAME but for me as a presenter.” The students, mainly civilian personnel, were highly interested in learning and applying the CM Standards of Practice, Thomas said.

Dr. Bob Wolff, SAME Executive Director, was on site for the event and described it as “a great success.”

SAME has plans for additional SAME University sessions in San Antonio, Texas, in October 2009; Seoul, South Korea, in January 2010; Rolla, MO at the conclusion of the Captains Career Course in June 2010; and again in Frankfurt, Germany, in July 2010.

July/August 3

CMAA News

Back in September 2007, CMAdvisor took a big step forward by moving to full color printing and accepting color advertising for the first time.

Now, CMAA’s main publication is once again readying a leap into the future.

Your next issue of CMAdvisor – September/October – will come to you exclusively in a new, flexible, and highly interactive electronic format.

In making this move, CMAA is joining a growing national trend. The number of business-to-business publications reporting digital editions grew 215% between 2005 and 2007, the latest avail-able data. The number of digital sub-scriptions grew 222% in that time. The number of pages read and the average length of the “sessions” grew more than 100%. The number of link click-throughs increased by more than 100%, and the number of unique readers grew by 150%.

Electronic magazines are growing in popularity for many reasons, and the new CMAdvisor will offer a variety of powerful advantages.

First, it’s part of a “greener” approach to CMAA communications. “The Association has been increasingly stressing electronic connections with its members in place of traditional print-and-mail. Given the central importance of sustainability in our business today, this transition is a natural,” says CMAA President Bruce D’Agostino.

The “E” approach also means more content in each issue. The old page limits are off. In fact, CMAA no longer must decide whether to add complete four-page signatures to an issue. Each edition of CMAdvisor can have all the space it needs.

The new format provides expanded room for Member News, Chapter News, and coverage of industry events. Deadlines will be later, and readers will have opportunities to forward contents to colleagues, discuss articles online, and get fast access to background information via the Web.

Advertisers will benefit from direct web links to the online content of their choice: Web pages, flash movies, PowerPoints, and so forth. They will be able to incorporate animation and other effects in their ads. Such special features as wrap-arounds and gatefolds will also be available.

Plus, CMAA will be able to provide greatly enhanced data on readership, clicks and other actions.

Watch for an informational email in September and a link to your first issue of our new magazine shortly afterward.

Note: To be sure you don’t miss these or other important communications, please add mailams.cmaanet.org and mail.vresp.com to your approved sender list.

A New Era for CMAdvisorCMAA Joins in Infrastructure Bank Advocacy

“We can’t play around. The time to do this is now,” said Pennsylvania Governor Ed Rendell, one of the co-chairs of the coalition Building America’s Future,

at a recent BAF-sponsored conference promoting legislation to create a National Infrastructure Bank.

CMAA took part in the conference and has supported the bank proposal as an innovative tool to provide significant, consistent funding for high quality infrastructure projects. Legislation to create the Infrastructure Bank, sponsored by Rep. Rosa DeLauro (D-CT) and others, could provide up to $625 billion for infrastructure projects over a five year period.

“The investors are there,” Rep. DeLauro said at the conference, which was also co-presented by Third Way, a “think tank.” DeLauro said private investors both in the United States and overseas “have a growing interest in infrastructure investment…It is time to seriously invest in our nation’s economic growth,” she said.

Rendell warned that “the American people will not support a massive infrastructure program that goes through the same old process,” meaning a politicized process that funds various “pet projects” without regard to need or merit. “The best part of the Infrastructure Bank is that it is a concept the American people can support.”

The Tenth annual Owners Survey conducted by CMAA with FMI is in the works, and will closely examine the value owners believe they realize from application of specific components of the CM Standards of Practice.

This survey has addressed issues ranging from risk management to ethics in previous years.

For the Tenth survey, CMAA and FMI have focused on the value of CM to owners across all phrases of

construction. In each phase, the survey questionnaire lists selected specific functions or tasks that are defined in the SOPs and asks responding owners to rate the value they receive from this particular function.

The survey also asks for respondents’ forecasts of how important and valuable these practices will be in five years.

The survey findings will be presented in October at CMAA’s National Conference & Trade Show in Orlando.

New Owner Survey Weighs Value of SOPs

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Newly Published CMAA eJournal Paper Examines Women in CMCMAA has recently published two new articles in the eJournal, our peer-reviewed, scholarly online journal for CM profes-sionals. One new entry examines how the construction industry’s long history of male domination has influenced perceptions about the effectiveness of women in CM positions.

In order to measure perception, respon-dents were divided into three categories: women, men who had never collabo-rated with women in the CM industry, and men who had worked with women in the CM industry. Authors Barbara Chun, David Arditi and Gulsah Balci found that most male Construction Managers who had worked with female Construction Managers didn’t perceive them as any less capable of performing their job. However, men who had never worked for or alongside a female CM sometimes perceived them as less effective than their male counterparts.

The survey also looked at whether women in CM positions perceive bias against them in the form of skepticism and indifference as a result of their gender. The majority of women surveyed agreed that being female does not help when their performance is assessed.

Most respondents subscribed to the modern belief that women are equally as capable as their male counterparts to perform the duties of a CM. The sur-vey’s findings suggest that an attitude that accepts women as an equal part of the construction population is gaining momentum, and will continue to do so as more women join industry.

The focus of CMAA’s eJournal is the examination of timely technical issues confronting the architectural, engineering, construction and facilities management communities. Those interested in submitting a paper for review by CMAA’s eJournal staff should visit http://cmaanet.org/cm-ejournal for details.

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July/August 5

CMAA News

CMAA Green Building Webinar Prepares Participants for LEED Version 3.0Major strides forward in the world of green building are brought forth by the adoption of LEED 2009 version 3.0. Some of these raised standards were highlighted in the first session of CMAA’s Green Building webinar series hosted by WPL Publishing: “Uncovering LEED 2009 – Managing the Transition.”

Presenters Elaine Ayre, IIDA, ASID, LEED-AP and Glen Philips of Green Building Services Inc. explained how the new version of LEED gives a higher profile for climate-change related issues such as resource depletion, eco-toxicity, and habitat alteration. The latest version makes it harder for buildings that ignore climate change impacts to perform well in LEED.

A common criticism of LEED in previous versions was its inflexibility to accommodate regional issues. While the new version does not adapt a region-specific rating system, it does issue regionally-assigned

weight to existing credits, determined by regional councils and chapters.

Population density differences help establish different playing fields and their respective zone-specific concerns. For example, protecting farmland may be a concern in a suburban area, while connectivity to existing cities is a more relevant concern to a rural zone.

LEED version 3.0 accreditation for new construction places greater emphasis on the following categories:

• Development Density & Community Connectivity

• Public Transportation Access

• Energy Performance

• On-site Renewable Energy.

For more information about CMAA’s webinar series offerings, visit http://cmaanet.org/courses-and-events. Learn more about LEED at CMAA’s National Conference & Trade Show.

The Nominating Committee has proposed a slate of both new and returning directors and officers for election at the annual meeting this October in Orlando.

The following members have been nominated to fill open positions on the Board:Chris Griffith, CCM, KCI

Dave Rathmann, CCM, Parsons

Milo Riverso, PhD, STV

Palmina Teta-Whelan, CCM, American Airlines

In addition, these current Board members have been nominated for additional terms:Michael Potter, CCM, RKK

Ron Price, CCM, PB

Ray Brady, CCM, MWH

Sam Sleiman, CCM, Massport

The proposed slate of officers for 2009–2010 includes:Chair Gary Cardamone, PE, Port of Long Beach

Vice Chair Dave Conover, CCM, HDR

Sect. Treas. Ron Price, CCM, PB

Vice Chair Ray Brady, CCM, MWH

Vice Chair Bill Heitz, CCM, Heery

Vice Chair Ron Kerins, CCM, GRAYHAWK

Vice Chair Michael Potter, CCM, RKK

Social Media? CMAA Is There!Do you tweet?

If so, you should be following jmatcmaa on Twitter for the latest news, opinions, and links to other interesting content.

Are you a fan of CMAA? Click the Face-book button on our home page and become one on Facebook! There’s also a special group on Facebook for CCM candidates. CMAA can be found on LinkedIn as well, along with a special LinkedIn group exclusively for CCMs.

The CMAA Foundation’s new career videos have been posted on Youtube, where they have been viewed more than 5,000 times!

Previews of the eight SOP online mod-ules are also available on Youtube, and have drawn more than 2,000 views.

Twittering Both WaysCMAA isn’t only posting its tweets in Twitter, but also using the service to keep track of daily events in some critical areas.

Twitter allows members to post very brief statements – of what they are doing, what they think, etc. – and have these statements downloaded auto-matically to the desktops or PDAs of other members who are “following” them. As a result, Twitter serves as a real-time communications channel among people with shared interests.

Consider the progress of the Transpor-tation Authorization Act of 2009. The Act’s sponsor, Rep. James Oberstar, tweets to post hearing notices, high-lights of testimony, news conferences and other information. Secretary of Transportation Ray LaHood tweets, as do the American Society of Civil Engineers, Building America’s Future, Public Works magazine, the editorial staff of Engineering News-Record, and a number of freelance journalists.

Each day brings a lively discussion of the very latest developments. To keep up, try following jmatcmaa in your own Twitter account.

New Directors Nominated

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SERVINGAS A TRUSTED ADVISORimproving life for generationsSM

SOP Modules Well ReceivedWith training budgets among the first to be cut in tough economic times, it can be difficult to keep your team sharp and up-to-date. That’s why CMAA created online Standards of Practice Modules, launched earlier this year.

The eight modules are:

• Contract Administration

• Cost Management

• Professional Practice – Role of the CM

• Project Management

• Quality Management

• Construction Safety Management

• Time Management/CPM Lab

• Value Engineering

The self-paced and flexible nature of the modules and their high quality content have led many CM professionals to utilize them. An increasing number of organizations are opting for the subscription option, enabling them to pay a flat annual fee of $10,000 to make the eight-part curriculum available to all employees.

Here’s what individuals who’ve taken them have had to say:

• “Course was well designed, concise, and comprehensive, with minimal diversions from the basics. This course was extremely well put together and will be of great value to those taking this to reinforce their learning or those learning for the first time!”

• “Overall, the course was very good. It was a help in cleaning the dust of the shelf. With my busy schedule it is hard to get the time to sharpen my knowledge.”

• “This is a well written and clear course. It is a good foundation for the young professional and a good refresher for the older professional.”

Learn more and preview the courses at http://cmaanet.org/sop-modules.

“Best of CMAdvisor” Now Available on WebsiteEver wanted to return to a Professional Practice Corner or other article in a past issue of CMAdvisor, only to find you can’t locate that issue?

Now, CMAA has compiled some of our most noteworthy articles over the past two years in one location. Take a look back at some high-impact articles, or pass them along to your colleagues. View the articles at http://cmaanet.org/best-cm-advisor.

July/August 7

CMAA News

BIM is one of the most exciting developments in the A/E/C industry. Learn about how you can use it, how others use it, and how it will keep you competitive in today’s fast paced market.

Take advantage of a benefit of your membership in CMAA, and obtain these publications at a discounted member rate!

Building Information Modeling

A Strategic Implementation Guide for Architects, Engineers, Constructors, and Real Asset Managers

Authors: Dana K. Smith, Executive Director of the building SMART Alliance, a program of the National Institute of Building Sciences (NIBS) & Michael Tardif, Sole proprietor and editorial director of Design Byline

This book makes the business case for BIM, how it can improve collaboration, facilitate better design and construction, optimize workflow and reduce error. It presents methods for benefiting from BIM in your own firm or practice. Purchase this book for your team

and receive insightful, first-hand accounts from early adopters of BIM, and learn how to gain a competitive edge through its use.

Green BIM: Successful Sustainable Design with Building Information Modeling

Authors: Eddy Krygiel, AIA, LEED AP & Bradley Nies, AIA, LEED AP of BNIM Architects

Meet the challenge of integrating Building Information Modeling and sustainability with this in-depth guide, which pairs these two revolutionary movements to create environmentally friendly design through a

streamlined process. Written by an award-winning team that has gone beyond theory to lead the implementation of Green BIM projects, this comprehensive reference features practical strategies, techniques, and real-world expertise so that you can create sustainable BIM projects, no matter what their scale.

Purchase these books and explore our publications at www.cmaanet.org/bookstore.

CMAA Bookstore: NEW Building Information Modeling Resources

BIM can now have a huge impact

on your preconstruction services.

BIM Software & Services from Beck TechnologyIn 2005, a leading construction firm set out to develop a technology to reduce VE by helping owners make better informed decisions earlier. The vision was simple: integrate cost and 3D modeling in real time. Today, DProfiler™ software is the realization of that vision and is available from Beck Technology to other construction stakeholders. Yes, even other contractors.

To learn more, visit www.beck-technology.com

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CMAA Foundation

Scottsdale Reception Nets $2K+A special “Taste of the Southwest” recep-tion during CMAA’s Leadership Forum in Scottsdale in May raised more than $2,000 for the Foundation and provided a lively networking event in the process.

Attendees enjoyed Southwest-themed foods and beverages in a venue that embraced the scenic setting of the Westin Kierland hotel.

In addition, Forum participants chipped in roughly another $2,000 for tickets in the Foundation raffle drawing, which featured such prizes as an iPod Shuffle and free registrations for CMAA’s online SOP modules.

A similar event during the National Conference & Trade Show last fall also generated ample amounts of enjoyment for attendees and new funding for the Foundation.

Scholarships UpdateThe CMAA Foundation has received a dozen applications for scholarships for the coming school year. Winners will be announced at the National Conference & Trade Show in October.

Visionary – $25,000 ARCADIS/PinnacleOne CH2M HILL Keville Enterprises Parsons Brinckerhoff PBS&J Christopher Reseigh, FCMAA URS

Champion – $10,000 HNTB Corporation Chuck Kluenker, FCMAA CMAA New England Regional Chapter McDonough Bolyard Peck Summit Associates Vanir Construction Management

Leader – $5,000 Mansour Aliabadi, FCMAA, CCM APSI Construction Management Brookwood Program Management CMAA Chicago Chapter CMAA Southern California Chapter CMAA South Central Texas Chapter Fred Kreitzberg, P.E. Hazen and Sawyer Hill International

Hoar Program Management Joseph P. McAtee, FCMAA Michael Baker, Jr. Inc. Parsons PSOMAS Ken Rice Donald Russell, FCMAA, CCM SGI Construction Management STV Urban Engineers

Mentor – $2,500 Bond Brothers CMAA NY/NJ Chapter CMAA Mid-Atlantic Chapter D.J. Mason, P.E. DeMatteis International Group Dick Corporation GREYHAWK HDR Jacobs Engineering Group Project Mediation Quintessential LLC Rockmore Contracting Corporation Rummel Klepper & Kahl Swinerton Management & Consulting

Thank You, Foundation Donors!Capital Campaign Donors Pledging Annual Contributions

Congratulations to Our Latest CCMs!Congratulations to these CM professionals who have earned their Certified Construction Manager distinction:

William Atessis Gunda Corporation Houston, TX

Jerry Avalos Vanir Construction Management Sacramento, CA

John Bartholomew PBS&J San Diego, CA

Dhruba Bhattacharyay Parsons Pasadena, CA

Brian M. Bush Kitchell CEM Sacramento, CA

Wade Eller Eller Group, LLC Fairfax, VA

Ronald Garraffa HDR Construction Control Corporation Tampa, FL

Donald Edward Haase Vanir Construction Management Sacramento, CA

Greg Havo U.S. Army Engineering & Support Center Huntsville, AL

Robert Hildreth, Jr. Vanir Construction Management Tempe, AZ

Matthew Kellett Vanir Construction Management San Diego, CA

Jeffrey Mertens Hill International Washington, DC

Jeffrey Scott Phipps Chicago, IL

Cymbre Potter Vanir Construction Management Oakland, CA

Chris Remme Arcadis U.S., Inc. Richmond, VA

Jack Ridgeway Vanir Construction Management Sacramento, CA

Amin Salari-Saeedi Vanir Construction Management Los Angeles, CA

Carl Schneider SchneiderCM, Inc. Escondido, CA

Warren Walker Arcadis Columbia, MD

Mary Wise U.S. Army Corps of Engineers Rio Linda, CA

Samuel Zitser Vanir Construction Management Los Angeles, CA

July/August 9

Professional Practice Corner

A recent CMAA survey on the use of CM Agents with various project delivery systems got my attention. It reported that over 60% of owners who use multi-prime CM employ a CM Agent firm to help them deliver their projects. With my practitioner’s hat on, I immediately leapt to the question: “If it’s multi-prime CM, why would an owner hire a second Agent CM on top of their Agent CM already delivering the project using the multi-prime delivery system? The firm delivering the project is already an agent of the owner. It seemed like a double layer of agents, adding cost to the project without adding value.

John McKeon, CMAA’s VP of Communications, reminded me that many owners who use multi-prime CM do it themselves, particularly in the private sector. They are staffed for this and gain the benefits without using an outside firm. But according to the survey about two-thirds of owners using the multi-prime delivery system aren’t staffed to manage the work themselves, and hire an Agency CM firm to help them with it. From my experience, it seems that many of these owners who use an outside Agency CM firm to help implement the multi-prime delivery system are in the public sector.

So this got me to thinking about the origins of this CM business, and the fact that multi-prime CM is a separate Project delivery system, same as Design/Bid/Build, CM-at-Risk and Design/Build. My comments are based on what I have seen, experienced, read and been told (and agreed with) over the last 35 years.

Multi-prime CM emerged fairly spontaneously in the public sector in the late 1960s and 1970s, in response to projects that were typically bid over budget, finished behind schedule, and were generating an increasing number of claims. It was one alternative to the traditional general contracting design/bid/build delivery strategy that worked within existing public procurement law. The CM firm was hired as an agent of the owner on a qualifications/fee basis, and all construction was competitively and publicly bid directly to the subcontractor tier. The owner then held 15, 20 or more individual prime trade and supply contracts, and the CM was responsible for managing and coordinating those individual prime contracts to meet the owner’s time, cost and quality requirements. The CM functioned as an advocate of the owner.

The owner received the cost benefits of procuring the construction directly from the trade contractor tier, the time benefits of phased (fast-track) design and construction, and the benefits of having the CM managing and coordinating the work of the trade contractors. The CM, as an agent of the owner, had a contractual duty to manage and coordinate those trade contractors in the owner’s best interests. Time, cost and claims were significantly reduced when projects were properly run.

Successfully providing multi-prime CM services required a firm with both the general contractor’s knowledge of construction and ability to take control of the trade contrac-tors plus the agent’s ability to think and act on behalf of the owner. A number of GC’s got into the business, as did start-up CM firms. There were many successful projects. But CM firms lacking either the skills of the general contractor or of the agent of the owner (sometimes both) also got into the business and there were multi-prime CM projects that did not go well at all. As a result, multi-prime CM in the public sector got mixed reviews.

But the delivery system continued to provide cost-effective projects when properly applied by competent CM firms. Multi-prime CM remains a viable option today for owners who want the cost benefits, direct control and CM advocacy that this delivery system provides.

Beginning in the 1990s, CM-at-Risk emerged in the public sector as an alternative to multi-prime CM as, state-by-state, procurement laws were opened up so public owners could take advantage of the CM-at-Risk project delivery system. Often, multi-prime CM was already an accepted delivery method when the prospect of CM at-Risk came upon the

Multi-Prime CM and CM at-Risk in the Public Sector: “Kissing Cousins” Chuck Kluenker, FCMAA, Vanir Construction Management

The CM, as an agent of the owner, had a contractual duty to manage and coordinate those trade contractors in the owner’s best interests. Time, cost and claims were significantly reduced when projects were properly run.

10 CMAdvisor

scene. But the prospect of the CMs holding the trade contracts, bonding the job, guaranteeing the price, and taking on the contractual role of the general contractor was understandably attractive. Many public owners moved to this method because of the contractual guarantees, backed by a bond on the CM.

As CM-at-Risk emerged in the public sector some projects went well, and others did not. One reason for the mixed results was that some CM-at-Risk firms were not familiar, culturally or procedurally, with how to act as an agent of the owner. Additionally, some owners did not understand that by putting their CM in an at-risk contract, they were pushing the CM away from their side of the table and would not get the level of advocacy that they had come to expect. So, as with multi-prime CM, results were mixed. However, those CM-at-Risk firms that could take on the risks while retaining a meaningful level of owner advocacy have been successful and many have stayed in the game. Over time, more and more successful public sector CM-at-Risk projects are the result.

Through these same 15 or so years, CMAA has been devel-oping its policies and guidelines for CM-at-Risk. The goal of these policies and guidelines is to provide the owner with the contractual guarantees of CM-at-Risk, while providing a level of advocacy that can approach that of a multi-prime CM. The intention is to keep the CM-at-Risk on the owner’s side of the table as much as possible, considering the risks the CM is assuming.

These CMAA policies/guidelines are focused on reducing the potential for conflict of interest between the CM-at-Risk and the owner. Current thinking can be summarized by the following points:

• The CM-at-Risk is selected on the basis of qualifications, with the fee a consideration.

• The CM-at-Risk makes its money solely on its fee, not on general conditions or mark-ups on subcontracts or change orders.

• The CM-at-Risk does not self-perform construction.

• All parts of the subcontractor marketing and procurement process are open to the owner.

• All subcontracts are bid competitively, or negotiated if circumstances require.

• The owner should consider bonding the project at the subcontractor level, but not at the CM level.

• All of the subcontracts and the work is “open book” to the owner.

• All subcontractor and supplier payments are “open book” to the owner.

These prospective policies/guidelines have been generally understood and accepted within CMAA circles for some time, but have not been officially adopted. So they are open for discussion, and CMAA welcomes and needs your feedback.

So the development of multi-prime CM and the emergence of an approach to CM-at-Risk biased towards serving the owner’s interests have given the public sector owner some viable alternatives to what was the conventional Design/Bid/Build approach. Successful application of these two alternatives requires a clear understanding of the points raised above and an engaged and informed owner. Selection of the CM that is right for the particular job is the first and arguably the most important task of the owner.

Approached correctly, CM-at-Risk can give the owner the best of both worlds; the strong advocacy that one receives from a professional CM firm, and the contractual guarantees that accrue from a CM-at-Risk contract.

Chuck Kluenker, FCMAA, of Vanir Construction Management can be reached at chuck.kluenker@vanir.com.

We welcome submissions for the Professional Practice Corner. Please send your ideas to John McKeon at jmckeon@cmaanet.org.

Record Breaking Submissions for Project Achievement AwardsCMAA is proud to report a record 140 submissions for this year’s Project Achievement Awards. This program’s growth demonstrates the steadfast commitment our profession holds to project outcomes of world class quality.

Since 1999, CMAA has been presenting its Project Achievement Awards to recognize instances in which professional Construction or Program Management has made a significant contribution to the successful completion of a challenging project or program.

Last year’s honorees included a hospital, a university building, a school construction program, a seismic retrofit of a state capitol building, a refrigeration plant expansion, a water treatment plant, and a bridge replacement project.

Winners will be honored during the Industry Recognition Banquet at the National Conference in October. Learn more about CMAA’s Project Achievement Awards at http://cmaanet.org/cmaaprojectachievementawards.

July/August 11

Legal Corner

Indemnification provisions are a common feature of agreements for design and construction-related services, yet it seems no two are the same. Standard form contracts published by the American Institute of Architects, Engineers Joint Contract Document Committee, ConsensusDOCS, Design-Build Institute of America and Construction Management Association of America all contain contractual indemnification provisions. Although frequently short on words, some indemnification provisions can create tremendous liability exposure and prove quite costly to the party discharging an indemnification obligation.

At its most simple, indemnification is the act of compen-sating another party for its loss or damage. The generally understood purpose of indemnification appears reasonable enough – if acts or omissions of Party A cause damage to Party B for which Party C becomes legally liable, it is only fair that Party A (the indemnitor) compensate Party C (the indemnitee) for the loss or damage sustained. Parties often have protection from this type of derivative third-party claim in mind when entering into indemnification agreements. Indemnification provisions typically allow the “innocent party” to pass through liability to the party actually respon-sible for causing the third-party damage. On occasion, however, an indemnitor may be surprised to discover its indemnitee using the indemnification provision not only to pass through third-party claims and damages, but also to recover its own, first-party attorneys’ fees. This puts the indemnitor in the unenviable position of funding a legal battle against itself by being required to pay the legal costs of its adversary, the indemnitee, for direct claims such as the indemnitor’s alleged breach of the parties’ contract.

Part 1: Attorneys’ Fees, the “American Rule,” and Prevailing Party Provisions

Litigation can be very expensive. There are occasions where a prevailing litigant may win the battle but lose the war by having its attorneys’ fees and other litigation costs erode the total recovery to the point where, from at least a business perspective, the ultimate recovery proves not to be worth the effort. In most cases, a prevailing party in this position can thank the “American Rule” for its disappointing economic bottom line. Under the American Rule, absent a specific contractual provision or statutory grant, each party is responsible for its own attorneys’ fees and other legal costs. The American Rule contrasts the “British Rule” under which the losing party pays the prevailing party’s attorneys’ fees. The rationale behind the American Rule is that society is better off promoting the advancement of meritorious claims

and the extension of existing law. Under the British Rule, a party facing the prospect of paying the other party’s legal costs may be discouraged from advancing not only frivolous claims and actions, but also meritorious ones.

The standard and straightforward way for contracting parties to implement a loser-pays rule is to include a “prevailing party” or “attorneys’ fees” provision that provides for the recovery of first-party attorneys’ fees. The terms “prevailing party” and “attorneys’ fees” often are used interchangeably in this context, but note that such provisions frequently address more than just attorneys’ fees and can include related costs such as court costs, expert witness costs and staff time. The following is a fairly standard example of a prevailing party provision:

In the event litigation or any alternative form of dispute resolution between the parties arises from this Agree-ment or the services provided pursuant to this Agreement, the prevailing party shall be entitled to recover from the non-prevailing party all reasonable costs incurred relating to the litigation or alternative form of dispute resolution including court costs, attorneys’ fees, and all other related expenses. In the event an alternative form of dispute resolution resolves a dispute between the parties, the term “prevailing party” and application of this provision shall be determined by that process.

Express prevailing party provisions present their own concerns for design professionals and construction managers, a chief one being a potential lack of insurability. Professional liability insurance policies typically exclude liability assumed by con-tract, unless the liability otherwise would exist in the absence of the contractual assumption. A prevailing party provision arguably is an assumption of liability by contract that other-wise would not exist. As previously discussed, absent such a contractual provision, the American Rule generally requires each party to bear its own attorneys’ fees and costs. Because of this insurability concern, at least one AE professional liability insurance carrier now advises against entering into prevailing party provisions.

Part 2 of this article will address how some indemnification provisions can be used to shift responsibility not only for third-party claims and damages, but also for first-party attorneys’ fees and legal costs.

Willcox Dunn is an attorney with Vandeventer Black LLP. He can be reached at wdunn@vanblk.com. This article is meant to bring awareness to this topic and is not intended to be used as legal advice.

Contractual Indemnification Provisions and the Recovery of Attorneys’ FeesBy Willcox Dunn, Vandeventer Black LLP

12 CMAdvisor

Member News

CMAA at IECM Conference in Thailand

The third annual IECM (International Engineering and Construction Manage-ment) Thailand conference was held in Bangkok in March. CMAA members Robert A. Bennett, PE, president of RABCO Engineering PC, and Porie Saikia-Eapen, RA, of CH2M HILL were key organizers and speakers at the event.

RTC Hires PB for Auxiliary Lanes Project

New York-based Parsons Brinckerhoff will serve as the Santa Cruz County Regional Transportation Commission’s eyes and ears for its Highway 1 Soquel/Morrissey auxiliary lanes project, which is to begin in August 2010.

As the commission’s Construction Management firm, the 115-year-old company, which has an office in Camp-bell, is charged with making sure the $15 million project runs smoothly with little to no surprises, delays and cost overruns. The auxiliary lanes project seeks to add one lane in each direction of Highway 1 between Morrissey Boulevard and Soquel Drive.

PB will be paid $2.7 million, which includes the cost of the Construction Management consultant team, construction support activities, such as public outreach and project scheduling, and a contingency fund for any unknowns that might arise.

Berry Construction Gives Trades a Boost with First Youth Mentoring Partnership Program

William A. Berry & Son, Inc. has launched a Youth Mentoring Partner-ship program for Boston area students. Students from Madison Park Vocational and Technical High School and Youth Build Boston began the program during simultaneous learning sessions at two active Boston construction sites: Bos-ton Medical Center and University of Massachusetts Biologic Laboratories.

“This new mentoring program provides a pre-qualified, diverse group of young people who have shown interest in the trades a chance to build relation-ships and to learn what is involved in particular trades,” said Peter Campot, CEO of Berry. “We hope that through the program, students will receive the knowledge and guidance to pursue post secondary and/or apprenticeship training for careers in construction.”

Fria Company Project Wins RED Award

The thirty-four story “44 Monroe” condominium tower was awarded the RED Award as Best Multi-Family Project of the Year in Arizona. The Fria Company provided full service develop-ment management on the two hundred condominium, 488,000 SF project.

“This project is a glowing example of collaborative project management in action,” said Rick Fria, President of The Fria Company and author of Suc-cessful RFPs in Construction. “All prime consultants and the contractor exhib-ited proactive and creative interaction in producing a high quality project, in budget and on time. We offer our congratulations to all members of the team. We are honored to have provided the leadership on this magnificent Phoenix landmark.”

Gilbane Helps Manpower World Headquarters Earn LEED Gold

Gilbane Building Company built the $60 million, 292,000-square-foot Manpower corporate headquarters along the banks of the Milwaukee River, and the four-story beacon of revitalization has been certified LEED

Gold. Only two other buildings in the city have achieved this. Partners on the project included Johnson Controls, Kahler Slater and Eppstein Uhen Architects.

“We’re excited to be involved in this project, and the LEED aspect of the building,” says Gary Grunau, Senior Vice President in Gilbane’s Milwaukee office. “We fully utilized the means and meth-ods to make it environmentally friendly at no additional cost to construction.”

Some of the sustainable design elements at Manpower are: under- floor air distribution systems, 90% of spaces receiving daylight, water use reduction, water efficient landscaping, maximization of construction material recycling, use of low-emitting materials, 50% of the wood used came from rapidly renewable forests, and public transportation access.

MBP Named Best Small Company to Work for in America

The Society for Human Resource Management (SHRM) and Great Place to Work® Institute have selected McDonough Bolyard Peck, Inc. as one of their Top 50 Best Small and Medium Companies to Work for in America.

For the second year in a row, MBP was ranked in the Small Companies list, at number 24. The Small and Medium Companies lists are comprised of 25 firms each.

“We are honored to once again be named to the Best Small Company to Work for in America list. Our team members are our greatest asset and the reason we were selected”, states Blake V. Peck, PE, CCM, MBP President and Chief Operating Officer.

Granary Associates is PM for Susquehanna Health

Granary Associates provided Project Management and Architecture services for Susquehanna Health’s new Energy Services Center at its Williamsport Hospital and Medical Center campus.

Continued on page 14

July/August 13

Member News

Chapter News

The $17 million co-generation facility will leave a smaller “carbon footprint” by cutting carbon emissions by 50 percent and saving an estimated $540,000 in annual energy costs for Susquehanna Health.

This new facility is part of the greater Project 2012 at Susquehanna Health which includes a major expansion and renovation at the Williamsport Hospital and Medical Center, as well as additional renovations to the other hospitals in the system including Divine Providence Hospital and Muncy Valley Hospital. Granary Associates is providing Project Management, Planning, Architecture and Interior Design services for the project.

Khaled Husein Joins HAKS

Khaled T. Husein, CCM has joined HAKS in its New York headquarters as vice president in the CM Division.

Prior to joining HAKS, Khaled was

the Deputy General Manager for SBG/RPD, a leading Saudi Arabian General Contractor where he managed high profile aviation and higher educational projects in the Middle East.

Mr. Husein spent 22 years with URS, where he successfully managed major projects including GSA’s $400 million court house and post office in downtown Brooklyn, NY.

Virginia Tech

Recently a group from the Virginia Tech Student Chapter traveled to the BMW Manufacturing Plant in Spartanburg, SC, for the Chapter’s annual Spring Field Trip. The trip was hosted by Global Performance, a subsidiary of Mustang Engineering. In a joint venture with Faithful+Gould, Global Performance is providing CM services for BMW’s $750 million investment, which includes a new 1.3 million square foot assembly plant.

After a project overview and safety discussion, the group toured the site and new Assembly North Building. The trip provided students an insight into industrial construction, as well as the scheduling and coordination challenges of a large scale project. The Chapter expressed its thanks to Program Manager Kevin Ball of Global Performance for hosting the group, as well as its sponsors, CMAA National Capital Chapter and the Virginia Tech Myers-Lawson School of Construction and Department of Building Construction.

For more information about the Virginia Tech Student Chapter, visit www.cmaa.org.vt.edu.

Mid-Atlantic Chapter

The Chapter held its annual fund raising golf outing at DuPont Country Club in Wilmington, DE, celebrating three Student Leadership Awards and eight Project of the Year Awards. Approximately 75 people participated.

The Student Leadership Awards program, chaired by Rick Bernardini, CCM, TN Ward, presented awards to three students: Robert Kudenchak from Rutgers; Gretchen Heberling from University of Wyoming; and Patrick Hearn, Pennsylvania College of Technology.

Chaired by Brian Stover, CCM, Urban Engineers, the 2009 Project of the Year awards were given to Alvin H. Butz; TN Ward Company; Structure Tone, Inc.; Foreman; Hill International, Inc.; Urban Engineers, Inc.; Alexander Building; and Skanska Construction. Awards of Honorable Mention went to Hill International, Inc., and Michael Baker Jr., Inc

Students receive award for participation in Mid-Atlantic Chapter Student Leadership Award Program. Left to right – Rick Bernardini, CCM, Chapter program chairman; Robert Kudenchak; Patrick Hearn; and Chuck Romanoli, CCM, president of Mid-Atlantic Chapter.

Want to share your firm’s or organization’s news with other CMAA members?

Send your member news and updates to Sarah Black, communications associate, at sblack@cmaanet.org. Please make your submission no longer than 200 words.

Member News, Continued from page 13

14 CMAdvisor

President’s Report

What Makes Us Stand Out?Bruce D’Agostino, CAE, FCMAA

I’ve encountered a number of owners in my recent travels to CMAA chapters whose experiences bear out some important points about professional CMs in the marketplace, as well as giving the association some interesting guidance in shaping its own programs.

One owner had managed to launch a major condominium project in which all project risk was being borne by the financier. This owner didn’t see the value of having an owner’s representative on his team from the beginning. The project ran into difficulties, mostly stemming from the cost of building what the architect had designed. Fortunately for the owner, the contractor on the job was responsive and helpful.

Elsewhere, I had an occasion to visit two major water projects being executed by CMAA members in San Diego. It struck me that although the corporate “cultures” on those two job sites were very different, both jobs were going well, moving forward on budget with little or no delay.

This comparison made me think about what attracts owners to use CMAA members. Surely the main attraction factors transcend individual style or personal relationships. The profession’s chief appeal to the sophisticated owner rests on our Standards of Practice, and the promise of dependable, uniform performance that SOPs represent.

CM certification is a vital adjunct to SOPs: The CCM designation identifies a practitioner who has, though education and experience, demonstrated the ability to deliver the SOP level of performance on every job.

Recognizing what owners truly want and need from a CM is a critical step in making both the profession and our association more effective.

Of course, sometimes what owners say they want turns out not to be the reality. All CMs have encountered the occasional bad owner: The owner who calls for leadership and collaboration but won’t listen to you, or the one who “knows exactly what he wants” and views all suggestions and innovations with suspicion. This owner’s main goal is to squeeze all of his vendors and consultants to the maximum, and this attitude presents a strong disincentive to the CM to bring anything new or creative to the table.

Suggest adopting BIM, for example, and this owner is apt to say that “(a) you’re trying to get more money out of me and (b) you’re trying to cloud responsibility so I won’t know whom to sue when the project goes bad.”

We don’t need to look far for examples of where this attitude leads. Anyone who has ever tried to do business with General Motors, for instance, can vouch for the company’s “my-way-or-the-high-way” approach to vendors. The long-term result? Now we all own part of GM.

You could argue with that kind of owner, but wouldn’t it be better to be prepared to deliver leading edge ideas and execution for owners who recognize and appreciate value?

In the eyes of these leading owners, what makes the profes-sional CM stand out? Very simply, our professionalism and our Standards of Practice.

What, in turn, will make CMAA stand out in our crowded and competitive marketplace? Associations like CMAA rise or fall on two basic standards: How we serve our members and how we relate to the marketplace.

I’m proud of the raves we routinely get from members for the quality of our programs and for the customer focus of our staff. We want to continue to earn that praise by delivering better programs and better service all the time.

Turning our face to the industry, we need to be an advocate for the profession – to owners, government, the media, and the public. To all of these audiences, we need to deliver a strong, clear, honest and consistent message about the value professional CMs brings to construction and to all of society.

If we can do that, we will be accomplishing just what our members accomplish when they deliver success for their best clients. Not a bad target, is it?

Recognizing what owners truly want and need from a CM is a critical step in making both the profession and our association more effective.

July/August 15

Construction Management Association of America

7926 Jones Branch Drive, Suite 800 McLean, Virginia 22102-3303 USA

Professional Development Calendar

Webinar Series: Keys to Project Success—Avoiding Disputes

CMs TalkLive! Webinar August 20 Beyond the Presentation— Effective Q&A and Debriefing

September 17 Adding Value as a CM in Different Delivery Methods

National Conference & Trade ShowOctober 25 – 27 Orlando, Florida

Refer a FriendWith nearly 100 potential new members referred, CMAA’s Refer-a-Friend contest is off to a steady start.

Just by sending basic CMAA membership information to a peer, you can earn a chance to win one of a variety of exciting prizes, capped by a free registration to the National Conference or a 42 inch HDTV.

Have more than ten colleagues who stand to benefit from CMAA membership? Refer them all and take the contest lead.

Share our “good thing,” and get your colleagues involved in CMAA!

August 27 Measuring Inefficiencies on a Construction Project

September 24 Steps to Ensure Project Completion & Litigation Avoidance