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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)
