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Construction Manager-at-Risk (CMR) project delivery (also called Construction Manager/ General Contractor or CM/GC) is an integrated team approach to the planning, design, and construction of a highway project, to control schedule and budget, and to ensure quality for the project owner. The team consists of the owner; the designer, who might be an in-house engineer, and the at-risk construction manager. A CMR contract has two parts: (1) pre- construction services and (2) construction. The CMR and the designer commit to a high degree of collaboration. This is especially vital when the agency is using CMR to implement new construction technologies. Additionally, the CMR furnishes a means to negotiate the allocation of risk between the owner and the contractor through its pricing mechanism. A guaranteed maximum price (GMP) is established at a point where the design is sufficiently advanced and the contractor can furnish a price with a minimal contingency for possible increases in scope. The aim of this project delivery method is to engage at-risk construction expertise early in the design process to enhance constructability, manage risk, and facilitate concurrent execution of design and construction without the owner giving up control over the details of design as it would in a design-build project. CMR project delivery has long been used in the building industry to deliver projects that require early contractor involvement to optimize cost, schedule, and quality. It is particularly well-suited for projects that have a revenue stream that starts when construction is complete, as exists in the retail building and health care sectors. Additionally, the education sector uses CMR to facilitate the expansion of school buildings in a manner that minimizes disruption to the students. Its major advantage is reported to be the ability to select both the designer and the contractor on a basis of qualifications and preserve competitive bidding at the trade subcontractor level. Another is the sense of design ownership that is developed by the con- structor when it is allowed to make substantive input to the final design. Finally, the review shows that CMR is selected for building projects in which the owner wants to ensure a high level of sustainable design and construction. The use of CMR for federal aid transportation projects requires Special Experimental Projects Number 14 approval. As a result, its use is relatively new in highway projects. A number of state and local transportation agencies have undertaken or experimented with CMR project delivery on road, bridge, and other projects. These include the Alaska, Arizona, Florida, Oregon, and Utah Departments of Transportation (DOTs). Utah is the most experi- enced having completed 13 CMR projects, with another 16 in progress. Florida also has mul- tiple CMR project experience, but tends to reserve this project delivery method for projects that have a strong vertical construction component. Additionally, Maricopa, Pima, Pinal and other Arizona counties, as well as the Arizona cities of Flagstaff, Glendale, Phoenix, and Tempe have implemented CMR project delivery on major transportation projects. Phoenix has completed more than 200 CMR projects in both the transportation and building sectors. The Michigan and Rhode Island DOTs have overseen CMR projects for local airport and seaport authorities. The objective of this synthesis is to identify and synthesize current methods in which state DOTs and other public engineering agencies are applying CMR project delivery to their SUMMARY CONSTRUCTION MANAGER-AT-RISK PROJECT DELIVERY FOR HIGHWAY PROGRAMS
construction projects. The synthesis identifies three different models for CMR project delivery in use and effective practices and lessons learned that have been gleaned from the experiences of seven highway case studies (Alaska, Florida, Michigan, Oregon, and Utah DOTs, plus Pinal County and the city of Glendale, both in Arizona) and case studies from the airport, rail transit, and building industries; Memphis Airport in Tennessee; Utah Transit Agency; and Texas Tech University. The synthesis received survey responses from 47 state DOTs regarding CMR experience. It also conducted a formal content analysis of CMR solicitation documents from 25 transportation projects and 29 non-transportation projects from 17 states. Finally, structured interviews were conducted with both agency and contractor personnel from the case study projects. The synthesis also addresses project characteristics and requirements that make a project a good candidate for CMR project delivery. The details of the selection process and pre- construction services are covered. Procurement policies and procedures found in the study including those used in the quality assurance process are also discussed. Finally, various options for establishing a GMP, a feature unique to CMR, are covered in detail. The synthesis conclusions covered the gamut of CMR project delivery issues from making the project delivery method decision to its impact on final project quality. The detailed con- clusions along with a list of effective practices and lessons learned are contained in chapter nine. The major conclusions are summarized as follows: 1. CMR project deliveryâs major benefit to the agency is derived from contractor input to the preconstruction design process. The cost of preconstruction is a reasonable invest- ment that accrues tangible returns. The average fee for preconstruction services on highway projects was found to be 0.80% of estimated construction costs. 2. It is reported that modifications in agencyâs standard design contract are to specifically require the designer to coordinate its efforts with the CMR to accrue the benefits possible in preconstruction. 3. Allowing contractor input to design in CMR project delivery appears to have no impact on design quality. If the design and preconstruction services contracts are properly coordinated it may improve it by adding a layer of design quality control. 4. CMR services furnished during the preconstruction phase reduce design costs by diminishing the amount of design detail that is required and by focusing the early design effort on constructable solutions. In other words, the CMR can tell the designer when it has sufficient design detail to properly construct a given feature of work. The Utah DOT has experienced a 40% savings on its design contracts, whereas the U.S. Army Corps of Engineers reported a savings of 2% of on its design costs for medical facilities. Achieving these savings requires a high level of collaboration and strong spirit of partnering. 5. Selecting the CMR at a point in time where it can influence fundamental design deci- sions before they are made not only saves design costs but also maximizes the oppor- tunity for the CMR to add value to the project. This can be before the selection of the designer. If an agency wants to evaluate cost and fees as part of the selection process, the CMR selection point is best if sufficient design has been completed to permit rea- sonable numbers to be generated for the scope of preconstruction services and/or the magnitude of quantities of work to be priced in the proposal. 6. Protests of CMR selection decisions are rare. Three protests were identified in the review and all were unsuccessful. 7. The use of progressive rather than lump sum GMPs appears to add value to the CMR project by reducing the total amount of contingency carried in the GMP and by allow- ing an orderly method to price early work packages and/or construction phases. It also provides a series of points where the agency can negotiate the allocation of cost and schedule risks with the CMR. 2
38. Allowing the CMR to procure early work packages (typically materials to be installed by subcontractors) is reported to mitigate cost risk by locking in the cost of the materials and services associated with those packages. 9. Limiting the CMRâs ability to self-perform and constraining its freedom to prequalify and select its subcontractors does not ensure âcompetitive pricingâ and actually dimin- ishes the CMRâs ability to use its professional contacts during preconstruction. Eight of ten case study projects allowed the CMR to self-perform and select subcontractors without constraint. 10. The qualifications of the CMRâs personnel and its past project experience are the aspects that have the greatest perceived impact on project quality. 11. Incorporating a shared savings clause does not appear to create a significant incentive to the CMR and may actually add a layer of administration/accounting whose cost is not recovered by its actual benefit. Savings associated with actual costs being less than the GMP were less than 1% in the projects reviewed with shared savings clauses. 12. CMR project delivery is a less radical shift in procurement culture than design-build because the owner retains control of the design by holding the design contract. The case studies reported that design consultants prefer this arrangement because they receive the benefits of early contractor involvement without the pressure to design to the pro- posed design-build lump sum bid price. This project delivery method may furnish an attractive option to agencies that do not want to use design-build.
