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Construction Manager-at-Risk Project Delivery for Highway Programs (2010)

Chapter: Chapter Seven - Quality Management Procedures

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Suggested Citation:"Chapter Seven - Quality Management Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Construction Manager-at-Risk Project Delivery for Highway Programs. Washington, DC: The National Academies Press. doi: 10.17226/14350.
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Suggested Citation:"Chapter Seven - Quality Management Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Construction Manager-at-Risk Project Delivery for Highway Programs. Washington, DC: The National Academies Press. doi: 10.17226/14350.
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Page 78
Suggested Citation:"Chapter Seven - Quality Management Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Construction Manager-at-Risk Project Delivery for Highway Programs. Washington, DC: The National Academies Press. doi: 10.17226/14350.
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Page 78
Page 79
Suggested Citation:"Chapter Seven - Quality Management Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Construction Manager-at-Risk Project Delivery for Highway Programs. Washington, DC: The National Academies Press. doi: 10.17226/14350.
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Page 80
Suggested Citation:"Chapter Seven - Quality Management Procedures." National Academies of Sciences, Engineering, and Medicine. 2010. Construction Manager-at-Risk Project Delivery for Highway Programs. Washington, DC: The National Academies Press. doi: 10.17226/14350.
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77 INTRODUCTION There are two key issues that are of great concern to all pub- lic transportation agencies: project quality management and project delivery method. With the growth of alternative proj- ect delivery methods in the past few decades, the issues have become interrelated. It is important to understand how agen- cies that are using CMR project delivery are approaching the quality management issue on their projects. In project delivery methods where the contractor is selected before the design is complete and is expected to make a contribution to the design, the agency might consider the impact of that shift on quality management planning and execution at every phase of project development. Table 31 compares the potential for meeting three quality objectives among three project delivery methods based on an analysis of federal projects (Uhlik and Eller 1999). This study concludes that CMR project delivery has a high likelihood of delivering two of three quality objec- tives. The third objective, single point of responsibility, can only be achieved by DB project delivery. The chart indicates that CMR may be the preferred project delivery method for projects where ensuring quality is difficult. Another author reached the same conclusion and stated: “CMR improves quality and value . . . [by keeping] focus on quality and value— not low bid” (Ladino et al. 2008). A high-quality highway project needs high-quality design- ers and constructors to build it. The synthesis asked both the agencies and the contractors to comment on the impact of various aspects of CMR on a project’s final quality (see Table 32). There was unanimous agreement by both the owners and their contractors that the aspects that have the greatest impact on project quality are the qualifications of the CMR’s personnel and its past project experience. ODOT interviewee stated that “qualifications are critical to achieving quality.” This corresponds with the information cited in the literature with regard to the value of these aspects. Taken together, it leads to the conclusion that tailoring the CMR RFQ/RFP to fit the project’s specific technical and management requirements will attract the kinds of contractors who have the correct set of personnel and experiences. All the advantages of CMR project delivery cited in Table 1 are lost if the quality of the constructed project is poor. An AASHTO international scan team concluded that international transportation agencies use project delivery methods that might reduce pricing competition, but that the benefits of improved quality offset any marginal increase in design and construction costs. The report went on to recommend that U.S. agencies “apply more contractor quality management . . . [and] enhance qualification-rating processes” (DeWitt et al. 2005). CMR project delivery provides a method to implement these recom- mendations. To do so will require the agency to evaluate and implement quality management policies and procedures for every phase in a project’s delivery cycle. Chapter five covered quality in the procurement phase. Therefore, this chapter will detail its findings in the design and construction phases of highway CMR projects. QUALITY MANAGEMENT IN DESIGN PHASE “The design phase . . . is the phase where the ultimate quality of the constructed facility is quantified through the production of construction documents . . . the point of the project where quality is defined . . . it is imperative that the design quality management responsibilities be clearly defined in the solici- tation documents” (Gransberg et al. 2008). Much of what is said in this section regarding the CMR preconstruction services contract ought to be coordinated with the design contract as well. The Memphis case study highlighted the need to alter the standard DBB engineering design contract to accommodate effective collaboration between the agency’s consultants and the CMR. That being noted, the remainder of the discussion will be restricted to the CMR’s roles, responsibilities, and actions during design as related to quality management. Enhancing Design Quality Through Collaboration CMAA commissioned a study in 2005 to survey owners about their perceptions on how project quality can be improved (Doren et al. 2005). The study’s top five responses all relate to enhancing the project’s quality during design by collabo- ration between the designer and builder. • A/Es [designers] need to be more conscious of the cost to build their designs • More coordination/collaboration among team members • Need quality reviews from CMs • Needs a thorough review of the technical design details • Need to bring contractors, subcontractors, and suppliers on board in the design phase (Doren et al. 2005). The UDOT CMR report confirmed the same notions specifically for design quality. It also indicated agreement CHAPTER SEVEN QUALITY MANAGEMENT PROCEDURES

from both the design and construction industries in Utah. The report stated: The program managers and AGC representatives agree that contractor participation in design minimized risk and improved schedule. Design consultants preferred this method because UDOT controlled the design and innovations selected for the project. This gave them a greater ability to develop a quality design (Alder 2007). Another public agency report on its CMR project found that “[d]esign and peer review of the 30%, 60%, and 90% detail designs are required to ensure quality and constructabil- ity” (Kwak and Bushey 2000). This agency points to con- structability as a measure that goes hand and hand with quality. Design reviews are an integral part of any design QA program. They ensure the constructability of the project, and they ensure that the design meets the contract requirements (Dunston et al. 2002). A survey on the benefits of constructability reported the following responses regarding its impact on a project: • Minimizes contract change orders and disputes, • Reduces project cost, • Enhances project quality, • Reduces project duration, • Increases owner satisfaction, and • Enhances partnering and trust among project team (Pocock et al. 2006). 78 An NCHRP Project 20-7 report (Dunston et al. 2002) reviewed at the costs and benefits of constructability reviews. Its findings apply to CMR project delivery and can be summed up as follows: Quality documents facilitate quality construction . . . Review of the constructability of transportation facilities in the planning and design phases, specifically [for] deficiencies in quality and clarity of construction plans is critical . . . Constructability reviews . . . are the key mechanism for insuring that plans and specifications fulfill these quality objectives (Dunston et al. 2002; italics added). Gauging Effective Impact on Project Quality The case study structured interviews contained a list of 22 project outcomes and asked each to compare the change in quality seen in the CMR case study project from a traditional DBB project on a Likert scale of 1 to 5 on each outcome, with 1 = “worst quality” and 5 = “best quality.” The scores were then summed and an average was calculated. Twelve of the outcomes were related to the quality of the design. Table 33 presents the results of the owners compared with the con- tractors. The Likert scale in this analysis had a neutral value of 3 (no change). Therefore, a rating above 3 would indicate that those outcomes could expect to improve in quality in a CMR project versus a DBB project. All 12 outcomes received average scores of between 4.0 (better quality) and 5.0 (best Likelihood of Meeting Objective Quality Objectives DBB CMR DB A system of checks and balances exists between design and construction High High Low Input on quality is provided during design by someone with construction expertise Low/medium High High Single point of responsibility for design and construction quality Low Low High Source: Uhlik and Eller (1999). TABLE 31 QUALITY MANAGEMENT COMPARISON OF PROJECT DELIVERY METHODS Agency Ratings Contractor Ratings Procurement Phase Component Very High or High Impact Some or Slight Impact No Impact Very High or High Impact Some or Slight Impact No Impact Qualifications of CMRís staff 100% 0% 0% 100% 0% 0% CMR’s past project experience 100% 0% 0% 100% 0% 0% Early contractor involvement in design 90% 10% 0% 100% 0% 0% Preconstruction services 80% 20% 0% 100% 0% 0% GMP contract 70% 30% 0% 67% 0% 33% Level of detail expressed in the procurement documents 60% 40% 0% 0% 83% 17% Level of agency involvement in the QA process 50% 50% 0% 33% 67% 0% Use of performance criteria/specifications 50% 40% 10% 67% 33% 0% Quality management plans 40% 60% 0% 83% 17% 0% Warranty provisions 40% 40% 20% 33% 50% 17% Use of agency specifications and/or design details 20% 60% 20% 17% 67% 17% TABLE 32 IMPACT ON CMR FINAL PROJECT QUALITY OF PROCUREMENT PHASE COMPONENTS

79 quality) from the agencies. Looking at the raw interview data, there was only one case study that rated any of the design- related outcomes less than neutral. That was ODOT, which rated cost growth during design as a 2 but qualified the answer by saying that in this project, their first CMR, all the cost growth was the result of owner-directed scope improvements that were missed during the procurement phase. The contractor rating had a greater range, but all were above 3, indicating agreement with the agencies regarding the perceived impact of CMR on design quality. QUALITY MANAGEMENT IN CONSTRUCTION PHASE CMR construction quality management will not differ greatly from that seen in DBB. The owner still occupies the same contractual position with respect to the designer and builder. Therefore, the systems in use in DBB projects will directly apply to CMR projects with little alteration. The key difference is the change in motivation of the constructor. In DBB, it has no input to the design and builds what is shown in the construc- tion documents. In CMR, the contractor has assisted in devel- oping the final design and as a result has assumed a significant degree of ownership in the design product. One of the case study project contractors described the idea of having “buy-in” to the design, making the CMR less prone to submit a claim for additional compensation for design problems in features of work for which the CMR had been paid to review and furnish input. This notion was also found in the literature (Kwak and Bushey 2000). Additionally, the presence of contingencies further ameliorates the motivation to cut corners on quality as a means of recovering financial losses resulting from contractor or subcontractor error (Trauner 2007). Finally, the issue of remaining competitive for future work with the agency is a strong motivator to achieve the requisite construction quality and satisfy the owner. “CM At-Risk is still largely a position of representing the Owner’s interests, and if it is pursued as simply a negotiated general contract it will leave the Owner dissatisfied and the CM without future work” (Strang 2002). Construction Phase Quality Assurance and Quality Control Construction phase quality management relationships are established in the procurement phase, nurtured during the design phase, and applied when work begins on the proj- ect. The roles of the agency’s QA personnel as well as the designer’s responsibilities during construction are known and understood by the contractor before starting work. “It is also recognized that, because of constrained staffing and budgets, it is not possible for state agencies to ‘inspect’ qual- ity into the work. Therefore, a procurement process is needed that considers value-related elements in awarding contracts” (Scott et al. 2006). The value found in CMR is the in-depth knowledge of the design that the constructor gained during the preconstruction when it starts construction. The case study interviews revealed that eight of ten agencies did not change their DBB QA program to accommodate CMR project deliv- ery. The two that did were Alaska and Michigan and their reason was to adapt the quality management process to the vertical component of the construction. The case study projects were asked to describe the assigned roles and responsibilities for construction quality management. Project Quality Outcome Average Agency Rating (5 max.) Average Contractor Rating (5 max.) Cost growth during design 4.8 4.3 Accuracy of design calculations 4.6 3.5 Completeness of final design deliverables 4.5 4.2 Acceptance of design deliverables 4.5 4.2 Accuracy of preconstruction cost estimates 4.5 4.5 Accuracy of preconstruction schedules 4.5 3.7 Accuracy of quantities 4.4 4.2 Accuracy of specifications 4.3 3.2 Maintainability 4.3 4.2 Aesthetics 4.1 4.8 Sustainability 4.1 4.3 Operability 4.0 4.3 TABLE 33 CMR IMPACT ON DESIGN QUALITY OUTCOMES—AGENCY AND CONTRACTOR RATINGS

The purpose was to identify trends in how the projects allo- cated the various tasks. The four possible entities to which these responsibilities were assigned are shown in Table 34. The independent consultant is not the same as the designer. The Alaska, Florida, Michigan, and Utah DOTs, as well as the UTA and the Memphis Airport, all retained consultants to perform construction QA services. The sum of the number of times a given entity was assigned a task is at the bottom and gives an indication of the distribution of construction quality management responsibilities in the case study CMR projects. The agency and its independent consultant share the most responsibility, followed by the design consultant and the CMR in that order. The CMR’s assigned roles appear to line up almost with what one would expect to see in a DBB construction QC plan. The only anomalies are one instance of shop drawing review and two instances of verification test- ing. The shop drawing review occurred in Michigan where the CMR was required to conduct joint reviews with the designer of certain subcontractor submittals. The CMR veri- fication testing was done jointly with the agency’s staff in the Pinal County project and the UTA assigned this responsibil- ity to the CMR exclusively. The Utah project put 4% of the construction fee at risk on each monthly progress payment (Touran et al. 2009b). The decision as to how much was awarded was made by a panel and included the evaluation of quality performance. No pertinent information was derived from the content analysis on this subject. QUALITY OUTCOMES NCHRP Synthesis 379 (Anderson and Damnjanovic 2008) evaluated the potential for and impact of alternative con- struction methods to accelerate completion. CMR was one of the methods that was included in this study. The authors found that quality was not reported to be degraded by the use of nontraditional contracting methods such as CMR and also made this observation: The majority of respondents stated that quality was the same for the contracting methods evaluated as compared with typical 80 projects. This result seems to counter the perception that accel- erating project completion negatively impacts quality, which was cited as a perceived disadvantage for some contracting methods (Anderson and Damnjanovic 2008). Sorting Out Fact from Fiction on Quality The NCHRP Synthesis 379 comment by Anderson and Damnjanovic aptly points out the “popular mythology” that appears to surround the culture shift from traditional project delivery to something different. There are always champions that promote the new method with evangelistic zeal and opponents that can see all sorts of unsolvable problems being spawned by the change in contractual relationships. Degraded quality appears to be one of the disadvantages cited by oppo- nents to change and the champions cite reasons why quality is actually enhanced. The real issue with regard to quality is not how to guarantee that it will improve but rather to ensure that the change does not create a set of circumstances that causes it to decline. This quality issue was effectively debunked by the FHWA “Design-Build Effectiveness Study” (2006). The FHWA study team found that: On average, the managers of design-build projects surveyed in the study estimated that design-build project delivery reduced the overall duration of their projects by 14 percent, reduced the total cost of the projects by 3 percent, and maintained the same level of quality as compared to design-bid-build project delivery (“Design-Build Effectiveness Study” 2006; italics added). Strang (2002) holds that public owners who “are not bold enough” to implement DB will be drawn to CMR as a more palatable alternative to DBB. Design consultants that work for UDOT have indicated a preference for CMR over DB because UDOT controls the details of the design (Alder 2007). Other agencies have found that CMR furnishes a good option to both DBB and DB project delivery. “The performance to date of Tri-Met’s [Portland, Oregon] two major CM/GC contracts for the Interstate MAX light rail line is exemplary from the perspective of keeping the project on schedule and maintaining Assigned Responsibility* Construction Quality Management Tasks Does Not Apply Agency Designer CMR Independent Consultant Technical review of construction shop drawings 0 1 9 1 6 Technical review of construction material submittals 0 2 7 0 7 Checking of pay quantities 1 4 3 0 6 Routine construction inspection 0 3 3 4 4 Quality control testing 0 0 2 10 1 Establishment of horizontal and vertical control 0 0 3 6 2 Verification testing 0 3 3 2 4 Acceptance testing 0 7 2 0 3 Independent assurance testing/inspection 0 3 3 0 5 Approval of progress payments for construction 0 9 0 0 3 Approval of construction post-award QA/QC plans 0 8 1 0 2 Report of nonconforming work or punchlist 0 7 1 0 4 Total responses 1 47 37 23 47 *Total can be > 10, as some agencies assign dual responsibilities for the same QM task. TABLE 34 DISTRIBUTION OF CONSTRUCTION QUALITY MANAGEMENT TASKS IN CASE STUDY PROJECTS

81 good quality” (“Tri-Met’s Construction Manager . . .” 2003). The same report goes one to say: With a more cooperative working partnership between the owner, the designer, and CM/GC contractor—Tri-Met calls these entities the CM/GC team—work quality improves. The contractor has been selected on factors other than just price, many of which are strong indicators of ability to complete the job successfully. Also, the CM/GC contractor has increased responsibility for quality control over all aspects of the job under this method (“Tri-Met’s Construction Manager . . .” 2003). Quality Outcomes in Washington State Construction Manager-at-Risk Projects Unfortunately the only comprehensive study of quality perfor- mance on CMR was done primarily in the building sector. Nevertheless, it serves to furnish a good background for what changes might occur in transportation as the CMR delivery method proliferates and matures. The Washington State report evaluated quality information from 80 of 104 public projects constructed over 14 years and summarized its findings in this manner. Ninety-eight percent of the completed projects met or exceeded standards. Only GA/DOC’s Stafford Creek Corrections Center project did not meet standards (Septalka and Goldblatt 2005). That literally means that only one project in over a decade of CMR usage failed to achieve the standards established in the CMR contract. Although details of this project were not avail- able, transportation agencies considering CMR need to know that a large percentage of the projects covered by this study were school buildings where local school boards that normally have few if any technical professionals on staff advertised, evaluated, awarded, and accepted the contracts. The hidden message in this statistic is that CMR project delivery induces a culture shift in the construction contractor’s organizations as well. One of the advantages often cited about CMR in building construction is that it furnishes a technically un- sophisticated owner, such as a school board, a means to bring the necessary technical expertise to its projects (Carlisle 2006). The report contains this testimonial about CMR construction quality: Our GC/CM has worked with us to tailor testing and mockups and included [the] Owner in MEP [mechanical-electrical-plumbing] coordination meetings and all subcontractor preconstruction meetings to set quality standards early. Our school district has a design standard specification manual incorporated into the contract documents. Working with the GC/CM during preconstruction challenged our standards and resulted in more cost effective ways of meeting our needs. The preconstruction process also allowed us to identify critical areas and subtrades and review with [the] team to manage our [quality] risk (Septalka and Goldblatt 2005). The Washington State CMR experience can be described as a success with regard to furnishing a project delivery method that “improves quality and value . . . [by keeping the] focus on quality and value—not low bid” (Ladino et al. 2008). SUMMARY This chapter strove to present the requirements of quality man- agement in CMR projects chronologically with the project’s life cycle. The changes needed to transition from DBB to CMR are required in the procurement, design, and construc- tion phases. Investing management time, effort, and creative energy to structure quality management in the procurement phase pays dividends in design and construction. The over- arching conclusion found here is that ensuring quality in CMR is really about selecting the right contractor and clearly delineating the owner’s quality expectations from concept to ribbon-cutting. As with other project delivery methods, CMR requires a certain element of trust between all parties in the project. However, the process starts at the agency and by selecting CMR project delivery, the agency gets to pick its contractor on a basis of qualifications and its record of past quality performance. Therefore, the risk of ending up with an incompetent contractor is greatly diminished, and if the win- ning firm does not satisfy the agency’s quality expectations, it can use that as a reason to not give that firm another chance to fail. Conclusions The following conclusions are drawn: • The agency and contractor ratings shown in Table 33 indicate that implementing CMR project delivery fur- nishes the same quality as DBB and indeed may improve quality (Armstrong and Wallace 2001; Gambatese et al. 2002; Uhlik and Eller 2005; Alder 2007; Rojas and Kell 2008). • The qualifications of the CMR’s personnel and its past project experience are the aspects that have the greatest perceived impact on project quality (“CM/GC Peer Review Meeting” 2003; DeWitt et al. 2005; Qaasim 2005). Effective Practices Two effective practices can be identified in the analysis in that chapter. • Based on the conclusion that CMR qualifications and past experience have the greatest perceived impact on project quality, the CMR selection process evaluation plan could consider giving the greatest weight in the award algorithm to qualifications of the CMR’s personnel and its past project experience (“CM/GC Peer Review Meeting” 2003; DeWitt et al. 2005; Qaasim 2005). • Eight of ten case study agencies used the same QA pro- gram for CMR as they do for DBB. Therefore, it appears that no modification is necessary to a DOT’s QA program to implement CMR project delivery.

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TRB’s National Cooperative Highway Research Program (NCHRP) Synthesis 402: Construction Manager-at-Risk Project Delivery for Highway Programs explores current methods in which state departments of transportation and other public engineering agencies are applying construction manager-at-risk (CMR) project delivery to their construction projects.

CMR project delivery is an integrated team approach to the planning, design, and construction of a highway project, to help control schedule and budget, and to help 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. The goal 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 relinquishing control over the details of design as it would in a design-build project.

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