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7 jects, which may include local street or road, bridge, and multiple prime contracting. Agency CM is widely tunnel, and public transit projects. The California DOT used in the public sector and has a long history of suc- (Caltrans) has authority for up to 10 projects, which cessful use in the transportation and transit industry. may include state highway, bridge, or tunnel projects. Unlike Agency CM, CMAR is a unique delivery sys- The law also permits DB for certain other types of pub- tem. Under this system, the owner hires a designer and lic projects and allows the use of PPPs for transporta- contractor using separate contracts, just as in the DBB tion projects. method. However, these two services are generally The procuring agency for a DB project authorized hired nearly simultaneously, well before the design is under the law may use either a best-value or a low-bid advanced, and usually as soon as the project is ap- selection process, as approved by the CTC. The CTC proved. Unlike the contractor in a DBB process, the must ensure that use of low bid and best value is bal- CMAR firm provides preconstruction services--such as anced among the approved projects, so that the costs design input, constructability reviews, value engineer- and benefits of each method can be assessed. Procure- ing, and estimating and scheduling support--on a pro- ments under the statute involve two steps: prequalifica- fessional basis. At some point, the CMAR firm will tion based on a standard questionnaire prepared by the stipulate to a guaranteed maximum price (GMP) above procuring agency, followed by a request for proposals which the owner is not liable for payment. Often these issued to the prequalified firms. In determining wheth- contracts include incentive clauses in which the CMAR er a firm is prequalified, the agency must consider and owner can share any cost savings realized below technical design and construction expertise and skilled the GMP. The CMAR firm contracts directly with trade labor force availability. firms and takes on performance risk (cost and schedule The process for selecting a design-builder will de- commitments) for the project, although, unlike DB, it pend on whether the CTC authorizes the procuring does not take design risk. agency to use competitive bidding or a best-value proc- A key difference between DBB and CMAR is how the ess. For procurements involving competitive bidding, contractor is selected. Using the DBB method, all con- bidders would be required to provide sealed bids includ- struction firms are assumed to be equally capable and ing lump sum prices, and award would be made to the are judged only by price. In contrast, the CMAR method lowest responsible bidder amongst the prequalified bid- recognizes that each construction firm has unique skills ders. Procurements using a best-value process would and experience, and the contractor is selected through call for an RFP that must specify the criteria to be used the same qualifications-based selection process used to to evaluate proposals. Criteria must include price, tech- select the designer. Because the design phase is not yet nical design, construction expertise, and life-cycle costs. complete when the contract is executed, establishment The best-value procurement process under the Califor- of a firm final price is accomplished later in the design nia law may include negotiations with responsive bid- phase. ders. Upon conclusion of a best-value procurement CMAR has long been associated with private sector process, the contract would be awarded (if at all) to the construction--virtually every commercial office building responsible bidder offering the best-value proposal. The across the country has been delivered through this sys- award must be publicly announced, along with a list tem. In recent years, as public owners have considered identifying the rankings of the top three proposers and alternatives to DBB, they have considered using a written decision supporting the award. CMAR. In many respects, this has been prompted by owners who like the idea of collaboration between the Construction Management design and construction teams, but prefer to hold the contract with the designer instead of using a DB proc- Historical Review ess, where the collaboration takes place within the con- Construction management emerged in the 1960s as a text of a contract between the contractor and designer. direct way to address some of the major challenges of Use of CMAR in State Procurement the DBB system. While the term "construction man- agement" as applied to project delivery systems can be a While the use of public sector DB has been substan- very broad term, its public-sector use has generally tial, CMAR's use in the public sector is much more lim- come to mean one of two forms: Agency Construction ited. Appendix B provides a compilation of some appli- Management (Agency CM) or At-Risk Construction cable CMAR legislation in each state, along with Web Management (known by many labels, including CMAR site links. This information is valid as of December and CM/GC). For clarity, this report refers to any At- 2009. Risk Construction Management as CMAR. The Associated General Contractors of America Under Agency CM, the construction manager is pro- (AGC) and the National Association of State Facilities viding a professional service and is an agent of the Administrators recently collaborated on a survey of owner relative to specifically identified matters--be it state-by-state information on CMAR. They concluded procurement, constructability reviews, or supervision of that many states are still determining how to approach trade contractors. Agency CM is not a delivery system CMAR, and this can result in a lack of clear and precise per se. Rather, it is a management approach that is information. In fact, unlike DB, where there is legisla- used with other delivery systems, including DBB, DB, tion throughout the states, many states are silent on