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

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114 CASE STUDY PROJECT DETAILS The following sections relate the details of each case study project. The objective of this section is to portray the breadth and depth of the case study project population in a manner that gives the reader the background to understand how each project’s features contributed to the analysis reported in sub- sequent chapters. The format has been standardized for each project to per- mit the comparison of each project with all other projects in the sample. The following sections are included: • Location—location of the project • Value—cost of the project • Scope—brief description of the project scope • Rationale—explanation of why the owner decided to use Construction Manager-at-Risk (CMR) for this project • Procurement—narrative regarding the procurement process for CMR selection • Project administration—account of the contract type, establishment of the guaranteed maximum price (GMP), and self-performance of work by the CMR • Preconstruction services—listing of the preconstruction services included as part of the contract by the CMR to the owner • Quality management—discussion of the quality control (QC) and quality assurance (QA) responsibilities for the project • Summary—any unique information not covered in the previous sections. Very little analysis of the information is contained in this chapter, as each succeeding chapter will synthesize the infor- mation found in the case study projects on a topic-by-topic basis for the sample as a whole. In all cases, the details shown in this chapter were obtained through structured interviews (either in-person or telephonically) with the agency and the project’s at-risk construction manager and then supplemented as required by specifics found about the project from the literature. Case 1—Alaska DOT&PF—Fairbanks International Airport Location: Fairbanks, Alaska Value: $99 Million Scope: New construction of an 80,000-square-foot addition to the existing terminal in Fairbanks, Alaska, and included reconfiguration of roadways, parking, and the airside terminal area. It also involved renovating 65,000 square feet of existing terminal, which included demolition of the structure, recon- figuring the mechanical and electrical systems, and adding seismic upgrades to the building. Additionally, the project entailed the demolition of those portions of the terminal built before 1985 and the construction of an employee parking lot. Rationale: The Alaska DOT&PF decided to use CMR project delivery on this project and another airport expansion project because they were non-typical agency projects being primarily vertical construction. The decision was made before 30% design development, and it also considered budget control and the specialized technical content required in an airport project to be other factors for selecting CMR. The major reasons for making the decision were to reduce the project delivery period, get early contractor involvement in the design process, and ensure flexibility during construction for the airport’s operational constraints. Less important reasons for selecting CMR were cited as follows: • Establish project budget at an early stage of design development • Gain better control over a constrained budget • Encourage constructability in Alaska’s challenging envi- ronment • Redistribute risk • Gain assistance in dealing with complex project require- ments • Shift the responsibility for dealing with third-party issues, primarily the airlines, to the contractor. Procurement: The project was designed by a consultant who was selected before the CMR and assisted the agency with the CMR selection process by evaluating CMR qualifications and references. The CMR was selected from a Request for Qualifications (RFQ) asking for qualifications only. It planned to evaluate all responses (i.e., no short listing). However, they only got responses from three firms. The solicitation docu- ments were short and contained only a description of the scope of work. Competing CMRs were required to submit the follow- ing information: • Organizational structure/chart • Past CMR project experience • Past related project experience (non-CMR) • Qualifications of the Construction Quality Manager. The agency interviewed each candidate in person. The interview consisted of the formal presentation of qualifications, past projects, and key personnel. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the RFQ advertisement. Price was not considered in the selection. Additionally, there were no protests of the decision. APPENDIX C Case Study Projects

115 Project Administration: This project used a lump sum GMP contract. The GMP was established before 100% design com- pletion. The GMP contained a single transparent project contingency and a management reserve that was controlled by the management above the project level. There was no shared savings incentive. The consultant design contract was modified to include CMR specific clauses on design review by CMR, design milestones coordinated with preconstruction services, coordination of design and subcontractor bid pack- ages, selection of materials in concert with the CMR, and joint coordination with third parties (in this case primarily the airlines). The CMR was not allowed to self-perform any work, but there are no restrictions on the CMR regarding sub- contractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates, schedules, and design approach • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability reviews • Value analysis • Coordinate with third-party stakeholders. The preconstruction services fee was negotiated after award. The CMR’s post-award construction fee was also negotiated after award. No specific training of the CMR’s personnel was required and no formal partnering was conducted. Quality Management: Table C1 shows the distribution of quality management responsibilities among parties to the contract. Alaska DOT&PF hired a consultant to assist it on this project and that consultant essentially represented the DOT across the QA/QC spectrum. The DOT was satisfied with the consultant and believed that the CMR produced better quality than the DBB because the CMR wanted to be rated in a favorable light as this acts as an incentive for future work. Summary: The interviewee indicated that the project accrued benefits in both cost and time savings as a result of the CMR’s involvement in the design process. Alaska DOT&PF is also delivering a similar project at the Anchorage airport through CMR and, based on the outcomes of these two projects, has interest in applying this project delivery method on its tradi- tional road and bridge projects. Case 2—City of Glendale, Arizona, Downtown Pedestrian Improvements Location: Glendale, Arizona Value: $16.2 million Scope: The project involved rebuilding the primary downtown road network to accommodate increased pedestrian traffic. It included upgraded lighting, landscaping, sidewalk, curb and gutter, utility relocations, and pavement rehabilitation/ replacement. Traffic control was a major portion of the proj- ect, as well as coordination with impacted property owners and utility companies. Rationale: The city of Glendale Public Works Department has extensive CMR experience, having completed a variety of vertical and horizontal CMR projects. It makes the project delivery method selection decision before starting design. On this project, the major reason for selecting CMR was to have a single entity to deal with the myriad of third-party entities that ranged from utilities to business owners. The project, although seemingly simple, was quite complex and had a tight budget and schedule as well as significant traffic control issues that drove the city to use CMR and get the contractor involved in the design process as early as possible. Additionally, the city believed that CMR would also reduce the workload on their in-house engineers, technicians, and inspectors. Less important reasons for selecting CMR were cited as follows: • Establish project budget at an early stage of design development • Encourage innovative solutions to conflicting require- ments Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C1 FAIRBANKS INTERNATIONAL AIRPORT CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

116 • Encourage constructability, facilitate value engineering, and reduce life-cycle costs • Redistribute risk • Gain assistance in dealing with complex project require- ments. Procurement: A consultant furnished all design services and was selected before CMR. It assisted the city with the CMR selection process by evaluating qualifications as a non-voting member of panel. The CMR is selected as early in the process as possible, immediately after selection of the consultant. The CMR was selected from an RFQ asking for qualifications only. The city put all qualified firms on the short list and had more than three firms. The solicitation documents were short and contained only a description of the scope of work. Competing CMRs were required to submit the following information: • Organizational structure/chart • Past CMR project experience • Past related project experience (non-CMR) • References from past projects • Qualifications of the CMR’s project manager • Construction quality management plan. The agency interviewed each candidate in person. The inter- view consisted of the formal presentation of qualifications, past projects, and key personnel. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the RFQ advertisement. Price was not considered in the selection. Additionally, there were no protests of the decision. Project Administration: This project used a progressive lump sum GMP contract. The final GMP was established before 100% design completion. However, each work package GMP is established after sub bids are determined. The GMP con- tained transparent project contingencies for both the owner and CMR. There was no shared savings incentive. The consultant design contract was modified to include CMR specific clauses on design review by CMR, budget review points in the design schedule, coordination of design and subcontractor bid pack- ages, selection of means and methods in concert with the CMR, and joint coordination with third parties. The CMR is allowed to self-perform up to 50% of the work; however, there are no restrictions on the CMR regarding subcontractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates, schedules, and design approach • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability reviews • Cost engineering reviews • Value analysis • Coordinate with third-party stakeholders. The preconstruction services fee was negotiated after award. The CMR’s post-award construction fee was also negotiated after award. No specific training of the CMR’s personnel was required and no formal partnering was conducted. Quality Management: Table C2 shows the distribution of qual- ity management responsibilities among parties to the contract. The agency believed that CMR produces better quality than DBB owing to the close collaboration between the designer and the builder on a CMR project. Summary: The contractor interviewed on this project agreed with the city in its assessment of enhanced quality, but its reason was that the parties in this project kicked the project off by holding a “scope definition and clarification” meeting where they essentially negotiated the final technical scope of work before launching into the design and assigned each risk to the party that could best manage it. This resulted in the CMR taking on identifying the underground conditions at a very early stage in design, as well as producing a construction sequenc- ing plan that was synchronized with the design schedule. The two allowed the CMR to start digging as soon as possible and therefore it could identify those conflicts that were previously unknown as early as possible. Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C2 GLENDALE CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

117 Case 3—Florida DOT Miami Intermodal Center Location: Miami, Florida Value: $1.7 billion Scope of Work: This huge project entails road, bridge, and interchange construction to upgrade access to Miami Inter- national Airport in Miami, Florida; rail component, including heavy rail transportation modes both at-grade and elevated; public concourses connecting all transport modes both at-grade and elevated; bus facilities; and airport landside improvements, including arrivals and departures roadways. It also involves constructing the new Miami Intermodal Center (MIC) and Miami International Airport APM Station (MIC-MIA Con- nector), parking, joint development space involving private sector partners on the MIC site, and a rental car facility. Rationale: The Florida DOT (FDOT) has a respectable amount of CMR experience having completed more than 10 projects using the method. However, most are primarily vertical in nature. It makes the project delivery method selection decision before starting design. On this project, the major reason for selecting CMR was the technical nature of the project. The vertical component was substantial and the horizontal portion included light rail transit features, making it a non-typical FDOT project and leading the agency to view the CMR as an additional point of technical expertise. Additionally, complex coordination requirements and the desire to get early con- tractor involvement contributed to the decision to select CMR project delivery. Less important reasons for selecting CMR were cited as follows: • Compress the project delivery period • Establish project budget at an early stage of design development • Encourage innovative solutions to conflicting require- ments • Encourage constructability, facilitate value engineering, and gain flexibility during the construction phase • Redistribute risk. Procurement: A consultant furnished all design services and was selected before CMR. It did not assist with the CMR selection process. The CMR is selected as early in the process as possible, immediately after the consultant. The CMR was selected from a request for letters of interest. FDOT then published a short list of three firms. The solicitation documents contained a description of the scope of work as well as pre- liminary plans and specifications. Competing CMRs were required to submit the following information: • Past CMR project experience • Past related project experience (non-CMR) • Qualifications of the CMR’s project manager. The agency interviewed each candidate in person. The inter- view was based on a standing list of questions that are asked to all competitors on the short list. The winner was determined by the output from the selection panel’s direct point scoring in unweighted categories published in the advertisement. Price was not considered in the selection. Additionally, there were no protests of the decision. Project Administration: This project used a unit price GMP con- tract. The final GMP was established before 100% design completion and is completed as early as possible. The GMP contained transparent project contingencies for both the owner and CMR. The CMR gets to keep its unused contingency as an incentive savings. The consultant design contract was only modified to show that the design services are in conjunction with a CMR project. The CMR is allowed to self-perform up to 50% of work and must publicly accept bids to conduct sub- contractor selection. The preconstruction services fee was negotiated after award. The CMR’s post-award construction fee was also negotiated after award. No specific training of the CMR’s personnel was required and no formal partnering was conducted. Quality Management: Table C3 shows the distribution of quality management responsibilities among parties to the contract. The agency believed that CMR produces comparable quality to DBB. Summary: FDOT is generally satisfied with the results of its CMR program and intends to continue to use the project Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C3 MIAMI INTERMODAL CENTER CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

118 delivery method for those projects where it makes sense. It is also expanding it into its more typical road and bridge projects on a case-by-case basis. Case 6—Oregon DOT I-5 Willamette River Bridge Location: Eugene, Oregon Value: $150 million Scope: Remove existing decommissioned Willamette River Bridge; construct new 1,800-foot-long bridge in place of the decommissioned Willamette River Bridge structure. Replace- ment of the decommissioned Canoe Canal bridge; reconstruct- ing approximately 2,500 feet of roadway approaching and between the bridges; construct modifications of the Franklin Boulevard northbound off-ramp and southbound on-ramp to adjust to I-5 alignment modifications. Rationale: This is the Oregon DOT’s (ODOT) first CMR proj- ect. The decision to use CMR was made before 30% design completion. The overarching reason for selecting CMR was to gain experience with the project delivery method before using it on a much larger and more complex bridge over the Columbia River. Project-specific reasons for selecting CMR for the Willamette River Bridge were project budget and schedule control issues, as well as a desire to redistribute the risk from that normally found in a design-build project. Less important reasons for selecting CMR were cited as follows: • Compress the project delivery period • Establish project budget at an early stage of design development • Gain better control over a constrained budget • Get early construction contractor involvement • Encourage constructability and facilitate value engi- neering • Assign the responsibility for coordinating third-party issues to the contractor. Procurement: A consultant furnished all design services and was selected before CMR. It did not assist with the CMR selection process. In the future they will appoint as a non- voting member of panel. The CMR is selected as early in the process as possible after the consultant. The CMR was selected from a Request for Proposal (RFP), which contained four to five unit prices for major pay items. The Oregon DOT planned to short list three firms, but received only two proposals. The solicitation documents contained a description of the scope of work, quality management roles and responsibilities, and design criteria checklists. Competing CMRs were required to submit the following information: • Past CMR project experience • Past related project experience (non-CMR) • Qualifications of the CMR’s project manager, construc- tion manager, and project principal • Construction quality management plan and public rela- tions plan • Preliminary project schedule • Proposed preconstruction services fee, post-construction services fee (profit), and general conditions fee. The agency interviewed each candidate in person. The inter- view was based on a pre-published list of questions that are asked to all competitors on the shortlist. Formal presentation of project-specific issues and details of preconstruction services took place. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price carried a 15% weight in the selection. There was a protest on this project for ODOT’s alleged failure to pursue clarifications requested during pro- posal preparation that affected the final scoring. The protest was denied. Project Administration: This project used a lump sum GMP contract. The final GMP was established before 100% design completion. The GMP contained a single transparent proj- ect contingency and the CMR was allowed to keep any remain- ing contingency as a shared savings incentive. The consultant design contract was modified to include CMR specific clauses on joint value engineering with the CMR, coordination of design and subcontractor bid packages, selection of means and methods in concert with the CMR, and joint coordination with third parties. The CMR is allowed to self-perform up to 30% of the work, but there are no restrictions on the CMR regarding subcontractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates, schedules, and design approach • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability reviews • Cost engineering reviews • Value analysis • Coordinate with third-party stakeholders. The preconstruction services fee was presented in the pro- posal. ODOT fixed the post-construction fee and general con- ditions at 13.5% of the GMP. There was no negotiation of these items after award. Context-sensitive design training for the CMR’s personnel was required and formal partnering was conducted. Quality Management: Table C4 shows the distribution of quality management responsibilities among parties to the contract. The agency had no means of forming an opinion about the comparative quality with DBB as the project was in design when the interview was conducted. Summary: The contractor interviewed on this project had no objections to the agency fixing the profit and general conditions fee in the RFP. He stated that this took that element out of the

119 competition and allowed his team to focus on demonstrating the value that it could add without worrying about being undercut on the margin amount. The contractor also felt that project quality would be better on CMR than DBB projects because the fundamental design is better and reflects the actual constructed product. One interesting aspect on this project was that the CMR found that it could get permits in about one-quarter the time it took the agency because the permitting agencies perceived that the design would not change from that displayed in the permit application if a construction contractor was the one pulling the permit. This is even more interesting when one considers that Eugene, Oregon, has some of the most stringent environmental constraints in the nation. Case 5—Pinal County Public Works; Ironwood–Gantzell Multi-Phase Road Improvement Location: Florence, Arizona Value: $63.7 million Scope of Work: Convert 2-lane highway to 4-lane, construct bridges and approach roads; at-grade intersections and ancil- lary safety improvements. Rationale: Pinal County had some experience with CMR, having completed four previous projects. The decision to use CMR was made before 30% design completion. The major reason for selecting CMR was the need to compress the schedule along with the requirement to maintain extensive coordination with third-party stakeholders, such as utility companies, and the need for positive public interface through- out the project. Less important reasons for selecting CMR were cited as follows: • Get early construction contractor involvement • Encourage constructability and facilitate value engi- neering • Sort out complex project requirements • Gain flexibility during construction • Assign the responsibility for coordinating third-party issues to the contractor • Take advantage of innovative financing. Procurement: A consultant furnished all design services and was selected before CMR. It assisted the agency with the CMR selection process by evaluating CMR qualifications, participating as a voting member of the panel, and develop- ing the short list. The local Associated General Contractors (AGC) also furnished a voting member to the selection panel. The CMR was selected from an RFQ and a short list of all qualified proposers. It is possible in Pinal County to have more than three on the short list. The solicitation documents contained a description of the scope of work quality man- agement roles, preliminary plans and specifications, quality management roles and responsibilities, and a conceptual schedule. Competing CMRs were required to submit the following information: • Past CMR project experience with references • Past related project experience (non-CMR) with refer- ences • Qualifications of the CMR’s project manager, pre- construction services manager, general superintendent, and public relations person • Construction traffic control plan and public relations plan • Preliminary project schedule • Declaration of self-performed work and subcontracting plan • Critical analysis of project budget. The agency interviewed each candidate in person and con- sisted of a formal presentation, including qualifications, past projects, key personnel, details of preconstruction services, and CMR’s analysis of potential project issues and how they can be managed. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price was not scored. Pinal County has never had a protest of a CMR selec- tion decision. Project Administration: This project used a lump sum pro- gressive GMP contract. The final GMP was established before 100% design completion and was the sum of previous work package GMPs and the estimate for the final work package Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C4 WILLAMETTE RIVER BRIDGE CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

120 plus contingencies. The GMP contained transparent contin- gencies for both the owner and the CMR with no shared sav- ings incentive. The consultant design contract was modified to include CMR specific clauses for design review and mile- stones to facilitate preconstruction services, a requirement to notify CMR of major design changes, joint value engineering with CMR, coordination of design and subcontractor bid pack- ages, and joint coordination with third parties. The CMR is allowed to self-perform up to 45% of work; however, there are no restrictions on the CMR regarding subcontractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates, schedules, and design approach • Assist in permitting actions • Assist in right-of-way acquisition • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability and cost engineering reviews • Value analysis • Coordinate with third-party stakeholders • Conduct material market survey for cost and availabil- ity during design • Establish sequence of design work to coordinate with construction work packages • Forecast material/labor pricing to make input to contin- gencies. The preconstruction services fee and post-construction man- agement fee were negotiated after award. No special training was required, but formal partnering was mandatory. Quality Management: Table C5 shows the distribution of qual- ity management responsibilities among parties to the contract. The agency held that CMR produces better quality than DBB because of better relationships among all project stakeholders. Summary: The contractor for this project agreed with the owner that the project’s quality is better if delivered using CMR because in his words: “Being able to make input to the design creates a sense of ownership in that design.” This case study project had the most robust preconstruction services program, involving the contractor in material selection, per- mitting, right-of-way acquisition, and public relations. Both the agency and the contractor agreed that the progressive GMP system allowed the CMR to keep contingencies at a mini- mum and allowed the project to proceed in those areas where third-party issues were settled. This created the reduction of uncertainty and permitted the project’s schedule to be com- pressed to its greatest extant without excessive time-related contingencies. Case 6—Utah DOT I-80 Location: Salt Lake City, Utah Value: $130 million Scope of Work: Add one lane to each side of I-80; construct six new bridges; improve two interchanges, including adding lanes; retaining walls; residential sound/noise walls. Rationale: The Utah DOT (UDOT) had 48 CMR projects either finished or underway at the time of the interview and is very comfortable with the status of its procurement system, as well as the provisions in their design and CMR contracts. The decision to use CMR was made before 30% design completion. The major reason for selecting CMR on this project was the need to bring in technical expertise and experience with Accelerated Bridge Construction, a process where a bridge is constructed offsite and driven into place atop a specialized bridge erection vehicle. Additionally, UDOT believed that the need to control budget and schedule on a technically complex project was best met by CMR project delivery. Less important reasons for selecting CMR were cited as follows: • Get early construction contractor involvement and redistribute risk • Accelerate the project delivery period and establish the budget at an early stage • Encourage innovation, constructability, and facilitate value engineering Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C5 IRONWOOD–GANTZELL CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

121 • Assign responsibility for third-party issues to the CMR • Gain flexibility during construction • Reduce agency oversight requirements during design and reduce life-cycle costs. The rationale for using CMR on this project is stated as follows: “[we] chose CMGC because the owner is more involved in the design decision process. As owners we make better decisions when we understand the project and that occurs during design. Furthermore, our understanding is enhanced by the contractors experience of how to build it. Evolving the contractor in design is like having a continuous peer review. We catch our mistakes, gain a better understanding of our choices, and make better decisions” (Alder 2009). Procurement: The project was designed by a combination of consultant and in-house designers with the in-house group initiating conceptual design. The designer is selected before CMR and assists DOT with CMR selection process as non- voting member of panel. The CMR was selected by a two-step RFQ/RFP process. A short list of the three most qualified firms was formed and then asked to submit a proposal containing four to five unit prices for major pay items. The process is described by one of its authors here: Using price in the selection process forces the contractor to think about what they will be building. When we add price they have to apply assumptions, boundaries, quantities, schedules, etc., to the project. Price forces the contractor to think through a project like they would have to think through a traditional Design, Bid, Build project. It also adds price completion to the selection process. Associated with this effort we ask them to document assumptions, risks, innovations, and risk mitigation strategies. We are not as concerned about the proposed price as we are about their process in getting there. We want to know if they will open their cost estimating books to us. Will they be good team players and follow an open book process in their cost estimating? Cost is an important part of the design decision process and we need a contractor that shows his cards. In the design process the engineer and the contractor share price information. We can then compare their prices for the bid items they responded to in the proposal. We also consider assumption used in the creation of those prices and make adjust- ment where it is justified. In the bid opening process we com- pare the contractor’s price to a cost estimate performed by an Independent Cost Estimator (ICE). The ICE is not told contrac- tor prices during the design. The ICE knows measurement and payment information and what is included in each bid item. The ICE is an experienced contractor estimator who bids the project like another contractor. We compare the contractor’s price to the ICE for each bid item. We also compare the contractor’s price to the bid items he proposed on in the selection process. If oil or other material costs have gone up then a price increase on HMA [hot mix asphalt] for example is permitted, else we expect the same price at bid opening as we were given at contractor selection. The process is not perfect and we are looking for ways to improve it. One technique we are developing is a Cost Model being developed by a local university professor. We have a model for HMA, PCCP [portland cement concrete pavement], storm drains, and sidewalks. We intend to expand this to 20% of the bid items that represent 80% of a projects cost. The primary purpose of this tool is to force a discussion about assumptions— like what is the material cost, the labor rates, the production rates, and other relevant choices that are used to estimate the cost. This gives the engineer a better understanding of what the construction challenges are. The engineer is then better able to create an estimate from historical data. The contractor is better able to share his cost and create a more accurate construction cost (Alder 2009). The solicitation documents contained quality management roles and responsibilities and preliminary plans and specifica- tions. Competing CMRs were required to submit the following information: • Organizational structure/chart • Past CMR project experience with references • Past related project experience (non-CMR) with refer- ences • Qualifications of the CMR’s project manager, precon- struction services manager, general superintendent, and public relations coordinator • Construction traffic control plan and public relations plan • Preliminary project schedule • Subcontracting plan • Proposed post-construction services fee • Rates for self-performed work • Critical analysis of project budget. The agency interviewed each candidate in person, which consisted of a formal presentation, including qualifications, past projects, key personnel, details of preconstruction services, and CMR’s analysis of potential project issues and how they can be managed. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price weight ranges from 26% to 50%; this project was about 30%. UDOT has never had a protest of a CMR selection decision. Project Administration: UDOT uses different contract types based on project type. They have used Unit Price GMP; Unit Price with no GMP; Preconstruction fee only with construction features hard bid by subs. This project used a progressive Unit Price GMP, which is assembled incrementally as the design of bid packages are completed and subcontractor bids are received. The final GMP was established after 100% design and there is a single transparent contingency and no shared savings. The contingency was broken down into three cate- gories: material contingency, westbound portion plus Accel- erated Bridge Construction, and eastbound portion. UDOT does not modify its typical consultant design contract for CMR. The CMR can self-perform up to 70% of the project and there are no restrictions on the CMR regarding subcontractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates, schedules, and design approach • Prepare project estimates and schedules • Assist/input to agency/consultant design

122 • Constructability and cost engineering reviews • Coordinate with third-party stakeholders • Public relations and public information planning. The preconstruction services fee was negotiated after award. There is no contractual post-construction services fee. In a unit price, GMP is contained in the construction costs provided in the GMP. No special training was required, but formal partnering was mandatory. Quality Management: Table C6 shows the distribution of qual- ity management responsibilities among parties to the contract. The agency that held CMR produces better quality than DBB because CMR believes that the quality of its work reflects on its competitiveness for the next UDOT CMR project. Summary: The contractor on this project agreed that CMR pro- duces better quality than DBB because the contractor design input can assist in literally designing the quality into the proj- ect. It also believed that the progressive GMP allowed for keeping contingencies as low as possible. It also preferred breaking out the material contingencies from the time-related contingencies in that it created an open-books method for discussing contingency issues with the state. Finally, the con- tractor believed that requiring the competing contractors to detail their project approach during the interview was a particularly effective way to differentiate the winner. UDOT agreed that the winner’s approach to the project was the over- whelming reason for its selection. DEPARTMENT OF TRANSPORTATION OVERSIGHT OF CONSTRUCTION MANAGER-AT-RISK PROJECTS The next case study is a CMR project where the DOT is over- seeing the project and had much less input into the decision to use CMR project delivery. As result, as much information as possible was collected by interview or from the literature. It is included to furnish examples of nonstandard project delivery. This includes an additional section indicating the agency providing the funding for the project. Case 7—Michigan DOT: Oversight—Passenger Ship Terminal Expansion Agency Providing Funds: Detroit Wayne County Port Authority Location: Detroit, Michigan Value: $10 million Scope of Work: Construct new wharf and expand service roads that service the new wharf. Rationale: The Michigan DOT (MDOT) had no prior expe- rience with CMR; this project is the first one. MDOT was not involved in the rationale behind the decision to use CMR project delivery. The decision by the Port Authority was made before 30% design completion. The major rea- sons for selecting CMR were the technical complexity of the project and the need to reduce agency staffing to oversee the project. Procurement: A consultant furnished all design services and was selected before CMR. It assisted the funding agency with the CMR selection process as a voting member of panel, evaluating qualifications, checking references, and evaluating fees after award. The CMR was selected from an RFQ and no short list was formed. All proposals were considered. The DOT was not involved in the selection decision. The agency interviewed each candidate in person and consisted of a for- mal presentation, including qualifications, past projects, key personnel, details of preconstruction services, and CMR’s analysis of potential project issues and how they can be man- aged. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price was not scored. There was no protest of a CMR selection decision. Project Administration: This project used a lump sum GMP contract. The final GMP was established after 100% design completion and after subcontractor bids had been received. The GMP contained transparent contingencies for both the owner and the CMR, with a shared savings incentive of the unused contingencies. The consultant design contract was not modified. The CMR is allowed to self-perform up to 35% Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X X Technical review of construction material submittals X X Checking of pay quantities X X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on-site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X X TABLE C6 I-80 CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

123 of the work, but there are no restrictions on the CMR regarding subcontractor selection. Preconstruction Services: The following preconstruction services were provided: • Validate agency/consultant estimates and design approach • Prepare project estimates and schedules • Constructability reviews • Value analysis • Coordinate with third-party stakeholders. The agency specified a fixed preconstruction services fee of $50,000. It also specified a post-construction management fee of 3.5%. No special training or partnering were required. Quality Management: Table C7 shows the distribution of qual- ity management responsibilities among parties to the contract. The agency had no opinion regarding the comparative quality of CMR as the project is not complete and this is the agency’s first CMR job. Summary: No contractor interview was forthcoming on this project. The agency is evaluating the outcome of this project before deciding if it will apply it to traditional MDOT projects. NON-HIGHWAY SECTOR CASE STUDY PROJECTS The final three case study projects are from outside the highway sector. There is an airport case study from Tennessee, a transit CMR project from Utah, and a university building from Texas. The first two projects were taken from previous research projects for ACRP (Touran et al. 2008) and TCRP (Touran et al. 2009). The third was taken from a research project completed at the University of Oklahoma on CMR use in the building sector (Gransberg and Carlisle 2008). As a result, no specific structured interviews were made for this synthesis. The information collected in the three cited research studies was extracted and input into the format used for the case studies collected by the consultants for this project. Therefore, there are some details of interest to this study that are missing, but overall the three case studies are complete enough to allow a comparison of highway CMR projects with the three other sectors. Case 8—Utah Transit Authority: Weber County Commuter Rail Project Location: Salt Lake City, Utah Value: $241 million Scope: The 44 miles of new transitway alignment begins in downtown Salt Lake City at the Inter-modal Hub and extends north along the Union Pacific Railroad right-of-way through Davis and Weber counties, passing on new elevated struc- tures over the Ogden Yard continuing north of Union Station in Ogden to Pleasant View, Utah. Grade crossings and grade crossing protective devices for the commuter rail line are also being constructed or reconstructed as needed. The project also includes seven stations that include Park and Ride capabilities and an upgrade of an existing maintenance facility and storage site to maintain the commuter rail fleet. Rationale: This project involved coordinating with multiple stakeholders as it passed through 10 different municipalities and shared or abutted on right-of-way owned by the Union Pacific Railroad. The Utah Transit Authority (UTA) had limited experience with CMR, having completed fewer than five previous projects. The decision to use CMR was made before 30% design completion. The major reason for select- ing CMR was the project’s technical complexity, along with the requirement to maintain extensive coordination with the third-party stakeholders, such as utility companies, impacted municipalities, and the railroad. Finally, there was a need to ensure continuous public interface, as well as a desire to compress the schedule to accrue transit and parking revenue as early as possible. Less important reasons for selecting CMR were cited as follows: • Get early construction contractor involvement • Establish the project budget for each phase as early as possible Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X X Technical review of construction material submittals X X Checking of pay quantities X Routine construction inspection X Quality control testing X X Establishment of horizontal and vertical control on site X X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C7 PASSENGER SHIP TERMINAL CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

124 • Encourage constructability and facilitate value engi- neering • Gain flexibility during construction • Assign the responsibility for coordinating third-party issues to the contractor • Reduce agency staffing requirements. Procurement: A consultant was selected to complete the design. The designers were selected before the CMR. The consultant assisted the agency with the CMR selection process as a non-voting member of the panel. The CMR was selected from an RFP and a short list of three qualified proposers. The solicitation documents contained a description of the scope of work and quality management roles and responsibilities. Competing CMRs were required to submit the following information: • Past CMR project experience with references • Qualifications of the CMR’s project manager and quality manager • Proposed preconstruction fee. The agency interviewed each candidate in person and con- sisted of a formal presentation, including qualifications, past projects, key personnel, details of preconstruction services, and CMR’s analysis of potential project issues and how they can be managed. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price was not scored and UTA has never had a protest of a CMR selection decision. Project Administration: This project used a lump sum GMP contract. The final GMP was established as soon as practical before 100% design completion. The GMP contained separate transparent contingencies for the CMR and the owner and the CMR with no shared savings incentive. The consultant design contract was modified to include CMR specific clauses for CMR design review, joint value engineering, and joint coordination with third parties. The CMR is allowed to self-perform as much of the work as it pleases, and it had no restriction on its selection of subcontractors. Preconstruction Services: The following preconstruction services were provided: • Validate consultant design • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability and cost engineering reviews • Value analysis • Market surveys to assist in material selection design decisions • Coordinate with third-party stakeholders • Assist in right-of-way acquisition and permitting actions. The preconstruction services fee was proposed before award and the post-construction management fee was negotiated after award. No special training was required. Formal partnering was mandated. Quality Management: Table C8 shows the distribution of quality management responsibilities among parties to the contract. The agency held that CMR produces better quality than DBB because of the CMR’s ability to work with third parties to reduce permitting delays and maintain the schedule. Summary: The UTA was able to complete this project 9 months ahead of schedule and within budget. They believed that the use of CMR project delivery and especially the early contractor involvement in the design process was largely responsible for project success. The CMR initiated a value engineering study of a large fly-over bridge that crossed the Union Pacific railroad yard. The basis of the savings was a right-of-way swap between UP and UTA that allowed the fly-over to be reduced to two small bridges on three fills. UTA accrued the entire savings of nearly $7 million because it was paying for value engineering services in the preconstruction services contract. UTA also used an innovative clause in their CMR contract that created an incentive for the contractor to maintain good public relations. The clause effectively put half of CMR’s post-construction services fee at risk by requiring a monthly meeting of a stakeholder panel that included the impacted municipalities, the state environmental quality agency, and Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X X Technical review of construction material submittals X X Checking of pay quantities X X Routine construction inspection X X X Quality control testing X Establishment of horizontal and vertical control on site X X Verification testing X Acceptance testing X X Independent assurance testing/inspection Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C8 WEBER COUNTY COMMUTER RAIL CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

125 representatives from the railroad and the FTA. The panel reviewed the issues that arose in the past month and made a recommendation to UTA as to how much of the at-risk fee should be awarded in the monthly progress payment. The clause worked because there was only one month that less than the full amount was applied, and the panel decided to restore it the next month after the CMR had taken aggressive and immediate corrective action to resolve the issue. Finally, it should be noted that UTA’s desire to minimize the agency’s oversight staff was realized in that the project was success- fully completed with only two UTA employees assigned to manage it. Case 9—Memphis–Shelby County Airport Authority: Whole Base Relocation Project Location: Memphis, Tennessee Value: $245 million Scope: Relocate the 164th Airlift Wing base in its entirety to a new location at Memphis–Shelby County International Air- port (MSCIA). New apron and taxiways, three specialized hangars with associated shops to support the C-5 program, and all related administrative base operations; design packages for 15 buildings (560,000 square feet); and associated utilities and infrastructure. Rationale: This project involved multiple stakeholders: the MSCIA Authority, FedEx, Inc.; 164th Airlift Wing, Tennessee Air Guard; and Headquarters, Air National Guard, Washing- ton, D.C. It also involved mixing private funding with dif- ferent types of public funding. The MSCIA Authority had prior experience with CMR, having completed more than 10 previous projects. The decision to use CMR was made before advertising the design contract. The major reason for selecting CMR was the need to compress the schedule along with the requirement to maintain extensive coordination with the four stakeholders contributing funds to the project as well as third-party stakeholders, such as utility companies and the scheduled airlines. Finally, there was a need to be able to track which features in the scope of work were being designed and built from each pot of funds throughout the project. Less important reasons for selecting CMR were cited as follows: • Get early construction contractor involvement • Establish the project budget for each phase as early as possible • Encourage price competition through competitive bid- ding by subcontractors • Encourage constructability and facilitate value engi- neering • Redistribute risk and sort out complex project require- ments • Assign the responsibility for coordinating third-party issues to the contractor • Take advantage of available federal and private financing. Procurement: A consultant was selected to act as CM-Agent and represents the MSCIA Authority throughout the course of the project. The project had five phases and the CM-Agent treated each as a separate project, procuring phase design consultants to complete the design and requiring full compe- tition for each CMR contract. The designers were selected before the CMR. The CM-Agent assisted the agency with the CMR selection process by evaluating CMR qualifications, checking references, and participating in the interviews as a non-voting member of the panel. The CMR was selected from a two-step RFQ/RFP and a short list of three qualified pro- posers. The solicitation documents contained a description of the scope of work and preliminary plans and specifications. Competing CMRs were required to submit the following information: • Organizational chart • Past CMR project experience with references • Past related project experience (non-CMR) with refer- ences • Qualifications of the CMR’s project manager, pre- construction services manager, general superintendent, and quality manager • Construction traffic control plan and construction quality management plan • Preliminary project schedule • Declaration of self-performed work and subcontracting plan • Critical analysis of project budget including target GMP • Proposed preconstruction and post-construction fees. The agency interviewed each candidate in person and each interview consisted of a formal presentation, including qual- ifications, past projects, key personnel, details of preconstruc- tion services, and CMR’s analysis of potential project issues and how they can be managed. The winner was determined by the output from the selection panel’s direct point scoring in weighted categories published in the advertisement. Price was weighted at 25% of total points and the MSCIA Authority has never had a protest of a CMR selection decision. Project Administration: This project used a lump sum GMP contract for each phase. The final GMP was established by the sum of phase GMPs and the estimate for the final phase contingencies. The GMP contained a single transparent contingency and the CMR with no shared savings incentive. The consultant design contract was modified to include CMR specific clauses for milestones to facilitate preconstruction services, budget review points, coordination of design and sub- contractor bid packages, and joint coordination with third parties. Additionally, the MSCIA CMR design contract con- tained a provision that put up to 10% of design fee at risk based on the quality of the construction documents. This was mea- sured by the number of additive change orders that had to be issued after 100% construction documents were released for construction. The CMR is allowed to self-perform as much of the work as it pleases, and it was required to accept competitive

126 bids from the trade subcontractors. It was allowed to designate a subcontractor whose bid was not the lowest, but the CMR had to reduce its margin to be the difference between the low sub and the desired sub. Preconstruction Services: The following preconstruction services were provided: • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability and cost engineering reviews • Value analysis • Coordinate with third-party stakeholders. The preconstruction services fee and post-construction man- agement fee were proposed before award. No special training or partnering was required. Quality Management: Table C9 shows the distribution of quality management responsibilities among parties to the contract. The agency held that CMR produces better quality than DBB because it made the CMR more competitive for future work. Summary: The MSCIA Authority was able to complete this project ahead of schedule and within budget. They believed that the use of both CMR and CM-Agency in this phased project was largely responsible for its success. The first phase had difficulty getting the design consultant to accept CMR input because it feared that this would compromise the contractual design liability. The second phase CMR design contract contained the provision that put up to 10% of design fee at risk based on the quality of the construction docu- ments. This changed the consultant’s attitude from view- ing the CMR as technically unqualified interference to see- ing the CMR reviews as a valuable contribution to the design quality control system. This contractual innovation along with furnishing the CMR with the ability to select a subcontractor whose bid was not the lowest by reducing its own fee created an environment where the CMR’s value to the project was significant. Case 10—Texas Tech University Lanier Professional Development Center Location: Lubbock, Texas Value: $13.7 million Scope: Construct a 34,560 gross square foot addition that includes a state-of-the-art 150 seat courtroom; a 300 seat auditorium–classroom, capable of holding an entire law school class as well as continuing education conferences; and office spaces for the Office of Academic Success Programs, Career Services and Alumni Development, and student organizations. Rationale: Texas Tech University (TTU) had extensive expe- rience with CMR, having completed more than 20 previous projects in the past decade. The decision to use CMR was made before 30% design completion. TTU’s policy is to use CMR on all projects that are over $5.0 million and on technically complex projects under that limit. The major reason for select- ing CMR was the project’s technical complexity along with the requirement to maintain extensive coordination with the third-party stakeholders, such as the Law School Dean, the funding donor, and interested alumni. Finally, there was a need to ensure that construction did not interrupt the educational activities in the immediate area of the project. Less important reasons for selecting CMR were cited as follows: • Compress the schedule • Get early construction contractor involvement • Establish the project budget for each phase as early as possible • Encourage constructability and facilitate value engi- neering • Redistribute risk for complex project requirements • Gain flexibility during construction • Assign the responsibility for coordinating third-party issues to the contractor • Encourage sustainability • Reduce agency review/inspection requirements. Procurement: A consultant was selected to complete the design. The designers were selected before the CMR. The consultant Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X X Technical review of construction material submittals X X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C9 WHOLE BASE RELOCATION CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES

127 assisted the agency with the CMR selection process as a non- voting member of the panel. The CMR was selected from an RFP and a short list of three qualified proposers. The solicita- tion documents contained a description of the scope of work and quality management roles and responsibilities. Competing CMRs were required to submit the following information: • Organization chart • Past CMR project experience with references • Qualifications of the CMR’s project manager and quality manager • Construction quality control and traffic control plan • Preliminary project schedule • Declaration of self-performed work • Subcontracting and Disadvantaged Business Enterprise plan • Proposed preconstruction, post-construction, and gen- eral conditions fee • Critical analysis of the project budget. The agency interviewed each candidate in person and each consisted of a formal presentation, including qualifications, past projects, key personnel, details of preconstruction services, and CMR’s analysis of potential project issues and how they can be managed. The winner was determined by the output from the selection panel’s adjectival rating in unweighted categories published in the advertisement. Price was scored and carried a weight of 25%. TTU has never had a protest of a CMR selection decision. Project Administration: This project used a lump sum GMP contract. The final GMP was established as soon as practical before 100% design completion. The GMP contained sepa- rate transparent contingencies for the CMR and the owner and the CMR with no shared savings incentive. The consul- tant design contract was modified to include CMR specific clauses for CMR design review, design milestones for pre- construction services, budget review points, joint value engi- neering, coordination of design packages with subcontractor bid packages, and joint coordination with third parties. The CMR is allowed to self-perform as much of the work as it pleased, and it must accept bids from subcontractors and award to the lowest responsible bidder. Preconstruction Services: The following preconstruction services were provided: • Prepare project estimates and schedules • Assist/input to agency/consultant design • Constructability and cost engineering reviews • Value analysis • Market surveys to assist in material selection design decisions • Coordinate with third-party stakeholders • Assist in permitting actions and prepare sustainability certification paperwork. The preconstruction services and post-construction manage- ment fees are proposed before award. No special training was required. Formal partnering was mandated. Quality Management: Table C10 shows the distribution of quality management responsibilities among parties to the contract. The agency held that CMR produces better quality than DBB because of the CMR’s ability to work with third parties to reduce permitting delays and maintain the schedule. SUMMARY The ten case study projects detailed in the previous section represent a cross section of the types of projects that state DOTs and other public transportation agencies might use CMR to deliver. The analysis of the output from the case study data collection will be detailed in the next chapters on the various aspects of CMR project delivery. Quality Assurance/Quality Control Tasks Does Not Apply Agency Designer CMR Agency- Hired Consultant Technical review of construction shop drawings X Technical review of construction material submittals X Checking of pay quantities X Routine construction inspection X Quality control testing X Establishment of horizontal and vertical control on site X Verification testing X Acceptance testing X Independent assurance testing/inspection X Approval of progress payments for construction progress X Approval of construction post-award QM/QA/QC plans X Report of nonconforming work or punchlist X TABLE C10 LANIER PROFESSIONAL DEVELOPMENT CENTER CMR PROJECT QUALITY MANAGEMENT RESPONSIBILITIES