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Suggested Citation:"Chapter 2 - Overarching Contract Administration Strategies." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery. Washington, DC: The National Academies Press. doi: 10.17226/25829.
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Suggested Citation:"Chapter 2 - Overarching Contract Administration Strategies." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery. Washington, DC: The National Academies Press. doi: 10.17226/25829.
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Suggested Citation:"Chapter 2 - Overarching Contract Administration Strategies." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery. Washington, DC: The National Academies Press. doi: 10.17226/25829.
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Suggested Citation:"Chapter 2 - Overarching Contract Administration Strategies." National Academies of Sciences, Engineering, and Medicine. 2020. Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery. Washington, DC: The National Academies Press. doi: 10.17226/25829.
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7 2.1 Introduction This chapter introduces overarching strategies that will aid in successful CM-GC contract administration. A comprehensive examination of the 35 tools in this guidebook, content analysis of agency alternative contracting methods manuals, and themes from the case studies reveals higher-level strategies for CM-GC contract administration success. Five overarching CM-GC contract administration strategies will assist with the implementation of the existing tools, the creation or addition of new contract administration tools, and, ultimately, the successful admin- istration of CM-GC projects. Alignment Strategy—Establish clear project goals, and create productive relation- ships within the agency, as well as between the agency and CM-GC team members. Scope Strategy—Ensure that the project scope and responsibilities are understood and agreed upon by all parties. Preconstruction Services Quality Strategy—Ensure quality of preconstruction services through active participation in design reviews and through verification of competitive pricing of estimates. Construction Quality Strategy—Promote quality during construction, and enforce the requirements of the CM-GC contract. Construction Efficiency Strategy—Implement a system that increases efficiency during construction and aligns with roles and contractual responsibilities. The following sections describe the strategies in more detail and discuss how agency leader- ship can implement them across programs and within projects. Strategy icons throughout the guidebook—particularly in the tools appendix—highlight the tools and recommendations that relate to the strategies. C H A P T E R 2 Overarching Contract Administration Strategies

8 Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods 2.2 Alignment Strategy Establish clear project goals, and create productive relationships within the agency, as well as between the agency and CM-GC team members. A key element to con- struction administration project success begins with clear communication and purposeful alignment between team members during the early stages of the project, right after procurement. Better alignment and integration between project stakehold- ers correlates with better project performance on a variety of metrics and in diverse sectors, including transportation. Developing effective lines of communication and working on agency–engineer–contractor relationships early on will set positive behavioral expectations for the duration of the project. Delaying stakeholder alignment may allow the project team to revert to traditional D-B-B roles and behaviors where there is a purposeful and legal separation between these parties. The CM-GC contracting methods require intense collaboration. Agencies must align these parties from the onset of the contract. Agencies should establish project goals when selecting the CM-GC method (see Chapter 3, Project Goals). Project managers must emphasize these project goals with the engineer and CM/GC team throughout all project phases, beginning with the 1 Kickoff Meeting. To ensure success, teams should consult the project goals during critical design, risk allocation, scheduling, and pricing decisions. The CM-GC contracting method maintains the legal separation of design and construction entities, but roles and responsibilities can change. The use of 2 Roles and Responsibilities can clarify team member functions and help to avoid problems. The use of 6 Co-Location of Key Personnel can help to expedite decisions and the overall design and construction process. The use of CM-GC encourages partnering by assembling the team early and establishing relationships and communications protocols before the project activities ramp up, as in 8 CM-GC–Specific Partnering. This partnering can be either informal— occurring organically with team formation and normal interactions—or formal, with facilitated meetings producing a team charter in alignment with project goals and using an evaluation plan. On major projects, using formal partnering with a formal evaluation plan is an effective alignment strategy. Project teams should also realize that alignment extends beyond the core project team. The team must also align key stakeholders, especially those who might not be familiar with the team integration or pace of a CM-GC project. Project teams can apply tools such as 4 External Stake- holder Coordination Plan, 5 Regulatory Agency Partnering, and 10 FHWA Involvement Over- view to maximize alignment with external stakeholders. 2.3 Scope Strategy Ensure that the project scope and responsibilities are understood and agreed upon by all parties. A clear understanding of the project scope is essential for successful execu- tion of a CM-GC project. The Alignment Strategy discussed earlier is a foundation to allow for a successful Scope Strategy because it helps align all key stakeholders around the scope of the project. The CM-GC process involves the contractor early in design. This is beneficial for construc- tability reviews and overall team alignment on the project scope. However, there is a risk that this early involvement can lead to scope growth if all team members do not fully understand the limits of the project scope. Some agencies use 27 Risk Pools—or another similar tool—to help balance Co-location of key personnel can help to expedite decisions and the overall design and construction process.

Overarching Contract Administration Strategies 9 risk and scope growth. Project teams must identify any discrepancies in team understanding of scope or areas of uncertainty as soon as possible to avoid delays or cost growth. 9 Continuity of Team Members describes a key lesson learned from the research case studies. The highly integrated and fast-paced nature of CM-GC contracting requires a stable group of core team members. Teams can also gain beneficial scope management through the use of 13 Indepen- dent Party Design Review, as long as the design reviewers have a clear grasp of the original project scope. Many contractors and agency team members are knowledgeable about their responsibilities within the traditional method. However, some of these responsibilities change for a CM-GC project. These include preconstruction services, discussed in the next section in the context of ensuring preconstruction services quality. Among the tools that support the Scope Strategy are 2 Roles and Responsibilities and 10 FHWA Involvement Overview. 2.4 Preconstruction Services Quality Strategy Ensure quality of preconstruction services through active participation in design reviews and through verification of competitive pricing of estimates. Unlike with traditional D-B-B projects, in a CM-GC project the agency hires the contractor before or during the design phase of the project to provide services prior to the start of construction. The CM-GC provides design input in the form of plans and continuously updates project costs and schedule estimates as the design progresses. CM-GC design reviews—for example through the use of 15 In-Progress Design Workshops—ensure constructability of the design and adherence to the project budget and schedule. The CM-GC involvement in the preconstruction phase also allows the agency to verify the project cost through a better understanding of project risks. Since the procurement of the CM-GC firm typically focuses on qualifications rather than on final pricing, it is important for the agency to ensure that estimates are accurate and competitive prior to acceptance of a construction agreed-upon price or a guaranteed maximum price (GMP). Therefore, the Precon- struction Services Quality Strategy should place a strong emphasis on project cost. Multiple tools are available to support this strategy, including 18 Open-Book Estimating, 21 Cost-Comparison Spreadsheet, 22 Cost-Modeling Approach, 23 CM-GC Bid Validation, 24 Independent Cost Estimator, and/or 25 Cost–Savings Matrix. Effective preconstruction services should begin with a good definition or description of the agency’s expectations, including the range of services and the degree or extent of each of the ser- vices required. For example, every preconstruction contract will require cost-estimating services. However, the extent of those services can vary widely. Is the agency expecting checkpoint cost vali- dation at 30 percent design, 60 percent design, and 90 percent design? Or, is the agency expecting continuous, open-book cost estimation? If these items are not clear in the request for qualifications (RFQ), the agency should set these expectations at the beginning of the preconstruction phase. 2.5 Construction Quality Strategy Promote quality during construction, and enforce the requirements of the CM-GC con- tract. CM-GC contracts are often selected for their potential time and cost savings, but it is important that project quality remains excellent. All quality assurance (QA) and QC methods that apply to D-B-B projects apply to CM-GC projects. Additionally, the CM-GC contracting approach provides agencies with opportuni- ties to implement alternative QA-QC methods that align with project goals. The highly integrated and fast- paced nature of CM-GC contract- ing requires a stable group of core team members to maintain scope and budget control.

10 Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods The primary difference between CM-GC and traditional D-B-B construc- tion quality approaches occurs in the roles and responsibilities for QA-QC. Because the CM-GC process involves the contractor early and provides an opportunity for specifying construction means and methods, agencies can request that the CM-GC firm be responsible for major QC activities. Tools to support the Construction Quality Strategy can include 28 Contractor- Controlled QC Testing and 29 Contractor Involvement in Establishing QC Standards. The CM-GC process allows for alternative approaches to D-B-B to ensure the achievement of existing requirements and specifications. If the agency desires, it allows for a focus on superior quality during the construction phase. 2.6 Construction Efficiency Strategy Implement a system that increases efficiency during construction and aligns with roles and contractual responsibilities. The CM-GC contracting method provides strong potential for time and cost savings. Achievement of this potential depends on efficient construction operations. The Construction Efficiency Strategy is dependent on clear project goals being set during procurement (see Chapter 3, Project Goals) and quality preconstruction services being applied. In other words, construction efficiencies are made possible by the CM-GC aligning with other team members during design, gaining a clear understanding of project scope, and providing quality preconstruction services that result in a clear allocation of risks and an accurate estimate of price. The CM-GC can also adapt to the design and be ready for the construction phase ahead of time by planning earlier than they typically can in a traditional D-B-B delivery. For example, a temporary traffic control plan is vital to project safety. CM-GC offers a tremendous advan- tage because the contractor can design the plan with interaction and input from the agency and allocate the necessary resources to ensure a high level of worker and motorist safety. Although this activity is similar in D-B-B and CM-GC, the timing of it makes a big difference. CM-GC offers these types of opportunities to improve construction performance and efficiency. CM-GC also offers opportunities for a more efficient construction closeout phase to transi- tion from construction to operations and to ensure a safe and efficient startup of the new facility. Examples of CM-GC tools to support the Construction Efficiency Strategy can include 30 Real- Time Electronic QM Information and 32 Payment Checklist. 2.7 Summary Agencies can use these five CM-GC strategies to select tools that will help to achieve the proj- ect’s goals. Agencies can assess the strategies to select tools from within this guidebook, adapt them for project-specific use, and develop new tools to fit agency-specific needs. An important aspect of developing CM-GC project tools is to identify differences from D-B-B projects and determine how to leverage these differences to lead a more successful project. By emphasizing Alignment, Scope, Preconstruction Services Quality, Construction Quality, and Construction Efficiency strategies, agency leadership can guide the project stakeholders toward CM-GC con- tract administration success. To facilitate this task, each of the tools in Appendix A have icons corresponding to the strategy or strategies that the tool addresses. Because of the contractors’ knowledge of design, materials, and methods in the CM-GC process, agencies are more apt to involve them in QC activities.

Next: Chapter 3 - Pre-Award Phase Administration »
Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery Get This Book
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The transportation industry has a need for contract administration guidance.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 939: Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods, Volume 2: Construction Manager–General Contractor Delivery provides a practitioner’s guide for construction administration on construction manager–general contractor (CM-GC) projects.

Vol. 1, on design-build delivery, and Vol. 3, a research overview, are also available.

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