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23 6.1 Introduction This chapter introduces the preconstruction phase and presents contract administration tools that contribute to successful preconstruction. This chapter addresses â¢ CM-GC preconstruction process overview and â¢ Preconstruction phase contract administration tools. In the preconstruction phase, the agency ensures that there are opportunities for the CM-GC to provide input on the design to enhance constructability and innovation. Addi- tionally, the agency administers the cost-estimating process with input from the engineer, the independent cost estimator, and the CM-GC. The key deliverables of this phase are the GMP and construction work packages. Scheduled and impromptu communication are necessary to develop a high level of collaboration between the various stakeholders engaged in the preconstruction phase. 6.2 Construction ManagerâGeneral Contractor Preconstruction Process Overview Traditional D-B-B project delivery has a clear separation of the engineer and construc- tor roles, and construction is awarded to the lowest bidder. In contrast, the CM-GC con- tracting method involves the general contractor in several aspects of design. The CM-GC firm does not perform design but provides preconstruction services, such as constructability reviews, scheduling, progressive cost estimates, construction phasing, value engineering, risk management, and other design-related support activities. Rather than competitive bidding, which prioritizes cost at the expense of all other key metrics, the CM-GC pro- cess uses a GMP process for construction work package pricing and may involve negotia- tions to determine the agreed-upon price. Agencies and contractors complete this process in cooperation with an independent cost estimator to act as an objective third party in the price negotiations. Key activities for the preconstruction phase typically include the following: â¢ Review CM-GC input for design, â¢ Approve design changes based on CM-GC input, â¢ Approve CM-GC preconstruction services invoices, â¢ Review project management plans, â¢ Negotiate GMP, â¢ Enact CM-GC contract modifications, and â¢ Manage CM-GC documentation. C H A P T E R 6 Preconstruction Phase Administration
24 Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods 6.3 Preconstruction Phase Contract Administration Tools In this phase, the agency seeks to facilitate preconstruction services from the CM-GC that can enhance the design and the built facility. In this phase, agency administration tasks focus on ensuring that the preconstruction services are performed in alignment with project goals and in collaboration with other project stakeholders. The agency will also want to ensure that preconstruction services are integrated into the design to facilitate innovation that achieves project goals while maintaining safety and quality in a cost-effective and timely manner. An agency can foster innovation on a CM-GC project by implementing a variety of tools. For example, 16 Deviation from Agency Standards creates an atmosphere where the CM-GC firm can think outside the box in search of new ways to achieve project goals. Innovative ideas with cost implications can be captured by the 25 CostâSavings Matrix, a table that describes each innovation and lists the individual(s) responsible for researching the idea, the potential costs and benefits, and the project teamâs decision of whether to implement the innovation. During the preconstruction phase, the CM-GC firm should strive to understand the design goals, and the engineer should strive to understand the construction goals. 8 CM-GCâSpecific Partnering can help foster mutual understanding. In addition, 5 Regulatory Agency Partnering can promote smooth working relationships with regulatory agencies. In a traditional D-B-B project, a contractor may not deal directly with obtaining permits from regulatory agencies. But in a CM-GC project, preconstruction services may place the CM-GC in direct contact with regulatory agencies. Partnering is one tool that can strengthen relationships and open chan- nels of communication. FHWA can be a stakeholder on federally funded projects. 10 FHWA Involvement Overview clarifies when FHWA staff are invited to participate in project meet- ings and when they are required to receive specific design documents. When jurisdictions, utilities, and other entities have a stake in the project, 4 External Stakeholder Coordination Plan can be implemented so that their design feedback is considered as early as possible. 19 Public Announcements keep the general public informed about the project scope, schedule, budget, and how the CM-GC delivery method will benefit the project. 9 Continuity of Team Members means that the agency, engineer, and CM-GC staff that worked on the project during procurement and alignment continue to work on it during the preconstruction phase. These project team members help ensure continuity so that the issues that have been decided previously are not reopened, and the project understanding that was built during alignment allows designâand later, constructionâto proceed smoothly. 6 Co-Location of Key Personnel allows key team members from the agency, engineer, and CM-GC firm to be in one physical location. Preconstruction services can require significant interface between many disciplines; having everyone nearby helps facilitate efficient and timely communication. As preconstruction services are performed, decisions need to be made. 20 Delegation of Authority puts the decision-making authority into the hands of the agencyâs engineer in charge of the project. This brings confidence to the team that decisions will be made in a timely manner by people knowledgeable about the project. To perform preconstruction services effectively, the CM-GC firm has to be well integrated into the design process. 15 In-Progress Design Workshops bring together team members from different disciplines so that multiple perspectives and factors can be taken into account during design. In-progress design workshops are meant to develop and discuss various design options. However, 17 Over-the-Shoulder Reviews focus on obtaining review comments on one specific design option. In these meetings, the CM-GC can offer key information about the designâs con- structability, construction cost, and schedule implications. 11 Permit Commitment Database can be used during preconstruction services to help the CM-GC ensure that the feedback and work products developed comply with all agreements. The 14 Plan Standards tool streamlines
Preconstruction Phase Administration 25 the design development by focusing on plans that contain content the agency will need for as-built records. Because the CM-GC is actively participating in design through preconstruction services and has a thorough understanding of the project scope, designs for construction tasks that the general contractor will self-perform may not need to be developed to the level traditionally required for bidding, which can save time and effort. As discussed, contractor input with regard to the constructability of the design is a major benefit of CM-GC. These constructability reviews are tasks completed by the CM-GC firm; there is no agency tool labeled constructability review. However, agencies use various tools that help facilitate this constructability input. For example, tools such as 17 Over- the-Shoulder Reviews, 15 In-Progress Design Workshops, and 22 Cost- Modeling Approach, help ensure that constructability input is occurring during design development. Moreover, design and preconstruction services are separate contracts. Therefore, FHWA requires a value engineering process on federally funded CM-GC projects (Value Engineering 2014). The CM-GC firm provides progressive cost estimates, a key preconstruction service. Before the first cost estimate is produced, the team can come together to develop a 22 Cost-Modeling Approach that clarifies assumptions, means and methods, and baseline production rates. This tool is especially helpful early in design to reconcile the scope and budget. 7 CM-GC Manage- ment Fee Table documents which costs will have the CM-GCâs fee attached to them, ensuring that the individuals preparing an estimate and those reviewing the estimate are all on the same page. In addition to the CM-GC estimate, the agency can contract with a 24 Independent Cost Estimator to prepare a cost estimate separate from the CM-GC but consistent with the cost model. The agency can use a 21 Cost-Comparison Spreadsheet to determine where the CM-GC and independent cost estimator estimates are similar and different. For construction activities that the team deems risky, 27 Risk Pools are developed. Specific risks have budgets that are included in the estimate. Some risks pools are agency controlled, and other risks are CM-GC controlled. When design nears completion, the 26 Opinion of Probable Construction Cost Process begins. The CM-GC prepares a price proposal. The independent cost estimator also prepares a cost esti- mate that is used as a 23 CM-GC Bid Validation because the price proposal is negotiated and not competitively bid. With 18 Open-Book Estimating, the agency can review the CM-GC books to see how the price proposal was built up, which allows another way to validate the price proposal. Preconstruction services overlap with design and need to be well integrated with the design. Some of the tools used in the preconstruction phase are initiated in the alignment phase and may also be used by the agency to administer design. Tools used for the preconstruction services phase can help promote innovation during design. Some of the tools help integrate preconstruction services into the design process so that the design can benefit from construc- tability reviews, progressive cost estimates, scheduling, and phasing. Preconstruction services will ultimately lead to an enhanced design and a price proposal that can be used to facilitate successful price negotiations. Tools for the preconstruction phase are listed in Table 6.1. 6.4 Summary The preconstruction phase of a project brings together the agency, the engineer, and the CM-GC to incorporate design input related to constructability, innovation, risk pools, schedule, and cost. The tools in this chapter highlight tools agencies can use to administer preconstruction. More than half of the tools for this phase were used in one or more of the earlier phases. Therefore, team members should already be familiar with using some of these tools. The tools related to cost estimation and development of the probable construction costs are unique to the preconstruction phase. Therefore, the agency should introduce the FHWA requires a value engineering process on federally funded CM-GC projects.
26 Guidebooks for Post-Award Contract Administration for Highway Projects Delivered Using Alternative Contracting Methods team to these new tools to make sure there is a common understanding of their purpose, use, and timing. The primary goal of contract administration tools is to help project par- ticipants communicate, document, plan, and execute preconstruction efficiently. The tools provided in this guidebook may inspire agencies to develop new tools or adapt some of the available tools based on the needs of a particular project or the organizational structure of their agency. Detailed information on each tool and various examples generously provided by leading agencies are available in Appendix A. Tools for Construction ManagerâGeneral Contractor Preconstruction Contract Administration Phase Project Complexity Project Size A lig nm en t D es ig n P re co ns tr uc ti on C on st ru ct io n C lo se ou t N on co m pl ex M od er at el y C om pl ex C om pl ex > $5 0 m ill io n Phase 3. Administer Preconstruction Services of a Construction ManagerâGeneral Contractor Project 5 Regulatory Agency Partnering 6 Co-Location of Key Personnel 7 Construction Managerâ General Contractor Management Fee Table 8 Construction Managerâ General Contractorâ Specific Partnering 9 Continuity of Team Members 10 FHWA Involvement Overview 11 Permit Commitment Database 14 Plan Standards 15 In-Progress Design Workshops 16 Deviations from Agency Standards 17 Over-the-Shoulder Reviews 18 Open-Book Estimating 19 Public Announcements 20 Delegation of Authority 21 Cost-Comparison Spreadsheet 22 Cost-Modeling Approach 23 Construction Managerâ General Contractor Bid Validation 24 Independent Cost Estimator 25 CostâSavings Matrix 26 Opinion of Probable Construction Cost Process 27 Risk Pools Note: = Recommended; = Consider case by case; = Not recommended. $1 0 m ill io n $1 0 m ill io nâ $5 0 m ill io n Table 6.1. Summary of construction managerâgeneral contractor preconstruction phase tools.