1. CMGC Contracting at UDOT Program, Projects & Lessons Learned
~ Module 6 ~
CMGC Contracting at UDOT Program, Projects & Lessons Learned
Michelle A. Page, P.E. & Teri Newell, P.E.

2. UDOT CMGC Program FHWA - SEP 14 & Stewardship Agreement
Centralized Roles
Procurement
FHWA Reporting
De-Centralized Roles
Design
Construction
Project Closeout
Overview
Best Value – Ability to get a project started as soon as the environmental document is completed; Iterative design process; Owner makes informed decisions
Exceed Public Expectations – Get In/Get Out, Efficient use of lane closures; CMGC allows you to plan/design your approach to the project with Contractor input, reducing the amount of time the public is impacted
Optimize Innovations – Brainstorm through numerous value engineering concepts, mitigation strategies, design concepts, inclusion of new materials, products, equipment, etc. Incorporation of innovations up front in design, resulting in fewer change orders in construction
Risk Assessment & Management – Able to manage risk and encourage owner/contractor innovations; Pay for actual expenditures, not contingencies

3. UDOT Committed Funds by Delivery Method by Year of Advertisement Date ($ in Millions)
20 CMGC Projects = $1.1 Billion
Smallest –Bitter Creek Structure = $292k This was a remote structure on a low volume road. UDOT did not know whether it
would be better to price a full replacement structure (anticipated at approximately $875k) or spend money to lift the superstructure to repair the substructure. Due to the specialty work involved, the extra mobilization and special equipment pricing, this project was selected as a CMGC to address all the concerns and make an informed scope decision.
Largest – MVC $670 Million
Average Size - $23.5 Million
39 DB Projects = $4.9 Billion
DB vs. DBB vs. CMGC
Where you spend the time and effort delivering the project
DB :
Procurement, 30% Design Effort, RFP Development, and Selection is very labor intensive and time consuming;
Identify all the project specific minimum requirements as the DB makes the decisions after contract award
The RFP can be over 1500 pages by itself; Let alone the conformed contract documents
Preconstruction effort and getting to approved drawings can be time consuming as well
Construction – Things taper off for the owner and go back to standard acceptance criteria, conformance requirements, etc.
CMGC:
Quicker Procurement and Development of the RFP than any other delivery method it get a Contractor on board
The RFP can be anywhere from pages; Much smaller than DB because the Owner is at the table making informed decisions
Risk Contingency - Owner manages and assigns the risk.
Innovative Contracting is all about who does what, when; It is not about re-inventing a new process just because the Designer, or Contractor takes on traditional Owner roles and responsibilities. The process, state and federal requirements, preconstruction and construction requirements are the same.

4. UDOT Development of CMGC
CMAR Concept
Owner
Contract Manager
At-Risk Subs Designer
Contractor
CMGC Concept
Owner
Designer Contractor
Specialty Sub Specialty Sub
In the vertical world, CMAR does not have a lot of owner involvement. The owner hires the CM who hires the “At-Risk” Contractor, all the subs, and the designer. The CM is making the decisions for project delivery. The CM charges approximately 10% for its management services; they may or may not self perform work.
The difference between the vertical world and the horizontal is the level of expertise, knowledge, and amount of control/decision making the owner retains.
For CMGC, UDOT hires the designer, and the contractor; two separate contracts.
Owner (Owner = UDOT) manages a team; CMGC focuses on Partnering/Teamwork.
The UDOT Project Manager is the person at the table making the informed decisions.
As far as when to hire the designer, and when to hire the contractor, it just depends.
There is value in having some preliminary project information in a CAD system (existing survey, existing alignment, possibly utilities)
The Contractor wants to come to the table with options and input. This is best orchestrated when the Designer has a couple of weeks to get setup and running. It’s good to have the Contractor present for the SUE, geotechnical investigations (borings), potholing, and any other site investigations.
Also, UDOT has reduced ROW & Utility impacts during the design phase with the Contractor and Designer input.

5. CMGC Team Approach Partnering Build Trust
All Project Challenges Identified
Contractor Bids Actual Line Items
CMGC
Team
UDOT
Designer
Contractor
CMGC is a very intensive team effort, requiring the team to build trusting relationships.
3 Leg Stool Example – Each member of the team carries the weight of the whole team; a CMGC project relies on the Owner, Designer, and Contractor to be successful; no one leg can support the team. Everyone provides input, follows up timely on action items, and continue to work towards building the project.
Trusting relationships lead to the following:
Open Book Estimates (Actual costs for labor, equipment, materials, production rates, etc.)
Brainstorm/Sharing of ideas – There is no such thing as a “dumb idea” all ideas are valid during brainstorming/design phase; Even if just one really good idea is incorporated, the savings tend to be in the $100k+ range.
Detailed discussion of contingency/risk elements on a project – Just because a contractor has always carried a particular responsibility/liability; Is that the right thing to do? Again, paying for actual costs rather than possible costs; get to unit prices wherever possible
Development of risk mitigation strategies together; Having a plan when probable risks occur
No surprises, hidden agendas, etc.

6. Fair Price Strategy Engineer’s Estimate
Typically based on State Averages
Contractor’s Estimate
Prepared for specific project bid items
Typically based on production rates and unit price
Independent Cost Estimate (ICE)
Cost Validation
Reflects Current Market Conditions
Pricing and Bid Openings are the most stressful and challenging part of the CMGC process. The ICE is based on Fair Market Values and typically runs about 10-15% higher than what the Department would see in a low-bid DBB scenario. However, due to the value gained in making informed decisions, and the savings through innovations this additional cost is outweighed by the overall value and long term cost-benefits to the Department.
Engineer’s Estimate – UDOT has purchased production estimate software, even prepared a few estimates this way and will likely move in this direction in the future.
Contractor’s Estimate – Prepared based on all project meetings, design information, and understanding of what the owner wants built; Can be unit price or lump sum bid items; Contractor’s bid may be contingent on the amount of design completed at the time of bid; Open book – equipment list (type and size, number of pieces, etc.), materials (sources, quantities, calcs, QC effort/amount, etc.), and labor (rates, crew sizes, number of supervisor/project management level) available to the Department for review
ICE – Prepared as an outside set of eyes looking in; ICE attends weekly status meetings on the project to develop an understanding of the construction contract; Role of the ICE is to perform a cost validation, and if necessary identify the competitive range available in the current market conditions ; ICE obtains subcontractor, material, equipment, and labor quotes just as if he was bidding on the project; To award, the Contractor has to be within 10% of the ICE
Cost Validation –Opportunity for Owner to review labor, material, equipment, and production rates; Encourages project team discussion around means and methods, material source selection, haul distances, etc. The level of detail provided by the ICE, allows UDOT to “see” where the big differences are in each estimate and have detailed discussions around the “why” behind the difference. It takes all 3 estimates in the CMGC process to demonstrate that a fair and competitive price has been provided.
Typical Items of Discussion:
Mobilization
Direct/Indirect – Which items are “loaded”?
Markup (Home Office Overhead + Profit) – UDOT typically sees something close to 12% here. The acceptable range has been between 11-15%; the profit portion has varied from 3-6% depending on market condition and amount of projects the Contractor is currently working on. Definitely want to get this during Selection if your process allows for it, as it is obtained competitively with the Proposal submittal.

7. UDOT Lessons Learned - General
Build & Develop Trust
Communication
Team Building, Partnering Requirements, & Dispute Resolution
Project Manager
Project Team
Senior Leaders
Site Visits
Co-Location
Project Staffing Plan
Partnering
Project Level
Executive Level
Build & Develop Trust Early
Co-Location
Key to timely decision making
Assists in quickly developing a collaborative team environment
Partnering
Project Level
Executive Level
Internal Communication (Procurement, Design & Construction)
Project Manager (Most important person on CMGC projects)
Project Team
Senior Leaders
Site Visits
Great way to share with others what a CMGC project looks and feels like
Keeps the Project Team connected with the outside world
Other Contractors/Consultants who want to visit during Design/Construction
This is a great way for them to learn and understand what is happening on a specific project
Staffing Plan
Dedicated team members where this is their only project are ideal
If this is not possible, at least limit the complexity of their other projects and maybe even reduce the number a bit
For MVC there were 5 full time UDOT folks during the Procurement Phase, with the 2 Resident Engineers during the Design Phase, and 2 Region crews loaned for the construction phase, with their previous work load going to other region crews and consultants.
For I-80 there were only 2 UDOT folks for the entire $200 M project. This project was not staffed well enough with UDOT folks; resulting in huge challenges for the project due to the difficult in getting UDOT to make informed decisions and keep pace with the Designer/Contractor

8. UDOT Lessons Learned – Procurement
Project Goals
RFP “Boiler Plate”
Well Defined Selection Criteria & Scoring Method
Focus on the differentiators
What are the minimum qualifications?
Project Specific
Project Goals
RFP “Boiler Plate”
Keep one document current with all standard revisions
Understand where flexibility is allowed, and where it is not (Generally based on State & Federal Requirements)
Then make it project specific in defined sections
The best proposals are those that are written to the project’s goals, scope, schedule, and budget. Drawing parallels from previous individual and corporate experience that demonstrate why they are the best Contractor for the project.
Well Defined Selection Criteria & Scoring Method
Focus on the differentiators
What are the minimum qualifications? Find the balance between general descriptions of expectations here and specific requirements.
For example, if you are working on a very complex structures project you would probably require the project manager or superintendent to have at least worked on a couple of projects of similar scope, and in a similar role as being proposed on this one
Can you really compare 14 years experience with 5 years experience and always choose the individual or company with the greater number of years? Should you?
Make your selection criteria project specific. Really focus on the key “specialty” items you need from your CMGC contractor.
Maybe it’s a really good bridge contractor who has seen a lot of different types of repairs/replacements
Maybe it’s someone who is familiar with working in confined spaces
Maybe it’s someone who has completed a similar project somewhere else in the last 3 years, ask them to share their lessons learned and how it will make them the best contractor for your project
Maybe it’s someone who has worked in environmentally sensitive areas
And so on . . .
Also, remember there are multiple ways of “short listing”:
Mandatory Letter of Interest (Let’s the DOT know home many people may be submitting a Proposal)
Mandatory Pre-Bid; Are there specific items that are unique to this project and/or type of work
Mandatory Site Visit; Is there something of value to be gained in doing this?
And of course, interviews (Like how CDOT has outlined their interview format)
Written RFC Questions/Responses – Non Contractual
If a RFC triggers a contract change, do so through an Addendum

9. UDOT Lessons Learned – Procurement
Blinding of the Oversight Committee
Technical Evaluation Team presents as Proposer A, B, C, etc.
Oversight Committee provides an unbiased perspective
Always leave an option for interviews
Include a Consultant & Contractor as a member of the evaluation team
Documented Selection Process
Blinding of the Oversight Committee
Technical Review Team presents as Proposer A, B, C, etc. and explains how they scored each Proposal against the RFP
Oversight Committee can then provide an unbiased perspective of whether they agree with the Technical Review Team’s decision or if they have further questions
Always leave an option for interviews, but they are not mandatory
If there is a clear winner with the Technical Proposal, then there is no need to go to interviews
If there are 2-3 Proposals within a point or two of each other, go to interviews and all all Proposers to participate
Determine your scoring weights up front so those who are not in the top positions going into interviews can decide if they wan to participate or not
Include a Consultant & Contractor as a member of the evaluation team – Determine whether they will be voting or non-voting members; There is huge value to the program/process to have them witness it and ensure that it was consistently and fairly administered. Great way to incorporate first timers, expand the industry, and provide hands on training.
Documented Selection Process
Defensible, Transparent, Clear & Concise; Shows that the Department aligned with its goals and selection criteria; Focus on key/major strengths/weaknesses (again, the differentiators); let the little stuff like type errors, font size, etc. be reserved for another day. This is where you let the Proposer know what prevented them from getting the job. Consider having a third party/neutral representative host the debrief. UDOT has a 3 three program contract with an administrator that fulfills this role. If the Department ran this meeting there is a tendency to keep talking and fill the quiet space, or answer all of the Proposers questions without thinking things through first. It’s very hard to run a meeting while listening, and forming responses.

10. UDOT Lessons Learned - Design
Decision Making
Contractor Input
Risk Identification & Management
Important to watch Scope, Schedule, & Budget
Set goals to keep the team focused
Know your schedule limitations
Have candid budget discussions
Value Engineering
Procurement vs. Design
Decision Making
Contractor Input
Make sure the Contractor is contributing
Know when to push them for more ideas
Risk Identification & Management
A lower cost option initially may not be the best option when looking at all the risks
Effective mitigation strategies are key
Important to watch Scope, Schedule, & Budget
Scope “creep” is always a challenge with CMGC because there isn’t a well defined design to begin with
Set goals to keep the team focused
What was/is the purpose of the project? Update these if needed, and obtain senior leader buy in early on
Know your schedule limitations up front; CMGC is not as successful for schedule driven projects as you are compressing the innovation opportunities provided during design; However, having timeframes in mind keeps the design efforts, the numerous options, and determination of quantities for cost estimating moving forward; Don’t want to get held up on too many iterations here
Have candid budget discussions up front; Everyone should know what the budget restrictions are; Discuss how contingencies and mitigations will be handled (i.e. who owns the risk? Should the Contractor include it in his price, or will the DOT implement a change order to address the risk if it is encountered?)
Value Engineering – Can happen prior to selecting a CMGC contractor, after, or both
During Procurement - The Department may have a full understanding of the project and be able to outline several VE Options/Scenarios prior to the RFP
During Design – For more complex/risky projects, it is more beneficial to hold a formal VE meeting with the Contractor’s input; and it definitely doesn’t hurt to do two VE’s, one before and one after prior to the final construction package. The further along the design, the likely the Department/Designer/Contractor is able to develop effective risk mitigation strategies and effective VE options.

11. UDOT Lessons Learned - Design
Price Strategies
GMP, TMP, Lump Sums, Unit Pricing, Provisional Sums
Blind Bid Opening
Documentation
Decisions, Risk, Pricing, Comment Resolution, Etc.
Price Strategies:
TMP is most often used by UDOT, where UDOT manages the contingency
Blind Bid Opening Process:
Set EBS File/Spreadsheet so blinds are maintained (can walk CDOT through our process via video conference, if needed)
Plan on 3 BBO’s per design package; The first one always comes high and it can take two more to bring things down and understand the differences in approach, means and methods, etc.
Also hold them at least a week apart w/ a debrief meeting between EE, ICE, and Contractor to discuss major differences in items
As you refine the design, you identify/assign risk, which refines the price
Documentation:
Decisions Made; Risk Assessment, Management, Retired; Pricing Assumptions; Comment Resolution Log, Etc.

12. UDOT Lessons Learned - Construction
Quantities
Severable Packages
Payment
Order Girders
Early NTP
Order State Furnished Equipment
Risk Management Strategies
Build Haul Road
Change Order
Clear & Grub
Early Utility Work
Stockpile Material
Needs vs. Wants – Really watch scope creep, schedule, and budget
Have clear communication of project priorities at all levels
Severable Packages (cont.) – Earthwork/Grading; Bridge Work, Roadway Sections; Etc.

13. Mountain View Corridor
~ Module 6 ~
Mountain View Corridor
Teri Newell, P.E.

14. MVC Project Overview Salt Lake County (2010 to 2013) CMGC
15 mile segment
Two lanes in each direction
Utah County (2010 to 2011)
Low bid
3 mile segment
The Mountain View Corridor ($670M project) is a planned freeway, transit and trail system that is being implemented in phases. The entire project in environmentally cleared for 35 miles.
The first portion of MVC constructed was a 3 mile section delivered as a low bid job. This portion was straight forward and right of way and utilities were cleared prior to bidding the project. (Shown in green)
The second portion of MVC, a 15 mile section, is being delivered with CMGC and will be complete in December of The Salt Lake County portion has complicated utility issues due to conflict with multiple major transmission lines and crosses through 6 local jurisdictions. (Shown in red)
Phased Approach
MVC is being implemented as a phased project. Initial construction will include outside freeway lanes and ramps. Future phases will construct interchanges to transform the roadway into a fully functional freeway. We have utilized the philosophy of building what we need now, while planning for the future.
This type of implementation is optimized by having the contractor at the table during design to help with constructability review and estimating. The owner can make informed decisions about scope due to having contractor estimates available. Some improvements could be put off to the future to allow project to extend further, while other improvements were added to eliminate future tear out as interchanges are constructed.

15. Preconstruction Phase
The contractor and designer began working in summer of 2009 and over the course of a year prepared 4 sets of plans that were used for constructability review as well as for pricing.
The designer prepared plans and provided quantities, while the contractor prepared an open book estimate. Two independent estimates were prepared on behalf of the owner. One was prepared by the program management team (engineer’s estimate) and one was prepared by an independent cost estimator (ICE). All three estimators prepared direct costs (labor, equipment , materials and production rates) and project related indirect costs (supervision, insurance and project support). In addition to direct and indirect costs, each estimate included bond and markup (home office overhead plus profit = 12%)
The red dots indicated risk analysis that occurred at each update of the plans and estimates. This analysis allowed the team to assign the risk to the party that could best manage it.
At each of the four pricing milestones, extensive multi-day review meetings allowed the contractor and engineer's estimates to be compared, dissected and discussed regarding the approach to the job and the pricing. The ICE was involved in the discussions, while not revealing their pricing.
As final contract pricing was developed, the estimates were also reviewed based on parametric estimating of comparable projects and comparisons to average unit bid prices across three urbanized counties.

16. Results – Reduced Construction Cost
The red curve shows the risk curve for the initial pricing for MVC. This estimate was developed prior to the contractor. The brown curve to the right shows the cost attributed to risk increasing as the contractor identified additional risk issues not identified by the designer. After months of design progression, the cost curve becomes more vertical as some of the risks are mitigated and costs decrease as estimates are scrutinized and innovations included in progressed plan sets. The next curve to the left in blue is at a point when plans are 75% complete and there has been a $100m drop in estimate due to design progression, innovations and risk mitigation.
Risk assigned to contractor – With a low bid job, normally UDOT would take tickets for truck loads of road base in order to calculate quantity to pay contractor. On MVC, it was discussed and decided contractor could best manage the risk of overrun in quantity and road base was contracted as a lump sum based on plan quantity.
Risk assigned to owner – With a DB job, utility relocation risk is often assigned to the contractor. On MVC, due to the magnitude of utility conflict with major cross country gas and power transmission, the risk was carried by the owner. Although, due to the collaborative nature of CMGC, the contractor was instrumental in assisting in development and implementation of mitigation strategies which avoided cost increases and schedule delays.

17. Program Budget & Contingency Overview
Overruns/Underruns – UDOT’s Standard Contract language is +/- 25%; If this doesn’t work on a particular item, the Contractor is required to explain why and convince the Department; If there are specific items of concern, this could be asked for in the write up on Approach to Price in the RFP
See Joe’s on Provisional Sums . . .
Contractor is not allowed to just tack on markups for provisional sums; Require justification through demonstration and pre-approval
This is different than UDOT’s traditional construction procedures and change order practices. 17

18. CMGC Innovation
$25M savings through alternative design analysis and construction innovation – DART Process
$12M cost reduction in utility relocation – protect in place, means and methods analysis with utility owners
$6M savings due to schedule compression
$9.5M savings due to elimination of a rail bridge
The DART process allowed anyone on the team with an innovative idea to write it up for analysis .
Rail bridge elimination agreement signed one year after construction started and was easily negotiated due to open book process.

19. Why was CMGC Right for MVC?
Stagger the contractor selection for I-15 CORE and MVC, while maintaining similar construction schedules
Flexibility to develop and implement mutually beneficial solutions for communities, utility companies, land owners, and UDOT
Innovative solutions that saved time and money
Flexibility to add or delete scope to project with a firm understanding of pricing due to open book process
Informed decisions about future needs vs. initial construction (phasing) based on contractor’s constructability review and estimate
Risk had time to be mitigated due to early identification by the team of owner, designer and contractor
Construction schedule coordination throughout the design process allowed for prioritization of key right of way purchases

20. Benefits of CMGC
Deliver the Best Transportation Project at the Best Value
Owner Makes Informed Decisions
Optimize Innovations
Risks Managed Throughout Project Delivery
Best Value:
Incorporate Contractor input throughout the design process to refine the design, discuss different ways to get the project built, and for the best price
Informed Decisions:
DBB (traditional) owner chooses a design that may not address all of the constructability issues, usually resulting in change orders;
DB enables UDOT to deliver projects at a fixed price;
CMGC allows UDOT to make informed decisions
What does Design Option 1 cost versus Design Option 2? What if UDOT modifies Option 1, hence version 1A, 1B, etc.?
CMGC is an opportunity to discuss the pros/cons of various concepts/designs
Innovations:
Benefits of having all three players at the table to optimize innovations (Owner, Designer & Contractor)
Can be Owner led innovations – First time ever tried, or first time tried in Utah, etc.
Designers/Contractors can be aware of cutting edge technologies, or even practices elsewhere that have not been utilized in Utah
Everyone works together to solve project challenges
Risks:
Risk Management – CMGC Team (Owner/Designer/Contractor) assesses risks early in the design process; Mitigation strategies are developed and cost savings managed throughout construction by the team

21. Reference Materials & Questions
UDOT Annual CMGC Reports, and other related documents available online at
Questions?
Search Engine in the top right corner, just enter CMGC and it will take you to our Innovative Contracting /CMGC section
Various price strategies and experiences
Selection Process – Technical & Price components
If CDOT decides to proceed, come and work through the details with us. We would be happy to help.
Teri Newell,
Michelle Page,