Presentation on theme: "Utah’s Use of CMGC & Project Delivery"— Presentation transcript:
1Utah’s Use of CMGC & Project Delivery Presented by:Michelle Page, P.E.UDOT Innovative Contracting
2What is CMGC in Utah?Consists of a Project Team with Three Participants:An OwnerA DesignerA General Contractor with a Two Phase ContractPhase I – A “Construction Management” consulting contract to help with DesignPhase II – A “General Contracting “ contract to build the project
3Benefits of CMGC Public Expectation Political Capital Open RoadPolitical CapitalPoliticians Take CreditUDOT utilizes more state funds than federalUser Cost SavingsReduce Construction TimeReduce Construction DelaysBusiness Stays OpenUDOT’s funding program consists of 85% State funding and 15% Federal funding.Prior to innovative contracting, UDOT was 80% Federal and 20% State.
5Engineering Solutions Advances in Roadway Geometry:DDI, CFI, Flex Lanes, Movable Barrier, Reversible LanesABC Program:I-80 Bridge FarmPrecast Structural Elements (Bents, Columns, Superstructure, Deck, Pavement Slabs)Bridge Moves – UDOT has gone from taking 6-8 months to build a bridge to moving into place in just a few hours.
6Owner Controls the Design UDOTPlanBuildDesign ConsultantDesignContractorBidValidateIn this chart UDOT controls the design and has separate contracts with the design firm and the contractor.Not only does CMGC empower the owner to make cost, quality, and schedule decisions it also allows the owner to adjust scope.CMGC provides maximum flexibility with maximum information for the design process.Should the Owner not come to an agreement with the Contractor’s proposed price the project can go through a traditional advertisement and competitively bid the project.
7CMGC Expectations Better Designs Better Schedules Lower Costs Savings in DesignSavings in ConstructionSavings from InnovationSavings from Mitigated RisksRisk Management – Risks are identified and assessed early on. Where they can be mitigated or avoided the Contractor bids accordingly, where the risks remain unknown the owner holds the contingency amount and pays actual costs as encountered through the traditional change order process.
8Project Delivery Timelines TraditionalDesignAdvSelectConstructDesign-BuildDesignDesignSelectConstructRFQRFPContractor selection does not occur on traditional projects until the design is complete and the project is advertised. This takes several months to over a year.Contractor selection on Design Build projects occurs after we have described what we want and given the contractor consultant team time to do 30% design. This can take a year or more on large projects. The RFP is typically over a 1000 pages of documentation and the contractor response is 1000’s of pages. A 1000 page RFP provides the opportunity for a lot of hidden errors.Contractor selection on CMGC projects occurs early in design. The RFP can be developed in a day but we typically take a month. The RFP on Mountain View Corridor ($700 mil) was 51 pages however most RFP’s are in the range of 31 pages.With early procurement we typically save money and time. Some projects have be able to eliminate a year in constructionHowever to get the full benefit of the contractors knowledge and experience it is not recommended that we rush through design. CMGC projects should avoid schedule compression in design.CMGCDesignConstructSelectEarly ConstructRFP
9CMGC Project Delivery Results SpeedEarly start items of work before 100% DesignEarly ProcurementAdvanced Contractor PlanningBrevity30 to 50 Page RFPControlOwner makes design decisions with Contractor and Designer inputsFlexibilityWe can change scope during DesignSpeedABC bridge at 4500 S over I-215 ordered girders before designDixie Drive moved a golf course before they had a designContractor can plan sequence and schedule with consideration for utilities and RoWBrevityThe traditional process requires a design before a contractor is hiredDesign Build requires a performance spec of more than 1000 pagesControlOnly process where the owner make design decisions with advice from both the contractor and the designerFlexibilitySummit Park Bridge widened the bridge to accommodate a future climbing lane in Parleys Canyon
10When UDOT Uses CMGC Projects that need Contractor input Project where UDOT wants to control the designProjects with a high need for innovationProjects that can benefit from early procurement or constructionProjects with third-party riskProjects to introduce new technology
11Cost & Schedule Influences Knowledge and ExperienceDesign errorsRisk IdentificationTrustSite ConditionsInnovationDesignProcessConstructabilityContractor Means and Methods
12Mountain View Corridor Influence of Risk and Innovation on Cost Opinion of Probable Cost of Construction OPCCOPCC1 did not include the contractors inputs. It only included the Designers assessment of risk. It should be obvious that Contractors do not view risk the same way as designers. Designers tend to underestimate the risk. Contractor increase cost to cover risk.The design at OPCC2A was 30% complete which is the point at which contractors are typically selected in a Design Build Process. If this project had been awarded at 30% design it would have cost $126 million more than the $220 price agreed to at the award of construction contracts.Innovation and Risk management saved the project $126 million. The project cost 36.4% less than what it would have been at 30% design. This savings would not have occurred in traditional projects because the contractor is not involved in the design. This savings may occur in Design Build but the owner is not likely to see the cost benefit. CMGC is therefore the only process in which the owner has any hope of reducing project cost with contractor knowledge, experience, and creativity. The other processes rely solely on a competitive bid.The OPCC included risk and innovation. However, the contractor tracked innovation savings separately. They identified $24 million in innovation savings or 12% of the awarded value of the project. This would suggest that the risk savings was 15 to 22% of the construction contract award.
13Innovation SavingsThis is the recorded innovation savings for other CMGC projects. Direct construction cost savings are difficult to track because some of them occur in the reduced cost of line items and others eliminate line items. The I-80 project for example saved a $ 1 million dollar expenditure because of a contractor solution that avoided moving a power line. This savings does not show up in a line item in the construction bid but the project experienced a cost savings.(Taken from 2010 Annual Report)
14Who Gets the Savings? Contractor Risk Owner Risk Risk In traditional projects the owner holds the risk associated with design and change orders and overruns/underruns are 10.35%.In Design Build projects we push the risk onto the contractor. However change orders and overruns/underruns are 11.2% because (1) we have not worked through the design and do not know what we need and/or (2) we are uncertain of how much scope to include because of funding constraints.In CMGC projects the goal is to reduced the risk and decide who is best able to deal with it. Very few change orders occur because of design errors. In addition because the contractor participated in design decisions they tend to fix things on their own instead of asking for more money.Reduce risk, and share the savingsDBBDBCMGC
15CMGC Projects Save on Change Orders & Overruns good way to look at overall savings is to consider Change Orders and Overruns on closed projects. We have to look at closed projects to get actual data. Prior to closing a project we only have estimated costs on change orders and overruns.The savings differential between CMGC and Design Bid Build is 6.9%The savings differential between CMGC and Design Build is 6%(Taken from 2010 Annual Report)
16Owner Implemented Innovation No contractor will win a hard bid proposing a solution never used before.CMGC enabled us to introduce new technology to the State of Utah.ABC was possible because CMGC enabled the owner to share risk with the contractorThis technology has now been transferred to other delivery methods.
17Flexibility This project was begun with insufficient funding. Portions of the project were executed as money became available and scope was expanded as funding was added.Developers added funding to the project and CMGC provided the scope flexibility to deal with additional funds without initiating additional contracts.
18Fair Price Strategy Proposal Items State Averages & Ratio Prices set inCompetitive ProcessState Averages & RatioComparison toOther projectsTotal Cost Compared toIndependent Cost EstimateEngineers EstimateSelection Bid ItemsState Average PricesICE, EETraditional line item pricing versus production rate pricing.Although we can show cost savings for risk, innovation, and change orders we are still asked to look at line item pricesThis is our strategy for managing cost on CMGC projects.
19We Save on Bid Item Costs Compared to State Averages
20Where Owner Spends the Effort Define GoalsDescribe ProjectRFP DevelopmentProposal EvaluationsRisk AnalysisInnovation AnalysisCost ComparisonsDesign DecisionsContractor Construction