1. Facilities Institute July 9 - 12, 2012 Houston, Texas Click to edit Master title style www.NAEPnet.org

2. Facilities Institute July 9 - 12, 2012 Houston, Texas Understanding the Construction Manager at Risk Project Delivery Method Presented by Steve Skabla, Vice President Chief Estimator/Preconstruction Manager

3. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Presentation Overview Overview of Various Project Delivery Methods o Traditional (Lump Sum) Bid o Competitive Sealed Proposals o Design/Build o Job Order Contracting o Construction Manager at Risk Explanation of Construction Manager at Risk o Definition o Characteristics o Pros/Cons o Project Examples o Lessons Learned How to Evaluate Best Value

4. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas What is a “Project Delivery Method” The process of how a project will be planned, designed and built OR Procurement strategy for designing and constructing a facility OR Means of contractually communicating expectations and basis of reimbursement OR The process of managing how a project will be planned, designed and built

5. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Price & Technical Qualifications Overview of Delivery Methods Owner General Contractor A/E S u b c o n t r a c t o r s Traditional Price only Owner Design/Builder S u b c o n t r a c t o r s Self- Perform SelectDesignConstruct Owner JOC Contractor A/E or Consultant S u b c o n t r a c t o r s o r E m p l o y e e C r e w s SelectDesignConstruct Traditional & CSPDesign/BuildJob Order Contract DesignBidConstruct CSP Price and Technical Qualifications

6. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Overview of Delivery Methods Sub Owner A/E CM Sub Construction Manager at Risk Construct DesignSelect Fees, general conditions and qualifications

7. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Construction Manager at Risk (CM at Risk) What to Expect from Your CM o Provide constructability reviews o Provide detailed cost estimates at Schematic Design, Design Development and at Guaranteed Maximum Price (GMP) o Deliver GMP prior to completion of Construction Documents o Begin construction before design is 100% complete o Bring best subcontractors and best prices to the project o Control costs/budget o Take a business risk o Provide financial guarantees o Act in the Client’s best interest

8. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Preconstruction (Not Just an Estimate & Schedule) Solicitation & Pre- Qualification Process Budgeting Bid Package Development GMP Development Value Engineering Options Purchasing Process Over-the- Shoulder Design Reviews Scheduling Coordination & 3D Collision Check Constructability Review & Improvement Site Management Planning Team Communication Protocols Weekly & Monthly Reporting Process Site Logistics FF&E Coordination & Management Meeting Management Life-Cycle Analysis Job Hazard Analysis Severe Weather Preparedness OCIP/CCIP Plan Testing & Commissioning Process Occupancy Planning Quality Management Process Planning for Service After Completion Comprehensive Planning & Coordination Dependable Budgets & Schedules

9. Facilities Institute July 9 - 12, 2012 Houston, Texas PROS Flexibility in selecting a builder CM provides preconstruction services and works in team concept with A/E & Owner Usually brought on early in design (program/SD) Constructability reviews at each stage of documents Opportunity to phase/fast track Better opportunity to maximize HUB/MBE subcontractor participation through bid package strategic initiatives CONS Price is not guaranteed at time of selection Owner must have more involvement in the process Difficult to evaluate actual cost between CM at Risk candidates CM at Risk Opportunity for bid strategies on inflationary materials Reduces the risk of proprietary specifications Change flexibility

10. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Lowest Cost vs. Best Value Best qualified firm will give you the most value for the 91%.

11. Facilities Institute July 9 - 12, 2012 Houston, Texas Best Suited Large new or renovation projects Schedule sensitive Difficult to define Subject to change Least Suited Small or simple projects Project Candidates for CM at Risk

12. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Example: South Texas Research Facility

13. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Texas A&M Univ., Veterinary Imaging & Cancer Treatment Center

14. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas CM at Risk Lessons Learned The best performers at CM at Risk are the same best performers at CSP and hard bid. State procurement laws may vary the process. o Example: For Texas, 100% CDs and public subcontractor proposals on each package are required prior to any real work. o It is more work, not less for the Architect and Contractor. Allow adequate time for review and approval of the Guaranteed Maximum Price (GMP). Allow adequate time for the subcontractor selection process by the CM and Owner approval

15. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas CM at Risk Lessons Learned Agree on the subcontractor selection criteria and process early. The project design must be sufficiently advanced to have accurate general conditions proposals in the RFP. Clearly define what is to be included and excluded from “general conditions” in the RFP. Lump sum general conditions - not cost plus. o The most issues/problems. o 90% of contract administrator or Owner’s representative’s time on 5% of cost.

16. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas CM at Risk Lessons Learned Draft a total project schedule, not just a construction schedule. Give the CM the entire project budget. Tell the CM what parts it is responsible for. Add example schedule, decision milestones

17. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Benefits of CM at Risk Delivery Example: 1 Million GSF Public Hospital 4-year project duration Items bought early Potential cost savings

18. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Pick the Right Delivery Method Before starting the selection process, determine which delivery method will provide “best value” Factors to consider (add more): o Project size and complexity o Time allocated for the construction o Competitiveness of the current/local construction market o Desired flexibility o Availability of contractors and subcontractors in the local market After deciding on key factors, evaluate the various delivery methods and formally adopt the method you deem “best value.”

19. Facilities Institute July 9 - 12, 2012 Houston, Texas Facilities Institute July 9 - 12, 2012 Houston, Texas Hand-out

20. Facilities Institute July 9 - 12, 2012 Houston, Texas Thank You Steve Skabla 713.243.8301 steves@vaughnconstruction.com