CM/CG Contracting Tom Ravn, Mn/DOT Director, Office of Construction and Innovative Contracting

–Design-bid-build – Design -build –Best-Value (design-bid-build) Pre-qualification Alternative Technical Concepts –A+B (Cost + Time) –Lane Rental Current Procurement Tools TH 169 – Saint Peter

Design-Bid-Build Benefits –Mn/DOT retains control of the design –Contractors are familiar with the process Drawbacks –Limited Innovation –No contractor input –Cost unknown until letting

Design-build Benefits –Innovation –Accelerated project delivery Drawbacks –Owner has less control over design –Increase procurement costs to DB teams –Cost unknown until letting

–Each project is unique –Risk Management Appropriate risk transfer Minimize overall project risk –Higher cost certainty earlier in the process Control scope creep Overall project cost savings Why New Method? RISK DBBDB Contractor Owner

CM/GC –Construction Manager / General Contractor –(CM at-Risk) Potential New Methods ID/IQ Indefinite Delivery / Indefinite Quantity

What is CM/GC? Mn/DOT Contractor Designer Traditional Design-Build CM/GC

Benefits of CM/GC – Combines design-build and design-bid-build – Design Retain control Incorporate contractor innovation Lower design costs – Cost Control Manage to within budget Higher cost certainty earlier in the project Procure commodities earlier Real-time cost information

RISK DBB Design-Build Owner CM/GC Contractor

Process (Phase I) Select CM/GC Select Designer CM/GC advises on the design P/T Contract With CM/GC NOTE: CMGC does NOT assume design liability

Design-RelatedCost-Related Design input Design reviews Constructability reviews Assistance shaping scope of work Project estimates Early award of critical bid packages Value analysis/ engineering Preconstruction Services

Schedule-RelatedAdministrative-Related Prepare project schedules Construction phasing Schedule risk analysis/ control Coordinate w/3 rd parties Assist in permitting actions Preconstruction Services

Process (Phase II). CM/GC negotiates contract to build the project Low Bid Advertisement CM/GC begins construction Negotiation Successful ? Yes No

CM/GC Selection – Phase I QBS or Best-Value –Experience with construction of similar projects –Estimating experience –Innovation – Phase II Negotiated price –Guaranteed Maximum Price (GMP) –Fixed Cost (lump sum) –Unit prices –Combination of the above

Phase II Negotiation – Parties negotiated price & contract terms Minimize overall project risk Increase DBE participation Independent cost estimate (3 rd party) – If negotiations fail: Project goes to traditional design-bid-build CM/GC can not bid on the project

Outstanding Concerns – CM/GC Selection Process Subjective No-bid contract – Cost Validation Verify the price is acceptable to withstand public scrutiny What is the process for approving the price Will Mn/DOT negotiate in good faith

Implementation Process – Step 1: Legislation Current legislation for CM at-Risk –Excludes highway and bridge construction –Not tailored to highway industry Requires new legislation –Tailored to Mn/DOT

Implementation Process – Step 2: Develop Process with industry Identify White Paper Topics Draft White Papers – Step 3: Develop Manuals/Procedures – Step 4: Identify Projects – Step 5: Develop contracts

When to use CM/GC – Not for every project – Potential applications: Innovative construction techniques Complex staging/traffic control New materials/construction practices (ABC bridges)

Contact Jay Hietpas for more information – Thank You