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June 23, 2010
CM-AT RISK VS. DESIGN BID BUILD A TEXAS CASE STUDY – PROCUREMENT
AND IMPLEMENTATION
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Acknowledgement
Mike Adams, P.E
Executive Director of Engineering and Utilities City of Midlothian
Coy M Veach, P.E., CCM
Vice President Freese and Nichols, Inc.
David W. Sloan, P.E., BCEE Senior Process Engineer Freese and Nichols, Inc.
Bryant Caswell, P.E
Associate Schrickel Rollins and Associates
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Outline
• City of Midlothian, Texas • Project Delivery Systems (PDS) • Legislation History in Texas • CM-At Risk – Structure, Schedule and Services
– Solicitation and Procurement Process
• CMAR vs.DBB • Take Away Points • Questions and Answers
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City of Midlothian • Ellis County, Texas • Population - 16,000 residents • Strategically located equal distance from Dallas and Fort Worth –
25 miles southwest of Dallas and southeast of Fort Worth • 2006 Long Range Water Supply and Master Plan – projects
population to steadily increase over the next 20 years • Current water demand is 10.0 MGD • Projected water demand is 36.5 MGD • Existing Tayman WTP production capacity of 13.0 MGD
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Midlothian WTP Project Profile • Tayman WTP is completely build-out • New Membrane Filtration WTP to meet future demands and
provide redundancy to existing Tayman plant • Funding
– TWDB Drinking Water SRF + City Funds = $30.0 M – Engineering = $4.2 M – Funding Available for Construction = $25.6 M
• Owner Preferences – Maximize local construction participation – Operators involved in design/pre-construction phase – Desire for qualified contractor with experience
• Projected water demand may exceed available capacity in summer of 2012
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Selected Water Treatment Process
Raw Water Influent
Rapid Mix Flocculators Sedimentation
Basins
Membranes
Ground Storage Tanks High Service
Pump Station
GAC
Phase I – 9 MGD Phase II – 18 MGD Phase III – 36 MGD
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Project Delivery Systems
• In-house design and construction • Traditional – Design / Bid / Build (DBB) • Construction Manager Agency (CMA) • Construction Manager At Risk (CMAR) • Design Build (DB) • Design / Build / Operate / Transfer (DBOT)
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Legislation History In Texas
• 1995 SB-1 – Largely an education reform bill • 1997 SB-583 and 1999 SB-669 - Provided Guidance • 2001 SB-510 – Counties, Cities and River Authorities but
not for “horizontal” construction • 2003 HB-3028 - Revisions • 2007 HB-1886 – Authorization for all types of projects
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Structure and Schedule
OWNER
ARCHITECT/ ENGINEER
CM/GC CONSTRUCTION
SUBCONSULTANTS
SUBCONTRACTORS
CMAR PRE-CONSTRUCTION
Design PDR Normal Construction
Project Schedule
GMP $
$ Contractor Selected
Fast Track Construction
CMAR
CMAR CONSTRUCTION
CMAR PRE-CONSTRUCTION
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Typical CMAR Services
• CMAR assumes the risk of construction • Providing suggestions on constructability, risk
management, and materials during preconstruction. • Preparing bid packages for the procurement of
Subcontractors and Suppliers. • Preparing overall project schedule and updates. • Preparing Opinion of Probable Construction Costs (OPCC) • Guaranteeing the construction cost.
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Profile of a CMAR Project
• Complex project, difficult to define or subject to change. • Tight/limited budget or sensitive financial controls • Tight schedule, fast tracking desired. • Better risk management desired. • Builder selection flexibility The Midlothian WTP #2 fits this profile
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Prepare CMAR RFP. Evaluate and
Select CMAR
Award Contract to Low Bidder
Prepare CMAR RFP. Evaluate and
Select CMAR
Advertising and Bidding
CMAR Project Flow Chart
Contract with Architect/ Engineer
Prepare Preliminary
Design
CMAR Bids Project
Components
Complete Final Design
Contract with CMAR for Pre- Construction
Services
Negotiate GMP Enter into
Construction Phase Contract
Complete Construction
Contract with CMAR for Pre- Construction
Services
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Solicitation of a CMAR
• Request for Proposal – Scope: Project should be reasonably well defined. – Selection criteria – Schedule – Budget – Other information to support selection of CMAR
• One or two step selection process required. Midlothian selected the one step process.
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One Step/Two Step Process
• One Step Process – All qualification and fees are requested – Fees include preconstruction, general conditions, bonds, and
contingencies – Evaluation based on qualifications and pricing simultaneously
• Two Step Process – First step: Select maximum 5 proposers on the basis of
qualifications (non-monetary criteria) only. – Second step: Request full proposal only from shortlisted
proposers. – Evaluation based on qualifications first, then pricing
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Scoring Process • One effective method for evaluation is using a scoring
matrix based on weighted criteria and point scale • Initial scoring done independently and without
knowledge of the preconstruction fees • Owner/Architect/Engineer Due Diligence
– Reviews: Financials stability, personnel and reference checks
• Step up a workshop: – Compile scores – Open fees and score the last criteria – Reevaluate scores based on financials
• Determine if interviews are necessary – Revisit scores based on interviews.
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Midlothian CMAR Scores
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Guidelines for Interviews
• Short list to top contenders, release the rest. • Establish a set of standard questions • For the benefit of the CMAR
– Provide adequate time for CMAR to prepare. – Be specific about expectations for the interview. – Make the sessions informal and relaxed.
• Set aside time to discuss the collective results after each interview.
• Document reasons for scoring changes - be able to defend scores.
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Selection and Contract
• At the completion of interviews – Review and revise scores as necessary – Make final decision on CMAR for recommendation to Board or
City Council
• Publish results of selection process within 45 days • Notify TWDB (funding agency) of recommendation • Notify the selected CMAR firm and begin contract
execution process • Preconstruction services begins on contract execution
date and ends after GMP is established
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Proposal Evaluation Flow Chart
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CMAR = DBB
• Advertisement and solicitation process allows everyone to compete on “Best Value”.
• Selection includes competitive elements. • Includes safeguards of accountability and transparency. • Owner retains design professional as their advocate and
trusted advisor. • Price is known before construction begins. • Single point of responsibility for construction. • Contractor/Builder is at risk for cost overruns and errors.
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CMAR ≠ DBB
• More control in the selection of Builder/Contractor. • Allows negotiations with top ranked firms. • Collaborative team with Owner, A/E and CMAR – vested
interest • Costing is “open book” and allows owner to participate in
setting price. • Risk can be managed jointly. • Ability to effectively “fast track” construction. • Contingency is owned and managed by Owner
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CMAR Myths
• No Construction Inspection required
• Less qualified Construction Inspector is acceptable
• No change orders during construction
• Greatest cost savings to the Owner
• CMAR projects have shorter schedules
• No longer have the benefit of competitive bidding process
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Take Away Points
• Assess the project and determine if alternate delivery is beneficial
• Solicit and procure CMAR in accordance to local rules and regulations
• Owner must provide inspections, materials testing and verification inspections independently of CM
• Bonds are required • Specify the point at which the Guaranteed Maximum Price
will be set in the RFP. • CM recommends, Owner selects subcontractors and
suppliers.
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Questions and Answers
Theodore W. Chan, P.E. Project Manager
Freese and Nichols, Inc. 1701 N. Market Street
Suite 500 Dallas, TX 75202