facilities institute july 9 - 12, 2012 houston, texas click to edit master title style
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Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Click to edit Master title style
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Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Understanding the Construction Manager at Risk
Project Delivery Method
Presented by
Steve Skabla, Vice President
Chief Estimator/Preconstruction Manager
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Presentation Overview
• Overview of Various Project Delivery Methodso Traditional (Lump Sum) Bido Competitive Sealed Proposalso Design/Buildo Job Order Contractingo Construction Manager at Risk
• Explanation of Construction Manager at Risko Definitiono Characteristicso Pros/Cons o Project Exampleso Lessons Learned
• How to Evaluate Best Value
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, 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
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Price & Technical Qualifications
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
TraditionalPrice only
Owner
Design/Builder
S u b c o n t r a c t o r s
Self-Perform
Select Design Construct
Owner
JOCContractor
A/E or Consultant
S u b c o n t r a c t o r s o rE m p l o y e e C r e w s
Select Design Construct
Traditional & CSP Design/Build Job Order Contract
Design Bid Construct
CSPPrice and Technical
Qualifications
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Overview of Delivery Methods
Sub Sub Sub Sub
Owner
A/ECM
Sub
Construction Manager at Risk
Construct
DesignSelect
Fees, general conditions and qualifications
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Construction Manager at Risk (CM at Risk)
• What to Expect from Your CMo Provide constructability reviewso Provide detailed cost estimates at Schematic Design, Design
Development and at Guaranteed Maximum Price (GMP)o Deliver GMP prior to completion of Construction Documentso Begin construction before design is 100% completeo Bring best subcontractors and best prices to the projecto Control costs/budgeto Take a business risko Provide financial guaranteeso Act in the Client’s best interest
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Preconstruction (Not Just an Estimate & Schedule)
Solicitation & Pre-
QualificationProcess
Solicitation & Pre-
QualificationProcess
BudgetingBudgeting Bid Package DevelopmentBid Package Development
GMP Development
GMP Development
Value Engineering
Options
Value Engineering
Options
Purchasing Process
Purchasing Process
Over-the-Shoulder Design
Reviews
Over-the-Shoulder Design
Reviews
SchedulingSchedulingCoordination &
3D Collision Check
Coordination & 3D Collision
Check
ConstructabilityReview &
Improvement
ConstructabilityReview &
Improvement
Site Management
Planning
Site Management
Planning
Team Communication
Protocols
Team Communication
Protocols
Weekly & Monthly
Reporting Process
Weekly & Monthly
Reporting Process
Site LogisticsSite LogisticsFF&E
Coordination & Management
FF&E Coordination & Management
Meeting Management
Meeting Management
Life-Cycle Analysis
Life-Cycle Analysis
Job Hazard Analysis
Job Hazard Analysis
Severe Weather Preparedness
Severe Weather Preparedness
OCIP/CCIPPlan
OCIP/CCIPPlan
Testing & Commissioning
Process
Testing & Commissioning
Process
Occupancy Planning
Occupancy Planning
Quality Management
Process
Quality Management
Process
Planning for Service After Completion
Planning for Service After Completion
Facilities InstituteJuly 9 - 12, 2012Houston, 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
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Lowest Cost vs. Best Value
Best qualified firm will give you the most value for the 91%.
Facilities InstituteJuly 9 - 12, 2012Houston, 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
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Example: South Texas Research Facility
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Texas A&M Univ., Veterinary Imaging & Cancer Treatment Center
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, 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
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, 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.
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, 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
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Benefits of CM at Risk Delivery
Example: 1 Million GSF Public Hospital•4-year project duration•Items bought early•Potential cost savings
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, 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 complexityo Time allocated for the construction o Competitiveness of the current/local construction marketo Desired flexibilityo 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.”
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Hand-out
Facilities InstituteJuly 9 - 12, 2012Houston, Texas
Thank You
Steve Skabla
713.243.8301