Alternative Delivery Methods

posted by: Karen Bonvillain | 28th April 2015
Alternative Delivery Methods

This article was published in the March 2015 issue of City & Town, by the Arkansas Municipal League. Written by Adam Triche, P.E. a Partner and Project Manager at McClelland Consulting Engineers, Inc.

There is nothing more critical than the success of a project when managing a municipal program. All eyes are on you and the project is typically ‘out there’ for all the world (and citizens/taxpayers) to see. In years past, Design-Bid-Build has been the traditional prime delivery method used for projects in Arkansas. But Senate Bill 1092 has now allowed for CM/PM to be used as a means of project delivery for municipal projects over $2 million. McClelland Consulting Engineers is currently working on one of the only two municipal projects in the state using this alternative delivery method from the engineering standpoint.

To be able to ‘wrap our heads around’ the idea of what this entails, we first must learn some of the semantics of the actual process. The first being what differentiates the term ‘construction management (CM)’ from ‘program management (PM).’ Whereas construction management generally refers to a construction project from its initial beginnings and the time, cost, scope and quality of that project to its completion, program management is typically applied to capital improvement programs with one or multiple projects from beginning to completion.

So, the question is – Why do I need to know or understand CM or PM? The simple answer is this:

The CM/PM is able to assist the owner in choosing delivery methods or determining which programs are best suited to the project. This can help the owner keep the project within budget while averting costly redesigns. It helps the owner determine how these services are provided – for example, would they be provided by the owner, a consultant, or a combination of different resources? When this was recognized as a bill, clarifications were laid out for our industry, municipalities and agencies across the state.

 

As Senate Bill 1092 explains: ‘at-risk construction management’ is where the construction entity provides agency services during the preconstruction period and serves as general contractor where the construction manager provides a maximum guaranteed price (GMP); whereas the ‘general contractor construction management’ provides agency services during the preconstruction period and serves as general contractor. Basically Bill 1092 only allows for At-Risk and Design Build delivery methods.

On what would one base the need to begin this type of process? Here are a few a questions to help determine your answer:

  • How much help will you need to define quality and safety?
  • How much of the project will be completely finalized before construction begins? As in – how flexible will you need to be for changes during planning, design, or even perhaps construction?
  • Does your financing affect the schedule or what type of contract you’ve chosen? Is your design process straightforward or more complex?
  • How well do you, as the Owner, understand the entire design process and the effects of your schedule and costs?

The list of active participants throughout this entire process includes the owner, the designers, any consultants (and subconsultants), the CM, the PM, and finally, the contractor. One overriding advantage of any CM/PM process is that it is not dependent on one single delivery method (or contracting format).

Perhaps the most important aspect of the entire process is selecting the CM and/or PM. One must gather information and document all decisions regarding the project’s concept and the needs of the owner. A detailed description of the project must be shared with all participants involved from the outset – details such as purpose, goal, size and objectives. This would include all past studies or any documents related to your upcoming project. The scope and budget must be included in your description and once advised by your CM/PM of whether all these things can be achieved, only then would you move forward to finalize the schedule and program cost.

Of course, no project moves forward without a selection committee to determine the awardee. In the case of a CM/PM process, that committee should be given every opportunity to learn all there is to know about the program, from an early outset. The committee must keenly be aware of the owner’s expectations because its decision is critical to the entire success of the project. If there are no members of the committee familiar with this process, it is often the case to bring in a consultant who does understand the process and who can advise the committee as they deliberate. That consultant could be someone from the local community within the architecture / engineering business side, or even an expert from a national firm outside of the region. From that point, it is a matter of selecting the best team for the project which begins with their submitting a statement of qualifications, a technical proposal and finally a price proposal to negotiate a fee.

Most agencies understand the time involved with this evaluation process in selecting a qualified firm to perform services. An integral part of this process is to take a logical and very methodical approach to grade each level of the submittals without bias – based on qualifications alone. In this particular type of process, the committee should provide the finalists with questions that clarify points in the request for proposal. The goal here is to create an atmosphere of compatibility with the owner and the team chosen. After all, the entire success of the project can be seen as resting on the shoulders of the selection committee and its ability to choose the right firm.

Though fee is a large factor and the budget is most often ‘set in stone’, price cannot be the determining factor. And since the selection is based on qualifications alone, as in any professional service contract, the committee must keep in the forefront of their selection process that this team will be an extension of their own agency. They will be entrusted with all the important factors of the entire project’s progress so the capabilities are of the utmost to consider when making the final selection.

When the committee is confident in its selection process and has chosen the firm most qualified, that firm must then lay out its vision of the scope for the work which would include: project scope, a strategy for procuring services, budget, schedule, any specialty consultants who would be tasked to work on the project, designers, contractors and cost. Once the scope is shared, understood and agreed upon, the owner then must come into agreement with a final price.

In summary:  Certainly most agencies have carried out this process in some form or fashion and often questions arise as to the procedures. The CM/PM is an option to municipalities for the future with benefits that include protection of the budget, selection of the contractor and the avoidance of adversarial situations among the owner, engineer and contractor. Most of all, however, it encourages a true team relationship. There are vast amounts of information available concerning alternative delivery methods. If these descriptions pique your interest and you feel it may be something from which your agency could benefit, CMAA is a perfect source for learning more about the various processes. A good place to start is with your current professional consultant who will help guide you through this process and answer your questions and concerns.

Sources:
Construction Management Association of America (CMAA):
https://cmaanet.org
State of Arkansas, Senate Bill 1092, 85th General Assembly, Regular Session, 2005:
http://www.arkleg.state.ar.us/assembly/2005/R/Acts/Act2154.pdf

Adam Triche, PE, is a Partner and Project Manager at McClelland Consulting Engineers, Inc.’s Little Rock office. Contact Adam at 501-371-0272 or email atriche@mcclelland-engrs.com.

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