Construction Manager / General Contractor Overview
Construction Manager/General Contractor (CM/GC) project delivery (also called Construction Manager-at-Risk) is an integrated approach to planning, design and construction. Owners, designer(s), and contractors work collaboratively to develop the project scope, optimizing the design, improve quality, and manage cost.
During the design stage, the CM/GC assists the owner with developing the project scope to meet the budget, optimizing the design to reduce costs, and improve quality through innovation.
When the design is nearing completion, the contractor and owner enter into a construction contract. The contract often includes a guaranteed maximum price, providing the owner with more final cost certainty.
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Benefits of CMGC
- Innovation - contractor input into the design process.
- Cost Management - contractors provide real-time cost information.
- Design Savings - Reduced design effort.
- Design Control - MnDOT retains control of the design, with contractor input.
- Construction Risk - Construction risks mitigated during project development.
- Cost Certainty - Higher final cost certainty earlier in the project.
- Time Savings - Able to deliver early work packages similar to DB.
A third project delivery tool, Construction Manager / General Contractor combines the innovation of design-build contracting while minimizing risk to both the owner and contractor.
Drawbacks
- Transparency - Contractor may be slected based on qualifications.
- Cost Validation - Negotiated versus bid contract.
- Culture - New process for MnDOT staff.
- Risk - Limited use in heavy highway construction.
MnDOT Authority
In may 2012, MnDOT obtained authority to use CM/GC authority on 10 projects. The legislation includes the following:
- MnDOT may select the CM/GC using either a best-value selction of quality-based selction process (QBS).
- The CMGC must self-perform at least 30% of the work.
- MnDOT must conduct an independent cost estimate to validate the CMGC's price proposal and engineer's estimate.
- MnDOT reserves the right to competitively bid the project if a price annot be negotiated with the CMGC. The CMGC will have the right to participate in the competitive bidding process.
How does the CM/GC Contract Work?
Early in the design phase, MnDOT will issue a Request for Proposals to interested CMGC firms. The firms will be selected based primarily on their qualifications, but may include a price component.
Once selected, MnDOT will enter into a professional / technical contract with the CMGC to assist with project development. Potential tasks under thsi contract include conducting constructability reviews, participating in value engineering, risk assessments, providing feedback on costs, assisting with third party coordination (utilities, railroad) and working with the desingers to optimize the cost and efficiency of the project.
As the design becomes finalized, MnDOT and the CMGC will enter into negotiations to construct the project. An independent estimate is completed to assist in validating the CMGC price and MnDOT's engineering estimate. The CMGC constrution contract will look very similar to a design-bid-build contract.
Background
Innovation has improved quality, reduced costs, and minimized construction impacts on recent design-build (DB) projects. But the risk transfer of DB is not desirable on all projects.
Traditional design-bid-build (DBB) delivery methods allow for limited opportunities or contractor innovation. At the same time, nearly all of the project risk remains with MnDOT.
A third project delivery tool, Construction Manager / General Contractor (CM/GC) combines the innovation of design-build contracting, but allows MnDOT to control the ultimate design..