GENERAL CONTRACTOR/CONSTRUCTION …

1 Department of Finance and Administrative Services GC/CM CONTRACTING GUIDE 12/2011 CITY PURCHASING AND CONTRACTING SERVICES DIVISION 1 INTRODUCTION This manual provides the policy framework, procedures and guidance regarding the use of the GENERAL CONTRACTOR/CONSTRUCTION Manager (GC/CM) alternative public works delivery method. It is written for City departments. PCSD issues all forms, templates, contract boilerplates and similar documents to be used throughout the GC/CM contracting process. BACKGROUND RCW provides the GC/CM approach to public works.

2 A GC/CM is procured through a multi-part selection process that includes consideration and evaluation of the GC/CM bidder qualifications and experience together with some cost elements. The GC/CM is selected early in design and generally assists the Owner in evaluating the project during the design phase and then provides construction management services. This type of project delivery is sometimes called construction Management at Risk because the contractor assumes part of the project construction risk.

3 The GC/CM delivery method is intended to create a more collaborative relationship between the City and the GENERAL contractor that is not found in a traditional design-bid-build delivery method. The collaborative approach is a core philosophical component to make any GC/CM project successful. The Washington State Legislature established an oversight board for Alternative Public Works, called the Capital Projects Advisory Review Board (CPARB) in 2005 through RCW CPARB reviews alternative public works procedures and projects and provides guidance to state policymakers to enhance public works contracting methods.

4 The 2007 Legislative Session created the Project Review Committee (PRC) to work under CPARB. The PRC is responsible to review and approve Public Body certification and project approval applications for the utilization of GC/CM and Design/Build delivery methods of construction . The City of Seattle has been certified by the PRC to approve City GC/CM projects until January 4th, 2014. By the Seattle Municipal Code (SMC), City Purchasing and Contracting Services Division (PCSD) provides centralized responsibility to bid, contract and administer public works contracting for all City departments, including alternative delivery methods.

5 CONSIDERING GC/CM There are some benefits and risks to using GC/CM. Departments should consider these carefully. Benefits Allows a scored selection process that weighs various elements including qualification and cost to select the contractor . Selection based upon Best Value, not lowest responsive, responsible bid. Allows for early involvement of the contractor so information regarding cost, schedule and constructability are discussed through design development. Early involvement also allows: Better budget control Constructability reviews Value engineering to optimize the cost and performance of the project Team approach Fewer change orders Time savings Balances and mitigates risk between the Owner, Designer and the contractor Having both the designer and the contractor involved during the design phase can improve communication and provide a realistic, well-thought out schedule.

6 Can increase WMBE opportunities Can potentially save money by allowing a chance to change design and scope to meet project budget ALTERNATIVE PUBLIC WORKS GENERAL CONTRACTOR/CONSTRUCTION MANAGER (GC/CM) GENERAL INFORMATION CONTRACTING GUIDE 12/2011 PURCHASING AND CONTRACTING SERVICES DIVISION 2 before the maximum allowable construction cost is negotiated. Also, early involvement of the contractor allows greater understanding of costs and gives the City time to allocate costs before they are incurred.

7 Risks GC/CM is difficult and complex, particularly for City staff without past GC/CM experience. Indiscriminate use of GCCM can impact the bid pool as not all contractors have experience with GCCM. State guidelines should be carefully followed in selecting projects for GCCM. The Proposal process takes longer and more project staff time than a traditional bid. A Project Team with less experience is the greatest risk in project success, and one of the most common reasons for failure. There is a significant learning curve for the Owner s staff.

8 There are complexities to the GC/CM contract that can allow unintended costs, if the experienced contractor knows them and the City project manager has less experience. The Project Team needs to be very comfortable and experienced in the new GC/CM approach, so they don t revert back to traditional contracting and construction roles. Negotiation of a MACC requires experienced staff The invoicing and cost controls for the Work is more complex as there are several cost accounts to manage and earned value for several subcontractors for the actual work performed.

9 An Owner may see increased cost for the work that is self-performed by the GC/CM because there is a lack of competition, although this can be mitigated by the Owner reviewing and approving the GC/CM subcontract package plan that will be developed during pre- construction . What Departments Should Know GC/CM is a qualifications-based, negotiated-price contract GC/CM is not for every project and is more challenging to administer than traditional design-bid-build, cost administration is more complex and the QA/QC approach is different.

10 The key to a successful project is an experienced Project Team Requires a teaming mentality. Careful review, understanding and management of costs is key Federal funding programs don t usually accept GC/CM as an appropriate delivery method PCSD has responsibility and authority for all processes in public works including GC/CM. If contemplating GC/CM, consider training from PCSD, a consultant or a course such as those available from the AGC. CONTRACTING GUIDE 12/2011 PURCHASING AND CONTRACTING SERVICES DIVISION 3 Definitions Addendum A written or graphic document, issued to all Proposers prior to the proposal due date which modifies or clarifies the RFQ/PA and becomes part of the contract.