Detroit/Wayne County Port Authority (DWCPA)
SEP-14 Work Plan
February 23, 2005
Construction Manager at Risk Contract
The Public Dock and Terminal Project
SDG / Mannik & Smith
The Detroit/Wayne County Port Authority (DWCPA) submits this work plan for review and approval to issue the Public Dock/Wharf and Terminal Building as a Construction Manager at Risk (CM at RISK) project.
The DWCPA is seeking a qualified Construction Manager at Risk (CM at RISK) to provide design phase assistance and complete construction services for the Public Dock and Terminal. The combined estimated construction cost is $ 6 million.
Project Description and Scope of Work
The Detroit/Wayne County Port Authority (DWCPA) intends to construct a Public Dock and Terminal Project on the Detroit River to harbor and attract cruise ships and other transient vessels such as naval frigates, historic tall ships, racing yachts, tour boats, and dinner cruisers. The DWCPA will use $7.5 million in federal and state appropriations derived from the Transportation Equity Act for the 21st Century (TEA-21) grant to fund the planning and construction of the Public Dock and Terminal Facility. Requirements of the federal TEA-21 grant include easements along the dock face for public access and appropriate services for vessels.
The Public Dock and Terminal Project is part of a larger vision, namely the three-mile 'Riverwalk' from the Ambassador Bridge to Canada to the MacArthur Bridge to Belle Isle. The 'Riverwalk' includes recently completed improvements at the Detroit Civic Center area and the GM Renaissance Center Riverfront Plaza and Promenade.
The Public Dock and Terminal Project will be a significant and identifiable landmark on the eastern waterfront that will facilitate visits to our region by tourists and citizens alike. The proposed Terminal building will be approximately 24,000 square feet and provide:
- Support to cruise ships.
- Space for U.S. Customs and Immigration officials.
- Space for administrative offices of the DWCPA
- Potentially provide space for historical or cultural displays.
The proposed Public Dock will be a deep-water port designed to provide a 500 foot long mooring area. The 'design vessel' is the Great Lakes cruise ship Columbus, which is 472 feet in length.
General Description of Construction Manager at Risk (CM at Risk)
Why a CM at Risk?
"The CM at Risk delivery method is an alternative procurement process similar to longstanding private sector construction contacting. It allows the client to chose the CM at Risk before the design stage is complete. The CM at Risk is chosen based on qualifications, and then the entire operation is centralized. The architect, engineer (AE) and CM at Risk work together in order to cultivate and assay the design. Then, the CM gives the client a guaranteed maximum price and coordinates all subcontract work. Cost savings can be realized in a number of ways. By hiring the CM during the design phase early coordination is possible, which can increase speed of the project and strengthen coordination between the AE and CM at Risk. ...Finally, transparency is enhanced, because all costs and fees are in the open, which diminishes adversarial relationships between components working on the project, while at the same time eliminating bid shopping."
(Ref Issue Brief The American Institute of Architects August 2005)
"This system, adopted and promoted by many large general contracting firms, is similar in many ways to the traditional system, in that the CM at RISK acts as a general contractor during construction. That is, the CM at RISK holds the risk of subletting the construction work to trade subcontractors and guaranteeing completion of the project for a fixed, negotiated price following completion of the design. However, in this scenario, the CM at RISK also provides advisory professional management assistance to the owner prior to construction, offering schedule, budget and constructability advice during the project-planning phase. Thus, instead of a traditional general contractor, the owner deals with a hybrid construction manager/general contractor.
In addition to providing the owner with the benefit of design phase services, which may result in advantageous changes to the project, the CM at RISK scenario offers the opportunity to begin construction prior to completion of the design. The CM at RISK can bid and subcontract portions of work at a time, often while design of unrelated portions is still not complete. In this circumstance, the CM at RISK and owner negotiate a guaranteed maximum price (GMP) based on a partially completed design, which includes the CM at RISK estimate of the cost for the remaining design features.
An owner wishing to use the CM at RISK approach can realize many benefits. Chief among them are the opportunity to incorporate a contractor's perspective and input to planning and design decisions and the ability to "quot;fast-track" early components of construction prior to full completion of design. However, since a commitment is made to a contractor earlier in the process, a premium is placed on the proper selection of the CM at RISK to provide the best value to the owner."
(Ref: "Choosing the Best Delivery Method for your Facility Project", Blake Peck, CCM, McDonough Bolyard Peck, Inc.)
The criteria for selecting the CM at Risk is identified in the attached Request For Qualifications which is a part of the work plan.
Why CM at RISK for this project?
The proposed project is composed of two distinct projects; one is the terminal building with its site work and the other is a dock/wharf in the Detroit River. This project scope does not fit the mold of a typical road project and will require coordination for phasing of construction. The opportunity to have one contractor manage the construction will reduce costs by reducing conflicts, will speed construction operations.
The proposed CM at RISK method of award is an innovative public facilities project delivery process. This approach should significantly reduce the overall project schedule, reduce conflicts on the site and help prevent cost overruns. A reduction in design errors and omissions, change orders, and warranty issues is also anticipated.
The CM at Risk primary emphasis is to integrate design and construction phases of the project, allowing creativity in developing the design that achieves the owner's goals.
The benefits of Construction Management at Risk are:
- Reliable cost control early in the project.
- Often results in lower cost than traditional design-bid-build because of the contractor involvement during the design phase.
- Construction Manager at Risk as the General Contractor will self-perform work that is critical to quality and schedule.
- Improve coordination of construction between dock, building and site.
- Provides the opportunity for accelerated project delivery and/or phased construction.
- A spirit of cooperation between the owner, architect, construction contractor and trade contractors due to a defined allocation of project responsibilities and the CM at Risk interest in obtaining strong references for future work.
Construction Management at Risk allows the client to establish total cost, materials and schedule before the design stage is complete. Conversely, design bid build cost are not known until bids are received at the end of the construction document phase. The CM at Risk is chosen based on qualifications, and then the entire operation is centralized under a single contract. The owner's representative, architect and CM at Risk work together in order to review and refine the design. Then, the CM at Risk gives the owner a guaranteed maximum price, and coordinates all subcontract work. The CM at Risk then acts as the general contractor during the construction of the project and pre-qualifies and establishes procedures for all the construction trade contractors. Cost savings can be realized in a number of ways. By hiring the CM at Risk during the design phase, early coordination is possible, which can increase the speed of the project and strengthen coordination between the architect & engineer (AE) and the CM at Risk.
Innovative Contract Features
The CM at RISK will provide advisory professional management assistance prior to construction (design phase services). The CM at RISK will have the latitude to recommend and implement design changes, provided a benefit is recognized.
The CM at RISK approach will enable certain construction activities like utility relocation to begin before the 100% completion of design drawings thus allowing for a shorter completion schedule.
Disadvantages of traditional "low bid" contract award:
- It discourages (or precludes) innovation in design and construction or installation methods.
- It does not allow the owner to consider any factors other than price in selecting the contractor (except at a fairly low responsibility pre qualification level),
- The contractor is likely to feel they left too much money on the table and may try to cut costs during design and construction, adversely affecting quality, and,
- It does not permit a meaningful dialogue between the owner and the individual bidders to work out the appropriate solution to the transportation agency's needs.
The Construction Management at Risk will begin with the firm in an agency support role for design phase services and will hold the construction contract with the authority for construction of the project. At some point prior to construction, the CM at Risk will assume the risk of delivering the project through a guaranteed maximum price contract. The CM at Risk will be responsible for construction means and methods, and will be required to solicit bids from pre-qualified subcontractors to perform the work. The CM at Risk is responsible for self-performing a minimum of 35% of the construction work.
A. Design phase services by the CM at Risk will include the following:
- Provide detailed cost estimating and knowledge of marketplace conditions;
- Provide project planning and scheduling;
- Provide for construction phasing and scheduling that will minimize interruption to traffic operations and concurrent project construction;
- Provide alternate systems evaluation and constructability studies;
- Advise Authority of ways to gain efficiencies in project delivery.
B. Construction phase services by the CM at Risk will include:
- Bid, award, and manage all construction related contracts while meeting Authority bid requirements including DBE participation goals;
- Provide quality controls;
- Bond and insure the construction;
- Address all federal, state and local permitting requirements; and
- Maintain a safe work site for all project participants.
The CM at Risk Process will include.
- The call for qualifications will advertise according to FHWA and MDOT requirements.
- The Contact will be awarded with the approval of FHWA and MDOT.
- The Pre- Construction services include reviewing plans, specifications and special provisions. Recommend changes and modifications if needed.
- CM at Risk will negotiate a GMP based on the design of the Dock and Terminal building.
- Provide a construction duration schedule
- The Port Authority will provide a Final report evaluating the over all process with in six months of project completion.
- Provide information needed for an Audit.
Detroit/ Wayne County Port Authority
Estimated Project Costs Public Dock and Terminal Facility
ESTIMATED SITE COSTS
$1,000,000 Offshore Wharf
ESTIMATED BUILDING COSTS
TOTAL BUILDING AND WHARF
ESTIMATED PROFESSIONAL FEES
$500,000 Program Manager
$1,100,000 Architect Engineer Terminal and Site
$300,000 Engineer Wharf
TOTAL PROFFESIONAL FEES