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Alternative Contracting Work Plan

A. Introduction:

The Arizona Department of Transportation (ADOT) submits this work plan for review and approval for the use of the Construction Manager at Risk (CMAR) alternative contracting method to reconstruct the Interstate-17 (1-17)/ State Route 69 (SR 69) interchange at Cordes Junction (Cordes Junction TI), approximately 62 miles north of Phoenix in Yavapai County, Arizona. The Department has traditionally used the design-bid-build method of constructing highway projects. However, ADOT is currently using the CMAR process on two state-funded highway projects.

The existing Cordes Junction interchange is a systems interchange with a local access road off the northbound directional flyover ramp. Local traffic mixing with the high speed free-flow traffic has caused numerous accidents over the past years as traffic volumes continue to grow. The proposed project will separate the high speed directional traffic movements from the slower local traffic destined for the businesses and residences in the Cordes Lakes area, providing improved safety in the community. Use of the CMAR alternative method is expected to provide an accelerated construction schedule with reduced impacts to the motoring public and the surrounding businesses and residents. A project location map is attached.

B. Purpose:

The Department is authorized under A.R.S.28-7366 (attached) to utilize alternative contracting methods to deliver projects listed in the ADOT Five Year Transportation Program.

The CMAR alternative contracting method is an innovative process that is being widely used by local governments and the private sector throughout the country. it is a process that allows selection of a contractor based on qualifications early in the project development process. Once selected the CMAR becomes a collaborative member of the project team. As the contract documents near completion, the CMAR and Department will negotiate a Guaranteed Maximum Price (GMP). Once the GMP is accepted by the Department and a construction contract executed, the CMAR will construct the project for the GMP or less. If the actual cost of the work exceeds the GMP, the contractor is obligated to complete the work at no additional cost to the Department.

Use of the CMAR alternative contracting method will allow the Department to take advantage of the contractor's expertise during the design phase of the project. The CMAR method is expected to foster a cooperative owner-designer-contractor effort to develop and review design documents, to identify potential cost or time saving methods and to complete construction of the roadway improvements. The use of CMAR will enable the Department to bring the best available construction experience and expertise together to work with ADOT and consultant design staff to successfully meet the schedule, constructability and long term budget challenges presented by this project.

The early involvement of the contractor is expected to aid in providing a quality project achieving timely completion with undue inconvenience to the public, producing the work at a reasonable cost to ADOT. The CMAR's involvement in the design of the project should eliminate or greatly reduce change orders during construction. Proactive participation by the CMAR early in the design process will produce substantial benefit by providing constructability reviews, using the CMAR's best efforts to see that the project can be constructed in the best, most expeditious and economical manner consistent with the interests of ADOT.

Additionally, using the CMAR process allows the project to be designed to the specific strengths of the contractor who is expected to perform the construction work. Rather than designing for an average equipment spread or type of crew, the work can be planned based on the actual equipment and crews that will be used on the project.

It is expected that the design team, including the CMAR, will evaluate the advantages of phasing the construction of project. The Department may allow the use of multiple Guaranteed Maximum Prices (GMPs) on the project to accommodate phased construction. If phasing is implemented, it is expected that the project team will focus their first design and right-of-way acquisition efforts on the north TI. If all necessary clearances are complete, the Department may consider a GMP proposal from the CMAR for the construction of the north TI. This would allow the CMAR to begin construction on the north TI while the design and right-of-way acquisition is completed on the remainder of the project. It is anticipated that this could save approximately six months of project time. Additionally, lessons learned during construction of the first phase could be applied to the remaining part of the project with a potential cost savings to ADOT.

C. Scope:

Project Description:

The scope of work for this project will include the design and reconstruction of the 1-17 and SR 69 Interchange at Cordes Junction. An overall reconstruction concept drawing is attached. The designer for the project (HDR Engineering) is currently under contract with the Department. HDR has already started design and the thirty percent submittal is expected in April of 2008.

This project will reconstruct the existing Cordes Junction TI replacing the existing loop ramps and the free flow directional ramps with new structures and ramps designed to meet today's design standards and to accommodate traffic needs for the future. The improvements will also include:

  • Construction of a new TI north of the directional ramps for additional community access
  • Construction of Big Bug Creek bridge replacements
  • Construction of local street improvements
  • Accommodation of two-way traffic across 1-17 by constructing a new connector road and overpass connected to the local street system by roundabouts

It is possible that the Cordes Junction TI project will be constructed in two or more distinct phases, the first being construction of the new North TI and the second being the reconstruction in the area of the current interchange.

The CMAR will be free to recommend construction sequencing, maintenance of traffic options, possible structure types, earthwork balance, and construction methods. This freedom will allow the CMAR to aid in developing a project that will best use the contractor's abilities and equipment.

CMAR Process Description:

The Department will advertise for Statements of Qualifications (SOQs) and select the CMAR in accordance with ARS 28-7366. A general description of the process follows:

The Department will advertise for SOQs from interested, prequalified contractors through a Request for SOQs. Each contractor proposing on the CMAR project will Submit its SOQ following the format required by the Department.

Based on an evaluation of the SOQs, the selection team will invite firms to participate in oral interviews. Interviews will be held with at least the number of firms on the final list and not more than the number on the final list pius two.

Combined scoring from the SOQs and the oral interviews will determine the rankings on the final list. The Department will enter into negotiations with highest ranked firm on the final list for a Preconstruction Services Contract. During the design phase of the project, the CMAR will be compensated in accordance with Subsection E-1 of ARS 28-7366. The highest ranked firm will provide a list of specific billable rates that they expect to use during the Preconstruction Phase of the project and these rates will be negotiated with the Department. The Preconstruction Services Contract will be paid by the hour at the negotiated billing rates for each job classification required.

If the Department is not able to negotiate a satisfactory contract with the highest ranked firm on the final list. the Department may undertake negotiations with the next ranked firm on the final list.

The Department has the authority to award the Preconstruction Services Contract and to reject any and all proposals. Typical reasons for rejection will be listed in the scope of work. If a proposal is rejected. the contractor will be notified in writing of the reason for the rejection.

Under the Preconstruction Services Contract. the selected CMAR will be expected to perform the following tasks (list is illustrative and not intended to be all inclusive):

  • Coordinate with the design consultant
  • Prepare a construction management plan
  • Prepare a CPM project schedule
  • Attend regularly scheduled progress team meetings
  • Review design developed construction documents and make suggestions
  • Provide suggestions to improve efficiency and save construction or long-term operational costs
  • Provide a cost model for the entire project at each stage of project development
  • Provide constructability reviews
  • Evaluate and suggest construction phasing. sequencing and site logistics
  • Identify Long lead time item procurement
  • Provide bidability reviews
  • Permitting. subcontractor preparation and packaging
  • Provide a GMP

GMP Proposal Review and Approval

  1. The CMAR shall meet with the Project Manager and Design Consultant to review any GMP Proposal(s) and the written statement of its basis. In the event the Project Manager or Design Consultant discovers inconsistencies or inaccuracies in the information presented. the CMAR shall make adjustments as necessary to the GMP Proposal. its basis or both.

  2. Upon receipt of any GMP Proposal from the CMAR. the Department may submit the same documents that were used by the CMAR in developing the GMP to an independent third party or to the3 Design Consultant for review and verification.

  3. If the GMP Proposal is greater than the Department's estimate, the Department may require the CMAR to reconfirm its GMP Proposal. The CMAR may be requested to, or at its own discretion, submit a revised GMP Proposal for consideration by the Department. At that time the Department may do one of the following.

    1. Accept the CMAR's original or revised GMP Proposal, if within the Department's budget, without comment.

    2. Accept the CMAR's original or revised GMP Proposal that exceeds the Department's budget, and indicate in writing to the CMAR that the Project BUdget has been increased to fund the differences.

    3. Reject the CMAR's original or revised GMP Proposal because it exceeds either or. both the Department's budget and the independent estimate, in which event, the Department may terminate this Contract and/or elect to not enter Into a separate contract with the CMAR for the construction phase associated with the scope of Work reflected in the GMP Proposal.

  4. If design changes are required during review and negotiation of the GMP Proposals, the Department may authorize and cause the Design Consultant to. revise the Construction Documents to the extent necessary. Such revised Construction Documents will be furnished to the CMAR and the Project Manager for review. The CMAR shall promptly notify the Project Manager if any such revised Construction Documents are inconsistent with the agreed upon revisions.

The Department is not obligated to have the CMAR construct the project, the CMAR has no right to construct the project, and the CMAR has no claim against the Department if the Department elects to terminate the project or to advertise the project for bid through the Department's construction bidding process. If the Department elects to bid the project, the CMAR will not be allowed to submit a bid.

The Design Phase and the Construction Phase are not mutually exclusive in timing. The Construction Phase may begin before all activities of the Design Phase are complete. However, no construction activities shall begin until the site has been cleared by the Department's Environmental, Utility and Right-of-Way Sections. Regardless of when or whether the Construction Phase begins, the CMAR will remain obligated to complete the Preconstruction Services Contract.

Multiple GMPS

The Department may consider the use of multiple GMPs on this project. During the Preconstruction Phase. the Department, the Design Consultant. or the CMAR may propose portions of the work to be constructed under separate GMPs. The Department will only consider proposals for multiple GMPs that meet the following criteria:

  1. The implementation of multiple GMPs must be clearly understood by the Department to be in its best interest.

  2. The segment of work proposed for construction under a separate GMP shall have been cleared by the Department's Environmental, Right of Way and Utility Sections in advance of the start of construction. Additionally, work constructed under a GMP that does not cover the entire project shall not affect adjacent areas that do not have all required clearances.

  3. The final product of construction under each GMP shall be a stand-alone segment. For example, if a project includes construction of multiple traffic interchanges (TIs), a proposal for a separate GMP to construct one of the TIs that would be usable to the traveling public upon completion of construction would be a stand-alone segment and. may be considered for construction under a separate GMP.

  4. Use of more than one GMP on the project must be demonstrated to save time, inconvenience to the travelling public, or construction funds.

  5. If work on the project is done under multiple GMPs, each GMP will be a separate construction contract between the Department and the CMAR. Execution of a construction contract for one GMP does not obligate the Department to have the CMAR construct the entire project.

  6. The CMAR shall maintain a cost model detailing the estimated construction costs for the entire project throughout the Preconstruction Phase. If multiple GMPs are to be used, the Department will evaluate each GMP considering the cost model for the entire project. The Department will not approve a GMP for a portion of the work until the Department has determined that the CMAR can construct the entire project within the project budget.

D. Schedule:

The CMAR process will have the following steps:

Step 1: Preparation of the SOQ: (estimated time: one month)

A request for Statements of Qualifications will be developed by the Department. The Request for SOQs from the Department's first two state-funded CMAR projects will be used as a template. The template will be edited to include federal requirements and to address this specific project. As part of the Request for SOQs the Department will provide all of the project information developed to date. This will include the 30-percent design plans, Traffic Report, Initial Materials Memo, and existing environmental documentation.

Step 2: Advertisement and Selection of the CMAR: (estimated time: three months)

The request for SOQs will be advertised for a minimum of four weeks. The Selection Team will have approximately two weeks for review the SOQs and determine which firms to invite for interviews: The contractors will be contacted and scheduled for oral interviews within two weeks. The final list will be announced within five business days of the last oral interview. The Department will negotiate and execute the Preconstruction Services Contract.

Step 3: Design/Preconstruction Services Phase: (estimated lime: ten to twelve months)

Preconstruction Services will be initiated upon execution of the Preconstruction Services Contract by the Department and the CMAR. The CMAR will prepare cost models (estimates) at each stage of design. When the CMAR is comfortable that they can construct the project for the amount in the cost model, or less, they will submit a Guaranteed Maximum Price Proposal.

Step 4: Construction Phase: (estimated time: twelve to fifteen months)

Once the Department and the CMAR agree upon a GMP, all required clearances are completed, and Federal concurrence has been received the Department will recommend the GMP for award at a Transportation Board meeting. Once the Transportation Board awards the construction contract for the GMP or less, the CMAR may begin construction of the project or portion of the project.

If multiple GMPs are used, FHWA concurrence will be required prior to the acceptance of the first GMP. The Department will present the first GMP to the Transportation Board and recommend award of a construction contract for the amount of that GMP. The Department will request authorization to execute additional GMP contracts to the CMAR up to the approved project budget amount. As long as subsequent GMPs do not exceed the project budget, the Department will not return to the Transportation Board for action on the project.

Completion of the entire project is expected to be in mid to late 2009. Evaluation reports will be prepared as noted below in the reporting section.

Selection Team:

The SOQs and oral interviews will be evaluated by a Selection Team composed of a minimum of three individuals. ARS 28-7366 states that:

  • Selection Team members may be Department employees or outside consultants.
  • At least half of the Selection Team shall be registered engineers or architects.
  • At least one member of the Selection Team must be a senior management employee of a licensed contractor who is not involved in the project.
  • Any architect or engineer on the Selection Team that is not a Department employee shall not be otherwise involved in the project.

The FHWA will be given the option of including a representative on the Selection Team.

Evaluation of SOQs and Oral Interviews:

The Department has developed selection procedures in order to provide a balanced assessment of the SOQs and oral interviews. Evaluation criteria will be tailored to each project. The evaluation criteria and the associated points used to evaluate the SOQs will be included in the Request for Statements of Qualifications.

Example selection criteria follow:

  • Qualifications of the firm/consortium
  • Experience of key personnel (Resumes to be provided in SOQ)
  • Project understanding and approach including public relations
  • Firms overall approach to safety
  • Other miscellaneous project specific criteria.

The oral interview process will be defined in the Request for SOQs


All responsive submittals and oral interviews will be scored.

E. Reporting:

The Department will prepare and submit to the Federal Highway Administration initial, interim and final reports on the project. The initial report will be submitted after execution of the Preconstruction Services Contract. It will include any feedback received from the contracting industry on the CMAR process.

An intermediate report will be prepared and submitted at the point where the CMAR and the Department agree on a GMP. The intermediate report will discuss how the preconstruction services portion of the project has progressed to date. Included will be discussion of project quality, schedule, the GMP compared to the Department's initial program amount and work performance by the CMAR.

A final report evaluating the overall effectiveness of the CMAR alternative contracting method will be submitted upon completion of construction and acceptance by ADOT and FHWA. The benefits! advantages as well as any deficiencies noted during the CMAR process will be Identified and documented to use in determining whether this process is viable for continued use.

Updated: 06/27/2017
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000