Kivalina Evacuation and School Site Access Road Project No.: 0002384/NFHWY00162

CMGC Procurement & Information

We see value in this contracting method for the Kivalina Evacuation & School Site Access Road project because it will provide flexibility in the design and permitting process, and help us address unique project complexities associated with construction sequencing and phasing challenges in a remote environment, Local material source suitability, and causeway construction.

The primary objectives of the CMGC project delivery process are to:

• Select a contractor early on in project development in order to assist in the design process;
• Encourage use of innovative methods and materials;
• Enhance the constructability and value of the project;
• Reduce errors and omissions through close review of design documents; and
• Manage risk.

The FHWA defines CMGC as follows:

CMGC occupies the middle ground between the traditional Design Bid Build (DBB) and Design Build (DB). In a typical CMGC scenario, the owners of a project contract with a general contractor to serve as the construction manager, to provide the owner with constructability, pricing, and scheduling information during the design process. As the design nears completion, if the owner and the construction manager are able to agree on a price for construction, they sign a construction contract and the construction manager then becomes the general contractor. CMGC allows State DOTs to remain active in the design process while assigning risks to the parties most able to mitigate them. CMGC is also called Construction Manager at-Risk.

The CMGC project delivery process uses the skills and expertise of all members of the project team (i.e., owner, designer, and contractor) to accomplish the following tasks:

• Identify and mitigate risks
• Implement innovative solutions to technically challenging problems
• Refine the design through formal and informal reviews
• Collaborate to ensure project efficiency and constructability
• Identify project costs, contingencies, and budgets

Frequently Asked Questions About CMGC

On which other recent highway projects has the Department used the CMGC project delivery process?
CMGC was used to successfully deliver and construct the Parks Highway MP 237 Riley Creek Bridge project.  It is also currently being utilized on the University Avenue Rehabilitation and Widening project and on the Parks Highway MP 231 Enhancements project.

What is the CMCG project delivery process?
The CMGC method is an innovative contracting process that uses a team approach to the design and construction of a project.  The team typically consists of the owner (ADOT&PF in this case) and the selected CMGC and may include additional team members such as design consultants and an independent cost estimating firm.  The CMGC assists in pre-construction project development, including optimizing the design and consideration of construction impacts, and who then ultimately constructs the project based on a negotiated Theoretical Maximum Price (TMP). In the event that the owner and CMGC cannot agree on a TMP to construct the project, the owner retains the right to cancel the CMGC contract after the pre-construction services phase and competitively bid the construction phase of the project.

How is the CMGC selected?
Solicitation for bids will be via a Request for Proposals (RFP) package posted on the ADOT&PF construction bid calendar.  Contractors who respond to the RFP will be evaluated based on a variety of criteria, including qualifications, past performance and price.  We intend to utilize the standard RFP, selection and negotiation processes used for Professional Service Agreements.

How does the CMGC process work?
CMGC consists of two stages, preconstruction services (Stage 1) and construction (Stage 2).  During Stage 1 the contractor will provide assistance during design, construction planning, and completion of environmental documentation and permitting.

ADOT&PF will begin the CMGC process by advertising a Request for Proposal (RFP) package for the preconstruction services contract (Stage 1).  The selection of the contractor will follow ADOT&PF’s standard procedure for acquiring professional services.  Following negotiations, ADOT&PF will award the preconstruction services contract to the successful contractor.  As the project development proceeds, the contractor will provide constructability review, cost estimates, and other services.

Stage 2 of the contract begins after the design is complete.  The Contractor will propose a price for the project and ADOT&PF and Contractor may negotiate project costs with the intent of agreeing upon a reasonable price for the project.  Either the two parties agree upon the price, called the Theoretical Maximum Price (TMP) or ADOT&PF may suspend or terminate the CMGC contract and competitively bid the construction project.  When ADOT&PF and Contractor agree to the TMP, the construction contract is awarded.

Will the TMP be a lump sum amount?
The TMP will contain a bid schedule with unit prices or lump sum prices for individual pay items as negotiated with the Contractor.  The bid schedule will look the same as a design-bid-build project but the prices, scope of pay items and method of measurement will have been negotiated in advance.

Will the CMGC prepare multiple cost estimates? 
Yes, the CMGC will prepare multiple cost estimates throughout development of the project design.  Individual item estimates may occur during discussions of constructability, innovation and schedule.

Should the CMGC be concerned about a budget for design?
No, those costs will not be part of the CMGC contract.

Are specifications open to editing during this process?
Yes, that is part of the innovation in the process.

Will construction administration be conducted on the project as it would on any other ADOT&PF construction project?
Yes, ADOT&PF will conduct construction administration as typical and customary for this type of project.

How does risk sharing work with the CMGC process?
One way to explain this is to compare CMGC to a value engineering contractor proposal on a design-bid-build project; if the contractor has an idea on such a project, ADOT&PF and the contractor split the cost savings, the contractor fully develops the idea, receives half of the cost savings, but owns 100% of the risk.  On the other hand, the CMGC method provides an opportunity to identify, price, and allocate risk during the design.  As a team, the contractor and ADOT&PF can develop the concept to identify how it meets funding, permitting, and other criteria and then discuss how to best share the risk.

How are contingencies handled under the CMGC process?
The CMGC process allows for the discussion of contingencies and the final determination is negotiated between ADOT&PF, CMGC, and the Independent Cost Estimator (ICE).

One contractor might specialize in road work, another in bridge work, and yet another may be a specialty subcontractor.  How do you envision these contractors will propose on the project? Does the CMGC propose with subcontractors?
Proposers should consider ADOT&PF’s goals for the project and how to best determine innovations and efficiencies with their partner(s) in order to propose what they believe to be the best team to win the project.  ADOT&PF will accept proposals from joint ventures or from a prime contractor proposing on the project with one or more subcontractors.  ADOT&PF will evaluate and if selected, treat the proposed partnership as one entity, similar to a joint venture.

Links to Additional Information:

Federal Highway Administration (FHWA)
Every Day Counts Initiative
“designed to identify and deploy innovation aimed at shortening project delivery, enhancing the safety of our roadways, and protecting the environment.”

CMGC Construction Program Guide
The guide provides general information on CMGC with links to valuable resources for DOT’s and Contractors”

Transportation Research Board
Construction Manager-at-Risk Project Delivery for Highway Programs “publication”

American Society of Civil Engineers Defining Best Value for Construction Manager/General Contractor Projects
The CMGC Learning Curve, Journal of Management in Engineering, Volume 31, Number 4

Transportation Research Record
Effective tools for Projects Delivered by Construction Manager-General Contractor Method

Other State DOT’s CMGC Links
     California
     Colorado
     Maine
     Michigan
     Minnesota
     Oregon
     Tennessee
     Utah