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Capital Program Implementation Through Construction Management at Risk Delivery
Methods-An Owner’s Perspective
The Massachusetts Port Authority
(Massport)
Boston, Massachusetts
H. Sleiman, P.E., CCM
Director, Capital Programs and Environmental Affairs
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Definition of Massport• Massport is an independent authority
governed by a board of directors, appointed by the state’s governor
• Massport owns and operates– Boston-Logan International Airport– Hanscom Field, Bedford, MA– Worcester Airport– Conley Container Terminal– Black Falcon Cruiseport– Various real estate assets
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Overview
• Rolling 5-Year Program• Developed through Comprehensive and Coordinated
Merit Process to Meet the Authority’s Priorities of:– Safety– Security– Operational Efficiencies– Sustainability– Customer Services
• Reflects Current Financial Constraints• Limits Increases to the Rates and Charges
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Proposed FY10-14 Capital Program
Total Projects
Massport Funds:
CFC Funds:
Private Funds:
Contingent On FundingSource (CFS) Projects:
Unfunded:
FY10-14
379
$737M
$271M
$46M
$431M
$585M
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Spending Distribution By Facility(Does Not Include CFS, Private Capital)
FY10-14
4.6%
1.8%
85.6%
7.6%
0.4%
Agency-wide
Hanscom Field
Logan Airport
Maritime
Worcester Airport
$46M
$18M
$865M
$77M
$4M
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• Average Annual Number of Construction Awards • Average Total Per Year• Average Annual Number of Consultant Awards• Average Total Per Year
Capital Programs Statistics
44$150 M
41$48 M
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Project Delivery Method Traditional Design – Bid – Build
PROS
•Familiarity
•Owner Friendly Contract Language
•Price Competition
•Lowest Initial Cost
CONS•Contractor Qualifications•Adversarial Relationship•Claims / Litigation Mentality•Quality •Additional Oversight Costs
Program implementation prior to legislation passed on July 19, 2004, project delivery method was
“Design – Bid – Build”
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Design-Bid-Build Internal Resources
• Standard Contract Documents• Standard Procedures/Guidelines• Clear Project Expectations• Simple Contract Negotiations• Minimal Legal Involvement• Minimal Project Controls• Simple Accounting Interface• M/W/DBE Compliance
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Project Delivery MethodCM at Risk Guaranteed Maximum Price
PROS• Qualified Contractor
• Professional Working Relationship
• Team Collaboration /Realignment During Project
• Cost, Schedule, Quality Control Experience
• Pre-Construction Services
CONS
•Lack of Familiarity
•Develop or Select Contract Documents
•Additional Procurement Time
•Higher Initial Bid Price
Program implementation post-legislation passed on July 19, 2004, project delivery method was “Design – Bid – Build”
•Allows CM at Risk for vertical projects valued at $5M or above•Allows for Design Build for horizontal projects valued at $5M and above
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CM at Risk Internal Resources
• New Contract Documents• Increased Contract Negotiations• Lack of Standard Procedures• Increased Legal Involvement• Increased Procurement Involvement/Time• Increased Project Controls Support• Contingency – Mine or Yours?
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Change in Implementation
•Central Garage Addition and Renovations–$200M Value–CM: Turner Construction
•New Terminal A–$500M Value–CM: Skanska
•New Prescott Street Pumping Station–$12M Value–CM: O’Connor
•Terminal B Garage Renovations–$55M Value–CM: Consigli
•Economy Parking Deck–$17M Value–CM: Turner Construction
•Consolidated Rental Car Facility (CONRAC) –$250M Value–CM: TBD
•New Bus Maintenance Facility–$20M Value–CM: TBD
•Rehabilitation of Aircraft Hangars–$18M Value–CM: TBD
Projects Completed or Ongoing Since Legislative Change:
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CM Selection Process• Task 0: Retain a Qualified Designer that has Good Experience in CM at Risk Project
Implementation
• Task 1: Retain a Qualified CM Owner Representative (either from a Consultant/Designer Team or Independent CM)
• Task 2: Pre-qualify CM at Risk Teams
– Experience with similar work
– Project team members and management
– Safety records including OSHA violations and not just the EMR
– Financial stability
– Etc.
• Task 3: Issue RFP to Short-listed CM at Risk Teams
– 20% - 30% preliminary design documents
– Pre-construction contract form
– Master construction agreement form
– General provisions
– Special provisions
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RFP Requested Information
• Technical Proposal– Scope of pre-construction services
– Critical path schedule
– Assumption and qualifications
– Description of technical challenges
– Value engineering ideas and schedule enhancements
– Routine information: surety letter, prevailing wages, etc.
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Price Proposal
• Preconstruction Phase (hours X rate X multiplier)• General Condition: (Project Management Staffing)• General Requirement: Direct Cost from Document
Reproduction, Insurance and Bonds, to Quality Control and Lab Fees, Etc.
• Construction Contingencies• Fee• “Good Faith Estimate” (GFE) regarding Construction Cost • Project Duration Cash Flow and General Conditions
Spending Charts
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Proposal Evaluation
• Technical Proposal– Project understanding– Technical challenges and proposed solution– Assumption and qualification– Value engineering ideas– Etc.
• Price Proposal– Mulitiplier– Personnel– Fee– Breakdown of GFE– Comparison between proposals
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Case Study – Massport Terminal B Garage CM at Risk Project
The Project Involves:
• Drainage Improvements• Structural Strengthening• Lighting Replacement• Upper and Lower Roadway• Replacement• Waterproofing• Installation of Photovoltaics• Expansion Joint Replacement• Modernization of Elevator Lobbies
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• Advertised for CM Qualifications
• Review of Nine Qualification Packages led to Six Companies being Shortlisted
• Requested Technical Proposals and GFE from Shortlisted Companies
• Selected Three Firms to be Interviewed based on Proposals and GFE
• Selected Consigli Construction Company Based on Interviews and Evaluation of Proposals
Process
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• Gained Insight to Possible Areas of Conflict within the Project
• Evaluated Potential Solutions to Identified Conflicts• Confirmed Reasonableness of Preliminary Cost Estimates
($52 million)• Identified Areas where Additional Field Investigation/Field
Mock-up would be Useful• Team Approach helped to Minimize Owner Exposure for
Unknown Conditions by Establishing Contingency Costs (Signage, Bollard Relocation, Asphalt Escalation)
Owner Benefits of CM Selection Process
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Item # Item FST/PB Skanska Consigli Suffolk Walsh Gilbane Turner
Average CM Value
1Estimated CM Preconstruction Phase Services
Contained in Line Items $127,990 $182,080 $211,290 $373,555 $292,460 $362,204 $258,263
2Estimated total Cost of Construction Phase not to exceed General Conditions
$2,622,681 $3,350,506 $5,078,320 $6,522,845 $8,121,735 $4,368,775 $5,937,778 $5,563,327
3Estimated total cost of construction phase not to exceed General Reqmts
$2,185,567 $1,473,830 $4,274,312 $8,135,833 $9,160,910 $3,588,803 $4,284,603 $5,153,049
4Estimated total cost of construction phase Construction Contingency
$2,185,567 $4,313,167 $6,000,000 $2,200,000 $0 $3,000,000 $3,246,672 $3,126,640
5 CM at Risk Fee* $1,311,340 $1,357,762 $1,880,642 $1,636,344 $2,919,100 $1,789,436 $3,034,082 $2,102,894
Fee Percentage 3.00% 2.75% 3.75% 2.95% 5.00% 2.75% 4.50% 3.62%
6 Good Faith Construction Cost Estimate $43,711,347 $40,235,654 $34,797,826 $38,610,600 $41,099,358 $54,112,808 $53,954,998 $43,801,874
Duration (months) 46 40.5 42 41 42 44.5 36 41
Total Cost for Construction
$52,016,503 $50,730,919 $52,031,142 $57,105,663 $61,301,145 $66,859,866 $70,458,169 $59,747,824
TERMINAL B - CM PHASE II PROPOSALS - CONSTRUCTION COST SUMMARY
*Skanska % fee and written in fee differed by approx. $4,000
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DivisionNo. Item FST/PB Consigli Suffolk Skanska Walsh Turner Gilbane
Average CM Value
2 Site Work $4,374,633 $5,595,321 $3,207,435 $4,632,108 $1,944,781 $5,135,794 $16,346,069 $6,143,585
3 Concrete $28,800,760 $15,691,814 $24,207,245 $20,439,856 $25,287,414 $25,036,040 $17,442,150 $21,350,753
4 Masonry $232,692 $95,000 $1,241,360 $83,100 $402,413 $594,280 $904,427 $553,430
5 Metals $382,166 $427,511 $446,135 $1,277,934 $787,794 $2,780,248 $857,163 $1,096,131
7Thermal and Moisture Protection
$4,324,188 $2,376,487Covered within another item $5,149,794 $5,854,345 $5,769,000 $6,349,203 $5,099,766
8Doors and Windows
$11,000 $49,000 $14,000 $42,600 $13,049 $70,000 $23,382 $35,339
9 Finishes $172,643 $700,000 $57,260 $372,117 $120,791 $139,636 $288,554 $279,726
10 Specialties $451,000 $425,000 $150,000 $36,480 $132,947 $1,200,000 $13,997 $326,404
13Special Construction
Covered within another item $65,000
Covered within another item
Covered within another item
Covered within another item
Covered within another item $162,000 $113,500
15 Mechanical $701,467 $1,523,461 $1,483,310 $1,844,075 $740,652 $1,230,000 $1,415,949 $1,372,908
16 Electrical $4,260,798 $7,849,231 $7,803,855 $6,357,590 $5,815,172 $12,000,000 $10,309,914 $8,355,960
Total for Good Faith Construction Cost
$43,711,347 $34,797,825 $38,610,600 $40,235,654 $41,099,358 $53,954,998 $54,112,808 $43,801,874
TERMINAL B - CM PHASE II PROPOSALS - CONSTRUCTION COST SUMMARYGOOD FAITH CONSTRUCTION COST
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• Through Outreach to Subcontractors, Received Favorable Pricing on Many Items (Electrical, PV, Site Work)
• Preliminary Demolition of CMU Block Walls allowed Subcontractors to Examine the Physical Conditions Prior to Bidding
• Mock-up of LED Lighting Units allowed for Full Evaluation of Various Systems prior to Finalizing Specifications
• Savings on Pricing (approximately $6.5 M) allowed for Flexibility to Double the Number of Solar Trees
Successes of CM at Risk for Terminal B Garage Project
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• Items in Second Phase of the Project advanced to the First Phase thereby avoiding Re-work in the Same Area
• Collaboration between Designer and CM helped to Improve Specifications for Better Scope Definition Between Disciplines
• Collaborative Approach helped Develop Scheduling, Phasing and Code Solutions that were Responsive to Field Conditions and Owner/Passenger Needs
Successes of CM at Risk for Terminal B Garage Project (cont’d)
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Final Note
Train your Internal Staff, Project Managers, in Construction Management
and Have them Certified.
“C.C.M.”