Program Management for School Construction Presented to: Pasadena Unified School District Board of Education January 13, 2009
Project Delivery Options Design Bid Build Design/Build Construction Management At-Risk Agency Construction Management Multi-Prime General Contractor Program Management
Design-Bid-Build Definition Architect completes design Contractors submit sealed bids Lowest responsive, responsible bidder constructs the project
Design-Bid-Build DISTRICT Three key parties involved ARCHITECT- ENGINEER Hired directly by the District Provide some degree of construction administration GENERAL CONTRACTOR Contracted directly to District Does not participate in design Responsible for means, methods & sequence of work SUBCONTRACTORS
Design-Bid-Build Advantages Widespread use and familiarity A perceived fairness in the process Competitive construction number Bid based upon completed documents
Design-Bid-Build Disadvantages Subject to market demand/availability/cost escalation Lengthy process Potential adversarial relationship between District and contractor Cost unknown until bids finalized no GMP (GMAX) Low bidder potentially undesirable Intensifies the potential for change orders Fast track option not available Potential Claims
Design/Build Definition A contractor, architect, hybrid, or other duly licensed entity, contracts to complete both design & construction services as a single source provider
Design/Build DISTRICT District contracts with a single entity DESIGN/BUILD ENTITY May be a single firm Can be joint venture or a contractor with A/E as sub Holds all contracts Responsible for means, methods, techniques and sequence of construction VENDORS SUBCONTRACTORS SUPPLIERS
Design/Build Advantages Single source contract to complete both design and construction Early cost and schedule control of project Reduced overall project duration Reduced change order liability to District Fast track option available Potential to reduce complex claims exposure GMP/GMAX option available
Design/Build Disadvantages Complexity of structure, especially in the Public Sector Either design or construction could suffer if the right team is not assembled Potential adversarial relationship Potential to limit District/Design Team communication Potential loss of District control over project Cost savings could erode quality of design Design could exceed District budget/expectations
Disadvantages Design/Build If bridging is used, continuity of design and additional costs could be a potential problem If bridging is used, many advantages of early-on quality, schedule and cost control are eliminated Surviving the unknowns associated with any seldom used delivery system could be an issue
Construction Management At-Risk Definition A contractor contracts for a project, acting as a CM, but holding all sub-contracts in the same manner as a general contractor
Construction Management At-Risk DISTRICT District contracts separately with Architect and CM At-Risk ARCHITECT- ENGINEER CONSTRUCTION MANAGER AT-RISK No construction monitoring option SUBCONTRACTORS Assumes risk through GMAX Responsible for means, methods, techniques, and sequence of construction Holds all subcontracts All Construction monitoring
Construction Management Advantages At-Risk District benefits by involving expertise during most phases Early knowledge of cost and schedule, and control of same via a GMP/GMAX Fast track option available
Construction Management At-Risk Disadvantages CM cost to District (similar or greater in cost to a GC) with no real CM advantages (potential conflict of interest) Potential adversarial relationship between District and CM at-risk Reduced ability of District to control quality and limit change orders Legality in the Public Education (K-12) Sector in California an issue at this time
Agency Construction Management Definition CM contracts with a District in a relationship of trust to manage and oversee the design and/or construction process CM holds no sub or prime contracts, and manages either a general contractor or multi-prime trade contractors CM seen as a neutral party
Agency Construction Management District OWNER District contracts separately with Architect and CM All trade contract(s) are directly with District Has ultimate authority over trade contractor ARCHITECT ARCHITECT - - ENGINEER ENGINEER TRADE TRADE CONTRACTOR(S) Responsible for means, methods, techniques and sequence of construction CONSTRUCTION MANAGER Acts as agent of District in a fiduciary role Provides team leadership during design and/or construction Loyalty only to District and project delivery Provides efficient business administration and superintendence during construction Recommends District action(s) as appropriate Main Source of project information
Agency Construction Management Advantages Affords design and construction expertise to the District without conflict of interest Multi-prime contracting option available Cost and schedule control potential early in the process Eliminates or reduces certain fees in completing the project (multi-prime) Fast track option available
Agency Construction Management Disadvantages Could duplicate in-house expertise No guaranteed pricing (GMP) early in the process CM not driven by risk Requires knowledgeable Owner to be most effective
Program Management Definition Program Manager contracts with a District that is undertaking a multi-project (usually $100M plus) Capital Facilities Improvement Plan Program Manager can assist District with funding options, professional service provider selection, insurance options, master schedule and budget, Program procedures, design criteria, regulatory agency interface, community and bond oversight committee relationships, bulk purchasing, and in addition, could provide Construction Management services.
Program Management DESIGN DISCIPLINES District PROGRAM MANAGER TRADE CONTRACTORS CONSTRUCTION MANAGER(S) Trade Contractors Responsible for means, methods, techniques and sequence of construction District District contracts separately with Program Manager, Design Disciplines, CMs, and Trade Contractors (CM services can be part of the Program Managers contract) District has ultimate authority over Trade Contractors Program Manager Ties multi-projects and all aspects of Program together to achieve a smooth and efficient process Could also be the CM, however, CM often contracted separately by the District Construction Manager (s) Acts as agent of District in a fiduciary capacity
Program Management Advantages Enables District to view Program as a singular process to the ultimate cost, schedule and quality benefit of District Can provides the advantages of Agency Construction Management (see previous section) Extends and trains District staff without the burden of hiring new full-time employees Program budget and schedule determined early in the process Standardizes costs and maintenance efficient
Program Management Disadvantages Could duplicate some in-house expertise Same disadvantages as Agency CM (see previous section) Cost ineffectiveness could be an issue when in house staff performs redundant work
Factors Influencing Delivery Systems Restrictive schedules Existing contracting legislation Fast-tracking requirements Change Order potential Material and labor quality and supply Environmental issues Program size and complexity
Factors Influencing Delivery Systems (cont.) District s expertise in design & construction Budget constraints Political contracting environment Program/Project complexity Design requirements