University Avenue Rehabilitation & Widening
Construction Manager/General Contractor Procurement Method

The primary objective of the CMGC procurement method is 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.

We see value in this contracting method for the University Avenue Rehabilitation & Widening project because it will provide flexibility in the design process and help us address schedule challenges and complexities such as: the high number of parcels for right of way acquisition, constructability challenges of replacing the Chena River Bridge, extensive utility relocations and temporary traffic control and phasing within this high-volume corridor.

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 process uses the skills and expertise of the project team (designer, owner, contractor) to:

• Identify and mitigate risks
• Complete formal design reviews
• Provide input on constructability
• Develop a cost model to identify project costs, contingencies and budgets

 

Frequently Asked Questions About CMGC

What is the CMCG method?
Construction Manager/General Contractor (CMGC) is an innovative contracting method 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, then ultimately constructs the project based on a negotiated guaranteed maximum price (GMP). In the event that the owner and CMGC cannot agree on a GMP 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. The process will be similar to the one used to select a contractor for the Parks Highway Riley Creek Bridge Replacement project in 2012.

Who is completing the design of the project?
ADOT&PF contracted with PDC Inc. Engineers to develop the roadway design and utility relocations. Other consultants are also under contract to support design and Right of Way acquisition work and the Chena River Bridge is being designed by ADOT&PF bridge engineers.

How does the CMGC process work?
CMGC consists of two stages, the preconstruction services stage (Stage 1) and the construction stage (Stage 2). During Stage 1 the contractor will provide assistance during design, construction planning and completion 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 Guaranteed Maximum Price (GMP) or ADOT&PF may suspend or terminate the CMGC contract and competitively bid the construction project. When ADOT&PF and Contractor agree to the GMP, the construction contract is awarded.

Will the GMP be a lump sum amount?
The GMP 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.

What environmental approvals are necessary?
ADOT&PF is required by law and by the FHWA to complete the National Environmental Policy Act (NEPA) process before any construction occurs when any federal funding is to be used for the project. An Environmental Assessment (EA) is in place for the project and will be re-evaluated as part of the project. The EA re-evaluation will address changes to the design (and associated impacts) since the original EA approval. The re-evaluation of the EA is under way and is expected to be complete in November 2015, but subsequent re-evaluations may be necessary immediately prior to construction depending on changes to design and impacts. Beyond the NEPA document, several project permits will be required and will be discussed during design development.

What is the status of Right of Way (ROW) Acquisition?
To date, the Department has acquired the following parcels for this project:

• 2151 University Ave (former Trophy Cache)
• 465 Halvorson Road and 5000 sf adjacent vacant lot (former residence)
• Multiple contiguous lots immediately south of Indiana Avenue (former Holiday House Apartments)
• 851 University Ave (former residence)
• 875  University Ave (former residence)

The above descriptions are general and are not legal property descriptions. Additional ownership information and details are available through public property records in the Fairbanks North Star Borough.

There are over 100 remaining permanent parcels that need to be acquired in order to construct the entire project, the vast majority of which are partial take acquisitions. Proposed ROW is shown as hatched areas in the preliminary plans (some hatched areas are included as “proposed” but are already acquired if listed above). Temporary needs and needs strictly for utility easements have also been identified. Draft ROW plans are anticipated to be available for review in September 2015. Upon completion of ROW plans, individual parcel plats will be developed for appraisal and offer preparations.

When do you anticipate getting the contractor on board?
The RFP to select the CMGC will be released in July 2015 with proposals due in late August or early September. We anticipate selecting the CMGC, completing negotiations and issuing a Notice To Proceed by November 2015.

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 the 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 CMGC?
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, ADOT&PF and the contractor split the cost savings. The contractor fully develops the idea and receives half of the cost savings, but owns 100% of the risk. 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 do you handle contingencies?
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 the contractors will propose on the project? Does the CMGC propose with the 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.

Is there any work proposed on the Alaska Railroad at-grade crossing?
The track crossing will be reconstructed to accommodate the widened roadway design. Changing this crossing to make it grade-separated is a long-range goal but is not part of the project design or this CMGC contract.

Who will do utility relocation?
Underground utilities including water, sewer and communication duct bank work is anticipated to be performed concurrently with road construction as part of the negotiated Stage 2 construction contract(s). Aerial electric utilities are expected to be relocated in advance of the work (after necessary rights of way and/or easements are obtained) to avoid conflicts with the roadway work. The serving utility will make the final determination as to who does advance relocation work. Regardless of who is physically moving utilities, CMGC, ADOT&PF and all serving utility companies will be required to closely coordinate all project work.

Will removing the existing bridge and structures within acquisition parcels be part of the contract?
Yes, it will be part of the project to remove the existing structures, road, bridge and piling. Removing the existing structures and the environmental impacts of the demolition will be important to discuss in the Stage 1 preconstruction services.

Is there a maintenance period on the Chena River Bridge once it is done?
There is no maintenance period on the bridge once construction is complete. ADOT&PF will accept maintenance of the bridge once the project is accepted for final completion.

Do you expect any shutdowns during construction?
Shutdowns or closures appropriate for the corridor will be determined in conversations between ADOT&PF and CMGC.

Who is the ICE for the project?
The ICE is Stanton, LLC. They have completed this role for 65 projects across the country including the Riley Creek Bridge Replacement and the Tanana River Bridge projects in Alaska.

Links:

Federal Highway Administration (FHWA)
Every Day Counts Initiatives
http://www.fhwa.dot.gov/everydaycounts/

CMGC Construction Program Guide
The guide provides general information on CMGC with links to valuable resources for DOT’s and Contractors:
http://www.fhwa.dot.gov/construction/cqit/cm.cfm

Associated General Contractors of America (AGCA)
AGCA CM at-Risk
This link contains definitions and links to resources for owner and contractor
 http://www.agc.org/cm-risk

CMGC State-by-State Map
Map of the US showing states actively using CMGC for project delivery.
https://www.agc.org/cm-risk-state-state-map

Transportation Research Board
Construction Manager-at-Risk Project Delivery for Highway Programs (Publication)
http://www.trb.org/main/blurbs/162916.aspx

Other State DOTs’ CMGC Links
   Oregon: http://www.oregon.gov/ODOT/HWY/OPL/Pages/CMGC.aspx
   Utah: https://www.udot.utah.gov/main/f?p=100:pg:0:::1:T,V:4552,72498