Construction Delivery & Management Methods FOR AIRPORTS

1. Construction Delivery & Management Methods FOR AIRPORTS By Glenn M. Jardine, PE

2. What’s Best for Your Project? It Depends… • Success Criteria • On/Under Budget • Conforms to Expectations • On Schedule What are Additional Goals? • Large Number of Projects • Quick Delivery • Local/Minority Firm Participation • Risk Avoidance • Phasing and Security Concerns • Staff and Community Involvement

3. Evaluate: • How Much Risk are You Willing to Assume • Schedule and Budget Constraints • How Much Design Input by Staff • How Much Local Participation • How Much Minority Participation • Level of Quality Desired • How Much Flexibility • Ability to Tolerate Change Orders

4. Key Factors to the Decision: • Well Defined Scope • Shared Understanding • Legal Authority to use • Adequate Staffing & Knowledge • Established Budget • Established Completion Date • Availability of Contractors Providing Service • Multiple Projects • Cooperative A/E and Contractor Community • Need to Spread Work Around

5. Contract Strategy CONTRACT STRATEGY ONE MANY Turnkey Design/ Build Design/ Bid/Build Design/ Pre-Order/Bid/ Build Separate Prime Contracts Separate Trade Contracts CONTRACT TYPE AGENCY VENDOR Negotiated Fixed Price Escalation Clause Bid Fixed Price Quantity Survey Target Cost Plus G.M.P. OWNER’S RISK GREATEST LEAST CONTRACTOR’S RISK GREATEST LEAST OWNER’S CONTROL LEAST GREATEST CONTRACTOR’S CONTROL LEAST GREATEST

6. Construction Method CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD PM/CM AGENCY DESIGN - BUILD

7. Speed of Delivery CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD FASTER PM/CM AGENCY DESIGN - BUILD

8. Initial Cost Certainty CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD HIGHER PM/CM AGENCY DESIGN - BUILD

9. Owner’s Risk CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD HIGHER PM/CM AGENCY DESIGN - BUILD

10. Construction Method CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD PM/CM AGENCY DESIGN - BUILD

11. select a/e select cm early bids select a/e GMP (CCAP) CCAP GMP (CCAP) CCAP DESIGN – BID – BUILD select a/e design bid/award build DESIGN – BUILD design select d/b design build CM AT RISK design build PM/CM AGENCY select a/e design select cm early bids build

12. Design – Bid – Build

13. Design – Bid – Build

14. Owner’s Responsibility Security Costs Env Prog Legal Finance Soils Site TSA Baggage MBE Tech Airlines Tenants

15. Owner’s Responsibility Security Costs Env Prog Legal Traditional Who’s resp for errors Finance Soils Site TSA Baggage MBE Tech Airlines Tenants SUBCONTRACTORS SUBCONSULTANTS

16. Design – Bid – Build Advantages • Widely Understood and Legally Accepted Method • Owner’s Control/input Over Project • Completed Set of Documents When Bid • Competitive Pricing • Single Point of Contact for Warranty Issues Disadvantages • Don’t Know Price Until Bid Day • Additional Design Time • Owner Liable for Design Errors & Omissions • Can Create Adversarial Relationships • No Contractor Input During Design • Low Bidder Not Necessarily Most Qualified

17. Why Design – Bid – Build? Works Best With: • Relatively Little Staff Experience Required • Cooperative A/E and Contractor Community • Restrictions on other Delivery Methods • Adequate Staff to Handle Multiple Projects • Time Not Restrictive OK if: • Willing to Accept Change Orders

18. Why Design – Bid – Build? Does Not Work Well If: • You Don’t Want Claims • You Want Most Qualified Contractors • You Need Contractor Input During Design • Cooperative Attitude Does Not Exist • Mandated Minority Involvement

19. Construction Method CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD PM/CM AGENCY DESIGN - BUILD

20. select a/e select cm early bids select a/e GMP (CCAP) CCAP GMP (CCAP) CCAP DESIGN – BID – BUILD select a/e design bid/award build DESIGN – BUILD design select d/b design build CM AT RISK design build PM/CM AGENCY select a/e design select cm early bids build

21. Design – Build

22. Design – Build - Two Phase (1 Project) Security Costs Well Defined Scope Single Point of Resp Informed staff Env Prog Legal Finance Soils Site TSA Baggage MBE Tech Tenants Airlines SUBCONSULTANTS SUBCONTRACTORS

23. Design – Build Advantages • Single Responsible Entity for Design & Construction • Minimizes Design – Construction Risk • Potentially Less Time / Earlier Knowledge of Cost • Reduction in Disputes • Potential for Construction Methods Integrated into Design – Creative Solutions Through Collaboration

24. Design – Build Disadvantages • Owner Must Carefully Define Program (Bridging Documents) • Contractor Control May Impact Quality Level • Changes Due to Late Program Alterations • Legal Issues with Use • Selection Process Can Delay Start • Potential Loss of Control During Design Process • Changes Can Happen Without Owner Involvement Which Owner May Not Desire • No Checks/Balances Between Architect/Contractor (Unless Separate A/E Engaged for Bridging and Oversight)

25. Evaluation Works Best With: • Well-Defined Scope • Specifically Constructed D/B Contract • You Want Little Risk (all responsibility with Design/Builder) • You have No Legal Restrictions on Use

26. Evaluation Does Not Work Well If: • You Want Input During Design • You want Local/Minority Participation (Sometimes) • There is Not a Shared Understanding • There is Not a Well-Defined Scope

27. Construction Method CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD PM/CM AGENCY DESIGN - BUILD

28. select a/e select cm early bids select a/e GMP (CCAP) CCAP GMP (CCAP) CCAP DESIGN – BID – BUILD select a/e design bid/award build DESIGN – BUILD design select d/b design build CM AT RISK design build PM/CM AGENCY select a/e design select cm early bids build

29. Construction Management at Risk Consultants Suppliers

30. Construction Management at Risk Security Costs Env Prog Legal Finance Soils Site Tenants Baggage MBE Tech Airlines SUBCONTRACTORS SUBCONSULTANTS

31. Construction Management at Risk Advantages • Qualifications Based Selection (QBS) • Ability to Fast Track construction • One Point of Responsibility for Project Delivery • Advanced Input on Constructability and Costs • Budgeting Control with CM’s Input • Opportunities for Minority Participation Enhanced Disadvantages • CM Acting as Contractor • Importance of Selecting Right CM – Must be Good at Pre-con and Build • No Contract Between AE and CM • Changes – from Owner’s Contingency or CM Contingency?

32. Evaluation Does Not Work Well If: • You Don’t Structure your Contracts Well as a “Family” of Contracts • You Don’t Know up Front Difference Between “Cost of Work” and Reimbursables and Fee • You Don’t Understand the Contractor’s Pricing Intimately • AE is Not Familiar with this Approach

33. Construction Method CONSTRUCTIONMANAGEMENT DESIGN - BID - BUILD PM/CM AGENCY DESIGN - BUILD

34. select a/e select cm early bids select a/e GMP (CCAP) CCAP GMP (CCAP) CCAP DESIGN – BID – BUILD select a/e design bid/award build DESIGN – BUILD design select d/b design build CM AT RISK design build PM/CM AGENCY select a/e design select cm early bids build

35. PM/CM Agency

36. PM/CM Agency SUBCONSULTANTS TRADE or PACKAGE CONTRACTORS

37. PM (Multiple Projects) Security Costs Env Legal Finance Soils Site Tenants Baggage Prog MBE Tech Airlines SUBCONTRACTORS SUBCONSULTANTS

38. PM/CM Agency Advantages • Ability to Use Multiple Delivery Methods • Ability to Fast Track Construction • Competitive Pricing on Smaller Packages • Minority Participation can be Encouraged if Bidding Done Properly • Ability to Budget for the “Total Costs” of Building Program • Facilitator • All Savings to Owner

39. PM/CM Agency Disadvantages • Conflict from AEs and GCs who Feel the PM is Interfering with Their Relationship with Owner • Upfront Costs may Appear High • Misunderstanding of Roles/Responsibilities

40. Evaluation Works Best When: • Local Participation is Important • Required Minority Participation • Need for Input During Design from Contractor • Shared Understanding of Project • Need to Extensively Check as Built Conditions • Cost Containment is Important OK if: • Staffing is Adequate to Handle Paperwork/Changes • You Need Design Input • Schedule Needs to be Accelerated

41. Evaluation Does Not Work Well If: • You Don’t Want to Deal with Change Orders (risk) • Your Architect Does Not Understand Multiple Bid Packaging (May Add Fee) • You Want Guaranteed Cost • You Don’t Understand Ways Fees are Calculated

42. Conclusion • There is No “Right” or “Wrong” Way – All Methods have their Pros and Cons • Understand the Difference Between “Delivery Methods” and “Management Methods” • Understand the Existing Owner/AE/PM/CM Structure and their Concerns • Risk/Control/Reward must Balance • Relationships Rule the Day

43. Construction Delivery & Management Methods FOR AIRPORTS By Glenn M. Jardine, PE