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

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

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

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

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

By Category

• 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

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”

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

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

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?

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:

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

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.

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

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

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

• 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

• 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

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

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

• 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

• 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)

Final Note

Train your Internal Staff, Project Managers, in Construction Management

and Have them Certified.

“C.C.M.”