Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Major Changes to Public Contracting
and the CM/GC Delivery Method
Jeremy Vermilyea
Section 137-049-0690 – “The CM/GC form of contracting . . . . is a
technically complex project delivery system.
Contracting Agencies shall use this contracting method only with
the assistance of knowledgeable staff or consultants who have a
demonstrated capability of managing the CM/GC process in the
necessary disciplines of engineering, construction schedule and
cost control, accounting, legal, Public Contracting and project
management.”
Oregon Public Contracting Code
& Model Public Contract Rules
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
2. Select the Right People
Knowledgeable selection committee
Skilled owner’s team and staff
Qualified architect/engineer and contractor
3.
Build Teamwork
Focus on partnering
Seek common goals
Achieve project success
4.
Obtain the Highest Level of Pre-Construction Service
Emphasize pre-construction phase in RFP
Retain most qualified CM/GC
The Most Important Tasks for CM/GC Success Are:
1.
Select the Right Project
Larger, more complex, tighter schedule, more critical
Case studies: KOIN, Tram, Zoo, NOAA, fire stations
Successful CM/GC Projects
1. Key policies: least cost to taxpayers and competitive bidding
2. Use of findings and exemptions process for flexibility and adjustment
to market conditions
3. Issues: exemptions, selection, and execution
4. Exempting inappropriate projects or not following statute
5. Selection on personality or cost instead of formal evaluation
6. Bid shopping, transparency, bid packaging for favored subs
7. Mech/electrical subs sometimes part of the CM/GC team
8. Ancillary costs (e.g. time and delays) not being considered
9. Possible use of a CM (professional service) without CM/GC
10.Need for ‘
lessons learned’
and
‘Best Practices’
•
ORS 279C does not apply to:
– Oregon Legislature
– Judiciary
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Public Contracting Task Force
• 2012-2013 Legislative Interim Committee
• 30+ Stakeholders
– Public owners (State, City, County, Special Dist.)
– General Contractors (Hwy, Building & Heavy)
– Subcontractors
– Labor
– Design Professionals
– Legislators
Public Contracting Task Force
• Purpose:
– Address perceived deficiencies in competitive
bid exemption process
– Address perceived deficiencies and
inconsistencies in use of CM/GC
– Address ways to force better (Best?) practices
on all users of alternative delivery methods in
general and CM/GC in particular
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
CM/GC Best Practices
Exempting from Competitive Bidding on
Public Works Projects
• Competitive bidding is required unless
specifically exempted. ORS 279C.300.
• Public owner may exempt a public improvement
contract and use an alternative delivery method if
it makes certain findings that support a method
other than competitive bidding.
• “Findings” are the justifications & conclusions the
agency reaches, using the considerations in
Exempting from Competitive Bidding on
Public Works Projects – What’s New?
• 279C.335(2) has substantial changes.
• Agency must show that using an
alternative method will result in “substantial
cost savings” (old) AND
“other substantial
benefits”
(new).
– Examples: Life Cycle, time for delivery, safety,
etc.
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Exempting from Competitive Bidding on
Public Works Projects – What’s New?
• Agency must also consider:
– Number of potential bidders/proposers;
– Construction Budget + projected operating
costs;
– Potential “public benefits” resulting from
exemption;
– Potential use of value engineering in
Exempting from Competitive Bidding on
Public Works Projects – What’s New?
– Availability of “specialized expertise” (Owner’s
CM, engineering, etc.);
– Public safety considerations;
– Risk mitigation/reduction;
– How the alternative method may affect project
funding;
– Impact of exemption on market factors
(cost/time);
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Exempting from Competitive Bidding on
Public Works Projects – What’s New?
– Whether exemption allows agency to better address
size/complexity of project;
– Whether the project is new construction or
remodel/rehab of existing project;
– Whether project will be occupied;
– Project conditions and whether phasing will be used to
mitigate;
– Availability of necessary legal, project management and
other expertise with
experience in alternative
What does it all mean?
• Exempting projects from competitive bidding will
require more:
– Planning
– Research
– Resources
– Technical understanding
– Commitment to the process (not just belief that the
alternative is cheaper).
• Boilerplate Findings will no longer be sufficient.
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Using the CM/GC Process
• Oregon Statutes amended to prescribe the
proper use of CM/GC
• Designed to ensure opportunity,
transparency and true competition at every
level
Definitions
• CM/GC Services:
– Participating as member of project team w/ agency &
design professional;
– Design review for value, constructibility, delay and
error mitigation/minimization;
– QA/QC in design process;
– Establishing price for work (fixed, GMP, etc.);
– Other services associated with construction:
• Scheduling, estimating, subcontracting, project
management, self-performing work, etc.
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Definitions, cont’d
CM/GC Services does NOT include:
• Constructing per competitive bid or
non-exempted process
• Design-Build
• Energy Savings Contract
• Certain ODOT projects
Definitions, cont’d
• Guaranteed Maximum Price
– Total price for all work, including contingencies
– Excluding changes to scope of work
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Other CM/GC Requirements
• Agencies must use AG’s rules (no more using
own rules)
• Agency must tell proposers, in the RFP:
– Evaluation criteria and weight for each factor
– Whether & How agency will use interviews
and information gained therein
– Any other criteria the agency will use to
evaluate proposals
– How written and interview scoring will be
combined
Other CM/GC Requirements
• All savings accrue to agency, unless agency
specifically calls out sharing in contract
• In RFP, Agency must specify how pricing will be
determined, including what components will be
fixed vs. unit pricing
• Agency must set clear timelines for submission
of proposals, interviews and evaluation of
proposals.
• Agency must give unsuccessful proposers Rzbl
opportunity for post-selection interview.
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
Selection of Subcontractors
• Contract b/t agency and CM/GC must provide:
– Methods by which subs will be selected
• Must be competitive, but does not require selection of lowest
bidder by CM/GC. Must provide “reasonable opportunity”
• Still allows for teaming between CM/GC and “key” subs
• CM/GC can opt out of competitive process if it provides
another selection alternative that the agency accepts.
• CM/GC can self-perform work, but must identify the work and
how it will ensure fair opportunities for subs to compete.
• CM/GC must have method to notify subs of
selection/non-selection
• CM/GC must give non-selected subs rzbl
What’s Next?
aka: Rulemaking
Operative date of
SB 254: July 1, 2014.
Temporary Rules Issued
July 2, 2014
Bend, OR | Portland, OR | Salem, OR | Seattle, WA | Vancouver, WA | Washington D.C.
