change arises, as it often does with private individuals, it can
easily be implemented by the CMAR.
Since the CMAR is ultimately responsible for the schedule
and the budget, they will generally bid the trade elements
to subcontractors who are qualified and bondable, and who
the CMAR has confidence will construct their scopes of
work successfully. This enhances the quality of the work and
reduces the risk that either the design professional or utility
owner will reject the work. Work that is rejected and must
be redone can pose a significant schedule risk in addition to
quality concerns.
Another advantage of this method is that the CMAR is far
less likely to develop an adversarial relationship with the
Town during the course of the project. This results in a
construction team that is motivated to perform well for the
Town, resolve issues quickly and cost effectively, and maintain
a positive working relationship so they can continue working
with the Town on future projects. For this reason, the risk
of claims and lawsuits are often much lower for CMAR
than other delivery methods. A lawsuit resulting from poor
performance or claim on a project of this magnitude could
have significant schedule and cost impacts.
70 | CHAPTER SEVEN
Cost
We understand that the question may arise whether using a
CMAR will raise or lower the cost of the project. Having a
very cost conscious group involved during the design process
might lower the total cost of the project. However, by shifting
the cost guarantee burden onto the CM, a case can be made
that the actual savings may be less than promised if the CM is
too conservative and risk-averse. There are studies that seem
to indicate a substantial savings in cost growth (fewer change
orders) through use of CMAR, but no good information on
comparative initial cost for similar infrastructure projects.
This is mostly due to the fact that Owner’s do not build the
exact same project twice under different delivery methods.
While the cost savings potential exists, there is no guarantee
that it will cost more or less than any other delivery system.
The CMAR project delivery method requires the least
number of owner employees to manage the process because
the CMAR can expand to meet the owner’s staffing needs.
While not reflected in the GMP, the reduced owner personnel
required to manage the efforts of the CMAR is a cost savings
that needs to be considered.
The CMAR process offers the Town “open book”
transparency on how the construction price is developed. All
of the sub-contractor bid proposals, CMAR overhead, project
management, profit, and contingencies are clearly identified,
shared with the Town, and agreed upon before the work begins.
This also allows the Town to know the full budget for the
project, unlike the DBB method where budget issues may not
be discovered until well into the construction process.
As compared to other project delivery methods, the Town
maintains a greater degree of control over the construction
budget and use of any contingency funds. Change orders are
inevitable in any underground infrastructure project. While
upfront sub-surface investigation mitigates this risk, it cannot
eliminate the risk. In a DBB project delivery, the Owner and
Design professional work together to manage the rising project
cost due to change orders on the project. In a CMAR project
delivery, the Owner and Design professional work together to
preserve the Construction Contingency which ultimately lowers
the final cost of the project.
A significant cost advantage may be achievable through the
Town’s direct purchase of materials which can be streamlined
through use of the CMAR procurement method. The CMAR
can coordinate these efforts directly, retain responsibility for
accepting delivery, storage and installation of these materials
while achieving tax savings for the Town.
The Town’s history with this delivery method has been positive
with projects being completed on-time or ahead of schedule and
under the negotiated GMP. When the cost of the project is less
than the GMP, the contingency funds are returned to the Town.
CMAR Procurement Recommendations
There are multiple ways to select a CMAR to perform
a given project. Historically, the Town has selected their
CMAR contractors solely on a Qualifications-Based selection
methodology. The CMAR then negotiates a pre-construction
services fee, bids out the subcontracted trades, and assembles a
final GMP which is negotiated and agreed upon by the Town
and CMAR.
Another method that was explored by the Town to select the
CMAR is the Best Value Selection method. With this method,
both the cost of the work and qualifications are factors in the
final selection of the CMAR. Weighted factors are applied to
both cost and qualifications submitted by prospective CMAR’s
and the highest aggregate score determines the CMAR who will
provide the Best Value to the Town.
The cost elements that could be considered in a Best Value
selection process include:
y y Preconstruction Services
TOWN OF PALM BEACH