In an effort to reduce federal government construction project costs and delivery timelines, on November 8, 2018, the General Services Administration (GSA) issued a proposed rule amending the GSA Acquisition Regulation (GSAR) to formally adopt the project delivery method known in the private sector as Construction Manager as Constructor (CMc). The proposed rule adds the CMc delivery method to the two existing GSA-approved delivery methods: design-bid-build and design-build.
One goal of the CMc delivery method is to create value through early collaboration between the architect and the construction contractor in a project’s design phase, enabling construction to begin prior to full completion of the design, and thereby reducing the total project schedule. The CMc delivery method also provides the construction contractor with a cost incentive by allowing the construction contractor to share in the savings generated from these efforts; motivating the constructor to promote innovation and efficiencies that reduce costs throughout the construction phase of the project. According to the GSA, the CMc delivery method can reduce project cost growth and schedule growth, create administrative savings and result in a net economic burden reduction compared with the other project delivery methods.
While the CMc delivery method has already proven successful on a number of GSA construction projects, the Federal Acquisition Regulation (FAR) and GSAR currently provide no guidance on the use of the CMc delivery method. GSA’s proposal will amend the GSAR to add a definition of the CMc, which GSA defines as the project delivery method where design and construction are contracted concurrently through two separate contracts and two separate contractors. Unlike the traditional design-bid-build delivery method, under the CMc delivery method, the Government awards a separate contract to a designer (i.e., architect-engineer contractor) and to a construction contractor (i.e., the CM) prior to the completion of the design documents. The Government retains the CM during the design phase to work with the architect-engineer to provide constructability reviews and cost estimating validation. The CMc contract includes design phase services at a firm-fixed-price and an option for construction at a guaranteed maximum price.
In support of its proposal, GSA prepared an Economic Impact Analysis touting the benefits of the CMc delivery method on federal construction projects, which the GSA estimates will result in annual savings of $269,907 and an average reduced project schedule of 71 calendar days (or 60 business days). Among the anticipated benefits of the CMc delivery method are early collaboration between the CMc and architect, allowing for more efficient reviews of architect design submittals, innovation during design that leads to fewer change orders during construction, and identification of conflicts or errors before work investments are made.
The CMc delivery method also is anticipated to allow for identification and advanced execution of early work packages (e.g., demolition) and conversion to firm-fixed-price contracts, providing cost and schedule savings to the Government, especially in tight labor or material markets. Finally, when compared with design-build projects, the CMc delivery method is expected to result in less sunk costs and lower barriers to entry by members of the construction industry seeking to do business with the Government. GSA also anticipates that codifying CMc requirements into one publicly-posted location – the GSAR – will ease the burden to the industry and GSA in understanding CMc requirements and executing CMc projects and ensure consistent application of construction project principles across GSA.
Public comments on the proposal are due by January 7, 2019. For more information, visit https://www.regulations.gov/document?D=GSA-GSAR-2018-0013-0001.