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B. Construction Manager at Risk (CMR)

In the CMR system, the department contracts separately with a designer and a contractor to provide a facility design and to perform construction services. In this system, the contractor usually has significant input in the design process. It is distinctive from the traditional DBB in two ways. First, the department has the opportunity to engage the construction firm much earlier in the design process; and second, the early integration of team players allows for phased design, advanced ordering of items with long lead times, and early construction start dates for critical excavation and foundation packages.161

Lee County, Florida, uses a project delivery method that relies on qualifications-based selection for CMR procurements. The county selects the designer at the same time that it selects the CMR. Each contract is written to provide incentives for cooperation, quality, and timely completion. The CMR competitively bids out the construction work, ensuring free and open competition and competitive pricing. The numbers bear out the success of this project delivery method. Cost growth is negative, time growth is negative, and the unit price of finished construction progressively decreases throughout the project life cycle.162



Procurement flexibility; opportunities for innovation and cost savings; increased efficiency; reduced construction time; single- point accountability.

Reduced owner control; increased costs to incorporate design changes; more-complex award procedures.

Places construction risk on private partner; contract can control design and location requirements as well as operational objectives.

Reduced owner control; more-complex award procedures; increased costs to incorporate design changes.

Public sector does not have to provide capital funding for the upgrade; financing risk rests with partner; time reduction in project delivery.

Future facility upgrades not included in the contract may be difficult to incorporate at a later date.

Increased construction efficiency; lease payments may be less than debt service costs.

Reduced control.

Table A.1: Alternative Project Delivery Options

Partnership Design-build

Description A local government contracts with a

private partner to design and build a facility that conforms to the standards and requirements of the local government. Once the facility has been built, the local government takes ownership and is responsible for the operation of the facility.

Turnkey Operation

The local government provides financing for the project but engages a private partner to design, construct, and operate the facility for a specified period of time.




Douglas D. Gransberg, Vertical Construction Performance in Massachusetts Lags Far Behind Other States (Boston, MA: Pioneer Institute, 2000), www.pioneerinstitute.org/research/policy/piodrct6.cfm.

Wrap-around Addition

A private partner finances and constructs an addition to an existing public facility. The partner may then operate the addition for a specified period or until it recovers the investment and realizes a reasonable return.

Lease- purchase

The local government contracts with a private partner to design, finance, and build a facility. The partner leases the facility to the local government for a specified time, after which the ownership vests with the local government.

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