Construction Manager as Constructor – How is the CMc Selected on Publicly Funded Projects
In our last blog on Construction Manager as Constructor (CMc), we discussed what differentiated this delivery method from others. We also talked about what made a CMc different from a more traditional CM or Construction Manager as Adviser (CMa). This blog will look at the process required by law to formally select a CMc on a project funded by tax dollars.
In the private sector, an owner can select or hire a CMc based upon any criteria they desire: relationship, experience, personnel, or any other metric. In the public sector, there are very specific requirements.
The owner is required to make a public notice regarding Request for Proposals (RFP) for their project. The RFP is required to include:
- Statement of the owners planned criteria, process, and procedures to be utilized during the RFP process. This must include:
- How the RFP response will be evaluated
- How the CMc will be selected
- How the CMc will be awarded
- How the Guaranteed Maximum Price (GMP) will be established, if required by the Owner.
- A statement on the insurance requirements for the project.
- Description of the CMc’s history of contracting with or hiring MBE, WBE, and VBE.
- Documentation showing the CMc’s good faith efforts to fulfill the state’s goals for contracting with MBE, WBE, and VBE.
RFP Response evaluation
The owner must describe how the evaluation process will be handled. If a scoring method is utilized, then it must be enumerated. If a rating system will be implemented, ratings must be defined. Fees & qualifications are also required to be a part of the RFP response. Therefore, they must be a part of the criteria as well. Will the various requirements be weighted differently or equally? Will fee be a 20% weighted criteria and experience a 30% weighted criteria? All of these matter in how the RFP responses will be scored.
CMc Selection & Award Process
The owner now has to make a selection—the reason the previous discussion about criteria for evaluation is so important. The evaluation process will be questioned. Owners will get asked to provide the scoring used for each submitting firm and RFP. The owner should test their scoring with different potential scores in the categories determined. There should also be discussion about making some categories a pass/fail instead of a rated score or grade. If there are criteria that the owner determines is so important that a response should not be successful without it, then that category could be a pass/fail item. That might be project experience type or an experience level of key staff to be assigned to the project. Maybe it is a fee amount limit. The options are numerous. The requirement to describe the selection process to the CMc’s is important. The firms responding to the RFP need to know what is important to the owner to help determine if this project should be pursued. These companies will be making estimates on how they believe they compare to the competition in the marketplace.
A savvy owner will understand what they are asking for and the likely responses that the CMc firms in the community will provide. Planning the criteria and the selection process out thoroughly will help avoid surprises. In the end, this is a public process. The owner needs to be prepared for the transparency necessary in this process. In the next installment, we will discuss Guaranteed Maximum Price and how it can be implemented.