Rice Lake Construction Group, in conjunction with AE2S Engineering and the City of Watford City, successfully completed the first construction management at-risk delivery of a municipal wastewater treatment facility project in North Dakota. Below are a few items that made the project a success and a few that could have made the process better.
One of the most important factors is the development of a relationship between the owner, engineer/architect, and the construction manager.
A strong team relationship in the CMAR contract delivery allows for a higher level of trust from the owner as well as the design team. During the selection stage of the contract, CMAR delivery gives the municipality the ability to interview contractors and choose a team based on experience, qualifications, and character. Having the contractor on the team for most of the design stage allows construction to start prior to 100% complete plans, thus lessening the time and costs between design and construction. The contractor also helps guide the owner and design team with constructibility issues during the design stage, helping to keep the project within budget. Once under construction, the relationships that develop early on allow for a higher level of trust, greater flexibility, and a sense of equality amongst the team.
The preliminary scope of this project was over budget at the time the City and engineer started pursuing potential construction managers. Once Rice Lake came on board, various contractor-driven changes were proposed and analyzed by the team. Constructibility modifications were made to bring the cost of the project within budget while continuing to meet the owner’s needs, expectations, and timeline.
As with any team, communication is another important factor in the construction management at-risk delivery method.
First and foremost are expectations. What does the owner need to accomplish and what is their budget? What level of sophistication are they looking to have at the end of the project? What documentation and level of construction is the design team going to require? How finished do the design documents need to be for the contractor to feel comfortable starting construction?
One item that should be discussed early on is contingency and change orders. Once the team determines the project’s expectations, a clear scope needs to be created. This can be a full design package, or a short performance specification. But a document needs to be created that is clear to the entire team as to what’s to be provided and to what quality. The team needs to be clear on what funds are “owner’s allowance,” “design allowance,” or “construction contingency” and what constitutes a change to the GMP.
This project had a dollar amount set aside as “contingency.” The use of that contingency was not as clear as it could have been. Much of the contingency was used for items that were not included in the project scope during the design phase. Items that were requested by Rice Lake that would fall under a typical construction contingency were more greatly scrutinized. This led to some feelings of unfairness as the project progressed, but ultimately the team came to agreements on the various items that satisfied everyone. In retrospect, more communication and clarity should have been brought to the topic of contingency, who controlled it, and what factors would be used in determining merit.
The construction management at-risk project delivery worked well for all teammates on this municipal project.
Mike Carpenter is a registered professional engineer with a bachelor’s degree in mechanical engineering, a master’s degree in business administration, and 16 years of experience in providing project management for a wide variety of projects with varying contract deliveries.