ALTERNATIVE
CONTRACTING
1
ALTERNATIVE
CONTRACTING
LUMP SUM
DESIGN BUILD
CM@RISK
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LUMP SUM
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Lump Sum
What is it?
Project Selection
Construction Contract
Administration
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What is it?
Method of Contracting upon
which Contractor submits a LS Bid
for all work vs. bidding individual
Pay Items
Intended to reduce design &
contract administration costs
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Project Selection
“Simple” Projects
Well Defined Scope
Low risk of unforeseen
conditions
Low possibility of changes
during all phases
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Construction Contract
Administration
Payments based on approved
payout schedule (SoV)
Inspection Personnel should not
be required to document quantities
(except for those subject to
adjustments i.e. asphalt)
Focus on Inspection, Quality and
Conformance with contract
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LUMP SUM Project plans
preparation
 Desired Elements
 Typical Sections
 Milling/Resurfacing (and overbuild
where appropriate) details
 Summary boxes when work not shown
on Plan Sheets
 Plan Sheets depict existing conditions
& detail work to be performed
LUMP SUM Project plans
preparation
 Desired Elements (continued)
 Plan Sheets detail all work not covered by Typical
Section and/or Design Standards
 Cross Sections (when shoulder point is moved)
 Signing/Pavement Marking, Signalization and Lighting
Plans:
 Include Pay Items for Reference Purposes Only
 Include Note: “Pay item number provided only for
purpose of describing work to be performed”
LUMP SUM STANDARD
SPECIFICATIONS
 2-3.1 – INTERPRETATION OF
QUANTITIES (Lump Sum Contracts)
 Bidder responsible for determination of
quantities
LUMP SUM STANDARD
SPECIFICATIONS
 105-2 ADDITIONAL REQUIREMENTS FOR
LUMP SUM PROJECTS
 Job Guide Schedule
 Project specific list of materials & quantities
 Submit 21 days prior to commencement of
construction
 Update Monthly
 No Commencement until Department Approval
 Final JGS at Final Acceptance
LUMP SUM SPECIAL
PROVISIONS
 SP0030100LS – Award & Execution of Contract
 3-1
For the purpose of award, after opening and reading the proposals,
the Department will consider the total Contract Lump Sum Price as
the bid. On this basis, the Department will compare the amounts of
each bid and make the results of such comparison available to the
public. Until the actual award of the Contract, however, the
Department reserves the right to reject any or all proposals and to
waive technical errors that the Department may deem best for the
interest of the State. In the event of any discrepancy in the two
entries of the Contract Lump Sum Price, the Department will evaluate
the bid based on the lump sum price shown in words.
LUMP SUM SPECIAL
PROVISIONS
 SP0040100LS – Scope of Work
 4-1 Intent & Scope
 LS Contract w/1 Pay Item Listed in
Contract
 Pay Item Number References superseded
by the LS Pay Item
 Payment for all work made under LS Pay
Item
 Pay Adjustments don’t apply (except for
those in 9-2)
LUMP SUM SPECIAL
PROVISIONS
 SP0040100LS – Scope of Work
 4-3.1 General
 Defines term “significant change” as
Engineer determination
 Deletes reference to 125% increase / 75%
decrease of “original Contract quantity”
LUMP SUM SPECIAL
PROVISIONS
 SP0050501LS – Control of the Work
 5-1.1
 Adds “All reference to separate payment
for individual items of work will not apply.
The cost for various items of work will be
included and paid for under the Contract
Lump Sum Price.”
LUMP SUM SPECIAL
PROVISIONS
 SP0060100LS – Control of Materials
 6-1.3.3
 Establishes material sampling & testing
acceptance requirements are in accordance with
105-1 & 105-2 for the following:
 Earthwork
 Base
 Hot Bituminous Mixtures
 Portland Cement Concrete
 Reinforcing Steel
 Fabricated Metals
LUMP SUM SPECIAL
PROVISIONS
 SP0060100LS – Control of Materials
 6-1.3.4
 Establishes specific certification requirements for
QPL Products
 Notarized Certification prior to material utilization
 Manufacturer Letterhead
 Product Name & Batch Number
 FPID & Contract Number
 County
 Test Result
 Certification Statement
LUMP SUM SPECIAL
PROVISIONS
 SP0060100LS – Control of Materials
 6-1.3.5
 Establishes specific certification requirements for
Non-QPL Products
 Notarized Certification prior to material utilization
 Manufacturer Letterhead
 Material Identification
 Material Type
 FPID & Contract Number
 County
 Test Result
 Certification Statement
LUMP SUM SPECIAL
PROVISIONS
 SP0080401LS – Prosecution & Progress
 8-7.3.1 – Increased Work
 Department may grant time extension
when adding new work or providing for
unforeseen work rather than overruns in
original contract items.
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment
 9-1.3
 Establishes criteria for the determination
of Pay Reductions
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement & Payment
(cont.)
 9-2.1
 Establishes those items included in LS
Payment






Furnishing all materials
Performing all work
Loss / damage arising out of nature of work
Overhead
Profit
Direct / Indirect Cost
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment (cont.)
 9-2.1.1
 Establishes criteria for Fuel Adjustments
on Contracts with an Original Contract
Time in excess of 120 Calendar Days
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment (cont.)
 9-2.1.2
 Establishes
criteria
for
Bituminous
Adjustments on Contracts with an
Original Contract Time in excess of 365
Calendar Days or more than 5,000 Tons
of Asphalt
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment (cont.)
 9-2.2
 Establishes Pay Adjustment criteria for:
 Deficiencies (9-2.2.1)
 Spread Rate (9-2.2.2)
 Overbuild (9-2.2.3)
 Foundations (9-2.2.4)
 Quality (9-2.2.5)
 Deleted Work (9-2.2.6)
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement & Payment (cont.)
 9-5.5.2
 Establishes Partial Payment criteria
 Partial Payments less than $5,000 in any one
month are not processed
 No Partial Payment for aggregate or base material
received after paving / base construction begins
unless Department suspends paving or base
operations
 Deletes item bid price limitations placed on:
 Structural Steel / Precast Pre-stressed Items
(85%)
 Other Items (75%)
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment (cont.)
 9-11.1
 Establishes Invoice Submittal Requirements:
 Contractor prepares Invoice & submits to
Engineer
 Engineer approves Invoice prior to making
payment
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement &
Payment (cont.)
 9-11.2
 Establishes Invoice Submittal Requirements:
 Submit by 12:00 on Monday following
estimate cut-off date
 Invoice based on work completed
 Invoice must include:
 Contract/FPID/Invoice Number
 Invoice Date & period covered
LUMP SUM SPECIAL
PROVISIONS
 SP0090103LS – Measurement & Payment (cont.)
 9-11.2
 Establishes Invoice Submittal Requirements (cont):
 Basis of Progress Invoice amount:
 Approximate Quantities
 Less Previous Payments
 Less amounts previously retained or withheld
 Contract Summary:
 % dollar value of completed work
 % of days used based on present Contract Days
 Certify:
 Fuel & Bituminous Gallons
 Steel weight for Indexed items
DESIGN-BUILD
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Design-Build
Authorization
Project Selection
Criteria
Warranties
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DESIGN-BUILD
AUTHORIZATION
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Authorization
 Design Build (D-B) Contracting Authorization –
 FLORIDA STATUTES
 D-B Major Projects Authorization – 337.11(7) F.S.
 Buildings
 Major Bridge
 Limited Access Facilities
 Rail Corridor
Estimated cost exceeds $10M
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Authorization
 Design Build (D-B) Contracting Authorization
 FLORIDA STATUTES
 Minor D-B Projects Authorization –337.025 F.S.
 Innovative Contracting Statute – Annual Cap
of $120M
 Minor Bridge
 Resurfacing (no widening/shoulder work)
 Projects not covered by 337.11(7) F.S.
Estimated Cost less than $10M
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DESIGN-BUILD PROJECT
SELECTION
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Project Selection
Design Build (D-B) contracting should be considered on
the following types of projects:
 Demand an expedited schedule and can be
completed earlier
 Require minimal Right of Way acquisition and
utility relocation
 Well defined scope
 Allow for innovation in the design and/or
construction effort
 Low risk of unforeseen conditions
 Low possibility of significant changes
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Project Selection
Examples of projects which may be good D-B
contracting candidates:
 Major Bridges
 Minor Bridges
 ITS (computer signalized traffic)
 Intersection improvement (with known
utilities)
 Buildings-office building, rest areas,
welcome stations, etc.
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Project Selection
Examples of projects which may be good D-B
contracting candidates (continued):
 Interstate widening
 Rural Widening
 Fencing
 Landscaping
 Lighting
 Signing
 Signalization
 Guardrail
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Project Selection
Examples of projects which may not be good
D-B contracting candidates are:
 Major bridge rehab/repair with significant
unknowns
 Rehab of movable bridges
 Urban construction/reconstruction with
major utilities, major subsoil, R/W or other
major unknowns
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DESIGN-BUILD CRITERIA
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Developing Design-Build
Criteria
Adjusted Score or Low Bid?
Adjusted Score
• Want (or need) to have input by evaluating the D-B
firm and Technical Proposal (prior to bid time)
• Innovation or potential alternatives exist
• Scope is more versatile
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Developing Design-Build
Criteria
Low Bid
• Straight forward projects
–(guardrail, noise walls, milling and
resurfacing, etc.)
• Scope is well defined
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Request for Proposals
Much of the language is standard from
SCO website
Grading Criteria
Decide what is important
Innovation
Maintenance of Traffic
Aesthetics
Environmental
Schedule
Assign Points Accordingly
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Two Phase Adjusted Score
Design-Build Procurements
• ASDB procurement – Two phase
process which combines evaluation
scores of
– Phase I - Expanded Letters of Interest (ELOI)
– Phase II - Technical proposal
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Two Phase Process
Phase I
Phase II
ELOI
RFP
Evaluate & Score
Technical Proposals
Short List
Evaluate & Score
Award
Contract
Select
Design-Builder
Calculate Lowest
Adjusted Score Using
Price Proposal from D-B
Firm
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Issue Escalation &
Resolution
RFP sets a hierarchy for design issues
and construction issues to be
resolved through a defined chain of
command
D-B Firm will be required to set a
similar escalation process for both
design and construction
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Issue Escalation & Resolution
Design Project Manager
Construction Project Mgr
District Design Engineer
District Const. Engineer
Director of Development
District Secretary
Director of Operations
District Secretary
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STIPENDS
Only on ASDB Projects
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Stipends for unsuccessful
firms
 The Department intends to compensate eligible
unsuccessful short-listed Firms for submitting a proposal
 The eligible unsuccessful short-listed Firms may receive
compensation (lump sum) for their efforts in preparing a
proposal if the proposal is determined to be responsive
 The intent to compensate and the amount of
compensation will be noted in the RFP
 This decision will be at the discretion of the contracting
District or Central Office.
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Stipends for unsuccessful
firms
 Federal funds MAY be used.
 A Stipend is not intended to compensate the Firms
for the total cost of preparing the proposal package.
 In return, the Department reserves the right to use
any of the concepts or ideas within the technical
proposals, as the Department deems appropriate.
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CM@Risk
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CM@Risk Agenda
– CM@Risk What is it?
– CM@Risk Contract Structure
– CM@Risk Process
– CM@Risk Advantages
– CM@Risk Project Selection Criteria
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CM@Risk
• CM@Risk is an integrated team approach
that applies modern management techniques
in the planning, design, and construction of a
project in order to control time and cost, and
to increase the quality and value of the
project for the owner.
• Team= owner (Department), the
architect/engineer and the construction
manager (CM)
• Transportation or building project
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CM@Risk Contract Structure
OWNER
Constructibility
Designer
CM FIRM
(Prime Contractor)
SubContractors
SubContractors
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CM@Risk Process
• District hires Designer
• District hires CM Firm used standard
consultant selection process
– Early in the design phase, 30% plans
– Negotiated CM fee
– CM Fee during Design Phase: 1-1.5% of
Construction Cost
– CM Fee during Construction Phase: 4-8% of
Construction Cost
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CM@Risk Process (continued)
• CM Firm provides construction input
throughout design development to
minimize risks and improve the schedule
• Construction components for a project
may or may not be added by
Supplemental Agreement
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CM@Risk Process (continued)
• FDOT Prepares and Manages the Design
– Constructability reviews by CM during design
to optimize the design and control costs
– CM has no Direct Control over the Design
• CM selected thru Professional Services
– Limited to Quality Contractors
– Qualification Based Selection
– Historical Performance of the Contractors is
considered
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CM@Risk Process (continued)
• CM Firm Responsible for Construction
– Guaranteed Maximum Price (GMP) – The
Department pays only for cost of the work,
up to GMP.
– Generally prohibit self-perform
– Enhanced control of subcontractor selection
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CM@Risk Process (continued)
• The role of the CM is to represent the
interests of the owner in all phases of the
project.
• The CM is to perform value engineering,
cost estimates, and schedule and budget
recommendations during the
preconstruction phase to assist in
determining the best value based on the
budget.
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CM@Risk Process (continued)
• The CM may provide suggestions for
alternate designs, construction materials,
and processes.
• The Department will maintain final
approval of all proposed changes.
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CM@Risk Process (continued)
• During the design phase, usually about
60% plans, the CM will submit a GMP for
acceptance by the Owner/ Department.
• The CM warrants that the project will be
built not to exceed the GMP and
assumes the risk by holding all of the
subcontracts to perform the work.
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CM@Risk Advantages
• Time
– Eliminates Bidding and Contract Execution Time
– Bidding Prior to Completion of Design
– Flexibility to Re-Bid
– Procure materials early
– Reduction in Time Overruns
– Contractor participation can speed up design
– Construction can begin prior to: right-of-way clear,
all permits issued, utilities identified or finalized
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CM@Risk Advantages
• Cost
– Approximately Same Costs (Based on Risk)
– Requires CM Fee
– Claims Reduced, Reduced Cost Overruns
• Risk
– Construction Contract between CM and
subcontractors
– Shifted from Owner/Department to CM Firm;
subletting the construction work
– Reduce Quantity Risk
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CM@Risk Advantages (continued)
• Innovation
– Excellent Use of Contractor and Designer Linkage
• Technical
– Qualifications Based Selection of Best Contractor
– Allows for Significant Changes During
Construction
63
CM@Risk is NOT a standard
practice
• Section 337.025 Florida Statutes applies
to all project types as part of the
innovative practices package and the
Department is required to comply with
the $120 million annual contracting
monetary cap.
64
CM@Risk is NOT a standard
practice
• As a result, all projects must have approval
from Central Office.
• All requests should be sent to the State
Construction Office for the Chief Engineer’s
approval
• On Federally funded projects, the
Department must have specific
authorization from Federal Highway
Administration (FHWA), Special
Experimental Projects (SEP)-14.
65
CM@Risk Project Selection
• In selecting a project delivery method,
gauge the level of complexity,
uniqueness and innovative approaches of
a project so as to maintain control of the
project.
• No single project delivery strategy is
appropriate for all projects and there are
some key factors to consider:
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CM@Risk Project Selection
(continued)
• Size of Project
– The more complex and costly a project, the
greater the need for professional
management and advice
• Owner Capabilities
– Assess in-house capabilities in evaluating
project procurement methods and
construction management or use a General
Engineering Consultant
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CM@Risk Project Selection
(continued)
• Time Consideration
– If the project needs to be constructed in a
compressed timeframe, methods adaptable
to fast-track construction of components can
be considered, but weighed against
increased cost and risk of fast tracking.
– An unrealistic schedule should not be used
on a CM@Risk project. This can drive up
the cost.
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CM@Risk Project Selection
(continued)
• Likelihood of Changes
– If the scope of work cannot be defined
adequately upfront or if requirements are
likely to change considerably during the
project, this factor should be evaluated
against potential cost of such changes.
– CM can negotiate better prices subject to
owner’s approval and changes can be done
in a timely manner to reduce delay claims.
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CM@Risk Types of Projects
• Buildings/Vertical construction projects
where construction methods and
specifications vary between professionals
(i.e. architect and construction trades).
• Projects with budget constraints which
threaten the delivery of the project and
where CM alternatives can help contain
the costs.
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CM@Risk Types of Projects
(continued)
• Projects that allow for innovative funding
scenarios
• Complex construction projects where
construction input will be most beneficial
during the early phases of design.
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CM@Risk Types of Projects
(continued)
• Major Projects where there is a good
balance of risk to reward. Project has
significant utility relocations and can be
investigated by the CM and the CM can
provide insight in the design.
• Corridor Projects
• Bridge Rehabilitation (Bascule)
• Unusual or out-of-the ordinary projects, use
of new technology; ITS
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CM@Risk
• The Department plans to use CM@Risk for
appropriate type projects. Project selection
should be coordinated with the State
Construction Office.
• CM@RISK should not be considered on the
following types of projects: Milling and
Resurfacing, Guardrail, Signing,
Landscaping, Lighting, Signalization, and
Sidewalks
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CM@Risk
• Additional information can be found on
the State Construction Office website:
http://www.dot.state.fl.us/construction/CONSTADM/C
M@Risk/CM@Risk%20Main.htm
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QUESTIONS?
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