Loading...
CR 91-52 Construction Management Concept , , 4It February 28, 1991 Council Report: 91-52 AUTHORIZE CONSTRUCTION MANAGEMENT CONCEPT - MAINSTREET RECONSTRUCTION Proposed Action. staff recommends the following motion: Move that council authorize staff to incorporate a construction management concept in the biddinq and construction phases of the proposed reconstruction of Mainstreet. Overview. From the outset of this project staff has pondered the implementation of construction management as a tool ln directing and controlling project activities, especially those relating to bidding and construction. What follows is a detailed discussion of what staff perceives as a viable alternative to the standard approach to public works projects. 4It Primary Issues to Consider. o The pros and cons of construction management o Alternatives for managing the Mainstreet project o Recommended approach for the Mainstreet project Supportinq Information. o Bid scenario o Updated project schedule ~ rL , ; ..fJe-r-.M....- Le....- ames Gessele Engineering Superintendent 4It . Analysis. 0 Pros of Construction Management These are listed with the management of the construction process commencing near the time that the detailed design process is ending. 1- Greater control of the project budget during the construction process. 2. Lower direct bids because the contractors are bidding directly to the owner and not to a general contractor. The category of bidding areas relates to the number of bids that the city will receive and, to some degree, the lower cost. In some cases, the general contractor may have the low bid on a job compared to the other general contractors; however, in the various categories of the project, he may be higher than someone else. By having more bid packages, this situation is minimized. 3. Bidding competition is heightened on the project by having more bidding categories because more subcontractors will typically be involved in submitting a bid. There are general contractors that only solicit two or three bids on a project. They do not allow "open" bidding to them on the project; even though, the City fosters "open" . bidding and competition on the project through their bid advertisement process. 4. Greater flexibility in controlling the schedule during the construction stage because all the major contractors will contract directly with the city. The construction manager can direct the flow of work more directly because he does not have to work through a general contractor. with the fear of the businesses along Mainstreet to scheduling problems and loss of access, there is reasonable need to address the project scheduling issues with a review of the available construction management techniques. 5. There generally will be a reduced fee because the fees to manage the construction work will be less than the markup of the general contractor. 6. Greater flexibility and reduced overhead costs with change orders on the job because the city relates with each of the contractors and can communicate with them directly about the necessary changes without delaying the work. 7. The increase in the number of bidding packages allows the contractors reduced bonding without jeopardizing guarantees associated with the project. Each contractor only bonds for his portion of the work. e 8. The city may more easily be able to buy materials directly avoiding one level of taxation where general contractors pay taxes on materials supplied by the subcontractors. . 9. Because the contracts are with a number of contractors, partial payments from the city are more timely to the contractors than when they must wait for the general contractor to make their payment. 0 Cons of Construction Management 1. Since each of the contracts with the individual contractors is with the City, there is more liability on the City's part to accept if problems occur on the job relative to scheduling, quality issues or others. A "domino effect" can occur when delays and claims are made by one contractor that affects the others. The City is assuming the role of the general contractor, thus has the responsibility to coordinate the work activities. 2. There is a lot of experience with the construction management technique in the building trades division; however, there is not a significant level of experience with this method in the public project arena such as those projects similar to Mainstreet. 3. On the Mainstreet project the construction manager will have little impact on cost control measures during the design phase. Thus, the main role will be budget and schedule control in the construction e phase. Additional costs for the Construction Management (CM) service should reflect this reduced role compared to normal CM experiences. In fact, the CM should be tied directly to the project inspection, survey staking, project engineering and public relations on this project. Work activity duplication should be eliminated. 4. Some contractors will not be in favor of this bidding concept, particularly the large contractors who may wish to serve as the general contractor on the project. 0 Alternatives for Managing the Mainstreet Project There are two basic alternatives presented within this report: a Construction Management Proposal and a Project Management Proposal that employs portions of the construction management techniques. A third option is briefly described within the second alternative. Each of these alternatives are described briefly in this section of the report including comments on the scope of services and the organization of the alternative. Cost estimates in the form of percentages of the $3.0 million construction cost for the implementation of each of the alternatives are estimated. e - It 1. Construction Management Proposal Under this alternative, the Construction Manager would be placed on the team as soon as is possible to assist in the formulation of bidding strategies and review of potential cost saving techniques. It is estimated ten or more contracts for bidding purposes would be formed using the construction management approach. The following outline indicates the organization of the construction team, the role each entity would play, and a cost estimate for the services that are presented. Construction Manager --- There would be a construction manager assigned to the project and an assistant to the construction manager. 3.5% Project Superintendent and Inspector --- This would include two people that are highly skilled in managing construction projects. 4.0% Project Design Engineer/Landscape Architect --- Professionals knowledgeable of the detailed design aspects of the project would be used to check on the implementation of the design by the contractor forces. They would be used on an "on call" basis as problems occur during the project duration. 1. 0% e Survey Staking --- All of the construction staking through the duration of the project. 1. 5% soils Engineering --- This service would be bid by the Construction Manager to insure fair and equitable services are achieved. 0.5% Total Estimated Percentage 10.5% A diagram of the organizational relationship is shown below: City of Hopkins Construction Project Engineer Manager Landscape Architect project Superintendent I " I I Soils Engineer Inspectors Survey Staking e I I I I Contractor Contractor Contractor Contractor . 2. proiect Management Proposal The primary difference between this alternative and the previous IIConstruction Manager" plan is the consolidation of the construction management position with the project management and the project superintendent in one organization and with more of the responsibilities for project control with the project superintendent. The reduced responsibilities of the Construction Manager would be handled jointly by a part time Project Manager and the Project Superintendent. Because of the consolidation there would be a slight cost reduction. This plan would still involve multiple contractor bidding; however, the bid packages would probably involve less bidding intensity than the previous alternative where a full time construction manager is employed. An attachment is included with this report which indicates a possible bid scenario where there may be as many as five or six contractual packages. All contracts and bonds are written directly with the City as they would be in the previous proposal. Project Manager --- A part time construction manager would be assigned to the project to assume the administration and coordination responsibilities of the project. 0.5% e Project Superintendent and Inspectors --- Two full time people would be employed in these roles to manage the project on a daily basis. At the highly active periods of construction a third person may assist in the inspection role. 5.0% Project Design Coordination --- Professionals who would coordinate the design plans and specifications with the contractors under the direction of the project superintendent on an lias needed" basis would be used for this function. 1. 0% Survey Staking --- Survey needs for the duration of the construction project as directed by the project superintendent. 1.5% Soils Engineering --- This service would be bid by the City at a later date to insure a fair and equitable service/cost relationship. 0.5% Total Estimated Percentage 8.5% . . A diagram of the organizational relationship is shown below: city of Hopkins 1 , I Project Manager Project Project Engineer Superintendent Landscape Architect , I I Soils Engineer Inspectors Survey Staking I I I I Contractor Contractor Contractor Contractor 3. General Contractor Approach Under the second alternative shown above the project could be e rearranged and bid to one general contractor. A similar organizational chart would be used. A difference would be that the Project Superintendent would be a Senior Project Inspector. There would be a potential to realize approximately a 1.0 to 1.5% savings. This concept is the standard manner of bidding public works projects. In most cases it is the preferred method of bidding and managing the project because most of the work will be completed by the general contractor. In the Hopkins Mainstreet reconstruction project there will be several different subcontractors needed to complete the project. Like most other public works projects, there will be a dominant contractor on the Mainstreet project. 0 Recommended approach for the Mainstreet project It is recommended that alternative #2, the Project Manageament concept, be used on the Mainstreet reconstruction project. There are three primary reasons for this recommendation: 1. There is a slight cost savings indicated by using this alternative instead of the construction management approach, approximately 2.0%. . 2. Because the project design stage is nearly completed and construction bidding is scheduled to occur within the next 60 days, the construction management alternative will not have much of an effect on the bidding success of the project over that of the project manager approach. . 3. The two biggest concerns on this project are the schedule which relates to control of the contractors and public relations. These concerns can be best handled by the alternative #2 organizational structure and by placing an office directly on Mainstreet during the duration of the project. In the final analysis, the city should realize project cost savings of 5-10% when compared to the traditional general contractor approach. This estimate is predicated upon the City's finance office pegging its overhead fees (administration/legal) at 10%. Should Council concur with this recommendation, staff can proceed to direct its consultant engineer to compile bid documents that reflect the thrust of the recommended project management concept. Staff can also proceed soliciting scope of services proposals from interested firms specializing in construction management. staff would examine the proposals and make a recommendation; a subsequent final designation could be made by the Council before the projected April 12 bid opening. . . . BID SCENARIO HOPKINS MAINSTREET RECONSTRUCTION CONSULTANTS OFFICE MAINSTREET OFFICE MAINSTREET OFFICE PROJECT ENGINEER CONSTRUCTION MANAGEMENT PUBLIC RELATIONS SOILS ENGINEER PROJECT INSPECTION PUBLIC INFORMATION SURVEY & STAKING COORDINATION OF CITY PW FORCES SCHEDULING UTILITIES CONTRACTOR SIGNALS/LIGHTING ROAD CONTRACTOR CONTRACTOR Storm sewer Electrical Wiring Materials removal Sanitary sewer Conduit placement Subgrade construction . Watermain Refurbishment of Bituminous placement poles & fixtures Private parking lot Base construction and setback restoration Placement of Hardware Pavement marking STREET FURNITURE AMENITIES CONTRACTOR CONCRETE CONTRACTOR Hardware purchase & Salvage amenities Concrete curb & gutter installation Place new trees Sidewalks Planters Place landscaping Brick pavers Trash receptacles Bus Plaza relocation Bus plaza bases Benches Drinking Fountain Driveway aprons Kiosks Miscellaneous concrete Clock Tower . . Project Schedule The schedule that is presented in the following section has been updated from the past schedules and contains the current information on the project effort. March 12, 1991................Informational meeting at City hall on the Project design March 19......................city Council receives final design plans, specifications, cost estimate and orders advertisement for bids March 20 and 22...............First Ad for Bids appears in the local newspaper and the Construction Bulletin April 12......................Bids are opened and tabulated April 16......................Bid tabulations are presented to the . City Council and the assessment hearing is scheduled May 21........................Chapter 429 Assessment Hearing June..........................Preconstruction meetings are held by the Construction Management Team June 25.......................Council adopts assessment roll and various construction contracts are awarded to the lowest responsible bidders by the City Council June 21 through June 30.......Raspberry Festival in downtown Hopkins July 8........................Construction commencement between 5th Avenue and 11th Avenue November 15...................Completion of construction in segment #3 June, 1992....................Placement of the wear course of bituminous in the segment #3 area June 30.......................Substantial completion of the portion of the project between 11th Avenue and 17th . Avenue October.......................Construction completion of the Mainstreet project between 5th Avenue and Shady Oak Road -