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Chapter 8: Construction Manager at Risk Project Delivery Method

This Chapter outlines the procedures for design and construction procurement using the Construction Manager at Risk (CMR) project delivery method. Criteria to be considered in determining if a project is a good candidate for construction management at risk are outlined in Chapter 5.

  1. Professional Services
    To begin the procurement process for professional design services, the Campus Construction Administrator receives a project request with funding information and campus approvals to begin a project. When the construction contract cost for a project is expected to be greater than $500,000 the campus will forward a Project Information Form (PIF) to the UM Director of Facilities Planning and Development. The Director determines whether Board actions are necessary. A copy of the PIF is returned to the Campus Construction Administrator. The procurement and administration of professional services, until a construction contract is awarded, will be managed by the Project Manager.
    1. Consultant Selection
      1. Architect and Engineer Database:
        The University of Missouri maintains a listing of all consultants interested in providing services to the University of Missouri. UM Facilities Planning & Development maintains this file and distributes it electronically to the campuses. This database will be used as a starting place to determine the most qualified consultants for a project.
      2. Classifications:
        The University of Missouri uses two procedures for the selection of consultants depending on the size of the project. The dollar sizes of the projects mentioned below are guidelines. The Type II procedure may be used for projects with fees less than $200,000 based on the judgment of the Project Manager.
        (1) Type I: Major Projects: Major Projects include new buildings, major renovations and significant studies. Typically, professional fees on Major projects exceed $200,000.
        (2) Type II: Small Projects: Small Projects include various types of consulting and typically have professional fees less than $200,000.
      3. Evaluation Criteria:
        The University's procedures for selecting consultants follow the intent of State and Federal guidelines. For each project, the firms will be evaluated based on the following:
        (1) The firm's qualifications.
        (2) The number of projects the firm has completed that are similar in scope and size.
        (3) The current number of contracts the firm has with the University of Missouri.
        (4) The firm's past performance.
        (5) The firm's present work load.
        (6) The firm's experience with the project.
        (7) The firm's minority status and minority participation in the design team.
        (8) The firm's status as a Missouri Firm.
    2. Selection Procedure
      1. Type I - Major Projects The Campus Facilities Administrator defines the project scope and assigns the Project Manager.
        (1) For new buildings or major renovations the Campus Chancellor [or other officer] appoints a project committee. Members of the committee will include appropriate user representatives including faculty, staff and students. The Project Manager will also be appointed to the committee. The Chancellor may appoint a committee chairperson who will be responsible for coordination of user input, concerns, and suggestions. The primary role of the committee is to develop and define the program needs and ensure the design satisfies the program needs.
        (2) The Project Manager prepares a Request for Qualifications (RFQ). The RFQ outlines the project scope and services required.
        (3) The Project Manager will determine the appropriate architect/engineer fee for the project. This maximum fee will be stated in the RFQ. Typically, a CMR delivery method will require additional fees from the consultant for additional bid packages, etc.
        (4) The Project Manager uses the Consultant Database and their judgment to develop a list of consultants to receive the RFQ. The Project Manager issues the RFQ to prospective firms.
        (5) After qualifications are received from the consultants, the Project Manager reviews the information and recommends a list of firms to interview to the committee. Only the most qualified consultants are invited to be interviewed.
        (6) The interviews are coordinated by the Project Manager and should include the project committee.
        (7) Based upon the above evaluation criteria, the selection committee ranks the firms and they recommend a finalist. A written evaluation of the firms is placed in the project file. The Project Manager will complete the University of Missouri Consultant Selection Summary Form and place in the project file.
        (8)The Project Manager negotiates the final form of the contract with the selected Architect/Engineer.
        (9) If no Architect/Engineering firm agrees to the terms of the University contract or fee, the selection criteria and designated fee may be modified and the selection process shall start over.
        (10) After campus approvals, the top ranked firm and successfully negotiated agreement are recommended to the Board of Curators for Project Approval if necessary
      2. Type II: Small Projects
      3. The process follows the same steps as the Type I process. However, an RFQ and committee interviews are not required. The Project Manager will consider no less than three (3) qualified firms.
    3. Professional Services Fees:
      1. Process: For Type I projects, professional services fees shall be established before the RFQ is issued according to the Fee Guidelines. For Type II projects, the Project Manager will negotiate fees using reasonable and fair judgments. If the University and the consultant cannot agree, the negotiations will be ended. The Project Manager will justify any fee higher than the maximum listed in the guidelines, and document the extenuating circumstances. Fee Guidelines: UM Facilities Planning and Development will maintain the fee guidelines and calculation methods.
    4. Agreements
      1. Standard Consultant Agreement:
        (1) For basic design and construction services, a University of Missouri Standard Consultant Agreement is used. This agreement is a contract between the Owner (University) and the Consulting firm. This agreement is maintained by UM Facilities Planning & Development.
        (2) The agreement contains two major segments: the body of the agreement and the agreement exhibits. The body of the agreement identifies the responsibilities of both the Owner and Consultant. The exhibits include:
        • (a) the name of the Project Manager
          (b) the scope of sevices
          (c) amount available for construction
          (d) the project schedule
          (e) the fee and billing rates
          (f) other project specific requirements (e.g., Board of Curators presentations or visits, site visits, etc.)


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      2. The Project Manager prepares the agreement. The agreement is sent to the Consultant along with a transmittal letter that requests the firm's representative to: (1) sign the Agreement; (2) send a Certificate of Insurance; (3) direct all correspondence to the Project Manager and (4) return the agreement to the Project Manager. Normally, three signed copies of the agreement are required: one each for the Project Manager, the contracting official's file, and the Consultant.
      3. After the Consultant returns the signed copies of the agreement, the appropriate University official executes the agreement. See BPM 109 for delegations. For required documents for the UM Contracting Officer to sign the agreement, see the Agreement Processing Checklist. Once the agreement is fully executed and returned to the Consultant, the Consultant may proceed with the project.
      4. The Project Manager prepares the Consultant Agreement M/WBE Participation Summary Form.
      5. General Consulting Agreement
        (1) For services requiring no direct design and construction responsibility by the Consultant (such as the owner's design-build technical consultant, programming, master planning, and studies), a General Consulting Agreement will be used. The agreement specifies the scope of services, conditions for employment, agreed upon contract payment, the project completion date, and related contractual information. This agreement is maintained by UM Facilities Planning & Development.
        (2) The Project Manager follows the same procedures as for the SCA above.
    5. Engagement Limitations
      1. Firms providing programming and/or preliminary design on a given project may not eligible to provide design services for that project when that work is used to establish the project budget. 
    6. Payments
      1. General: Consultants may request payments following the criteria established in the agreement. The Consultant is supplied any payment request forms and instructions with the agreement.
      2. Invoice: The Consultant must submit to the Project Manager a request for payment of services performed at any stage of the projects development (e.g., schematic, preliminary design). Invoices must accompany all payment requests submitted by a Consultant detailing the services completed. The payment request shall summarize the total bill to date and the current bill.
      3. Executed Agreement: The Project Manager will review and approve all Consultant payments. No payments should be approved unless an executed agreement is on file.
  2. Construction Manager At Risk (CMR) Procurement Process
    The CMR may be selected at any time prior to bidding, but is often engaged during the Schematic Design phase of the project and made an integral part of the design team. A CMR firm is most effective when brought in to the project early enough to provide cost estimating and other preconstruction services while project parameters and strategies are still being developed.
    1. Selection Committee
      A CMR Selection Committee must be formed for the selection process. This may be the same as the Design Consultant Selection Committee. The Selection Committee may also choose to have the project lead design firm attend the CMR selection meetings in an advisory capacity.
    2. Selection Process
      The selection of the CMR uses a two-step process. Step one consists of a Request for Qualifications (RFQ) submittal and shortlisting process. Step two consists of interviews of the shortlisted firms and evaluation of their proposals submitted in response to a detailed Request for Proposals (RFP).

      The GMP is usually established after the design documents are prepared. At that time Amendment 1 is prepared and executed. If an early construction package is determined to be in the best interest of the University, prior to the GMP being set, an Early Release Order (ERO) may be issued. EROs require the approval of the Contracting Officer prior to the preparation of the documents or bidding of the work. Bonds and Bidders Risk Insurance are required with the ERO.

      1. Request for Qualifications (RFQ)
        (1) The Project Manager develops an RFQ which includes basic project scope information, including building purpose, size, and projected construction budget. Evaluation criteria for shortlist selection should also be included. It should be made clear that the purpose of the RFQ process is to identify the most qualified CMR for the particular project at hand. The RFQ is then publicly advertised according to the advertisement rules in the Collected Rules & Regulations.
        (2) Once Statements of Qualifications (SOQs) are received from the potential CMR firms, the Project Manager and design consultant (if applicable) review the information and recommend a list of firms to receive RFPs to the selection committee. Only the most qualified teams are invited to receive RFPs, but it is recommended that 3-5 teams be shortlisted.
        (3) Evaluation criteria for shortlist selection should be customized to fit the needs of the particular project. These criteria may include the following:
        • (a) The firm's experience and capabilities with University projects of a similar size, type and degree of complexity as the current project.
          (b) The approach the firm will utilize in interfacing with the University's personnel and the design consultants on this project.
          (c) The firm's methodology, approach and practices that will be utilized in managing and executing this project in the preconstruction and construction phases.
          (d) The firm's estimating and scheduling capabilities.
          (e) The firm's safety programs.
          (f) The firm's quality control and commissioning procedures.
          (g) The firm's proposed sustainability efforts to be utilized on the project.
          (h) The firm's proposed environmental controls to be utilized on the project.
          (i) The firm's proposed information technology that will be used on the project.
          (j) The firm's worker's compensation insurance experience modification rate.
          (k) The firm's proposed procedures to be utilized to meet MBE/WBE goals.
          (l) The firm's proposed organizational structure to be utilized on the project.
          (m) The resumes and qualifications of personnel to be assigned to the project.
          (n) The firm's latest audited financial statements and available bonding capacity.
          (o) The firm's references.


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      2. Once the selection committee reaches consensus on the short list, the Project Manager issues the RFP to the shortlisted teams.
      3. Request for Proposals (RFP):
        The Project Manager develops an RFP with input from the design consultant, which includes the following information at a minimum:
        (1) The Information for Proposers states procedures to be followed during the selection process and provides data about the project. It covers the preparation and submission of proposals, and such details as bonds, bid security, Proposer's Statement of Qualifications, award of contract, time of completion, liquidated damages, and any special bidding conditions that apply to the project. The Information for Proposers is maintained by UM Facilities Planning and Development.
        (2) The Proposal for Lump Sum Contract (Proposal Form) is a document furnished to the Proposer to be completed, signed, and submitted as the Proposer's Proposal. The Proposal Form provides blank spaces to be filled in by the Proposer and a place for the Proposer's signature to indicate the Proposer agrees to all the provisions in the Form. The Proposal Form is maintained by UM Facilities Planning and Development.
        (3) The M/WBE compliance evaluation bidding documents help the University to determine whether a Proposer has achieved the M/WBE contracting goals or has made a good faith effort to achieve those goals. The Information for Proposers sets forth proposer requirements for completing these forms. The forms are maintained by UM Facilities Planning and Development.
        (4) Contract Documents: The Contract Documents contain the legally enforceable requirements which become part of the contract when the Agreement Between Owner And Construction Manager as Constructor form and other related contract forms, are signed. These documents are included in the RFP to inform the Proposer of the contract they will be expected to execute with the University.
        (5) Project Description, including Space Program, design drawings, etc.
        (6) Project schedule.
        (7) Amendment Number One (GMP Amendment) Form
        (8) Items Included in General Conditions Amount: An exhibit is included that delineates those costs and expenses which may be charged to the project as General Conditions. This may include a matrix listing specific miscellaneous project cost elements and the portion of the project cost that they should be billed against.
        (9) Items Included in Construction Phase Fee: An exhibit is included that delineates those costs and expenses which should be included in the CMR's Construction Phase Fee.
        (10) Special Conditions: Special project requirements that are customized to fit the needs of the particular project.
        (11) General Conditions of the Contract for Construction: This document is maintained by UM Facilities Planning and Development.
      4. Evaluation procedures:
        The final selection of the Construction Manager at Risk is based on a point system. 60% of the total points are awarded as established by the review panel based on qualifications, responses to the University's selection criteria and interviews. The remaining 40% of the total points are awarded based on the sum total of the preconstruction services lump sum fee, the overhead and profit percentage fee and the lump sum for fulfilling the general conditions.

        For evaluation purposes, the overhead and profit percentage fee is multiplied by the anticipated construction budget to establish the overhead and profit component of the price. The lowest total price submission receives 100% of the price points. Ascending price submission totals from other firms will be awarded price points on a pro rata basis. The final sum payable to the successful CMR at the conclusion of the project for the overhead and profit component will be established as detailed in the RFP documents.

        Establishment of apparent best proposal: The following is an example illustration using a 1000 point total for evaluation; 600 points for qualifications/selection criteria and 400 points for price.

        (Lowest Cost Responsive Proposal) x 400 + Quality Points = Total Points
        (Proposer's Cost Proposal)

        Example:
        Proposal 001 – ($1,500,000) x 400 + 575 = 928
        $1,700,000

        Proposal 002 – ($1,500,000) x 400 + 590 = 965
        $1,600,000

        Proposal 003 – ($1,500,000) x 400 + 550 = 950
        $1,500,000

        Proposal Number 002 is determined to be the apparent best proposal. Note that in this example the low cost proposal does not represent the highest point proposal submitted. The highest point total must meet both budget and quality minimum point requirements. Award of contract will be to the apparent best proposer.

        The firm with the highest point total (qualifications/selection criteria + price points) will be deemed to provide the best value and will be the apparent successful firm. The University will then engage in negotiations with the apparent successful firm to establish final contract terms. If the University is unable to negotiate a satisfactory contract with the apparent successful firm, negotiations will cease and the University will negotiate with the next highest ranked firm and so on until an acceptable contract is reached or negotiations end. The University will make the sole determination as to when negotiations are at a stalemate and are no longer productive.

        Non-responsive proposals: During the evaluation process it may become apparent that one or more of the proposals do not qualify for consideration on the basis of technical evaluation deficiencies. If so determined by the Evaluation Committee, these proposals will be returned to the Proposer as non-responsive. Also, any proposal with less than 350 quality points may be considered non-responsive.
      5. Contract Execution:
        (1) Once the CMR as Constructor is selected, the Campus prepares the Agreement Between Owner and Construction Manager as Constructor and the appropriate Exhibits. The following information must be included:
        • (a) Compensation for Preconstruction Phase Services
          (b) Compensation for Construction Phase Services
          (c) Exhibit A, General Project Description
          (d) Exhibit B, Initial Construction Schedule
          (e) Exhibit C, Form of Amendment No. 1
          (f) Exhibit D, Preconstruction Schedule of Values
          (g) Exhibit E, Items Included in General Conditions Amount
          (h) Exhibit F, Items Included in the Construction Phase Fee
          (i) Exhibit G, Personnel Chart


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      6. The Campus sends the Agreement along with the Bond Forms and Insurance Requirements by certified mail to the Contractor. The Contractor must submit insurance certificates for all insurance required except for the Builder’s Risk. The Builder’s Risk Insurance and the Bonds are required either with Amendment 1 when the GMP is set or with an Early Release Order.
      7. The Campus receives the signed Agreement and accompanying documents from the Contractor.
      8. The campus forwards the Contract to the UM Director Facilities Planning & Development, with insurance, Bonds, Construction Backup, Contractor’s Proposal, and all other required documents. See Checklist for Construction Manager At Risk Contract for required documents. After review, the contract is sent to the UM Contracting Officer for execution. Construction Backup may be delayed until Amendment 1 is issued.
      9. For the UM Contracting Officer, the UM Director Facilities Planning & Development signs the Notice to Proceed and returns all documents back to the Campus for distribution.
      10. If phased construction prior to the GMP being established is determined to be in the best interest of the University, an Early Release Order (ERO) may be issued for that work. EROs require the approval of the Contracting Officer prior to the preparation of the documents or bidding of the work. Bonds and Builder's Risk Insurance are required with the ERO
  3. Design Management
    The project design process can begin once the consultant agreement is executed. The University's Project Manager (PM) is the Owner’s Representative during the design of the project. All instructions and approvals come to the Consultant from the PM. The PM manages the total project budget and requires the Consultant to manage the construction budget. The PM will manage internal University approvals and instruct the Consultant accordingly.
    1. Meetings and Stakeholders
      1. University projects normally involve many academic, student, and service groups as stakeholders in a project. The PM arranges for and coordinates the consultant’s and CMR’s contact with these groups. Meetings are scheduled by the PM’s office.
      2. Meeting minutes are kept by the Consultant and reviewed by the PM before issue. Meeting minutes should be issued to all participants within five working days.
    2. Design Phases
      1. Programming/Predesign: See Chapter 4 for information regarding Programming and Planning Studies. Program verification may be required prior to beginning the Schematic Design phase, especially if a significant period of time has elapsed between the two phases.
      2. Schematic Design (SD): During Schematic Design, the Consultant develops study drawings, documents, and other media that illustrate design concepts for University review. Building code requirements are initially researched and addressed during Schematic Design.
      3. The SD review submittal should include an SD Brochure, including drawings, a project narrative, and a construction cost estimate among other items. Refer to the UM CPDG for a detailed listing of submittal requirements. Project Design may be required to be submitted to the Board of Curators as an Informational Item. Once the SD submittal has been reviewed and approved the design can proceed to the Design Development phase
      4. Design Development (DD): DD phase work begins with the approved SD documents and develops them in further detail. This phase begins to establish mechanical, electrical, plumbing, structural, and architectural details.
      5. The DD review submittal should include dimensioned drawings and outline specifications. The construction cost estimate should also be updated at this time. Refer to the UM CPDG for a detailed listing of submittal requirements. Once the DD submittal has been reviewed and approved the design can proceed to the Construction Documents phase
      6. Construction Documents (CD): The CD phase incorporates all design decisions made in previous phases into detailed drawings and specifications to be used in the bidding and construction of the project
      7. There are generally two CD phase reviews. The first review occurs at approximately 50% completion of the Construction Documents. The final review takes place after the Consultant team is complete with the CD package.
      8. At each phase, the CMR shall provide recommendations on construction feasibility; actions designed to minimize adverse effects of labor or material shortages; time requirements for procurement, installation and construction completion; and factors related to construction cost, including estimates of alternative designs or materials, preliminary budgets and possible economies.
    3. Final Review and Approval
      The Project Manager shall schedule a Final Document Review Meeting to give stakeholders the opportunity to review and approve the Drawings and Specifications.
      1. The Project Manager will require the Consultant to provide 100 percent complete Documents (drawings and specifications) at least one week before a scheduled review meeting. Large projects, as identified by the Project Manager, will require additional review time.
      2. The CMR shall develop bidding criteria, bidding schedules and bidding information for the Construction Work and shall develop bidders’ interest in the Project. The CMR shall develop the invitation to bid, instructions to bidders, qualification criteria, the bid form, contract documents with Subcontractors, including any addenda issued prior to receipt of bids for the Construction Work. The CMR shall only utilize bidding documents for the Construction Work approved by the Project Manager in writing. The CMR shall include the provisions of the University’s Instructions for Bidders and other applicable bidding documents in the bidding documents.
      3. Once the contract documents are complete, the Project Manager will establish the advertisement date during the final document review meeting. The Project Manager will require the Consultant to produce complete specifications and drawings before bidding.
      4. Projects requiring Code Review should be submitted to UM Facilities Planning and Development at this time. See Chapter 3 for information regarding Code Submission.
  4. GMP Documents
    1. Within thirty (30) days after the Owner has requested that the CMR submit the GMP Documents described below, and the Owner has submitted drawings, specifications and other design documents prepared by the Architect/Engineer, the CMR shall submit the following to the Owner:
      1. Proposed Guaranteed Maximum Price, which shall be the sum of the Cost of the Work defined in Article 7 of the Agreement, the General Conditions Amount defined in Section 6.1 of the Agreement and the Construction Phase Fee defined in Section 6.1 of the Agreement. As requested by the Owner, the CMR shall provide an itemized statement of the Guaranteed Maximum Price organized by trade categories, general condition categories, allowances, contingencies, alternates and other items that comprise the Guaranteed Maximum Price;
      2. Schedule of Values that allocates the entire Guaranteed Maximum Price among the various portions of the Work, except that the Construction Phase Fee may be shown as a single item. The Schedule of Values should be prepared in standard form for Projex and supported by such data to substantiate its accuracy as the Architect/Engineer and Owner’s Representative may require. If the Architect/Engineer or Owner’s Representative has an objection to the Schedule of Values, the CMR shall revise the Schedule of Values to satisfy such objection
      3. The detailed Construction Schedule developed pursuant to Section 2.4 of the Agreement. The Date of Substantial Completion shall not exceed the completion date set forth in Exhibit B of the Agreement, without the written approval of the Owner’s Representative.
      4. MBE/WBE Participation Information
    2. The Guaranteed Maximum Price shall include CMR’s contingency, a sum established by CMR and approved by the Owner’s Representative to cover Costs of the Work, but not the basis for a Change Order. The Contingency shall be set forth in Amendment No. 1. The Contingency is intended to only cover certain costs for risks to the CMR that could not have been reasonably quantified in the establishment of the Guaranteed Maximum Price such as gaps between the scope of Work between Subcontractors; concealed site conditions; and costs to correct defective Work of a Subcontractor that are not recovered by CMR after diligent efforts by CMR. The Contingency shall not be utilized to cover costs due to the fault or negligence of CMR. CMR shall not be entitled to use the Contingency without the prior written approval of the Owner’s Representative
    3. The CMR shall meet with the Owner’s Representative and the Architect/Engineer to review the GMP Documents and the supporting documents. In the event that the Owner’s Representative or the Architect/Engineer discover any inconsistencies or inaccuracies in the information presented, they shall promptly notify the CMR and the CMR shall make appropriate adjustments in the GMP Documents.
    4. Upon acceptance of the GMP Documents by the Owner, the Guaranteed Maximum Price shall be set forth in Amendment No. 1. Campus shall prepare Amendment 1 and forward to CMR for signature. CMR shall return signed Amendment along all appropriate bonds, and Builder’s Risk Insurance documentation. Amendment 1 and all required documentation, see Checklist for Construction Manager At Risk Contract, is then sent to UM Facilities Planning and Development for review and execution by the Assistant VP of Management Services.
    5. As Construction Documents are developed by the Architect/Engineer for purposes of obtaining bids for the various portions of the Work, a copy shall be furnished to the CMR for its review. CMR shall not be permitted to claim any adjustment to Amendment No. 1 in connection with the completion of the Construction Documents except for Scope Changes.
      1. A “Scope Change” is defined as Work described in the Construction Documents that is not reasonably inferable from either the GMP Design Documents or any other previously furnished Contract Documents by a reasonably prudent and careful Contractor and is:
        (1) materially inconsistent with the GMP Design Documents; or
        (2) a material change in the quantity, quality, programmative requirements or other substantial deviation in the GMP Design Documents.
    6. After reviewing the Construction Documents provided by the Architect/Engineer, the CMR shall notify the Project Manager in writing of any item in the Construction Documents that, in CMR’s opinion, represents a Scope Change. CMR shall submit a “Scope Verification Request” with the detailed reasons that the information or requirements of the Construction Documents represent a Scope Change. Failure of the CMR to provide a Scope Verification Request within thirty (30) calendar days after the date of receipt of the Construction Documents for such portions of the Work to be bid by the CMR shall mean that the Construction Documents are consistent with the GMP Design Documents; no Scope or Schedule Changes exist; and Amendment No. 1 shall remain unchanged.
    7. If CMR timely submits to the Owner a Scope Verification Request, then the Owner shall have the following options:
      1. Within fifteen (15) calendar days after receipt of a Scope Verification Request, the Project Manager may direct the Architect/Engineer to redesign that aspect of the Construction Documents to bring the alleged Scope Verification design into original scope compliance. The CMR shall cooperate with the Owner and Architect/Engineer during the redesign effort and shall make recommendations appropriate to correct such portions of the Construction Documents. The Architect/Engineer shall then submit to the CMR and the Project Manager the revised Construction Documents; or
      2. If, upon review of a Scope Verification Request, the Project Manager believes that the portion of the Work described therein does not constitute a Scope Change, the Project Manager shall notify the Contractor within fifteen (15) calendar days of receipt of such Scope Verification Request. The Project Manager and the CMR will attempt to resolve their disagreement and identify elements of the Scope Verification Request that can be revised. If such disagreement is not resolved, CMR may pursue Administrative Review as outlined in the General Conditions.
    8. After approval and acceptance of the GMP Documents by the Owner and the Owner’s execution of Amendment No. 1, the CMR shall obtain bids for the Construction Phase Work as more fully set forth below, unless the CMR is authorized to obtain bids before acceptance of the GMP Documents by the Project Manager.
  5. Bidding and Award
    The CMR shall assemble the Contract Documents into appropriate packages for the Project Manager’s approval.
    1. Advertisement
      1. The CMR shall publicly advertise for competitive bids or proposals for the performance of all major elements of the Work other than minor Work that may be included in the General Conditions Amount (the “Construction Work”). See Collected Rules and Regulations 70.060 for minimum advertising requirements.
      2. The Campus should also post the project on their website for construction projects.
    2. Document Distribution
      1. The CMR shall distribute the packages to prospective bidders, the Architect, the Owner and other appropriate persons.
    3. Addenda
      1. Addenda are written text and/or drawings issued to clarify, revise, add to, or delete information in the original bidding documents or in previous Addenda. Addenda are issued before the opening for bids.
      2. Addenda are Contract Documents. The Project Manager shall approve all addenda items before issuing.
      3. The CMR shall distribute addenda so all plan holders have a copy of the addenda at least 72 hours before the bid opening. This may be done through the electronic plan or room the CMR may distribute directly to all plan holders. The CMR and Project Manager should extend the bid date if this requirement cannot be met.
    4. Pre-Bid Meeting
      1. The CMR, with the assistance of the Project Manager and Architect/Engineer, shall conduct Prebid conferences with prospective Bidders. The CMR shall prepare a record of the questions and answers discussed at the Prebid conferences, which shall be used by the Architect/Engineer to prepare the Addendum.
    5. Opening of Bids and Evaluation
      1. The CMR shall coordinate the bid opening, and in conjunction with representatives of the Architect/Engineer and the Project Manager, review all bids received for responsiveness, participate in investigating the qualifications and responsibility of bidders for Construction Work and provide a written recommendation to the Owner about the award of, or rejection of, any bid or bids in accordance with applicable Law. In making the recommendation, the CMR shall recommend the award to the bidder that provides the Best Value to Owner. The contents of the bids or proposals received by CMR for any major element of the Work shall not be disclosed to a person not employed by the CMR, the Owner or the Architect/Engineer. The contents of any bid or proposal for any major elements of the Work shall be made public only after the award of such Work or within seven (7) days after the date of final selection of bids or proposals for such Work, whichever is later
    6. Protests
      1. Persons or entities may protest the recommended contractor on a particular package. The contract documents do not address the issue of bid protests. However, if a protest is made, it must be resolved to the University’s satisfaction before the contract is awarded. Report any protest to the UM Director of Facilities Planning and Development for resolution.
  6. Construction
    1. General
      1. Owner’s Representative: The Owner’s Representative, or Construction Project Manager, assumes management of the project after the award of contract.
      2. Pre-construction Meeting: The Owner’s Representative shall arrange a Pre-construction Meeting before each project begins. The meeting provides a forum for the discussion of such items as the routing of communication, the construction schedule, construction documents, roof warranty requirements (if applicable), contractor submittals, use of the premises, special project requirements, and potential change orders.
        The Owner’s Representative introduces project participants, reviews the General Conditions, conducts the meeting in the format of the Preconstruction Meeting Notes, and verbally reviews the examples contained in the Preconstruction Orientation Booklet.
      3. Notice to Proceed: No work is permitted on site until the Notice to Proceed is received by the Contractor, signed, and returned to Owner.
      4. Reports and Communication: The Owner’s Representative coordinates reports and communication among the University, consultant, contractor, and client throughout the construction phase. With few exceptions, all communications and reports regarding the project flow through the Owner’s Representative. The Owner’s Representative shall maintain a record of project actions including phone calls, letters, and memos.
    2. Construction Observation
      1. The Consultant is responsible to make periodic site visits to review the work. The Consultant shall visit the site as required by the Construction Project Manager to assure the construction conformance to the drawings and specifications.
      2. Additional Testing and Inspection. If there are specialty items requiring inspection or testing, the University should hire a firm with the expertise required to perform such testing, such as concrete testing, weld testing, etc.
    3. Safety
      1. Contractor’s Responsibilities: The Contractor is solely responsible for the safety of its employees on the job site. As required by the General Conditions, the Contractor must comply with the provisions of the Associated General Contractor’s (AGC) Manual of Accident Prevention in Construction and with the requirements of the Williams-Steiger Occupational Safety and Health Act of 1970 (See Occupational Safety and Health, Volume III, Construction Standards and Interpretations).
      2. Owner’s Representative Responsibilities: Although the Owner’s Representative does not direct the Contractor regarding safety inside the perimeter of the job site, a potential safety hazard should be pointed out. If a life-threatening situation is observed, the Owner’s Representative may shut down the job and require remedial action by the Contractor. The Owner’s Representative may direct the Contractor in removing any potential hazard to students, faculty or staff, to members of the general public or to property.
      3. Contractor’s Job Site Accident Report: If a Contractor’s employee is injured on the job site and requires medical attention, the Contractor is required to submit an Injury Report to the Division of Workmen’s Compensation. The Owner’s Representative requests a copy of the report from the Contractor. It is given to the Campus Facilities Administrator for review and is ultimately placed in the Project File.
    4. M/WBE Participation
      1. The Owner’s Representative will monitor the status of the M/WBE subcontractors or suppliers on the project and notify the UM Director Facilities Planning and Development should the Contractor drop or change an M/WBE subcontractor or supplier. The Contractor must maintain the M/WBE percent goal indicated in the awarded contract. If the Contractor must remove any M/WBE subcontractor or supplier, the Contractor must notify the Owner’s Representative. The Contractor must make a good faith effort to replace the participation with another M/WBE, and satisfactorily explain why the removal was necessary. The UM Director Facilities Planning and Development will review all Contractor requests to remove or change of any M/WBE from the project. The UM Director Facilities Planning and Development will recommend appropriate action to the Contracting Officer including acceptance, or declaring the Contractor ineligible for future University contracts for no more than 6 months, or finding the Contractor in material breach of the contract.
    5. Change Orders
      1. Policy
        (1) A Change Order is a written agreement executed between the University and the Contractor, after execution of the Contract authorizing a change in the work (any additions, deletions or modifications); contract amount, or contract completion date. Change Orders can be issued at any time during the contract period. The Owner's Representative must provide documentation to support all Change Orders.
        (2) Limitations on Change Orders:
        (a) Campus Approval:
        • (i)When aggregate project Change Orders do not exceed $100,000 on an original contract under $500,000 and are within the original project scope.
          (ii) When aggregate project Change Orders do not exceed 10 percent of the original contract amount on an original contract over $500,000 or if they are individually less than $250,000; and within the original project scope.


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        • (i) When aggregate project Change Orders exceed $100,000 on an original contract under $500,000.
          (ii) When aggregate project Change Orders exceed 10 percent of the original contract amount on an original contract over $500,000.
          (iii) When a Change Order is individually greater than $250,000.
          (iv) When a Change Order is outside the original project's scope or significantly expands project scope.
          (v) When a Change Order requires significant design modifications.
          The UM Facilities Planning and Development will also determine if Board of Curator's approval is required, or necessary, for the completion of the orginal contract. Once the Change Orders exceed 10% of the orginal contract amount, the Director of Facilities Planning and Development will determine which future Change Orders will require UM approval.


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      2. (b) System Approval:
      3. Field Orders or Letters of Authorization to Proceed may be issued by the CPM for work changes within the scope of work. These orders/authorizations shall be promptly followed up with a formal Change Order.
      4. Optional Change Orders: An optional change order is not required, or necessary, for the completion of the original contract. Any change for work not covered in, or unrelated to, the original project is optional. Optional Change Orders will not be used unless the University gains no advantage from competitively bidding the work.
      5. Design Requirements: Design is required when the change alters a diagramed, sketched or drawn detail or arrangement, or when a drawing, sketch or other specific technical input is necessary from the Consultant. Design is typically not required when the change affects specified items, unforeseen conditions, or items of a minor nature which can be noted on an as-built drawing. Additional design fees may be paid for change orders requiring additional design work.
      6. Change Order Procedures:
        (1) Purpose
        The Change Order’s usual purpose is to facilitate the completion of work as intended by the original plans and specifications. Deviations from the original project intent must be approved by the Contracting Officer who signed the original contract.
        (2) Types
        Change Orders may be of four types:
        • (a) Required (with design)
          (b) Required (without design)
          (c) Optional (with design)
          (d) Optional (without design)


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        (3) Amount
        The total amount for all project Change Orders should not exceed ten percent (10%) of the original contract.
        (4) Methods of Costing
        There are four methods of costing:
        • (a) "Lump sum" for which support data are submitted, evaluated, negotiated and approved prior to writing the Change Order;
          (b) Time and material, for which work is authorized with the contractor supplying detailed, actual time and material cost information to be signed each day by the CPM and submitted with the payment request after completion of the work;
          (c) Time and material with fixed maximum, which is the same as 2 above, except that a cost limit is negotiated prior to the start of the work; and
          (d) Unit cost, for which an authorization to proceed is given based on the agreed upon unit cost negotiated in the original contract.

          Exhibit IX-7 is an example of the Cost Estimate for Change Order form. It can be used as a worksheet for estimating Change Orders. It can be attached to the Change Order Request (see below) after completion.

          The Consultant is to estimate any Change Order Requests requiring design. Independent estimates are required on all Change Order Requests expected to exceed $50,000. These estimates may be performed by the Consultant or the Construction Project Manager.


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        (5) Consultant Support Data
        The CPM requests the following support data from the Consultant for all Change Orders requiring design:
        • (a) all design documents required by the contractor for the implementation of the Change Order Request;
          (b) a detailed cost estimate (not just approval of the contractor’s estimate).
        (6) Contractor Support Data
        The CPM requests the following support data for all Lump Sum Change Orders from the Contractor:
        • (a) labor, a breakdown by item and hours required for each craft with rate (employer’s cost, including fringe benefits);
          (b) materials, a breakdown by item, including quantities and unit costs;
          (c)voverhead and profit, markups consistent with the General Conditions; and
          (d) time extension, if applicable. See General Conditions, for a more comprehensive breakdown of contractor support data requirements.
        (7) Initiation of Change Order Request
        The Change Order Request Form is originated by the CPM. The CPM may be asked to initiate a Change Order Request by the consultant, client, campus staff or the contractor. A Change Order Request for more than $50,000 must be accompanied by an independent detailed cost estimate prepared by the CM or the Consultant.
        (8) Completion of Change Order Request Form
        Line-by-line instructions follow for completing the Change Order Request Form. The items in the instructions are numbered in correspondence with the line numbers on Exhibit IX -10, and in the order in which they should be completed.
        • (a) Contractor: Enter contractor’s company name.
          (b) Project Name and Campus: Enter Project Name and Campus.
          (c) Architect/Engineer: Enter consultant’s company name.
          (d) University Authorization: Write in the name of the Construction Administrator after receiving verbal approval to proceed.
          (e) Description of Change: Enter a detailed description of the change requested and include drawings, if appropriate.
          (f) Reason for Change: Write a brief, but specific, explanation of the reason(s) for the change (scope change, design error, site condition change, etc.).
          (g) Change Order Request Number: Enter number which is automatically assigned by computerized construction management system and can be found on data entry screen.
          (h) Date: Enter date of initiation of the Change Order Request Form.
          (i) Requested By: Enter name of person who requested the Change Order.
          (j) Project Number: Enter Project Number.
          (k) Estimated Cost of Change Order: Enter estimated cost if Change Order is Estimated at over $50,000.
          (l) Type of Change: Indicate Change Order Type and obtain Project Manager’s initials for those Change Orders classified as requiring design.
          (m) Method of Costing: Complete method of costing.
          (n) Source of Funds: Enter source of funds.
          (o) Time Extension: Enter number of days that original contract will be extended. (Only those changes involving activities on the critical path of the project should result in a time extension.) Enter “NA” for those Change Orders that do not impact the project schedule.
          (p) Actual Cost of Change: Enter actual cost of the change, as documented by contractor’s quote.
          (q) Construction Project Manager: Sign here signifying receipt, review, approval and attachment of all required submittals (contractor’s quote, consultant’s estimate, source of funding letter, if required, and any other appropriate documentation.
          (r) Consultant: Initial for consultant and refer to attached consultant’s letter detailing cost estimate and conveying approval if design change needed.
          (s) Architect/Engineer Fee: Enter Fee (if applicable).
          (t) Other Charges/Fees: Enter other charges/fees (outside consultant fees, tests, surveys, etc.).
          (u) Construction Project Manager Fee: Construction Administrator enters Construction Project Manager fee.
          (v) Administration Fee: Construction Administrator enter administration fee.
          (w) Total Cost of Change Order:
          (x) Construction Administrator: Obtain signature indicating review of Change Order Request and supporting documentation.
          (y) Campus Facilities Administrator: Obtain signature indicating review of Change Order Request and supporting documentation.
        (9) Processing of Change Order Request/Issuance of Formal Change Order
        Upon receipt of the completed Change Order Request Form, the Campus Facilities Administrator initiates and signs a formal Change Order and sends it to the Contractor. The Contractor signs it, returns a copy and keeps the original, which serves as authorization to proceed in writing by the CPM.
        (10) Field Orders or Letters of Authorization to Proceed may be issued by the CPM for work changes within the scope of work. These orders/authorizations shall be promptly followed up with a formal Change Order.
    6. Schedule and Payroll Record
      1. Project Schedule: The Contractor is required to submit a schedule of planned progress on construction work. As the work proceeds, the Owner’s Representative is responsible for tracking project progress. When monthly Contractor payments are processed, a computerized monthly Project Schedule should be generated which compares scheduled progress and actual progress. The Owner’s Representative should use this schedule to encourage the Contractor to conform to the Project Schedule.
      2. Payroll Records
        • (1) The Contractor is responsible for paying prevailing wage rates and benefits and keeping supporting payroll records. The contractor shall submit certified payroll records with each monthly application for payment (see General Conditions).
          (2) Examples of situations requiring payroll inspection include:
          (a) Resolving questions on payment of proper wage rates.
          (b) Checking support data for time and material change orders.
          (c) Verifying Contractor’s certification that all wage rates and benefits have been paid. (3) The Owner’s Representative should contact the Prevailing Wage Coordinator with any questions regarding prevailing wage. Wage rate disputes shall be forwarded to the UM Director of Facilities Planning and Development for resolution.


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    7. Payment
      1. Schedule of Values: The Schedule of Values submitted by the Contractor serves as the basis for the Contractor payment process. The Owner’s Representative reviews and approves the Schedule of Values (prepared in accordance with Instructions for Completing the Breakdown of Costs) and works directly with the Contractor in resolving any discrepancies.
        The approved Schedule of Values is entered into Projex by the contractor.
      2. Contractor Payment Process: After the Schedule of Values data has been approved, the Contractor may request payments.
        • (1) The Contractor should be instructed to submit an application for payment into Projex on a monthly basis (see General Conditions).
          (2) The Contractor will be paid in a timely manner after approval (see General Conditions).


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    8. Retainage
      Each month, the Contractor is paid for 95 percent of the earned value of all completed work (including the associated cost of labor, materials, overhead and profit), less previous monthly payments.
    9. Breach of Contract
      The General Conditions outline breach of contract conditions. The Owner’s Representative will issue all correspondence to the Contractor regarding any breach of contract
      1. The first correspondence to the Contractor beginning a contract problem should be sent to the Contractor identifying the problem. The correspondence shall indicate a specific time period for the Contractor to respond. If the Contractor fails to respond, a second letter should be written with copies sent to the Contractor’s bonding company and the UM Director of Facilities Planning and Development.
      2. If the Contractor fails to respond or provide corrective actions, the project may need to be turned over to the bonding company. Correspondence to the bonding company should be copied to the Contractor and to the UM Director of Facilities Planning and Development.
    10. Damage for Delay
      1. Purpose: The University may assess the Contractor Damages for Delay. The General Conditions Article 8.2, inform the Contractor of liability for actual damages due to the delay, and these are included in the Construction Agreement. The Contractor agrees to a reduction in the Contract Price as provided in the Contract Documents. Damages are costs the University measures because the project is not finished within the agreed time. Examples include:
        • (1) Loss in revenue from revenue generating facilities such as bookstores, parking structures, or residence halls.
          (2) Increased interest costs on construction financing.
          (3) Loss of research grants.
          (4) Additional administrative costs.


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      2. Actual Damages: Actual Damages are specified in the UM General Conditions if no Liquidated Damages are specified. Actual Damages are calculated once the delay is over and all costs have been realized.
      3. Liquidated Damages: Liquidated Damages must be identified on the bid form under schedule requirements. The delay costs are predicted by the University and expressed as a dollar per day charge.
      4. Withhold Payment: The University will retain the right to withhold payments where there is reasonable doubt the contract can be completed within the time specified.
    11. Materials Stored at Site
      To provide incentive for the Contractor to purchase long lead items critical to the project completion, items considered to be major items of considerable magnitude, if suitably stored in a Bonded Warehouse (not owned or operated by the Contractor or material supplier) or on the site, will be allowed in the application for payment on the basis of ninety-five percent (95%) of original invoices.
    12. Administrative Review Process: All unresolved claims by the Contractor and disputes between the Contractor and the University must follow the process set forth in General Conditions
      1. Claim or dispute submittal by the Contractor to the Owner’s Representative.
      2. The Owner’s Representative may request review of claim or dispute by the Architect. The claim or dispute may be resolved at this step.
      3. If not resolved, recommendation by Architect to Owner’s Representative.
      4. Decision by Owner’s Representative.
      5. Agreement or disagreement by Contractor.
      6. If disagreement, Administrative Review initiated by Campus Contracting Officer or his Designee.
      7. Agreement or disagreement by Contractor.
      8. If disagreement, further Administrative Review by the Contracting Officer via the UM Director of Facilities Planning and Development. This is the end of Administrative Review.
      9. Agreement or disagreement by Contractor.
      10. If disagreement, Contractor may litigate.
    13. Project Closeout
      1. General: Project Completion includes all work completed, including clean-up, punch list items, and work added by contract change order. The University may lose the benefit of the contract provisions with respect to items of work which were deficiently performed or not completed by the Contractor if the Final Certification is sent prematurely. See Preconstruction Meeting Booklet, for Closeout Procedures.
      2. Partial Acceptance: The University may request Partial Acceptance of an individual piece of equipment, system, or area prior to Final Completion. The punch list for that equipment, system, or area must be performed prior to partial occupancy. The Owner’s Representative will send a Letter of Partial Acceptance to the Contractor detailing the area accepted for use by the University.
      3. Substantial Completion: The University may take possession of the facility before Final Completion. Substantial Completion will include all submittals and work required under the contract, except minor items that will not interfere with the use of the facility.
      4. Final Certification: When the Consultant is satisfied that all items have been completed, the Consultant makes a Final Certification in writing to the Owner’s Representative that the job has been completed according to the plans and specifications as modified by change orders. The date of Final Completion is recorded in the Letter of Certification. The Consultant’s Certification is required prior to processing Contractor’s final payment request.
      5. Final Payment: Final payment is made to the Contractor only after the Contractor fulfills all the above project close-out requirements.