2008-07-14 Regular Meeting, Public Hearing and Workshop Meeting of the La Porte City Council

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finished, the project is bid and awarded, and the team can mobilize. This type of contract can take months off the finish date of a project. Agency Construction lVlanager Constmction Cost Management is a fee-based service in which the Constmction Manager (CM) is responsible exclusively to the owner and acts in the owner's interests at every stage of the project. The constmction manager offers advice, uncolored by any conflicting interest, on matters such as: . Optimum use of available funds; . Control of the scope of the work; . Project scheduling; . Optimum use of design and constmction firms' skills and talents; . A voidance of delays, changes and disputes; . Enhancing project design and constmction quality; . Optimum flexibility in contracting and procurement. . Cashflow Management. Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners fi'om Constmction Management. Construction Manager At-Risk eM at-Risk is a delivery method which entails a commitment by the constmction manager to deliver the project within a Guaranteed Maximum Price (GMP), in most cases. The constmction manager acts as consultant to the owner in the development and design phases, (often referred to as "Preconstruction Services"), but as the equivalent of a general contractor during the construction phase. When a constmction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the constmction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM company. CM "At Risk" is a global term referring to a business relationship of Constmction contractor, Owner and Architect / Designer. Typically, a CM At Risk ammgement eliminates a "Low Bid" construction project. A GMP agreement is a typical part of the CM and Owner agreement somewhat comparable to a "Low Bid" contract, but with a number of adjustments in responsibilities required by the CM. Aspects ofGMP agreements will be elaborated below. The following are some primary aspects of the most potential benefits of a CM At Risk arrangement: Budget management: Before design of a project is completed ( 6 months to 1-1/2 years of coordination between Designer and Owner), the CM is involved with estimating cost of constructing a project based on hearing from the designer and Owner (design concept) what is going / desired to be built. Upon some aspect of desired design raising the cost estimate over the budget the Owner wants to maintain, a decision can be made to modify the design concept Page 2 of 4