PROJECT DELIVERY HANDBOOK

PROJECT DELIVERY HANDBOOK GuidetoCaliforniaSchooland CommunityCollege FacilityDelivery 2017

ThisversionincorporateschangesresultingfromlegislationincludingAB2316andSB693(2016). AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page TableofContents PREFACE... HOWTOUSETHISHANDBOOK... ChapterWHATISCONSTRUCTIONMANAGEMENT?... ChapterAGENCYCONSTRUCTIONMANAGEMENT...10 A. Description...10 B. EnablingLegislation...10 C. RelationshipoftheParties...10 D. PointsforConsideration...11 E. SimpleStepstoImplement...12 ChapterDESIGN-BID-BUILD...13 A. Description...13 B. EnablingLegislation...13 C. RelationshipoftheParties...13 D. PointsforConsideration...14 E. SimpleStepstoImplement...15 ChapterLEASE-LEASEBACK...16 A. Description...16 B. EnablingLegislation...16 C. AB566RequirementsK-12Only...16 D. RelationshipoftheParties...16 E. PointsforConsideration...18 F. SimpleStepstoImplement...18 ChapterCONSTRUCTIONMANAGEMENTMULTI-PRIME...20 A. Description...20 B. EnablingLegislation...20 C. RelationshipoftheParties...20 D. PointsforConsideration...21 E. SimpleStepstoImplement...21 ChapterCONSTRUCTIONMANAGERAT-RISK...23 A. Description...23 B. EnablingLegislation...23 C. RelationshipoftheParties...24 D. PointsforConsideration...24 E. SimpleStepstoImplement...25 ChapterDESIGN-BUILD...27 A. Description...27 B. EnablingLegislation...27 C. SkilledWorkforceProvisionsK-12Only...27 D. RelationshipoftheParties...28 E. PointsforConsideration...29 F. SimpleStepstoImplement...29 ChapterDEVELOPERBUILT...31 A. Description...31 B. EnablingLegislation...31 C. RelationshipoftheParties...31 D. PointsforConsideration...32 E. SimpleStepstoImplement...32 ChapterOTHERPROCUREMENTISSUES...34 Chapter10SUMMARY...38 GLOSSARYOFTERMS...41

PREFACE All delivery methods have advantages and disadvantages. Different projects can have different delivery methods.whatworksbestforyouandyourprojectshoulddefinethemethod,notviceversa. This Handbook was produced by the Association of California ConstructionManagers (ACCM)for use by California school district and community college district staff and board members. The ACCM Handbook gives practical outline of services provided by construction managers and useful description of the variousdeliverymethodsofeducationalfacilitiesavailabletodistricts. While construction management services are utilized in variety of construction sectors, they are increasinglysoughtoutbyschoolandcollegeadministratorsaswaytoensurethattrustedprofessionals are available to support staff resources. The members of ACCM are leaders in the field of managing educationalfacilityconstruction. The ACCM Handbook provides an independent resource for districts trying to choose from among the diverse project delivery methods that are available. The need for this Handbook stems from ACCM s recognition that there is no single project delivery method that meets all individual needs. Each of the contributing editors has preferred delivery method. However, ACCM members recognize that the appropriatedeliverymethodforparticularprojectwilldependonvarietyofuniquecircumstances.this guideprovidesdescriptionofeachdeliverymethod,advantagesanddisadvantages,reasonsforselecting particular method, and simple steps to implement each method. In addition, the ACCM Handbook provides project delivery selection matrix that districts may use to compare and contrast individual deliverymethodsandtherequisiteservicesconstructionmanagercanprovideyougivenyourparticular districtneeds. SchooldistrictsusingthisHandbookshouldunderstandthatifschooldistrictisseeking,orplanstoseek, statematchingfunds,theywillhavetomeetthestateprequalificationrequirementsforprimecontractors and mechanical, electrical, and plumbing subcontractors on projects exceeding $1 million. For Lease- Leaseback projects, more subcontractors are required to be prequalified andprequalification is required evenifstatefundswillnotberequested. WewishtoextendourappreciationtotheACCMBoardofDirectorsfortheirsupportandencouragement on this project. We especially wish to thank the Drafting Committee for their writing, reviewing and wrestling with what is an appropriate outline of education facility delivery methods in California. Those individualswhoofferedtheirtimeandperspectiveare: PaulBonaccorsiWLCConstructionServicesInc. DickCowanXLConstructionCompany BobKjomeRoebbelenContracting EdMierauNeffConstruction KrisMeyerLedesmaMeyerConstructionCompanyInc. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

PREFACE UsersofthisHandbookshouldrememberthatitisimportanttocontacteachoftheStateAgenciesinvolved in the approval of education facilities early in the process. Each of these agencies is staffed by knowledgeableprofessionalswhotakeprideintheircontributiontobuildingschoolfacilities. K-12andcommunitycollegedistrictsshouldcontact: DivisionoftheStateArchitect(DSA),DepartmentofGeneralServices,StateArchitect www.dsa.dgs.ca.gov SchoolFacilitiesPlanningDivision,CaliforniaDepartmentofEducation(CDE),DivisionDirector www.cde.ca.gov/ls/fa CollegeFinanceandFacilitiesPlanningDivision,CaliforniaCommunityCollegesChancellor soffice (CCCCO),AssistantViceChancellor www.cccco.edu/divisions/cffp/facilities/facilities.htm SchoolPropertyEvaluationandClean-UpDivision,DepartmentofToxicSubstancesControl(DTSC), DivisionChief www.dtsc.ca.gov/schools K-12districtsshouldcontact: OfficeofPublicSchoolConstruction(OPSC),ExecutiveOfficer www.opsc.dgs.ca.gov Communitycollegedistrictsshouldcontact: CollegeFinanceandFacilitiesPlanningDivision,CaliforniaCommunityCollegesChancellor soffice (CCCCO),AssistantViceChancellor www.cccco.edu/divisions/cffp/facilities/facilities.htm ForcontractorregistrationrequirementsandPWC100projectregistrationrequirementscontact: DepartmentofIndustrialRelations(DIR) www.dir.ca.gov AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

HOWTOUSETHISHANDBOOK This ACCM Project Delivery Handbook provides tools for understanding what construction managers do (Chapters and 2), comparing delivery methods (Chapters through 9), and selecting an appropriate deliverymethodforspecificproject(chapter10).comparingdeliverymethodsallowsschooldistrictor community college districtto analyze the resources and capabilities required and available to them on specificproject.thisanalysisputsthedistrictinpositiontoachieveitsfacilityconstructiongoalsontime andwithinbudget. This Handbook encourages early analysis of risks and resources. It also recognizes that any delivery method chosen will benefit from collaborative process. Even where the delivery method itself may suggest potential partners (e.g. Design-Bid-Build, Design-Build, Lease-Leaseback, Piggyback Contracts, DeveloperBuiltProjects),retentionofconstructionmanagertoactasthedistrict sagentcanensurepreconstructioncollaborationamongtheowner,thearchitectandconstructionprofessional. Thereisnooneperfectdeliverymethodforeverysituation.Justaseachprojecthasnumberofcommon elementsalongwithspecificuniquechallenges,eachdeliverymethodalsoofferstheuseradvantagesand comeswithsomedisadvantages.beforechoosingprojectdeliverymethod,therearenumberoffactors that each district and their delivery team should consider when evaluating which method best suits specificproject. Whilereviewingthisinformation,thedistrictneedstobeawareofthefollowingfactorsthatmayinfluence whichmethodtheymaychoose: 1. Districtstaffcapabilities 2. Timeavailabletohaveprojectcompleted 3. Complexityandsizeofproject 4. Levelofdistrictcontroldesired 5. Typeandsizeofcontractorsthatyouwanttoattract 6. Projectbudgetandfunding 7. Predominanttradepracticeinregion 8. Boardandstaffopennesstoalternativemethods 9. Appropriatecommunityandbusinessparticipation 10. Levelofacceptablelegalandfinancialrisk AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

ChapterWHATISCONSTRUCTIONMANAGEMENT? Construction Management (CM) is professional service that utilizes proven management techniques during the planning, design, construction, and post-construction phases of project for the purpose of controlling the three major components of time, cost and quality. Construction Management is service that specifically was created to promote the successful execution of capital projects for owners. These projectscanbehighlycomplexorsimpleinscope.accmviewsconstructionmanagementasprofessional service afforded to you by construction managers, best selected on qualifications basis. Separate and distinct is the selecteddelivery method, for whichthe means of procuring your project may be by either bestvalue or low-bid bases. ConstructionManagementisthepracticeofprofessionalmanagementappliedtotheplanning, designandconstructionofprojectsfrominceptiontocompletionforthepurposeofcontrolling time,scope,costandquality. The terms Construction Management Project Management and Program Management are not used consistently in California and the U.S. One concept is that Construction Management is managing only during the construction phase, while Project Management is managing the creation, initiation, planning, design, agency approval, and construction of the project and includes responsibility for the scope of equipping,furnishing,andstaffingtheproject.programisfamilyofprojectslinkedbycommonsetof objectives or by geography. Program Management covers the sourcing of program funds, including planningbondsalesandissuances,retainingthestafftomanagetheprogram,includingpoolsofdesigners, geotechnical engineers, California Environmental Quality Act (CEQA) experts, project inspectors, and testinglaboratories,aswellascreatingbudgetsforprogramobjectivessuchasadacomplianceorenergy reductionbudgets,creatingcriteriafordesigns,furnishings,andequipment,runningpublicrelationsor communicationsprogram,andmanyotherfunctions. The best practice and best value is to hire the construction manager and define the project delivery methodsearlysothattheentireprojectcanbecompletedintheshortesttime,atthelowestcostandwith thehighestquality.selectingtherightdeliverymethodwilldependonthenatureofthedistrict savailable staffexpertise,toleranceforrisk,abilitytomakeearlydecisionsandthecomplexityoftheproject. Therearerangeofprofessionalservicesthatconstructionmanagercanprovidetoassistinthefacility planning, design and construction process. The following is comprehensive list of services available at each of the five principal stages of project ranging from planning through design and construction, to post-construction. PlanningandPre-DesignStage Preparefacilitymasterplans,includingconditionassessment,siteandcommunityneedsassessment andanalysisofdemographicprojections. Assistwithdesignproceduresanddistrictdesignstandards. Developsiteselectionanalysisandmanageacquisition. Developtheprogram/projectmanagementplantodocumentprogram/projectgoalsand performancerequirements. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

Developprojectmanagementplantoincludeproceduresforteamcommunication,review, reportingandapproval. Facilitatecollaborativeteamofprofessionals. Developandimplementstrategiestointeractwiththepublic. Developpreliminaryscopeandbudgets. Determinetotalfundingrequirements. Establishandimplementmanagementinformationandreportingsystems. Establishandmonitormasterbudgetsandschedules. Acquireconceptualestimatingservices. Assistinprocurementofconsultingservices,includingdevelopingRequestfor Proposal/RequestforQualifications(RFP/RFQ),interviewprocessesandcontract negotiations. Developphasingplans. Developbiddingstrategies. Preparefront-endspecificationdocuments. Createwebsitesforreportingtothecommunity. DesignStage Developandimplementdetaileddesignschedules. Developdetailedcomponentcostestimatesateverydesignsubmittal. Resolvedesignteamconstructabilityquestions. Performvalueengineeringandlife-cyclecostevaluation. Performbid-abilityandconstructabilityreviews. Developcontractdocumentrequirementsforsafetyprogram. Reviewdesignsforeachphaseofarchitect/engineersubmittal. Assistwithagencysitereviewandapprovalprocess. Assistwithfundingapplicationsandreportingprocess. Pre-ConstructionandProcurementStage Performbidmarketingservicesandcreationofprequalificationdocuments. Performcommunityandcontractoroutreach. Ensurebiddersmeeteligibility. Implementcontractawardprocess. Conductpre-bidconferences. EnsureDepartmentofIndustrialRelations(DIR)compatiblepayrollreportingsoftwareisused. Coordinatebidprocess. Developcompletebiddocumentstoassureresponsivebids,whileavoidingprotests. Createconstructionphaseprocedures. Assistinreviewingandanalyzingbidsandselectingcontractors. Assistwithagencyreviewandapprovalprocess. ConstructionStage Performconstructionadministration(monitoring,processing,reportingandevaluationof constructionactivities). Serveastheowner srepresentativeandcoordinatewithotherownerconsultants. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

Conductprogressmeetingstoreviewandfacilitateresolutionofanyitemsthatmayimpactthe constructionprocess. Performconstructionscheduling(creationofpreliminaryschedule,reviewandimpactanalysisof contractor sschedule). Managechangeorders(evaluation,recommendation,andprocessing). Monitortheconstructionprocesstoanticipatedifficulties,resolveissuesearly,andkeepwork flowing(dailyprogresslogs,videotaping,anddigitalphotography). Administerprogresspaymentstoassurethatworkmilestonesaremetandthatexpensesarepaidin timelymanner. EnsureCaliforniaOccupationalSafetyandHealthAdministration(Cal/OSHA)compliantsafety programisrequiredbyeachcontractorinthecontractordocument. Coordinatepunchlistactivities. Coordinatequalitymanagement(inspectionservicesandqualityassurance). Coordinateoutsideagencyactivitiesandinteractionswiththeconstructionprocess. Performcashflowprojection. Manageoccupancyofnewschool. Post-ConstructionStage Managecompliancewithclose-outprocess. Managecommissioningandstartup. Managewarrantyprograms. Performagencyandcontractclose-outandcertification,includingreconciliationwithbudgets. Administerclaimsmanagementandmitigation. SelectingConstructionManager Whenthedistrictdecidesthatitsstaffcannotorshouldnotmanagenewschoolproject,wesuggestthe districtconsiderengagingconstructionmanagertoprovidetheseconstructionmanagementservices.we recommend that the district prepare Request for Qualifications (RFQ) or Request for Proposals (RFP), andadvertiseand/orsendtherfq/rfptoqualifiedfirms.accmprovidesmodelrfq/rfp,availableat www.accm.com.wealsosuggestthatconstructionmanagerbehiredearlyintheprojectplanningstages forthebestresults.thisshouldbedoneatthesametimethedistrictishiringthearchitect.itisdifficultto formrelationshipinmonthortwoforconstructionperiodofoneyeartothreeyears. Toachievethegreatestbenefitsfromearlycollaboration,onceconstructionmanagerishiredthereneeds tobe: Cleardefinitionofthescopeofworkforalldistrictconsultants. Cleardefinitionandagreementofthetotalprojectbudget(hardandsoftcosts). Cleardefinitionofthemasterprojectandconstructionschedules. singlepointofcontactforprojectdecisionsanddistrictcoordinationforthepre-constructionand constructionphases. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page

ChapterAGENCYCONSTRUCTIONMANAGEMENT A. Description AgencyConstructionManagementisaserviceinwhichtheconstructionmanagerisresponsibleexclusively to the district and without competing economic interests at any stage of the project. The agency construction manager offers advice, without conflicting financial interest. Construction Management services are sometimes also requested under the categories of project management or owner s representative. AgencyConstructionManagementisnotdeliverysystempersebutratherserviceutilizedbydistrict tomanageproject,orprojects,deliveredinanymanner(e.g.,design-bid-build,constructionmanagerat- Risk,Design-Build,andLease-Leaseback).TheuseofAgencyConstructionManagementduringeverystage of the project, beginning with the original concept and project definition, maximizes the benefit of this service.dsahasissuedira3affirmingthatcmsmayperformdutieswhichmightotherwisebeperformed bythedistrict,suchasactingintheselectionofdesigners,inspectors,andlaboratories,negotiatingscope and terms of contracts and administering these contracts and monitoring the duties required. IR A24 specificallyprohibitscmsfurnishingtheservicesofprojectinspectorsiftheyfurnishanyothercmservices tothedistrict. B. EnablingLegislation In the State of California, construction manager contracting with district to perform construction managementservicesmusteitherbecalifornialicensedclassgeneralcontractor,architect,orengineer [see Government Code Section 4525 and Public Contract Code Section 3300]. Government Code Sections 53060and4526providethatconstructionmanagementservicesmaybeprocuredbydistrictinsimilar mannertothoseofanarchitectorotherprofessionalserviceproviders.educationcodesection17072.35 provides that construction management services are fundable by the School Facility Program (SFP). Education Code Section 17070.50 requires competitive process prior to procuring construction managementservices. C. RelationshipoftheParties AgencyConstructionManagementisprofessionalservicewheretheconstructionmanagercontractswith schooldistricttomanageandoverseethedesignandconstructionprocesswithoutfinancialinterestin the construction contracts. Construction management fees may be either hourly not-to-exceed, fixed negotiated price, or percentage of bids. These relationships remove financial incentive for change ordersorothercostincreases.theconstructionmanagerholdsnosuborprimeconstructioncontractsand managestheeffortsofthedesigndisciplines,otherconsultants,andthoseofeithergeneralcontractoror multi primetradecontractors. In Agency Construction Management, the construction manager assumes the position of professional advisor or extension of staff to the district. The district holds both the design contract(s), and the construction contract(s). Whereas the architect retains design responsibility, the primary cost and performancerisksareplacedonthecontractors.theserisksincludefailureofsubcontractorstoperform, material price increases, or trade labor availability. Risks on the contractor also include the costs of performingre-work.thetermagencyimpliesdelegationoffunctiontotheconstructionmanagerbythe AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page10

district. The necessity for openness and candor between the construction manager and district is paramount. Agency Construction Management is service that is offered by many types of firms. When choosinganyrepresentativeitiscriticaltoevaluatetheirqualificationsandexpertisetomeettheproject needs. AnAgencyConstructionManagementfirmcanmanagevarietyofdeliverymethods.Duringconstruction, the construction manager performs oversight services similar to those of district employee with responsibility for the physical construction. In this manner, the district can select trusted construction management firm to oversee the district s contracts with general contractor or in lieu of general contractor, performing services via separate and unique set of contractual documents. Agency Construction Management is often used to represent the district s interests in ConstructionManagement Multi-Prime,Design-Build,Lease-LeasebackandforDeveloperBuiltschools. Constructionusuallystartsafterthedesignhasbeencompleted.Thisallowsforthoroughreviewofthe designdocuments by the agency construction manager. During the reviewperiodthe district can modify the design prior to the construction contract being let. The district also benefits from design and constructionexpertisewithoutanyconflictsofinterest,asthereisnoincentiveforincreasedconstruction managementfees. Construction contractors retain responsibility for means, methods, techniques and sequence of construction; however, the construction manager as an agent of the district manages the general contractor. D. PointsforConsideration 1. Thiscanbequalificationsbasedselection. 2. Itissuitableforanydeliverymethod. 3. Theconstructionmanagerworksdirectlyfortheownerasknowledgeableadvocateforthe owner sinterests. 4. Theconstructionmanageractsasthedistrictandhasnofinancialconflictsofinterest. 5. Theconstructionmanagerhelpsthedistrictmaximizecontrolovertheproject,providing expertiseforcost/time/qualitybenefits. 6. Theconstructionmanagerfacilitatespre-constructionserviceswithconstructionexpertise duringdesign. 7. Theconstructionmanagerprovidessupplementalprojectstaffingforthedistrict. 8. Thedistrictmaydelegatedistrictdecisionmakingauthoritytotheagencyconstruction manager. 9. Thedistrictholdsallcontracts(designandconstruction)andretainsallpaymentandother contractualliabilities. 10. Thereispotentialforduplicationofeffortamongstaff,otherprofessionalsandconstruction managerasagent,unlessresponsibilitiesareclearlydefined. 11. IftheAgencyConstructionManagementhasbeendelegatedagencydecisionmakingauthority, thedistrictshouldrequireprofessionalliabilityinsurance. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page11

SimpleStepstoImplement 1. DevelopdescriptionoftheprojectsforConstructionManagement. 2. Evaluatetheskillsandresources(time,experience,etc.)thatyourstaffhasavailableto contributetooverallmanagementoftheconstructionprocess. 3. Listtheskillsandservicesthatyouwillneedprofessionalconstructionmanagertoprovide. 4. Developpreliminaryselectioncriteriabasedonthoseskillsandservicesalongwithother importantneedsrelevanttothecultureofyourdistrict. 5. DevelopRFQorRFPtoallowyoutoselectthemostappropriatefirmsforaninterviewand finalselection(accmhasdevelopedmodelrfq/rfp,availableatwww.accm.com).the responsesandinterviewswillhelpyoutofinetunethespecificservicesthatwillbemostuseful foryourdistrict. 6. Negotiatetheservicesandfeethatbestfityourneeds.Bepreparedtodiscusshowmanyand whichservicesapplytoyourprojectorprograminordertodevelopthebestvalue. 7. ReachagreementonthefinalcontracttermsforBoardapproval. 8. Welcometheconstructionmanageraboardandbeginmeetingswithrelevantstafftoensure everyoneunderstandstheconstructionmanager sroleandresponsibilitiestothedistrict. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin The following chart is an example of the relationships of the parties in an Agency Construction Managementscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page12

ChapterDESIGN-BID-BUILD A. Description Design-Bid-Build (DBB) is the project delivery approach that was used for most of the 20 th Century to complete public sector projects. The DBB model segregates design and construction responsibilities by awardingthemtoanindependentprivatearchitecturalfirmandseparateprivatecontractor.bydoingso, DBBseparatesthedeliveryprocessintothreedirectphases:1)design,2)bid,and3)build(construction). Duringthedesignphase,publicagencyawardsdesigncontract,usingqualifications-basedapproach, toanarchitecturalfirmprovidingthebestexperienceintheprojecttype.thearchitectisresponsibleforall agency approvals as well as for completing final project design and providing detailed construction drawings,specificationsandsupportingdocuments. Inthebidphase,theownerusesthedocumentationpreparedbythearchitecttoassembleconstructionbid documents.eligiblecontractorsareinvitedtosubmitcompetitive,lump-sumbids,andtheownerawards the construction contract to the contractor submitting the lowest, responsive, responsible bid for total contractprice. The project then moves into the build (construction) phase, with the owner retaining responsibility for monitoringthecontractor'sperformance.dbbismostfrequentlydoneusinglumpsumbidcontract,but unitpricesaresometimesused. B. EnablingLegislation CaliforniaPublicContractCoderequiresthatCaliforniaPublicEntitiesmustawardpublicworkscontracts to the lowest responsive, responsible bidder. These bidding procedures are contained in the Public Contract Code (see Sections 20110 et. seq.). The intent of the Legislature in enacting this code was to ensure all qualified bidders have an opportunity to enter the bidding process, thereby stimulating price competition. C. RelationshipoftheParties Owner First and foremost, the owner wants the project constructed on schedule, at the original architect s estimate, and at the owner s construction budget. public entity must answer to an elected governing boardandtothecommunity.accountabilityforprojectdeliverymaybecriticalelementoffuturesuccess. The owner is accustomed to maintaining high degree of control during the design, bidding and constructionprocess.thisdesiretoretaincontroloverdesigndecisions,whethertheyaremajordecisions thatinfluenceprojectconfigurationandconstructioncost,orlesscost-criticalbutemotionalitemssuchas aestheticfinishesandfixtures,maybeanimportantownerobjective. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page13

Contractor The contractor s objectives are quite different. The contractor is in business to make money, build the projectwithoutchangesandcompleteitontime.theshrinkingnumberofqualifiedgeneralcontractorsis testimonialtotherisksinvolvedinfixedpricecontractenvironment.thehigherthedesignquality, the moreclearlythecontractorisgiventherulesforbiddingtheworkandhowthecontractorwillbepaidfor the work performed, the more effectively the contractor will understand and price the risks. This will directlyinfluencewhattheownerpaysfortheproject.becausetheowner-contractorrelationshipislargely influencedbystatutorylow-bidrequirements,thepotentialforconflictissignificant. Architect Whilethedesignarchitect(architectofrecord)alsowantstomakeprofit,thearchitectisnotgenerallyas exposedtoloss,noraslikelytoachieveprofit bonus, asisthecontractor.thus,theprofitdrivemay differ from the contractor s. The design architect also seeks innovation for the exposure and future businessbenefitsthatinnovationcanbring.innovationmayleadtountriedconstructiontechniquesby particularlow-bidcontractor,andresultinpotentialconflicts.totheextentthatcontractorqualifications and contracting approach will affect the overall success of the project, the architect also seeks the most qualified contractor on the project and well thought-out work plan. This may or may not be the contractor having the lowest responsive bid. To the extent that construction innovation can lead to cost savingsandhappierowner,thedesignarchitectshouldbemotivatedtofosteropencommunicationand efficientreviewprocessesthatallowtheseideastobebroughtforward. Under DBB, the project's design and construction are contracted separately. The owner must choose an architect/engineering firm to design the project. Professional design services for public projects are selected on the basis of qualifications by the owner, negotiating fee after selection. Contracts for construction services are then obtained by competitive bidding. After the design process by the selected team of architects and engineers, the owner then advertises to solicit bids from construction firms. The winning firm becomes the general contractor, responsible for overall completion of the project usingthe firm s own employees, sub-contractors, or combination of both. The design and constructionphases of theprojectareclearanddistinct.designdocumentsarefinishedbeforethecontractorbecomesinvolved. D. PointsforConsideration 1. DBBisfamiliarprojectdeliverymethod. 2. Designdocumentsmustbethoroughandcompletetoenablecontractorbidding. 3. PublicContractCodeandlegaldecisionshavesetacceptedandunderstoodstandards. 4. Thearchitectorengineerofrecordworksfortheownerandrepresentstheowner. 5. DBBrequirescompetitivebiddingwiththelowestresponsiveinitialprice. 6. Thereisnoearlybuilderinvolvement. 7. Conflictscanarisebetweenthearchitectandbuilderafterdesigniscompleteandthebuilderis selected. 8. Bidshigherthanbudgetcanpresentdifficultyanddelaysforadjustingprojectcosts. 9. Theownermaylosetimewaitingforalldesigntobecompletedforsinglebidformat. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page14

E. SimpleStepstoImplement 1. Selectthearchitectandanowner srepresentative. 2. Adoptprojectplanandconstructionschedulewithyourarchitectandrepresentative 3. Managethedesignprocess. 4. Developbiddingandconstructioncontractstailoredtothesizeandcomplexityofyourproject. Becognizantofthecomplexlegalframeworkforlow-bidpublicworkscontracts.Ensurebid documentsrequiredirpublicworkscontractorregistrationandanyprequalification requirementsnecessaryforstatefunding,ifapplicable. 5. ValidatecompliancewiththeDepartmentofIndustrialRelations(DIR)contractorandsubcontractoreligibilityrequirements,suchasbeingregisteredforpublicworkcontracting. 6. Obtainalloff-siteutilityapprovalsbeforethebid. 7. Openthebidspursuanttostatutoryframeworkandawardthecontracttothelowest responsive,responsiblebidder. 8. ObtainDivisionoftheStateArchitect(DSA)approvalofthedesignbeforecontractaward. 9. Putthecompleteddesignplansandspecificationsouttobid. 10. NotifyDIRoftheprojectscommencementwiththePWC100form. 11. Commenceconstruction. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin ThefollowingchartisanexampleoftherelationshipsofthepartiesinDBBscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page15

Chapter4LEASE-LEASEBACK A. Description TheLease-Leaseback(LLB)deliverymethodusesanorganization,nowreferredtoastheEntity,todevelop newbuildingorimprovebuildingsonpropertythedistrictowns.constructionmanagementfirmmay serve as an Entity. The mechanism is for the Entity to execute single instrument lease of the property givingittherighttodeveloptheproject,andgivingittheobligationtodeveloptheproject,andtoleasethe improvementsandthesitebacktothedistrict,withthedistrictowningtheimprovementswhentheleases expire.differentdistrictsandtheirattorneysusedifferentapproachesforentityfinancing,forselectionof the Entity, for design responsibility, for lease terms after occupancy, and for method of selecting trade contractors.thisflexibilityisprimaryattractionofllb. Pre-constructionworkcanbeprovidedbytheEntityaspartoftheinstrumentbutthefinalpriceafterany adjustmentsandafterdsaapprovalmusthaveschoolboardapprovalpriortocommencingconstruction. B. EnablingLegislation Thestatutes(EducationCode17406forK-12)authorizingthisapproachare very broad;therefore many variations and different approaches to LLB have been refined, but competitive best value selection process is required. Education Code Section 81335 for community colleges is similar to Education Code Section17406,exceptthecommunitycollegesmustadvertiseforbidsandmayuseanyselectionstrategy orformatitchooses. C. AB566andSB693RequirementsK-12Only RequirementsforLLBcontracts: Requiresprequalificationofallcontractorsandsubcontractorsofalltiersanddollaramounts. Definesskilledworkforceandrequires100%oftheworkforcetomeetthedefinition. Requires,commencingJanuary1,2016,30%oftheskilledworkforcetobemadeupof graduatesofdivisionofapprenticeshipstandardsapprovedprograms.commencingjanuary1, 2018,thepercentageincreasesby10percentagepointsyearuntil60%oftheskilled workforcemeetapprenticeshiprequirements. Requirestheapprenticeshipprovisionapplytoemployersateverytier. Requiresmonthlycertificationofcompliancewithpenaltiesfornon-compliance,unlessthe projectiscompletedpursuanttoprojectlaboragreement(pla). D. RelationshipoftheParties PartiesinvolvedinLLBincludethedistrictandtheEntity.Thedistrict steamwillincludelegalcounsel,the design team, testing and inspection, and potentially an agency construction manager representing the district sinterests.theentityteamincludeslegalcounsel,fundingsources,generalcontractorandtrade contractors.thegeneralcontractorcanactastheentity. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page16

LegalCounsel Perhapsmorethaninanyotherdeliverymethod,closecoordinationwithlawfirmiscritical.Thisdelivery methodrequiresatleasttwocontractsatminimum:thesite-leaseandthefacility-lease.inaddition,these arrangementsalsorequiredecisionsabouttheextentortermsofrequiredfinancing.anattorney sadvice isalsonecessarytodecidewhethervalidationprocessisadvisable.thislegalproceedingrecommended bysomeattorneystoobtaincourtapprovaloftheleaseterms. DeveloperContractorEntity LLBteamsareselectedbasedonqualificationswithbestvalueprocessbasedonanestimatedGuaranteed MaximumPrice(GMP).Somedistrictsalsoconsiderthelowestcostofthefinancing,andstillothershave shortlistofentityteamsandthenselectonebasedoncompetitionoftotalprojectcost. ThelegalstructureoftheEntitycanvary.Somedistrictshaveretainedfirmswhodevelopprivateprojects as the Entity. Many districts retain firms who are general contractors. Some districts have retained joint venturesofteamsincludingarchitecturalfirms.somefirmscreatelimitedliabilitycorporation(llc)to holdtheleasesandsubcontractoutconstructiontolicensedcontractors. ManyoptionsareopenforselectingthesubcontractorsandvendorswhowillworkundertheEntity.But AB2316,passedin2016,requiresthatifthedistrictmandatesidentificationofkeysubcontractorsinthe process of selecting the Developer Contractor Entity that those proposed have the rights of listed subcontractorsinpublicbidsituation.thelawalsoprescribestheprocessforadvertisingtheselectionof subcontractorsanddefineswhentheyhavetherightsoflistedsubcontractors. DistrictscanasktheEntitytotaketheriskofcompletenessandaccuracyofplans.Thesearrangementsare usually met by the Entity identifying the risks it accepts and including contingency or allowance inthe GMPfortheproject. Architect TherelationshipbetweentheEntityandthearchitectalsoisimportant.TheEntity:1)canperformdesign or participate in review and management of design performed bythe district s architect, or 2)develop pricebasedondesigndonepriortoitsselection. InmostLLBarrangements,thedistrictretainsitstraditionalrelationshipwithitsarchitectThedistrictand thearchitectcontrolthedesignoftheimprovements.manyllbagreementscallfortheentitytomonitor designs as they are developed to ensure attainment of budget. Almost all LLB arrangements call for the Entity to offer cost saving ideas. Some LLB arrangements call for the Entity to take the responsibility to designtheimprovements. DSAhasissuedIRA33toaffirmthat,ifthearchitectisundercontracttodevelopercontractoritmuststill participate in the selection, approval, and supervision of inspectors and laboratories. And builders are requiredtonotissueanydirectiontodesignerunderitscontrolwhichwouldimpairthedesignerfrom assuringthatconstructioncomplieswithdsaapproveddocumentsandthebuildingcodes. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page17

E. PointsforConsideration 1. districtmayusellbtosatisfyitsneedforfinancingtheproject. 2. Thedistricthasflexibilityonwhocontrolsthearchitect. 3. ThedistrictmayparticipateinselectingnotonlytheEntity,butalloftheeligibletrade contractorsandsuppliers. 4. Alltradecontractorsneedtomeetskilledworkforcerequirements. 5. Earlytradecontractorselectioncanavoiddeferredapprovalsandschedulerisk,andallow integratedprojectdeliveryandbuildinginformationmethods. 6. TheschooldistrictcansetGMPveryearlyinproject,orafterpre-constructionservices. 7. Earlytradecontractorselectionprovidestheownerwithearlierprojectcostandschedule certainty. 8. Thedistrictandcontractormustagreeonleasetermsandfinancingtoensureleasepayments aremadeafteroccupancy. 9. Regardlessoffundingsource,thedistrictmustperformprequalificationprocessascontained insection20111.6ofthepubliccontractcode. 10. LLBhasbeensubjecttorecentlitigationthathasvalidatedtheprocessbutcouldleadtopublic concernsandtheab2316entitycompetitiveselectionprocessisnew.schooldistrictsshould ensure they are knowledgeable about the best value process when considering this delivery method. F. SimpleStepstoImplement ConstructionManagementservicesaresometimesrequestedunderthecategoriesofprojectmanagement ordistrict srepresentative. 1. DeterminewhetherLLBistheappropriatedeliverymethodforyourproject. 2. ReviewthenewEdCode17406stepsfordevelopingpreliminaryLLBselectioncriteriawithan understandingoftherelativeimportanceofdesign,constructionandfinancingcomponentsof theproject. 3. ObtainBoardapprovaloftheproposalandselectiondocuments. 4. Determineanddefineifallorportionofthesitewillbeleasedtothedeveloper. 5. Consultwithriskmanagersregardinginsuranceforleasedsite. 6. EnsurethatanytitleorotherlanduseorcontractuallimitationsontheavailabilityofLLBare researchedandunderstood. 7. Workcloselywiththeattorneyyouintendtohavedeveloptheinstrumentofsiteleaseand facilitylease. 8. DevelopRFQorRFPtoallowyoutoselectthemostappropriatefirmsforaninterviewand finalselection.interviewappropriatefirms. 9. NegotiatewiththeselectedEntitytheapproachtotheproject:businessterms,schedule,and methodtosetprice,suchasgmp. 10. Completethedesign,ifnotalreadydone. 11. Obtainpriceproposalsfromsubcontractorsandvendors,selectthetradecontractorsand vendors,setthegmporotherprice,andsign(oramend)theleasesandobtainboardapproval. 12. Performtheworkoftheimprovements. 13. Completethesiteleasetermpayments. 14. OwnercompletestheTenantImprovementPaymentsandpaymentsforuseafteroccupancy. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page18

Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin ThefollowingchartisanexampleoftherelationshipsofthepartiesinLLBscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page19

Chapter5CONSTRUCTIONMANAGEMENTMULTI-PRIME A. Description TheConstructionManagementMulti-Prime(CM-MP)deliverymethodisbidoutsimilartotheDesign-Bid- Buildmethod,butwithindividualtradebidpackagesfortradecontractors,notgeneralcontractor.Rather thansubcontractorsbidandselectedbythegeneralcontractor,eachpackageoftradesisbidbythedistrict, assisted by the construction manager. This delivery method significantly changes the trade contractors relationshipwiththedistrictbyhavingthemcontractdirectlywiththedistrictratherthanwithgeneral contractor. The construction manager will prepare bid package summaries for all trades and the coordinationofallofthebidpackagesrequiredtobuildtheproject.thenumberoftradesandbidpackages canvarybyprojectscopeandsize.thetradebidpackagesarepublicallybidpursuanttothepublicworks low-bidselectionprocess.thentheconstructionmanagermanagesthecontractsofeachtrade.theon-site constructionmanagerreplacesthegeneralcontractor sroleduringconstructionbyprovidingscheduling, supervision, change order negotiations, and other activities required to build the project. This method allowsthedistricttoselectthe on-sitemanagementservicesbyqualifications,ratherthan low-bid,while using the low-bid process for selecting prime contractors. Construction management fees may be either hourlynot-to-exceed,fixednegotiatedprice,orpercentageofconstructioncosts. ThedistrictinCM-MPdeliverymethodassumesmanyoftherisksofgeneralcontractor;thedistrictis responsible for trade contractor failure. Risks that remain with the trade contractors are material price increases and trade labor availability. Each trade contractor must secure separate payment and performancebondpursuanttocivilcode.manyrisksthatwouldhavebeenbornebythegeneralcontractor aretherebybornebythetradecontractor. B. EnablingLegislation In 1994, Construction Management was authorized by the State Allocation Board (SAB) as an acceptable deliverysystem.thesabpolicyregardingeducationcodesection17719.3 authorizedschooldistrictsto contract, as specified, for construction management services to assist in the development and/or implementationofprojectundertheleroyf.greenestateschoolbuildinglease-purchaselawof1976. C. RelationshipoftheParties TherelationshipsbetweentheownerandarchitectaresimilartothosedescribedforDesign-Bid-Build.But newpartiesareinvolved:theprime(trade)contractors.duringthedesignphaseitisbestforthedistrict, construction manager, and architectto agree on project scope, budget, and estimatedtime frames for on andoff-siteagencyapprovals,aswellastheconstructionperiodandtradecontractorscopesandphasing, sothatdocumentscanbepreparedtomeetthecompletiongoals. ThetradecontractorsaremoredirectlyresponsibleforthesuccessofprojectwiththeCM-MPdelivery method.sincetheconstructionmanagerfillsthegeneralcontractor sroleinmanagingthemultipletrades, itistheconstructionmanager sresponsibilitytoprovideclearcommunicationandcoordinationoftrades. This includes the development of the scope content of each trade package and prime or trade contracts (thisstepiscriticaltomakesurealltheareasofscopeofworkandresponsibilityarecovered). AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page20

Ifcommunicationismaintainedperthebiddocuments,therelationshipwillgrowandtheprojectwillbe success. It is beneficial to have the team meet early. An effective CM-MP process maintains trust and cooperation among team members. CM-MP provides the district with independent advice and cost transparency. D. PointsforConsideration 1. Thedistrictownerhasmorecontrolof,andresponsibilityfor,theconstructionphaseschedule. 2. Tradecontractsareprocuredascompetitivelowestresponsiveresponsiblebidders. 3. Tradecontractorbiddingprocessisfamiliartothedistrict. 4. Thedistrictownerhastheabilitytore-bidsingle,over-budgettradepackagewithoutproject delay. 5. Thedistrictownerhasmoreflexibilityofbiddingandscheduling,allowingformultiplephases. 6. Theconstructionmanagerprovidesconstructionexpertisetoassistintheentiredesign, planning,permittingandconstructionprocess. 7. Usingmultiplebidpackageslevelstheplayingfieldforparticipationbylocaltradecontractors. 8. Tradecontractorlevelbondingprovidestheadvantagesofprequalificationwithoutthe disadvantagesassociatedwithprequalification. 9. Themethodprovidesthedistrictcomprehensivecontractpricingtransparency. 10. Thismethodrequiresmoreprimecontractswiththedistrictfortheconstructionmanagerto administer. 11. Theconstructionmanagerisresponsibleforavoidingpotentialoverlapsorgapsinthescopesof work. 12. Thedistrictacceptsmoreriskbyhiringmultipletradecontractsdirectly. 13. Contractswithseparatetradeswillmakeschedulingmoreimportanttoavoidnegativeschedule impacts. 14. Thetotalprojectpriceisnotknownbytheowneruntilalltradecontractsareawarded. 15. Thereisnotsingleguaranteedbondedpriceforthetotalproject. 16. Regardlessoffundingsource,districtmustperformprequalificationprocessascontainedin Section20111.6ofthePublicContractCode. 17. UnderCalifornialawanddependinguponthelanguageintheconstructionmanagement agreementandagreementswithprimecontractors,constructionmanageronmultiple employersitemaytakeonsomeoftheadditionalrisksassociatedwithoverallsitesafety. E. SimpleStepstoImplement 1. DeterminewhetherCM-MPistheappropriatedeliverymethodforyourproject. 2. Developpreliminaryconstructionmanagementselectioncriteriawithemphasisontheability todevelopbidpackagesformultipletrades,includingexperienceindealingdirectlywith subcontractorsandsuppliers. 3. DevelopRFQorRFPtoallowyoutoselectthemostappropriatefirmsforaninterviewand finalselection(accmhasdevelopedmodelrfq/rfp,availableatwww.accm.com). 4. ReachagreementonthefinalcontracttermsforBoardapproval. 5. Negotiateanappropriatecostfortheconstructionmanager sgeneralconditionsand appropriatefee. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page21

6. Welcometheconstructionmanageraboardandbeginmeetingswithrelevantstafftoensure everyoneunderstandstheconstructionmanager sroleandresponsibilitiesfortrade contractors. 7. Ifplanningprojectincrements,selectdesignfirmwithcomplementaryexperiencein designingprojectsusingincrements. 8. Useboththeconstructionmanagerandthedesigneranddevelopbiddingdocumentsandtrade contracts. 9. Bediligentaboutbiddingandawardingtradepackagespursuanttoallpublicworks requirements. 10. Commenceconstruction. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin ThefollowingchartisanexampleoftherelationshipsofthepartiesinCM-MPscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page22

Chapter6CONSTRUCTIONMANAGERAT-RISK A. Description ConstructionManagerat-Risk(CMat-Risk)isprojectdeliverymethodwhere constructionmanageris first hired under professional services agreement on fee basis. This professional services agreement provides blend of traditional Construction Management in the design and bidding stages. Before construction begins, the CM at-risk is assigned the multiple prime trade contracts for the purpose of administration.theconstructionmanagerisat-riskforconstructingtheprojectforthegivendurationand that the multiple prime trade contracts contain 100% of the scope depicted in the contract documents. ThereisNOguaranteedmaximumpriceinthisarrangement(seeInglewoodcasecitedbelow).TheCMat- Riskmanageschangestothecontractwiththetradecontractorsinsimilarmannerasmulti-prime.This methodissimilartotheconstructionmanagementmulti-primedeliverymethod,excepttheconstruction managertakesonsomeriskintheimplementationoftheproject.thistransferofriskcansignificantlyalter the relationship between the district and the construction manager. district choosing this delivery method should be as aware as the construction manager that the risks and relationship will change and engageinhonestdialoguewitheachothertosetthegroundrulesforsuccess. The use of CM at-risk, similar to the Construction Management Multi-Prime, is optimized if they are availableattheearlieststagesofproject.thecmat-risk,inmanycases,comeswithstrongconstruction knowledge that ensures that the district s desires are properly reflected on and in the construction documents.thisdeliverymethodissubjecttovarietyofdifferentrisklevelsandcontractadministration. This delivery method is sometimes also referred to as Construction Manager-General Contractor or ConstructionManagerwithGuaranteedMaximumPrice.SeetheendofSectionforbriefdescriptionof the important elements of these approaches. DSA has issued IR A3 which states that during the design phaseofprojectanycmwouldbecomecmat-riskandmaynotparticipateintheselection,negotiation ofcontractscopeorterms,oradministrationofcontractfordesigners,inspectors,orlaboratories. B. EnablingLegislation SimilartoConstructionManagementMulti-Primeasaddressedintheprecedingsection,CMat-Riskisthe multi-prime delivery method where riskfor cost overruns istaken bythe construction manager through careful planning and re-allocation of allowance and contingency sums associated with each of the trade contractors. Pursuant to Education Code Section 35160, commonly known as the Permissive Education Code, schools are given broad authority to carry on activities or programs as long as they are not otherwiseprohibitedbystatuteorlaw.onelimitationarisesfromthecaliforniasupremecourtcase,cityof Inglewoodv.LosAngelesCivicCenterAuthorityv.SuperiorCourt (1972) 103 Cal.Rptr. 689, 692, which providesconstructionmanagerisprohibitedfromguaranteeingpricesincesuchguaranteewouldbe too similar to competitive bid. This delivery method was challenged in the case BRCO Constructors v. Folsom-CordovaUnifiedSchoolDistrict;RoebbelenConstructionManagementServices,Incjudgementwas filedbythecourtthatstatedthecontractsinquestionwereawardedtothecmat-riskinaccordancewith Government Code 4526. The reasons cited were: all trade contracts were awarded in public bid to the lowestresponsiblebidder;theconstructionmanagerhadnocontrolovermeansandmethodsofthetrade contractors;therewasnogmp;andthecompensationforservicesisprovidedasfeeforservicesinlieuof profitonconstructionwork. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page23

C. RelationshipoftheParties In the CM at-risk process, trade contract bids are submitted to and received by the district pursuant to Public Contract Code. The bids are accompanied by bid bond and upon award and execution, the trade contractorsprovidepaymentandperformancebondsasrequiredbythetermsofthecontract,aswellas PublicContractCode.TheexecutedcontractsarethenassignedtotheCMat-Risktoadministerthroughthe completion of the contract. The trade contractors retain responsibility of the means, method and techniques of construction. In the CM at-risk process, the construction manager clearly dictates the sequence and schedule of the work within the required project duration. The construction manager also recommends which scope of work will be placed in each trade contract. In many cases, the construction manager is responsible for omissions in scope definition that are clearly shown in the construction documents. Contingencies are often included to manage that risk. Typically, the construction manager controlsportionofthiscontingencyaspartofthecontractdocuments. Thedistrictistaskedwithhiringthemostqualifiedconstructionmanagerforparticularprojectorgroup ofprojects.districtshavetheabilitytomakequalifications-basedselectionthatleadstoloyaltyofthatcm at-risktothedistrict.inmanysituations,thecmat-riskactslikeanextensionofthedistrictstaff. TheCMat-Riskprocessinmostsituationsismulti-primeapproachwhereoncetheconstructionbegins, theconstructionmanagerperformssimilarservicestothoseofgeneralcontractor.withthecmat-risk delivery method, the construction manager ends with project authorization under the master service agreementforeachprojectthatisbasedonprofessionalservices. ConstructionManager-GeneralContractor(CM-GC)orConstructionManagerwithGuaranteedMaximum Price (CM-GMP) differ from the CM at-risk model being presented here in that prior to the start of construction,theconstructionmanagertakesonalloftheperformanceandpaymentresponsibilityforthe project by taking on all of the low-trade bidders as subcontractors. The process used to assign the lowtradebidderstotheconstructionmanageristypicallyincludedinthetradecontractorbiddingdocuments. The construction manager essentially transitions to the role of general contractor and in addition to assumingalloftheresponsibilitiesassociatedwiththetradecontracts,providesperformanceandpayment bondscoveringalloftheworkassociatedwiththeproject.aspreviouslyalludedtoinsectionb,thereis considerablecontroversyassociatedwiththisversionofthecmat-riskdeliverymethodwithinthek-12 school construction field. It is extremely important that districts contemplating the use of this delivery methodoroneofitsvariationsconsultwiththeirlegalcounselpriortomovingforward. D. PointsforConsideration 1. Theconstructionmanagershouldbeselectedusingqualificationsbasedselectionprocess (Govt.Code4526). 2. Thedistrictownercanhavefixedpriceforeachtradecontractbasedoncompletedesign documents. 3. Thetradecontractsareprocuredascompetitivelowestresponsiveresponsiblebidders. 4. Thetradecontractorbiddingprocessisfamiliartothedistrict. 5. Theownerhastheopportunitytorebidsingle,over-budgettradepackage. 6. Thedistrictownerhasmoreflexibilityofbiddingandschedulingwhichallowsformultiple phases. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page24

7. Theconstructionmanagerprovidesconstructionexpertisetoassistintheentireplanning, permitting,designandconstructionprocess. 8. Multiplebidpackageslevelsthefieldforparticipationoflocaltradecontractors. 9. ThereareincreasedCMat-RiskfeesfortheCMat-Risk sassumptionofrisk. 10. Thereisnotsingleguaranteedbondedpricefortotalproject. 11. TherearenocommonstandardsforassumedriskinCMat-Risk. 12. Theconstructionmanagerrelationshipwithdistrictchangesduringtheprojectprocess. 13. Themethodcouldresultinpotentialdecreaseinthetotalnumberoftradecontractorbids becauseofaddedbidding,bondingandreportingrequirements. 14. Therearemorecontractsfordistricttoadminister,althoughmuchoftheworkisassignedto thecmat-risk. 15. Theconstructionmanagerisresponsibletoavoidnegativescheduleimpacts. 16. Ifthedistrictisrequesting,orwillberequesting,statefundingforprojectgreaterthan $1,000,000,itmustprequalifyallprimecontractors,includinggeneralengineeringcontractors orgeneralbuildingcontractors,andmechanical,electrical,andplumbingsubcontractors. E. SimpleStepstoImplement 1. DeterminewhetherCMat-Riskistheappropriatedeliverymethodforyourproject. 2. Developpreliminaryconstructionmanagerselectioncriteriawithemphasisontheabilityto developbidpackagesformultipletradesincludingexperiencewithdealingdirectlywith subcontractorsandsuppliers. 3. DevelopRFQorRFPtoallowyoutoselectthemostappropriatefirmsforaninterview andfinalselection(accmhasdevelopedmodelrfq/rfp,availableat www.accm.com). 4. ReachagreementonthefinalcontracttermsforBoardapproval. 5. Negotiateanappropriatecostfortheconstructionmanager sgeneralconditionsand appropriatefee. 6. Welcometheconstructionmanageraboardandbeginmeetingswithrelevantstafftoensure everyoneunderstandstheconstructionmanager sroleandresponsibilitiesfortrade contractors. 7. Selectdesignfirmwithcomplementaryexperienceindesigningprojectsformultipletrade packagesbyuseofphasingandothermechanisms. 8. Developthedesignusingtheskillofboththeconstructionmanagerandthedesignerand developthetradepackageworkdescriptions,biddingdocumentsandtradecontracts. 9. Bediligentaboutbiddingandawardingtradepackagespursuanttoallpublicworks requirements. 10. Assignthetradecontractstotheconstructionmanager. 11. Commenceconstruction. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page25

The following chart is an example of the relationships of the parties in Construction Manager at-risk scenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page26

Chapter7DESIGN-BUILD A. Description Design-Build(DB)isuniqueprojectdeliverymethodwherebythereissinglecontractwithoneentityto both design and construct the project. It is recently re-emerging, nationally and in California, as an alternativetodesign-bid-buildandotherdeliverymethods. Options typicaldbprojectutilizestwo-phaseprocurementprocess.thefirstphaseisprequalificationprocess, typically short-listingto three finalists. The second phase is the request for proposals, fromwhich best valueselectionprocessdeterminesthefirmwiththeproposalmostadvantageoustothedistrict. DB is an integrated process. The architect/engineer and general contractor are on same team from beginningtoend.therearetwoprimeplayers,thedistrictandthedesign-buildentity(dbe).thedbecan takeonmanyforms,suchascontractorled,architect/engineerled,orjointventure.buttypicallythedbe iscontractor-led.regardlessoftheformthedbetakes,thereisonlyonecontractbetweenthedistrictand DBE. DBmaybeusedoncomplicatedorsimpleprojects.Thetypeofcontroldistricthasovertheprojectvaries fromprojecttoprojectwithdbandcanbedictatedbythetermsoftherequestforproposal.pleasenote that after the contract is signed, the district has the control specifically addressed in the contract. DB requiresmoreinputbythedistrictupfront,butlessmanagementlateron. B. EnablingLegislation bestvalueselectionorlowestresponsiblebidisauthorizedbystatutefork-12andcommunitycolleges in California. Projects procured by the statutes to date have utilized the best value approach. DB competitionshaveemergedinthepublicsectorasmeansofachievingthebenefitsofdbwhileadhering totheneedtoawardconstructionprojectsoncompetitivebasis. EducationCode17250,etseq.specifiestheprovisionsforDBusebyK-12schooldistricts.Themethodmay beusedonallprojectsof$1millionorgreater*.educationcode81700,etseq.specifiestheprovisionsby community college districts, specifically Education Code 81702. The method may be used on projects of $2.5 million or greater in community colleges and contains certain requirements school districts and communitycollegedistrictsmustfollow. C. SkilledWorkforceProvisionsK-12Only(AB1358andSB693of2015)** Requiresprequalificationofallcontractorsandsubcontractorsofalltiersanddollaramounts. Definesskilledworkforceandrequires100%oftheworkforcetomeetthedefinition. Requires, commencing January 1, 2016, 30% of the skilled workforce to be graduates of Division of Apprenticeship Standards approved programs. Commencing January 1, 2018, the percentage increases by 10 percentage points year until 60% of the skilled workforce meet apprenticeshiprequirements. Requirestheskilledworkforceprovisionapplytoemployersateverytier. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page27

Requires monthly certification of compliance, with penalties for non-compliance, unless the projectisconductedunderprojectlaboragreement. *Revertsbackto$2.5millionin2025 **SunsetsJanuary1,2025 D. RelationshipoftheParties Simply stated, under DB, the district is responsible for the program, performance requirements, and financingoftheproject. The DBE is responsible for both design and construction. The architect is responsible for normal professional design responsibilities and is member of the DBE. The relationships of the parties in DB procurement may be viewed on two levels, practical and contractual. Practical relationships have to do with qualifying the DB team for procurement, as well as working relationships during the design and construction phases of the project. Contractual relationships relate to the contractual associations and relatedlegalobligationsoftheparties.theenablinglegislationdoesnotmakecleardistinctionbetween practicalandcontractualrelationships,nordoesitprecludethefollowingreasonabledescriptions.because the success of working relationships in DB project depends on an accurate understanding of roles and responsibilities,detaileddescriptionfollows. Design-BuildEntity TheDBEholdsthecontractwiththedistrict.Thismaybecorporation,partnership,jointventure,orother legalentity.inpracticalsense,andduringtheproposalphase,thedbemaybethoughtofasthedbteam, includingthegeneralcontractor,architect,sub-consultantsandsubcontractors. Unless the architect is the lead member or joint venture partner of the DBE, the architect of record contracts with the DBE. The architect may be in the lead position or partner, but is usually subconsultanttothegeneralcontractorofthedbe.thisdoesnotpreventthearchitectfrominteractingwith thedistrict.dsahasissuedira24whichnotesthatitispermissibleforthedesignerofrecordtobe responsibleforconstructionofallprovisionsoftheedcode17250or81700beingfollowed.thedsair A33cautionstheDBEtonotissueanyinstructiontodesignerswhichwouldimpairtheirabilitytoensure constructioncomplieswithdsaapproveddocumentsorbuildingcodes.italsoaffirmsthatthedesignersof record, even if under contract to DBE, must participate in selection, approval and supervision of inspectorsandlaboratories. ThearchitecthassimilarrelationshipwiththedistrictindevelopingthedesignasintraditionalDesign- Bid-Build with one notable exception. In typical DB project, the architect is directly responsible to the contractor,andindirectlyresponsibletothedistrict,formeetingthepre-establishedbudgetandtimeline. The DBE remains responsible to provide design that conforms to the district s stated requirements and applicablecodes. Subcontractors Trade contractors are under subcontract agreement to the DBE. Subcontractors may provide broad rangeofdesignandconstructionservicestothedbe. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page28

ConstructionManager district may elect to hire construction manager with DB expertise or use the district s employees as their staff. The construction manager may assist the district from the time of establishing the type of project procurement, through the selectionprocess and continue during projectdesign, constructionand close-out.thisrepresentativeisnotpartofthedbeandactsasanextensionofthedistrict sstaffandacts only for the district interest in this project. The construction manager can be provided decision-making authoritytobindthedistrict. E. PointsforConsideration 1. Teamworkispromotedbecausethegeneralcontractorandarchitectareonthesameteam. 2. districtcanaskforguaranteedcostduringdesign. 3. ThedesignriskshiftstotheDBE. 4. Thereissinglepointofresponsibilityforthedistrictwithfewerchanges. 5. OnlyoneRFQand/orRFPisrequiredfordesignandconstruction. 6. Onlyonecontractisneededforbothdesignandconstruction. 7. TheDBEmaybeselectedonstatutorybestvaluebasisratherthantraditionallowestresponsive responsiblebid. 8. Thedistrictneedstohavemoreinvolvementearlierinthedesignprocess,butlessinvolvement isneededafterdesignbegins. 9. Themethodhasthepotentialforfasterdelivery,particularlyforprototypedesigns. 10. DBrequiresnewlearningcurvefordistrictsandagencies. 11. TheownerandcriteriadesignerneedtocreateperformancestandardsbeforeDBEdesign begins. 12. ThereareuniquestatutoryrequirementsforselectingtheDBEandsubcontractors. 13. Theinsuranceandbondingdetailsneedthoughtandclarity. 14. Thereispotentialforlesscontrolbydistrictofdesignanddesigndetails. 15. Thereispoliticalresistanceamongthoseunfamiliarwiththemethod. F. SimpleStepstoImplement 1. DeterminewhetherDBistheappropriatedeliverymethodforyourproject. 2. Developdescriptionofthefacilityneedsandensurethatyourprojectandyourstaffwillmeet allofthestatutoryrequirementsforuseofthisdeliverymethod. 3. Hirecriteriaprofessionaltopreparepreliminarycriteriadocumentsuponwhichtobase facilityneeds. 4. DevelopandadoptthestatutoryfindingsandnoticeforuseofDB. 5. Developcriteriadocuments.Thecriteriaprofessional,staffandotherstakeholders,collaborate toprovidethoroughsetofprocurementdocuments(therfqandrfp).therfpmustset forththedistrict srequirementsfortheprojectindetail. 6. IdentifyqualifiedproposersutilizingquestionnairebasedontheDIRmodel (www.dir.ca.gov/dlsr/pqdb.doc).reviewalldistrictspecificqualifyingquestions,selection criteriaandweightingforconsistencywithstatutorycriteriapriortopublicrelease. 7. Short-listthemostappropriatefirmsforanRFP,aninterview,andfinalselection.Remain cognizantofthestatutoryrequirementsforbestvalueselectionpursuanttothisdelivery method. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page29

8. Useknowledgeablejudgingpaneltoconductseparateevaluationofcostandqualitative issues.theinterviewprovidesinsightandknowledgeoftheproposer steam,designand constructionplan,andabilitiestocompletetheprojectnotfoundinthewrittenproposals. 9. Negotiatetheservicesandfeesthatbestfityourneeds.Bepreparedtodiscusshowthe integrationofmanagement,designandconstructionserviceswillaffectdistrictdecisionmaking andensurethebestvalue. 10. ReachagreementonthefinalcontracttermsforBoardapproval. 11. WelcometheDBEaboardandbeginmeetingswithrelevantstafftoensureeveryone understandsthedbe sroleandresponsibilitiestothedistrict. 12. Designpursuanttocriteria. 13. Obtainallagencyapprovals. 14. Commenceconstruction. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin ThefollowingchartisanexampleoftherelationshipsofthepartiesinDBscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page30

ChapterDEVELOPERBUILT A. Description Developer Built is project delivery method whereby school district contracts with real estate developer to construct new school on property initially owned by the developer. The property and improvementswillsubsequentlybecomeownedbytheschooldistrict.frequently,developerbuiltschools areconstructedaspartofnewresidentialdevelopments,aspartofnegotiatedarrangementformeeting developerfeeresponsibilities.thiscanbewin-winsituationforboththedeveloperandthedistrict.the school can be better sequenced with residential development and the developer can take advantage of hiring subcontractors already working for them in the area. Developer Built schools can also be built on urbaninfillproperties,whetherornottheschoolispartoflargerinfilldevelopmentproject. WithDeveloperBuiltschools,thereisgenerallysinglepointofresponsibilitytothedistrictforboththe designandconstructionoftheschool.typicaldeveloperbuiltprojectisnegotiatedaspartoftheschool feesdiscussions.thedistrictallowsthedevelopertodesignandconstructthenewschoolfacilityaccording tosetofdistrictstandards.plansandspecificationsmustbeapprovedbythedsaandaresubjecttofield ActRequirements. In this type procurement, the developer decides how to contract for the design and construction. The schooldistrictmayhaveconstructionmanagertoassistthemintheconstructionprocess.thedeveloper may use variety of delivery models: Design-Bid-Build, Design-Build, CM at-risk, or Construction ManagementMulti-Prime. B. EnablingLegislation PursuanttoEducationCodeSection35160,commonlyknownasthe PermissiveEducationCode, schools aregivenbroadauthoritytocarryonactivitiesorprogramsaslongastheyarenototherwiseprohibitedby statuteorlaw.theprimarylimitationtodeveloperbuiltschoolarisesfromexpendituresthatwouldbe considered Public Works, and thus subject to competitive bidding under Public Contract Code Section 20111.ThetwoprimaryexceptionsutilizedforDeveloperBuiltschoolsare:1)settingforththeDeveloper Built school design and criteria as part of property purchase agreement, or 2) undertaking Lease- Leasebackarrangement. ThemostcommonDeveloperBuiltscenarioarisesfrommitigationconditionsduetodeveloperfeesfrom large development. As part of the agreement to pay developer fees, mitigation agreement may include conditionstothesaleofpropertyordedicationinlieuofdeveloperfeeswhichmayincludecompleted school. Since the construction of school is part of property sale or dedication, competitive bidding requirementsunderpubliccontractcodesection20111wouldnotapply. C. RelationshipoftheParties Under Developer Built, the district is responsible for the program, performance requirements, and final acceptanceoftheproject.thedeveloperisresponsiblefordesignandconstruction,usuallycarriedoutby thirdparties.thearchitectandengineersareresponsiblefornormalprofessionaldesignresponsibilities. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page31

Therelationshipsofthepartiesareasfollows: District-Developer:Thedeveloperistheentitythatholdsthecontractordevelopment agreementwiththedistrict.thismaybecorporation,partnership,jointventure,orotherlegal entity. Architect-DeveloperOption:Thearchitectmaybeconsultanttothedeveloper. Architect-DistrictOption:Thedistrictmayhirethearchitecttoprovidedesignthat conformstothedistrict sstatedrequirementsandapplicablecodes.thearchitect sproducts arepartofthecontractoranddistrictfinancialagreement. Contractor-Developer:Thecontractorsareusuallyhireddirectlybythedeveloperwhomay holdgeneralcontractor slicense.thedevelopermayalsohiregeneralcontractorwhowill hirethespecialtytradesubcontractors. D. PointsforConsideration 1. Themethodcanbringconstructioninputintodesign. 2. Itmayfacilitatevalueengineering. 3. Thedeveloper smonetarycontributionmaybegreaterthanstatutoryfees. 4. Designusuallyblendswithsurroundingcommunity. 5. Themethodcoulddelivertheschoolearlierfordistrictuse. 6. Thedistricthaslessresponsibilityandcontroloftheproject. E. SimpleStepstoImplement typicaldeveloperbuiltschoolprojectwillproceedasfollows: 1. DeterminewhetherDeveloperBuiltistheappropriatedeliverymethod. 2. Negotiateappropriatetermswiththerealestatedevelopertoaddressdeveloperfee responsibilities,districtinputondesignfeatures,responsibilitiesforstateagencyapprovalsand otherappropriatematters. 3. Developcriteriadocuments.Thedistrict,alongwiththeirconstructionmanager,willprovide completeandthoroughsetofcriteriadocumentstothedeveloper.educationspecifications, performanceorprescriptivespecifications,anddistrictstandardsshouldalsobedeveloped, alongwithillustrativedrawingsordiagrams. 4. Thedesignteamdevelopstheplansandspecifications. 5. ObtainallrequiredapprovalsfromtheDSAandothergoverningauthorities. 6. Thedeveloperhirescontractorstoconstructtheproject. 7. Commenceconstruction. 8. Occupancyandtitletransferoccurpercontractwithdeveloper. Formoreinformation,pleasereviewtheDSA sinterpretationsofregulations: www.dgs.ca.gov/dsa/resources/irmanual.aspx#admin AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page32

ThefollowingchartisanexampleoftherelationshipsofthepartiesinDeveloperBuiltscenario. AssociationofCaliforniaConstructionManagersUpdatedJanuary17,2017 Page33