Wednesday, February 25, 2015

Avoiding Closed Door Selection of a GC/CM Contractor

GC/CM (General Contractor/Construction Manager) is one of three alternative public works contracting methods authorized in the State of Washington.  It is a form of what is generically known in the industry as Construction Manager at Risk.  Some states refer to it as CM/GC (Idaho and Oregon), or CM at Risk, or CMAR, or CMR.  There are differences in how this form of public works contracting is implemented. 

3 step selection process for GC/CM:  In Washington, the GC/CM is selected based on a combination of their scores for their proposal, their interview (not required by state law but highly recommended), and their price for their Percent Fee and Specified General Conditions costs.  At each stage of this three step process, a public agency may further reduce the number of firms who will move to the next step.  In some states, such as Idaho, price may not be used as part of the selection process for the CM/GC. 

Previous scores must be disclosed at bid opening:  By state law, finalist contractors who are asked to submit their price for the Percent Fee and Specified General Conditions must be told the number of points they have received for the proposal and interview at the bid opening for their prices.  RCW 39.10.360 (4) states (in part) the following: "At the time and place named, these bids must be publicly opened and read and the public body shall make all previous scoring available to the public."  This provision in the law is intended to prevent public agencies from modifying scores for the proposals and interviews in order to have their favored contractor win the most number of points.  The law is intended to ensure that the GC/CM selection process is a fair and transparent process.

Don't disclose scores early:  Some public agencies using the GC/CM process have made a different mistake and that is to publicly disclose the scores for the proposals and interviews to the finalist contractors before bids are due.  This practice enables contractors to determine how low their price must be to win the project.  This may result in a contractor bidding the project so low in order to get the highest number of points that there is not enough money in the project for them to make money, be successful, and complete the project.

Complexities of GC/CM:  GC/CM is a great project delivery tool, but it must be carefully developed and managed by the public agency.  Without being aware of some of these issues and how the different cost categories for GC/CM work, a public agency may be at a significant disadvantage in using this process. 

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