At-risk management allows owner, designer, and builder to collaborate during preconstruction and construction. The construction manager acts as general contractor, coordinating all of the work to ensure the project is completed within a certain time frame and budget. Unlike design-build and design-bid-build, any savings resulting from efficient completion reverts to the owner in accordance with the contract.
By working with design engineers during the planning phase, the manager sequences construction so utility service lines are relocated in a manner and within a time frame that works for all parties. Similarly, the manager identifies which right-of-way acquisitions are likely to occur most quickly and prioritizes acquisition and construction schedules to focus on those areas first.
“This system produced a much more efficient schedule than we would've had using conventional project delivery,” says HDR Engineering Project Manager Ed Colon, PE, one of several consultants retained to help manage the program. “By allowing us to segment construction based on right-of-way acquisition, we can start clearing land and begin basic construction as soon as an area is acquired instead of waiting for acquisitions for the whole project. We save by being able to go to bid while still in design, and eliminate time spent procuring construction contracts.”
Similarly, permitting discussions with the South Florida Water Management District and U.S. Army Corps of Engineers began during the conceptual design phase, not when plans were 60% to 90% complete. Overall, Hostetler estimates the process cuts design time by half, and shaves nearly a year off construction.
After a project is advertised and bid, the construction manager spends 30 to 60 days going through plans with the subcontractors and establishing a budget, then provides the owner with a guaranteed maximum price. At this point, the owner may elect to proceed or revisit options to meet a certain budget. Fees are based on established percentages of total project cost. The owner's not at risk because the firm legally holds all subcontractor contracts.
In Osceola County, approximately seven projects that are in design will be under construction by the end of the year. Four of the original 11 proposed construction starts are on hold because of Florida's overall economic decline.
“We're starting to see the fruits of all the time and energy and frustration that went into this process,” says Principal Project Manager Jason Boulnois, PE, who oversees the construction end of projects with Balfour Beatty while Hostetler oversees design aspects. “Under the old system, we would've broken ground on only two or three projects by now.”
Hostetler adds: “We've also developed relationships with our local utilities that we never would've been able to develop in the past.”
Balfour Beatty advertised 36 different bid packages on the first and largest project — a $50 million effort to widen 7.5 miles of two-lane road into four lanes plus 4-foot bicycle lanes, an 8-foot multiuse path on one side and a 6-foot sidewalk on the other, and a 46-foot depressed median with grassed shoulders — before awarding one that will save $1 million on construction. Construction began in July 2008 and is scheduled to be completed in early summer 2011.
“We're getting 90% local participation in some cases,” says Boulnois. “Our goal is to get the money back into the community.” Department employees are present when bids are opened, and all information is available to bidders as before. Once subcontractors got over their initial confusion over where to look — on Balfour Beatty's Web site rather than the county's — for requests for proposals and formal bids, their concern that the process would eliminate transparency dissipated. At-risk management uses open-book accounting, so results become public after the construction manager confirms that the project's scope is complete and the county has accepted the guaranteed maximum price proposal.