Ohio construction reform
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Ohio School Facilities Commission. Ohio Construction Reform. Documentation of the Guaranteed Maximum Price. Documentation of the Guaranteed Maximum Price. What is it? Who determines it? How do you document it? When and where does it happen?. The Guaranteed Maximum Price. What is It?.

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Ohio construction reform

Ohio School Facilities Commission

Ohio Construction Reform

Documentation of the Guaranteed Maximum Price


Ohio construction reform

Documentation of the Guaranteed Maximum Price

  • What is it?

  • Who determines it?

  • How do you document it?

  • When and where does it happen?


The guaranteed maximum price

The Guaranteed Maximum Price

What is It?


Ohio construction reform

What is it?

  • What is the Guaranteed Maximum Price (GMP)?

  • G

  • In the CM at Risk (CMR) Delivery Method, the GMP is composed of a CM fee, the direct cost of the work, overhead, profit, and contingency.

  • In the Design-Build (DB) Delivery Method, the GMP is composed of a design fee, a CM fee, the direct cost of the work, overhead, profit, and contingency.


Ohio construction reform

What is it?

  • The Guaranteed Maximum Price (GMP) is NOT:

  • G

  • ● Guaranteed

  • Why not?

  • Things Change! Such as Unforeseen Conditions and Errors & Omissions

  • What do we have to do?

  • Minimize risk associated with changes. Clear identification of scope.

● Maximum


Ohio construction reform

What is it?

Current Model

Soft Costs Include:Hard Costs Include:

■ A/E Fees, CM Fees ■ General Trades, HVAC

■ Cx Agent, MPA ■ Plumbing, Electrical

■ Printing, Advertising, Permit Fees ■ Fire Protection, Technology

■ Third Party Consultants ■ Loose Furnishings

▪ Surveyor

▪ Abatement Consultant

▪ Geo-Technical

▪ Traffic Study Engineer

▪ Phase I Engineer

Master Facility Plan Budget

Soft Costs

Soft Cont.

Hard Costs

Hard Cont.


Ohio construction reform

What is it?

GMP Model

Owner Reserve

Owner Costs Include:GMP Costs Include:

■ A/E or C-AE Fees, PCC Fees ■ CMR (or DB) Fees

■ Cx Agent, MPA ■ General Trades, HVAC

■ Printing, Advertising, Permit Fees ■ Plumbing, Electrical

■ Third Party Consultants ■ Fire Protection, Technology

■ Owner Reserve ■ Loose Furnishings

■ CMR (or DB) contingency

Master Facility Plan Budget

Soft Costs

Soft Cont.

Hard Costs

Hard Cont.

A/E or C-AE

PCC

Other

Soft

Cont.

GMP


Ohio construction reform

What is it?

Unforeseen Conditions, E&Os for CMR only

Coordination Issues, Re-Work, Acceleration, E&Os for DB only

LFI $

What comes out of Owner’s Reserve and what comes out of Contingency?

CMR (or DB)

Contingency

Owner’s Reserve


Ohio construction reform

What is it?

Example One—Bid Day Savings—Does it belong to Owner or CMR/DB?

GMP

Owners’ Reserve

The Work

“Bricks ‘n Sticks” + General

Conditions

Fee, Overhead, Profit

CMR (or DB)

Contingency

$100 K

in bid day savings


Ohio construction reform

What is it?

Example Two—No Bid Day Savings—Owner wants Alternates

GMP

Owners’ Reserve

Fee, Overhead, Profit

CMR (or DB)

Contingency

“The Work”

Bricks ‘n Sticks, + General

Conditions


Who determines it

The Guaranteed Maximum Price

Who Determines It?


Ohio construction reform

Who Determines It?

  • The Players:

  • OSFC: PA, Planner, OSFC Legal Counsel, and possibly

  • Team Leader, Deputy Chief of Projects

  • District: Superintendent, Treasurer, District Legal Counsel

  • Owner Consultants: A/E or C-A/E (depending on delivery model), Project Cost Consultant (PCC)

  • CMR or DB: Project Executive, Project Manager, AOR (for DB), Design Assist Contractor (DAC)


Ohio construction reform

Who Determines It?

  • Their Roles:

  • PA provides overall coordination and management of the project and the GMP process.

  • Planner assists in scope review.

  • OSFC Legal Counsel, Chiefs, and Team Leader provide leadership and support.

  • Superintendent and Treasurer provide input on project scope and LFI budget and scope.


Ohio construction reform

Who Determines It?

  • Their Roles:

  • A/E (for CMR model) provides basis documents.

  • C-A/E (for DB model) provides basis documents for design intent.

  • Project Cost Consultant (PCC) assists in review of GMP estimate and provides clarifications.


Ohio construction reform

Who Determines It?

  • Their Roles:

  • CMR or DB communicates assumptions, provides estimate, schedule, and work packaging plans. The Project Executive and Project Manager provide oversight and coordination for process.

  • AOR(for DB) provides basis documents.

  • Design Assist Contractor (DAC) supports design and estimating.


Ohio construction reform

The Guaranteed Maximum Price

How Do You Document It?


Ohio construction reform

How Do You Document It?

  • The Agreement and the Amendment

  • The Agreement is executed at the onset of the project (very early in pre-construction). It includes dollars associated with the CMR or DB fee. It is based on the MFP budget.

  • The Amendment is executed once the GMP is determined and includes the following:


Ohio construction reform

How Do You Document It?

  • Articles of the Amendment—

  • I. Contract Sum and Related Items

    • Fee

    • Cost of Work

  • Contract Times

    • Milestones

    • Date of Commencement

    • Liquidated Damages


Ohio construction reform

How Do You Document It?

  • Articles of the Amendment (cont.)—

  • List of Exhibits

    • Basis Documents

      • DD Phase drawings, specifications, and other documents

    • Assumptions and Clarifications

      • List used by CM to prepare the GMP

    • Project Estimate

      • Detailed estimate that 1) allocates cost of each item of the work to labor and materials for each trade, and…


Ohio construction reform

How Do You Document It?

  • Articles of the Amendment (cont.)—

  • List of Exhibits

    • Project Estimate (cont)

      • …2) does not contain a lump-sum estimate for any item other than the CM fee and CM contingency.

    • Project Schedule

    • Construction Schedule

    • Subcontractor Work

      • Detailed scope of work for each anticipated subcontract


Ohio construction reform

How Do You Document It?

  • Articles of the Amendment (cont.)—

  • List of Exhibits

    • Self-Performed Work

      • Detailed scope of work for all trade work the CM proposes to self-perform

    • Allowances

      • Includes values and statement of basis

    • Unit Prices

    • Alternates


When and where does it happen

The Guaranteed Maximum Price

When and Where Does It Happen?


Ohio construction reform

When and Where Does It Happen?

  • “Selecting the point in time where a GMP is established is an extremely important decision.”

  • The guaranteed maximum price should be finalized by the end of the design development phase.

  • The process will include the submission of the required documents by the CMR or DB, followed by a review period by the owners.

  • The final GMP will be negotiated at a partnering session facilitated by a third-party.


Ohio construction reform

When and Where Does It Happen?

Design Timeline

POR

SD

DD

CD

C-AE

DB AOR

100%

Design

Intent

Bid/Award

Contracts

GMP Process

PCC

Finalize GMP

@ Facilitated Session


Ohio construction reform

When and Where Does It Happen?

Changes Happen

DB

POR

SD

DD

CD

C-AE

AOR

GMP

PCC


Ohio construction reform

When and Where Does It Happen?

Phased GMP

Building

One GMP

Building

Two GMP

Total MFP

GMP

Early Site Package

GMP


Ohio construction reform

Documentation of the Guaranteed Maximum Price

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