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HAMILTON CONSTRUCTION COMPANY

HAMILTON CONSTRUCTION COMPANY. 2010 ODOT/AGC ANNUAL MEETING. Salem, Oregon. I-5 Willamette River Bridge Project. Construction Group, Inc. February 5, 2010. Willamette River Bridge Project Introduction Characteristics of CM/GC on WRB CM/GC as Envisioned CM/GC on WRB

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HAMILTON CONSTRUCTION COMPANY

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  1. HAMILTON CONSTRUCTION COMPANY 2010 ODOT/AGC ANNUAL MEETING Salem, Oregon I-5 Willamette River Bridge Project Construction Group, Inc. February 5, 2010

  2. Willamette River Bridge Project Introduction Characteristics of CM/GC on WRB CM/GC as Envisioned CM/GC on WRB Opportunities and Challenges from the Owner Perspective Challenges from CM/GC Perspective Contracting Process Risk Management Questions and Answers Presentation Outline

  3. I-5 Willamette River BridgesEugene and Springfield, OR

  4. Design-Bid-Build Design-Build OWNER OWNER OWNER BID DATA BID DATA CONTRACTOR CONTRACTOR CONTRACTOR ENGINEER ENGINEER ENGINEER CM/GC GMP Relationship of Trust

  5. Characteristics of CM/GC DESIGN CONSTRUCTION GMP Owner Engineer General Contractor Construction Manager

  6. Characteristics of WRB 2008 2010 2012 DESIGN CONSTRUCTION GMP Vision Challenge DESIGN CONSTRUCTION EARLY WORK AMENDMENTS

  7. Characteristics of WRB

  8. EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-EWA-gmp Different than the CM/GC model Accomplished our goals Unique growing pains The patient will flourish Characteristics of WRB

  9. Flexibility Ability to react to information and input Open collaboration through design and construction Owner in continuous lead of decision making Design is adapted to Contractor’s approach Decisions are based on real and complete information Cost and risk can be openly discussed Opportunities with CM/GC

  10. CM/GC Process Refinement Organizational Momentum or Inertia Understanding Cost Estimates Contracting Risk Management Challenges from Owner Perspective

  11. Contracting Process Need Decision Makers at Negotiating Table Defining Scope of Early Work Amendments Department of Justice involvement Time between conclusion of negotiations and NTP for work was not anticipated Challenges from CM/GC Perspective

  12. Contracting Process Lump Sum Items require change orders to account for quantity variations or design changes Dividing the work into packages results in multiple bid items for the same scope of work Multiple work packages result in multiple base prices for fuel, asphalt, and steel price escalation clauses Results in extra efforts for contract administration Challenges from CM/GC Perspective

  13. Risk Management What is our definition of Risk? Damage to Third Parties (Liability Insurance) Damage by Third Parties (Theft, vandalism, fire) Equipment Damage or Abuse (Self Inflicted Wounds) Quantity Over-runs or Under-runs Labor and Fringe Benefit Cost Escalations Risk Assessment exercise Challenges from CM/GC Perspective

  14. Risk Management Liability Insurance (Including Pollution Endorsements) Premiums based on total company exposure, not project exposure High Deductible results in Lower Premium Different contractors assess risk in different ways How best to account for cost of deductibles? Who manages Third Party Claims? Challenges from CM/GC Perspective

  15. Risk Management Casualty Insurance (Comprehensive) Covers Vandalism, Theft, Fire, Equipment Damage Premiums based on total company exposure, not individual project exposure High Deductibles reduce premium costs Individual Contractors assess risk differently – Business Decisions ODOT unfamiliar with level of costs shown in estimates Challenges from CM/GC Perspective

  16. Risk Management Equipment Damage or Abuse Typically not covered by insurance Examples include: Tires ruined by debris Forklifts backing into pickup trucks Excavator or Crane tails wing strikes Accidental damage difficult to estimate Challenges from CM/GC Perspective

  17. Risk Management Quantity Over-runs or Under-runs Original intent was that CM/GC bear this risk – all LS items Defining scope time consuming Earthwork and drainage quantities based on original DTM and A&E models CM/GC quantity verification can check A&E model, but not original DTM A&E incurs additional costs refining models Challenges from CM/GC Perspective

  18. WRB – CM/GC Summary • WRB departed from the CM/GC model • There are advantages to CM/GC style contracting • WRB is well down the road to being a successful project • Team members endorse CM/GC contracting • There is work to be done to refine the approach

  19. QUESTIONS AND ANSWERS

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