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HomeMy WebLinkAboutAgenda - 12-02-2024; 8-e - Authorization to Utilize Construction Manager at Risk for the Orange County Crisis Diversion Facility Project 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 2, 2024 Action Agenda Item No. 8-e SUBJECT: Authorization to Utilize Construction Manager at Risk for the Orange County Crisis Diversion Facility Project DEPARTMENT: Asset Management Services ATTACHMENT(S): INFORMATION CONTACT: Construction Manager at Risk (CMAR) Connor Wilkins, Asset Management Delivery Method Services Assistant Director, 919- 245-2689 Alan Dorman, Asset Management Services Director, 919-245-2627 PURPOSE: To authorize the use of the Construction Manager at Risk (CMAR) project delivery method for the Orange County Crisis Diversion Facility construction project. BACKGROUND: Orange County is currently in the process of purchasing property to build a Crisis Diversion Facility, a facility designed to divert individuals experiencing a behavioral health crisis from hospital emergency departments and the County's Detention Center by offering: 1) behavioral health urgent care services for assessment, stabilization, treatment, and aftercare planning for patients 4 years old and older; and 2) facility-based crisis services for adults for longer-term treatment. At the September 17, 2024 Business meeting, the Orange County Board of Commissioners approved a proposal from CPL to conduct preliminary and schematic-level design and analysis services for developing the Crisis Diversion Facility. In order to complete the construction of the Crisis Diversion Facility, the Board has to authorize the use of a project delivery method. For large-scale construction projects, the four main project delivery methods are: a) Design Bid Build with Separate Prime Bidding b) Design Bid Build with Single Prime Bidding c) Construction Management at Risk (CMAR) d) Design Build Staff is recommending the use of a Construction Manager at Risk. Under this method of contracting, the owner contracts directly with the designer and the CMAR, all of whom are selected based on their demonstrated qualifications to design and construct the Crisis Diversion Facility. The objective will be to engage with the CMAR as the schematic and developmental design of the project begins in earnest to take advantage of scope and related cost information provided by the CMAR. The CMAR method was used to develop and construct the Bonnie B. Davis 2 Environmental and Agricultural Center, the Orange County Detention Center, and the County's Parks Operation Base which were all delivered on schedule and budget. The project program is developed as a collaborative partnership (County, Designer, CMAR) through a pre-construction phase process and, when pricing is ultimately agreed to by the parties, the CMAR establishes a Guaranteed Maximum Price ("GMP") which becomes the basis of the CMAR contract which binds the project to the agreed upon price unless Orange County changes the scope of the project in some manner. This method allows for significant, collaborative cost analysis with the full benefit of the CMAR during the pre-construction phase to analyze cost- benefit factors and appropriate value engineering throughout the design. Once the Construction Management at Risk procurement process is authorized, a Request for Qualifications (RFQ) will be issued by December 31, 2024 to obtain CMAR services. The RFQ will allow for the County to enter into a contract with a qualified CMAR to construct the Crisis Diversion Facility. After the closing of the RFQ process, a recommended firm will be presented to the Board in March 2025 for contract approval. Prior to the BOCC's authorization to construct the Crisis Diversion Facility, staff will present a Guaranteed Maximum Price ("GMP") (featuring several construction alternates that will assist in the flexibility of the project's construction) that the CMAR will commit to within the Agreement. In accordance with North Carolina General Statute (NCGS) 143-128.1(e), staff recommends that the Board make a determination which allows the utilization of CMAR services. Staff has determined that such utilization is in the best interest of the project, as the County has compared the advantages and disadvantages of using the construction management at risk method for the given project in lieu of other delivery methods identified in NCGS 143-128(a)(1) through NCGS 143-128(a1)(3). FINANCIAL IMPACT: Although there is not a specific financial impact with this item, the FY 2024- 34 Capital Investment Plan (CIP) recommended $22,098,484 for the construction of the Crisis Diversion Facility, along with $557,711 for furniture, fixtures, and equipment. A total of$1,100,000 was previously approved for the purchase of the property this fiscal year, and $2,047,155 was approved last fiscal year for professional design services. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 2: HEALTHY COMMUNITY OBJECTIVE 2. Expand access to quality, affordable healthcare services. (e.g., Crisis Diversion facility, Medicaid expansion, crisis response, healthy living campaign). RECOMMENDATION(S): The Manager recommends that the Board authorize the use of the Construction Manager at Risk process for the Orange County Crisis Diversion Facility construction project. 3 The following information about the Construction Manager at Risk process for procurement and building construction was compiled from Campbell County, Wyoming, and Procore, a leading project management software company. Construction Manager at Risk(CMAR)Delivery Method Background The Construction Manager at Risk(CMAR) is a delivery method which entails a commitment by the Construction Manager(CM) to deliver the project within a Guaranteed Maximum Price (GMP)which is based on the construction documents and specifications at the time of the GMP plus any reasonably inferred items or tasks. The CMAR provides professional services and acts as a consultant to the owner in the design development and construction phases. Often times, the CMAR also provides some of the actual construction of the project depending on the availability of bidders and the expertise the company has. In addition to acting in the owner's interest, the CMAR must manage and control construction costs to not exceed the GMP because contractually any costs exceeding the GMP that are not change orders are the financial liability of the CMAR. Generally, the CMAR will give the Owner a GMP after bidding the project. Included in this GMP is a contingency line item to take care of bid overages, reasonably inferred items and other project related items that may arise during construction. Owner Benefits This delivery method has several unique benefits to the Owner,including: • A higher level of cost control from the start. A successful CMAR project would involve hiring the CMAR prior to the architect and having the CMAR help select the architect. During the design process,the CMAR provides cost estimates at contractually established points. If these cost estimates are in line with the established budget, the architect then moves on to the next phase of design. If not, the CMAR, Owner and Architect assess the cost estimate and make design changes to bring the design back into budget alignment. This process ensures budget success. • The CMAR is an Owner advocate and manages the project with the Owner's best interest in mind at all times. • The CMAR takes burden off of the Owner in managing and coordinating the project. • The Owner's risk is limited by the CMAR process providing the construction documents are complete and proper allowances and contingencies are built into the GMP. • Constructability and value to the Owner are afforded by the Value Engineering expertise brought to the process by the CMAR. • CMAR services are professional services like architectural, engineering, surveying, etc. The CMAR's main purpose is not to construct the project,but to manage the construction 4 of the project. This management focus adds much value to the project. It is important to keep in mind that an adverse CMAR-Architect relationship can lead to some of the same issues that arise in a design-bid-build delivery method. By having the CMAR help select the Architect, the risk of an adverse relationship is minimized. As with any delivery method, incomplete and/or inaccurate construction drawings will result in change orders. The misunderstanding associated with the GMP is that this maximum price will not be exceeded in any case. It is important to understand that the GMP is based on the plans and specifications at the time of the GMP with some reasonable assumptions made and a reasonable contingency included. Major changes in scope will result in a change order, which increases the GMP contract. In addition, any Owner changes to the project and scope require a change order. By requiring the documents by 100% complete prior to receiving the GMP, the risk of unanticipated change orders are minimized.