Kenneth J. Harms Vice President Kitchell, CEM

2. Kenneth J. Harms Vice President Kitchell, CEM Rona G. Rothenberg, FAIA, LEED Green Associate Senior Manager, Design & Construction Services, Judicial Branch Capital Program Office Judicial Council of California-Administrative Office of the Courts

3. Would you accept this deal? • Design a 103 story office building in 2 weeks • Build a $500M project in less than 14 months

4. CMAR has Been Around for a Very Long time! • Built in 1930 for $41M ($8M below budget) in 13 ½ months • $500M in today’s dollars

5. State and County Authority • SB 1732 – Trial Court Facilities Act of 2002 established the judicial branch authority for facilities, including funding and exemption from the Public Contract Code (PPC) • SB 328 (2013) extends CMAR as a project delivery method to all. (Government Code Section 20146)

6. “ Construction management at-risk is seen by many policy-makers and legislators as an innovative approach to public sector project delivery. The CM at risk delivery method is an alternative procurement process similar to long-standing private sector construction contracting. CM at-risk is a cost effective and time conscious alternative to the traditional design-bid-build process. ” -AIA Washington DC, 2005

7. “ A project delivery method is fundamentally a people method because people remain the most valuable construction resource. The success or failure of any delivery method depends upon the performance, trust, and cooperation among the parties. ” -AGC, Project Delivery Methods for Construction, 2011

8. CMAR Not Using Under Consideration

9. CMAR Public Owners in California CALIFORNIA STATE UNIVERSITY 23 Locations UNIVERSITY OF CALIFORNIA 10 locations Administrative Office of the Courts 58 Locations

10. CM at Risk Philosophy • Respect the role & responsibility of each team member • Develop trust & confidence based on performance • Exceed expectations OWNER Collaborative Team Approach A/E CM

11. Organization • Procurement and contract structure functional much like a private sector model of the negotiated contract. • Criteria for selection are qualifications based and include competitive bid with preconstruction services. Criteria for selection of the CMAR vary from one jurisdiction to another based on allowable and measurable factors. • In Preconstruction services, the contractor works slid-by-side with architect and owner in the design phase to analyze and select materials equipment based on cost, benefits and availability

12. CM at Risk vs. DBB/Lump Sum *Low bid not always final price

13. California SB 1732 • Trial Court Facilities Act of 2002 California Code of Regulations Government Code Sections 69202 et seq. • Establishes statutory authority for the State of California Judicial Branch responsibility for court facilities including initial funding source • Section 70374 provides an exemption from the Public Contracts Code, subject to appropriate contracting policies and procedures

14. Trail Court Facilities Program 2002 - Present • Court projects: 46 authorized since 2004 • Courtrooms: 1 to 71 • Sizes: 6,500 – 704,000 bgsf • Project Cost: $3M – $634M • Estimated Total:$5.5B • Funding: Cash, lease revenue bonds • Project Status in 2014: • 14 Completed • 12 in construction • 20 in design or site acquisition

15. California Judicial Branch Capital Program • Court Facilities Contracting Policies and Procedures, Adopted by the Judicial Council of California on 12/7/07 established multiple construction delivery methods, procedures for procurements of goods and services • Judicial Branch Contracting Manual, CA PCC Sections 9201-19210, became effective 10/1/2011 as an overriding contracting code with certain exemptions pertaining to capital facilities projects

16. CM at Risk Comparison

17. CM at Risk Lessons for Success • Owner involvement essential • Need clear definition of CM & A/E’s roles • Determines preferences for “Agency” vs. “At-Risk” contracts • Inform and educate your staff and superiors • Establish County internal processes to support CMAR • Establish a fundamental attitude toward a collaborative or advocacy approach to the “open-book” type of contract administration, non-adversarial with a spirit of trust about scope, cost and time

18. Benefits to the Owner • Owner chooses their builder on QBS • Project team works in a collaborative atmosphere • Greater schedule control/ flexibility • Greater budget control including re-bid on individual trades if necessary • Pre-qualify all trade contractors • Minimum three bids in each trade • Owner & Architect can participate in sub selection • Lowers potential for future change orders • Perceived as more friendly contracting approach by designers and subcontractors • “Open Book” financial approach

19. Benefits to the Architect • A/E maintains contractual relationship to Owner • Selection of contractor based on qualifications • Contract involvement during design phase • GMP prior to construction

20. Benefits to CMAR Firm • Selected on Best Value not Low Price • Involved in Design Phase • Collaboration vs. Confrontation • Prequalification of Major Trades • Manageable Risk • Known Site Conditions • Quality of Documents

21. CMAR Selection Process

22. CM at Risk Selection Process: RFQ Recommended Information • Basic Company Data • Firm History • Local Office • Primary Contact • Licensing Information • Form of Ownership • Designer/County Internal Processes to Support CMAR

23. CM at Risk Selection Process: RFQ’s Recommended Information • Insurance Requirements • Limits of Coverage • Company Rating • Completeness of Coverage • Bonding Capacity • Single Project Limit • Aggregate • Letter from Agent

24. CM at Risk Selection Process: RFQ’s Recommended Information • Safety Program • EMR • Safety Plan • Training • Quality Program • Management Information Systems and Technology

25. CM at Risk Selection Process: RFQ’s Recommended Information • Personnel Capability • Consultants • Experience in Delivery System and Project Type • Safety Record • Financial Information • References

26. CM at Risk Selection Process: RFQ’s Recommended Information • Detailed Information on Select Relevant Project Information- at least 3 similar • Team • Organization Chart • Resumes • % of Time Commitment • Management Plan • Approach to Managing the Project -Phasing, Bid Package Strategy, Site Logistics • Schedule

27. CM at Risk Selection Process: Discussion/Interviews • Provide for Adequate Time • 45 to 60 Minutes for Technical Presentation • 15 to 30 Minutes for Questions & Answers • Objective and Interested Selection Committee • Well Defined Selection Criteria and Scoring Information- Share It!

28. AOC Criteria for Contractor Selection and Short List, CMAR and Prequalified GC • Written SOQ’s which respond to specific requirements of the RFQ • SOQ’s ranked based on published criteria • Evaluations done by the PMS with Procurement team and Court, with architect as advisory • All submissions must be in on time!

29. Criteria for Contractor Selection Criteria for Selection per RFQ: • Financial Strength • 20 points • Demonstrated Experience of firm • 30 points • Demonstrated Experience and training of personnel • 30 points • Project Plan including • 20 points • Local Outreach Plan • 5 points Total scoring 100 points

30. AOC Contractor Selection Process CMAR Selection and Prequalified GC • Separate evaluation of RFQ and Interview per RFQ Criteria by point scoring CMAR Selection • Sealed fee (including total of preconstruction services and fee based on direct cost of work) opened: • $ Total price in dollars = Cost Per Unit of Quality Total quality points of Quality • Lowest Cost per Unit of Quality is responsive

31. CMAR Services

32. CM at Risk Design Phase Services • Management Plan • Budget Estimates • Value Engineering • Constructability Review • Bid Package Strategy • Master Schedule • Construction Schedule • Logistics Planning

33. CM at Risk Bid Process • Pre-Qualify Subcontractors • Advertise to Bid • Invitation/ Instructions to Bidders • Scope of Work Sheets • Pre-Bid Meeting • Public Bid Opening • Evaluate Bids • Owner Assigns Bids to CM at Risk

34. What is a GMP A Guaranteed Maximum Price (GMP) is the amount that the CM at Risk firm guarantees (the sum of the cost of the work and the CM’s fee) it will not exceed. The maximum is subject to additions and deductions, due to changes in the scope of work. All costs which exceed the GMP and are not approved by change order are paid by the CM.

35. CM at Risk-Preparation of the Preliminary GMP Total Direct Cost of Work $ CMAR Fee $ CMAR GC’s $ Project Contingency $ Allowances $ Total GMP $

36. Terms and Requirements which Affect the GMP • DVBE, MBE and related goals or requirements • OCIP or CCIP • Self Performance and terms of procurement • Labor agreements • Local outreach goals or requirements • Subcontractor listing • Deductive and additive alternates • Terms for administration of the retention

37. CM at Risk - GMP Changes to the GMP Errors & Omissions Change of Scope Unforeseen Conditions Including Force Majaeur CM at Risk Cost (GC’s + Fee + Precon Cost) + Subcontractors Bids = GMP + Contingency (3% controlled by CM)

38. CM at Risk Services Construction Phase • Field Management • Safety Program • Field Engineering • Quality Control Program • Field inspection Administration • Commissioning Services • Project Close Out Process • Warranty Period Service

39. Construction Phase • Construction of building and site features • Furniture installation • Quality Assurance • Inspections • Site visits by A&E and AOC OCCM Team • Commissioning of building systems

40. Occupancy • Court responsible for telephone and data equipment and servers • Court responsible for staff move-in • AOC post occupancy evaluation • Survey building users • Lessons learned • LEED “Silver” certification by the United States Green Building Council

41. New Hollister CourthouseSuperior Court of San Benito County Status: Bid Phase Construction Cost: $34M Architect: SmithGroup Contractor: Kitchell (CM@Risk)

42. Lessons Learned from AOC in CMAR • Careful consideration of qualifications • Meticulous checking of references and background • Unimpeachable qualification of low bids • Establish a basis to evaluate the preconstruction services as a condition for the construction contract • Watch out for the “lump sum low bid in disguise” delivered by some CMAR’s

43. Lessons Learned from CM’s • When is GMP Established? • Establishing the GC’s as a baseline allowance in the initial fee proposal • Ownership of Design Errors/ Omissions • Shared Savings Clauses • Contingency Ownership • Self-Perform Work – Yes or No?

44. Contract Key Features CMAR • Scope of work in preconstruction • Contractual obligation for the content of the architects’ documents • Appropriate development of bid packages and prequalification of the subs • Administration of the contractor’s contingency • Administration of the GMAX as an open book process • Re-qualification of the GC’s, consideration of supplemental conditions if needed • Proper field staffing and administration of field documentation

45. What’s Important to AOC • Compliance with design standards which anticipate well-designed, well-constructed buildings that consider long-term ownership costs and needs • Strong partnerships with our architects and contractors which are collaborative advocacies • Good service by you to us and the Courts • That you succeed and are profitable in giving us these things

46. CMAR Projects in California Cal Berkeley Memorial Stadium Fullerton State Steven Mihaylo Hall Fresno State Library Cal Poly Recreation Center Jacobs Medical Center AOC, Hollister Courthouse Marian Medical Center Cal Poly Recreation Center

47. Questions & Answers

48. SUMMARY • For more information:

49. Contact Kenneth J. Harms Vice President 2750 Gateway Oaks Drive, Suite 300 Sacramento, CA 95833 O: 916.648.9700/ C: 916.956.4059 Follow us:Facebook | Twitter | LinkedIn | KitchellProgress.com

50. For Information Judicial Branch Building Program • www.courts.ca.gov/programs-facilities.htm