Construction and the Law in Texas
The construction manager at-risk (CMAR) delivery method has become increasingly popular for constructing infrastructure projects in recent years, especially in the area water and wastewater azena. Public owners have chosen this delivery method because of the flexibility it provides for their projects. A CMAR assumes the risk for construction, rehabilitation, alteration or repair of a facility at the contracted price in the same manner as a general contractor, but also provides consultation to the owner regarding construction during and after the design of the facility. The use of the CMAR delivery method for public works is controlled by chapter 2267 of the Government Code. In this column, I will broadly explain the statutory procurement process so that interested parties will understand the legal framework public owners must follow. The owner may hire a CMAR in a onestep or two-step process that is outlined below. In addition to selecting a CMAR, the owner must select or designate a design professional who will be responsible for the design and preparation of construction documents. The owner’s design professional may not serve, either alone or in combination with another, as the CMAR unless the owner also chooses that design professional to act as CMAR under a separate selection process.
In the one-step selection process, the owner issues a Request for Proposals (RFP). This RFP includes general information on the project site, scope, schedule, selection criteria and relative weighting of selection criteria, estimated budget, time/place for receipt of the proposal, and any other information that would assist the owner in its selection of a CMAR.
In the one-step process, the owner may request, as part of the requested proposals, information regarding proposed fees and prices for the fulfillment of the general field conditions. Both qualifications and pricing are evaluated in one process.
In the two-step selection process, the owner first issues a Request for Qualifications (RF(y, which is identical to the RFP as described above, except that no cost information may be requested. In the second step, the owner selects a max- Eor Infrastructure Projects imum of five respondents to provide additional information. That information may include proposed fees and costs for the completion of the CMAR’s general field conditions.
In both the one- and two-step processes, the owner must evaluate and rank the offers according to its published selection criteria within 45 days of the responses having been opened. All proposals must be publicly opened and read aloud in their entirety. The owner then selects the proposal that offers the best value for the owner according to the published selection criteria and the ranking evaluation.
Following the selection of the respondent that offers the best value, the contract negotiation process begins. The owner negotiates first with the selected respondent. If the parties cannot reach an agreement, the owner must give formal written notice to that respondent that negotiations are ended. The owner may then negotiate with the next ranked respondent. This process continues until the owner reaches an agreement with a CMAR or negotiations with all ranked respondents end.
Once selected, the CMAR is required by statute to advertise for bids or proposals for subcontracted scopes of work. This is true for all major scopes. Minor scopes of work are free from the public procurement requirements. With respect to the procurement of subcontractors, the CMAR administers this process and selects the contract procurement method determined to provide the best value from among the various methods available to the owner. Essentially, the CMAR acts as the owner or the owner’s agent for this process. The CMAR may self-perform any part of the work as long as the CMAR presents its bid or proposal in the same manner as any trade contractor or subcontractor and the CMAR’s bid or proposal is determined by the owner to provide the best value.
Although the CMAR administers the process for subcontractor selection, the statute requires the CMAR, the owner and the design professional to review the proposals and select the subcontractors in a manner so as not to disclose the price of the bids or proposals to the public. Ultimately, however, all bids or proposals shall be made public once the related contract has been awarded or seven days after the final selection of bids, whichever is later.
The CMAR may recommend the acceptance of a particular bid or proposal from a subcontractor, but the owner has the ultimate right to require another bid be accepted. If the owner overrides the CMAR’s recommendation in selection of any trade contractor, it must compensate the CMAR for any changes in price, time, guaranteed maximum cost, or any additional cost or risk associated with the owner’s choice that differs from that recommended by the CMAR. The CMAR still contracts directly with the selected trade contractors and subcontractors. If any trade contractor or subcontractor defaults, the CMAR may complete the work, without advertising for completion bids, or may select a replacement trade contractor or subcontractor.
The use of the CMAR delivery method for public works is proving itself to be a beneficial and viable means for procurement. It is gaining in popularity for civil works because of the expertise and teaming that a CMAR can bring to a project. The fact that there are no limits on the use of CMAR, like there are for design-build, also makes it an attractive alternative to traditional design/bid build.
– As seen in the July 2013 Issue of Texas Contractor.