Is CMAR Right For Your AIP Project?
Design-Bid-Build (DBB) has long been the standard delivery system for Airport Improvement Program (AIP) projects. The DBB project delivery system is well established and understood by all parties engaged in the project. The Owner selects and contracts with a Designer who completes the plans and specifications for the work and frequently assists the Owner to administer and observe the construction. The Owner competitively bids the project and awards a construction contract to the responsible bidder who submits the lowest responsive bid. Unfortunately, sometimes the “responsible” low bidder turns out not as responsible as the Owner had hoped. Some Owners, particularly state and local governments, are turning to the Construction Manager At Risk (CMAR) delivery system to avoid this problem. Would CMAR work for your next airport project?
Under CMAR, the Owner engages a Designer but also selects a CMAR, based on qualifications, who supports the design process with document and constructability reviews, cost estimating, and scheduling; and then converts to a general contractor during construction. The CMAR may self-perform some of the work, but most of the project is competitively bid to subcontractors.
DBB routinely provides the highest quality construction at the lowest price, but this delivery system requires significant and diligent involvement by the Owner during construction to achieve those results. CMAR procurement requires less Owner participation during construction. DBB procurement requires the contractor to deliver the quality, materials and finishes described in the contract documents. In contrast, the CMAR may make capital cost reduction decisions that affect project functionality, maintainability, operating costs, or life span; the Owner does not have full control of those decisions in a CMAR procurement. Successful CMAR procurement relies on mutual trust and shared interests between Owner and CMAR.
CMAR delivery may offer the advantage of fewer change orders, but only to the extent that contingencies and allowances for those changes are included in the Guaranteed Maximum Price (GMP) construction contract. (Note: contingencies and allowances may not be eligible for AIP funding.) CMAR procurement does offer an opportunity to accelerate the project schedule.
CMAR procurement rules and guidance are evolving rapidly. 49 CFR 18.36 was rescinded and replaced by updated 2 CFR 200 Subpart D – Post Federal Awards. Advisory Circular (AC) 150/5100-14E Change 1 was issued 9/25/15 and incorporates the latest federal rules applicable to AIP projects. Appendix G discusses Alternative Project Delivery Systems, including CMAR. FAA Order 5100.38 D (AIP Handbook) was issued 9/30/14; it includes some procedures that have been further clarified in AC 150/5100-14E Change 1.
An Airport Sponsor must satisfy several important requirements if you choose to use CMAR:
- The FAA Airports District Office (ADO) must approve CMAR for your project in advance of the project starting. Appendix G.2 of the AC lists eight items that must be documented in your request for ADO approval.
- You must follow all applicable state and local laws, but also include the required Federal contract clauses in the procurement documents. Most states now allow CMAR procurement, but the prerequisites for approval and the procurement rules vary from state to state.
- You must use your own documented procurement procedures which reflect applicable state, local and tribal laws and regulations. The documentation should include detailed procedures for CMAR solicitation, selection, contracting and dispute resolution.
- You must maintain historical records of the procurement, including the rationale to use the CMAR delivery system and selection of the contract type. Two excellent references are “ACRP Report 21” and “Airport Owner’s Guide to Project Delivery Systems”. Both are readily available on the internet. Although prepared before the latest changes to the regulatory documents, they offer solid guidance. The delivery system selection method described in ACRP Report 21 results in a report that would clearly document the CMAR delivery system selection and justify ADO approval.
Remember that even with ADO approval for CMAR procurement, the Airport Sponsor is ultimately responsible for compliance with all associated federal, state and grant regulations. Be careful to ensure that all expectations are clearly written into the project contracts.
Selecting and justifying the CMAR delivery system is just the first step in a successful CMAR project. Soliciting and selecting the CMAR, negotiating contract terms and pricing and administering the CMAR contracts require significant Owner involvement and rigorous adherence to federal and state procurement rules. Any Airport Sponsor who does not have experienced procurement professionals on staff should consider engaging a consultant who is familiar with federal and state procurement laws and regulations to guide the Sponsor through the CMAR procurement process.