State moves to new construction program: construction-manager-at-risk contract guarantees maximum price and provides other benefits to a public client.

Under contract with the State of Alaska Department of Transportation and Public Facilities, RIM Architects is moving forward with the design of upgrade projects to Anchorage's Ted Stevens International Airport. Joining the State and RIM on the project are construction contractor PCL Construction Services Inc., a Denver-based contractor; and the overall contract program manager, Parsons Brinkerhoff, a worldwide engineering and construction-management firm.

"The State has chosen to do this project under a construction-manager-at-risk contract," said James Dougherty, a principle at RIM and the architectural project manager. "This is one of the State's first contracts using this delivery method."

The CM-at-Risk method lets a public client, such as the State of Alaska, select the construction manager/contractor before the design phase is complete. The rest of the operation is then centralized under a single contract, and the architect and CM work together to deliver the project at a guaranteed maximum price.

"The CM-at-Risk has to guarantee the cost of the airport project before construction starts," Dougherty said, "and they're responsible for turning in a successful project for that price. It's a new way of doing things in the public sector, and takes some new thinking."

David Eberle, the airport's director of construction, said he'd researched the process after construction of Concourse C. Peter Kiewit Construction Company, the general contractor for Concourse C, had suggested the state consider the CM-at-Risk process for future work. Kiewit had worked at Phoenix's Sky Harbor Airport, where the City of Phoenix had used the CM-at-Risk process.

"I talked to the City of Phoenix, and they'd had a lot of success with the process," Eberle said. "It gets the contractor on board, and provides early feedback on design and costs. That lets the designer know earlier in the process if they need to scale back, and it gives the owner more end-result control."

During his research, Eberle found the Anchorage School District had used the CM-at-Risk process locally. After talking to Mike Price, the school district's construction manager, Eberle asked Price to participate on the contract-selection committee.

"There are two phases," Eberle explained. "We signed a contract with PCL for pre construction services a little more than a year ago to review the design, do the cost estimating, and prepare construction sequencing plans. It's a simple fee-for-services contract, and we only pay for the work completed. Now, we're gearing up for actual construction, and will enter into a contract with PCL as the CM-at-Risk contractor.

"One of the benefits of this two-step process is that we can terminate the first contract and find another contractor for construction if we're not working well together," Eberle said.

Eberle said PCL was scheduled to get subcontractor quotes in early October and put together an overall maximum price. After that, the State would enter into a contract and issue a notice to proceed in early November.

Dougherty added he believed all contracts for the initial phase should be signed by year-end, with visible signs of construction during the winter.

"At the same time PCL is putting together their maximum price, we're doing our own independent estimate," Eberle said.

According to Eberle, the first phase of the project will move ahead immediately, and will make improvements to the A Concourse in preparation for closing the B Concourse for retrofitting and upgrades. The first phase of work will also initiate structural upgrades to the terminal building and include, among other work, the replacement of the upper and lower landside window walls and entry vestibules. The second phase will begin in the summer of 2007, and will involve the B Concourse and the ticket lobby.

"Once these are complete, and if there's available funding, we'll determine the level of upgrades to Concourse A," Eberle said.

"At the same time, we'll be going into a new operating agreement with the airlines. The current agreement expires in early 2007, and the airlines are due to tell us what their space requirements are in the new agreement," Eberle said.

In the meantime, the State is moving forward with the CM-at-Risk contract process, and is looking forward to a successfully completed upgrade.

"The idea is that you're a team striving to reach a common goal," Dougherty said. "This is the direction in which the construction industry is moving today. It's 21st century contracting to develop better facilities at better cost."

Eberle said he feels the process is working just the way it's supposed to work.