Construction-Manager-As-Constructor Recognized as an Acceptable Project Delivery Method in Federal Contracts

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On December 19, 2019, the U.S. General Services Administration (“GSA”) issued a final rule which amends the General Services Administration Acquisition Regulation (“GSAR”) regarding project delivery methods for construction.[1] This rule, effective January 21, 2020, adopts the Construction-Manager-as-Constructor (“CMc”) project delivery method, one of the three most common construction services delivery methods. By adding the CMc delivery method in the GSAR as an alternative to design-bid-build and design-build, the Government is making it easier to comply with contracting requirements and to conduct business with the Government.

Specifically, the final rule amends 48 C.F.R. parts 536 and 552 to provide definitions and guidelines for the CMc project delivery method and to account for it in the parts governing solicitation provisions and contract clauses. As defined in the newly-added Code of Federal Regulations § 536.102, CMc is the “project delivery method where design and construction are contracted concurrently through two separate contracts and two separate contractors.”  Under the CMc delivery method, the Government awards a separate contract to a designer (i.e., architect-engineer contractor) and to a construction contractor (i.e., CMc contractor) before the design documents are complete. The Government retains the CMc contractor during design to work with the architect-engineer contractor to provide constructability reviews and cost estimating validation. The CMc’s design phase services are at a firm-fixed-price and the contract includes an option for construction at a guaranteed maximum price (“GMP”).  The amendments also provide a cost incentive through shared savings that are split between the CMc constructor and the Government under the CMc contract, which is intended to promote CMc constructor innovation and efficiencies.[2]

The aim of CMc is to create value by getting the contractor on board early on during the design phase to collaborate with the architect-engineer, the goal of which is to reduce cost growth, reduce schedule growth, and achieve administrative savings. During the design phase, the CMc contractor will provide constructability reviews and cost estimating validation. Additionally, under the CMc delivery method, construction can begin before the full completion of the design, which in theory reduces the total project schedule. It is long overdue that GSA recognized and formally adopted this delivery method for government construction.

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[1] General Services Administration Acquisition Regulation (GSAR); Adoption of Construction Project Delivery Method Involving Early Industry Engagement—Construction Manager as Constructor (CMc), 84 Fed. Reg. 69627 (December 19, 2019).
[2] See 48 C.F.R. § 536.7105-5.