 FSU Online Policies & Procedures
OP-B-11-D2 ADMINISTRATION OF CONSTRUCTION MANAGER AGREEMENTS
SPECIFIC AUTHORITY
Sections 240.209(3)(p), 1001.74, 1013.46, F. S.
OBJECTIVE
To establish procedures for the administration of construction manager
agreements, including negotiation, contracting and payments.
OVERVIEW
This document describes contract administration procedures for
Construction Manager agreements, including negotiations for
pre-construction services and for the Guaranteed Maximum Price;
amendments and change orders; approval of pay requests; subcontractor
pre-qualification and bidding.
A. SCHEDULING THE NEGOTIATION
Upon approval of the construction manager selection as described in FSU
Online Policies and Procedure OP-B-11-C2, Construction Managers
Selection Process, the Facilities Design and Construction Office (FDC)
schedules the negotiation meeting with representatives of the
construction manager. The FDC transmits to the construction manager the
standard Agreement between Owner and Construction Manager, the Project
Manual, the Supplementary General Conditions for Construction Manager
Agreements, applicable Supplements to the Project Manual and the link
to download this procedure document. FDC directs the construction
manager to prepare a proposal for pre-construction services in
accordance with the "Guidelines for Construction Managers for the
Preparation of Proposals for Pre-construction Services" (forms section).
B. NEGOTIATION FOR PRE-CONSTRUCTION SERVICES
Representatives of the FDC meet with the construction manager to negotiate the pre-construction portion of the contract.
If negotiations with the first ranked firm are unsuccessful,
negotiations with that firm may be terminated and negotiations may be
commenced with the second ranked firm. If negotiations with the second
ranked firm are unsuccessful, the negotiations with that firm may be
terminated and begun with the third ranked firm. If negotiations with
the third ranked firm are unsuccessful, negotiations with the third
ranked firm may be terminated and additional firms from the original
pool may be selected or the project may be re-advertised. At any time
during the negotiation process, negotiations may be terminated entirely
and the use of construction management for the project may be
reconsidered.
- 1. Preparation of agreement
- Upon
completion of successful negotiations, the FDC prepares the Agreement
between Owner and Construction Manager. After approval by the
University General Counsel, the FDC transmits five (5) copies of the
agreement to the construction manager for execution.
-
- 2. Distribution of executed agreement
- Upon
final execution of the agreement by the University President, copies of
the agreement are distributed as follows: the construction manager, the
FDC, the University Accounting Office (2) and the architect/engineer.
-
- 3. Pre-construction agreement file
- The
FDC maintains a pre-construction agreement file containing: the
pre-construction agreement, the pre-construction fee proposal and any
additional information related to the pre-construction negotiation.
C. NEGOTIATION OF GUARANTEED MAXIMUM PRICE (GMP)
When
it is time for the construction manager to develop the GMP proposal,
the project manager directs the construction manager to prepare it in
accordance with the "Guidelines for Construction Managers for the
Preparation of Guaranteed Maximum Price Proposals" (forms section).
After the construction manager develops the GMP, the FDC reviews the
proposal. The project manager ensures that the architect/engineer
receives a copy for review and obtains a written recommendation from
the architect/engineer that the GMP be accepted. When all parties have
reviewed the GMP proposal, the project manager schedules the
negotiation meeting.
If negotiations regarding the terms of the GMP proposal are
unsuccessful, the FDC may terminate negotiations with that firm and
begin negotiations with the second ranked firm from the original
selection. If negotiations with the second ranked firm are
unsuccessful, the FDC may terminate negotiations with that firm and
begin negotiations with the third ranked firm from the original
selection. If negotiations with the third ranked firm are unsuccessful,
the FDC may terminate negotiations with the third ranked firm and may
select additional firms from the original pool or re-advertise the
project. At any time during the negotiation process, the FDC may
terminate negotiations entirely and reconsider the use of construction
management for the project or may re-advertise the project.
D. PREPARATION OF THE GMP AMENDMENT
Upon successful negotiation of the GMP, the FDC prepares the GMP
amendment to the Agreement between Owner and Construction Manager. The
amendment shall establish the GMP amount, the number of calendar days
for completion and the liquidated damages amount (see FSU Online
Policies and Procedures OP-B-11-E, Establishment of Construction
Contract Time and Liquidated Damages) and shall reference any
applicable supplements to the Project Manual. The FDC also prepares the
Performance Bond and the Labor and Materials Payment Bond.
E. TRANSMITTAL OF AMENDMENT TO CONSTRUCTION MANAGER
After approval by the University General Counsel, the FDC transmits
five (5) copies of the amendment to the construction manager, together
with five (5) copies each of the Performance Bond and Labor and
Materials Payment Bond, for execution. An example transmittal letter is
included in the forms section.
F. REVIEW OF INSURANCE ISSUES
Upon receipt of the signed amendment, insurance certificates and bonds
from the construction manager, the FDC will provide the Insurance
Consultant (if such services are being provided on the project) with
insurance documents for review. If an Insurance Consultant is not
providing service on the project, the FDC reviews the bonds and
insurance for compliance with the specifications.
G. DISTRIBUTION OF EXECUTED GMP AMENDMENT
Upon final execution of the GMP amendment by the University President,
the amendment is distributed (each with a set of bonds), as follows:
the construction manager, the FDC, the University Accounting Office,
(2) and the architect/engineer.
H. GMP FILE
The FDC maintains a GMP file containing: the executed GMP amendment,
the Performance and Payment Bonds, the insurance certificates, the
approved GMP proposal, a recommendation letter from the
architect/engineer, documentation of the approval of the bonds and
insurance if reviewed by an insurance consultant, documentation of the
calculation for liquidated damages and any correspondence related to
the GMP.
I. 100% CONSTRUCTION DOCUMENTS
When the GMP was based on documents prior to the final 100%
Construction Documents, the construction manager shall be required to
execute a change order which accepts the 100% Construction Documents as
the basis for construction. If there are scope increases between the
100% Construction Documents and the documents on which the GMP was
based, those shall be addressed in the change order.
J. BIDDING SCHEDULE
The project manager discusses the bidding schedule with the
construction manager. Based on the proposed schedule, the FDC develops
a payment schedule with the architect/engineer for the
architect/engineer's bidding phase payments.
K. PRE-QUALIFICATION OF SUBCONTRACTORS
The construction manager develops procedures for pre-qualification of
trade contractors and coordinates with the FDC to ensure that the
procedures are acceptable.
L. BID OPENINGS AND AWARD RECOMMENDATIONS
The project manager ensures that the construction manager publicly
advertises for each bid package. While the bid openings are not
required to be public, a university representative, generally the
project manager, must be present when they are opened by the
construction manager.
The project manager instructs the construction manager to provide
the recommendation for award of each bid package, the recommendation
from the architect/engineer, a copy of the bid tabulation form and a
copy of each bid proposal.
M. CONSTRUCTION MANAGER INVOICES AND PAY REQUESTS
During the pre-construction and construction phases, the construction
manager is paid as provided for in "Invoicing Procedures" (forms
section).
N. REQUESTS FOR SELF-PERFORMANCE
If the construction manager makes a request to self-perform any portion
of the work, the request is handled as described in "Procedures for
Self-Performance of Work" (forms section).
O. CONSTRUCTION MANAGER'S CONTINGENCY AUTHORIZATIONS
The GMP includes a contingency amount for the construction manager's
use as described in the Agreement between Owner and Construction
Manager. The project manager must approve a CM Contingency
Authorization for all expenditures of this contingency. These
expenditures are to be supported by detailed breakdowns, including
labor and material costs.
P. CHANGE ORDERS
Prior to approval, change orders must be supported by bids or by the
unit prices established in the original bid. The CM markup on the
change order will be limited to the percentage of profit approved in
the original GMP. If changes are funded from bid savings, they are not
eligible for a CM markup until the originally contracted GMP amount has
been exceeded.
FORMS
Guidelines for Construction Managers for the Preparation of Proposals for Pre-Construction Services
Guidelines for Construction Managers for the Preparation of Guaranteed Maximum Price Proposals
Example Transmittal Letter
Invoicing Procedures
Procedures for Self-Performance of Work
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