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48SOUTH BEND, INDIANA GSC <br />VIEWING PRICING STRUCTURE <br />During the development of the GMP, Kokosing develops a “bid book”, structured according to the order of the specifications. The estimate will show all bare costs (labor, materials, equipment, vendor quotes) as well as the provider fee (overhead and profit). When we competitively bid subcontracted work, all received bids will be processed and can be submitted to The City of South Bend for a selection. Under the GSC rules, the owner has the flexibility to select the best response, not necessarily the lowest. Once the vendor is selected, the bid is incorporated into the bid book. <br />Once the GMP is set, the cost elements are tracked using our ViewPoint Software. ViewPoint has many different reports available to the project team such as job cost detail and job cost analysis. In the early phases, we will work with you to determine the level of detail and format that you prefer. <br />VIEWING SAVINGS <br />Value engineering and constructability savings identified after the contract is executed will move an agreed cost from the work budget to a separate line item, often a contingency. Where work is eliminated, the savings are generally immediately available for reallocation. <br />Savings from performing better than the project estimate remains in the project budget until a level <br />of mutual comfort is achieved that the savings are real. The GMP contract is on the overall value <br />of the work, not the individual line items. Consequently, we retain control of our budget until we are <br />confident the balance will meet or do better than performance goals. <br />Monthly reports will show the balance of the released savings, as funds flow into and out of work <br />line items. Released savings can be used to add scope during the project. Internal documentation <br />denotes the scope, schedule and cost of the new work without the need for external change orders. <br />If the new work extends the duration of the project beyond the contract date, a change order may be <br />required. At final completion, a change order is issued that returns all remaining funds to The City of <br />South Bend. <br />The use of contingency and tracking of post-GMP cost reductions can be tracked in our cost/expenditure logs. With the final agreement on the potential changes, including cost/value and written authorization, the items are then acted upon accordingly, moving funding to or out of the different funding lines. <br />VIEWING CONTINGENCY <br />Construction contingency line items are created within the estimate/GMP as a management tool. Contingency is not built into individual work/cost items but reflects the risk across all areas of work. Some owners find it advantageous to create additional contingency pools or allowances to address either specific areas of risk, such as dewatering an excavation, or work areas not well defined at the GMP. Depending on the intended use, contingencies or allowances can be owner controlled, requiring a more formal process utilizing the funds to perform work. <br />Kokosing utilizes a simple log to identify, assign and track the use of contingency, as shown in the example in Table 6-2. The contingency log is part of every monthly report with the use of contingency discussed and agreed to at monthly meetings. Once the use of contingency is final, it is incorporated into Viewpoint and reflected in the project reports.