Opening of Proposals - Four Winds Field Renovation & Expansion Proj No. 123-046 - Hagerman

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CMc Proposal for City of South Bend — Four Winds Renovation and Expansion Project u 24 • Identify how your firm handles cost overruns, delays, and incentives in a typical contract and your firm’s approach to project contingencies. Cost overruns and delays are two elements of the construction process that must be dealt with swiftly and strategically. We tend to focus on the strategic element of this first so that we can minimize the potential issue of any overrun. It starts with clear communication with our subcontractors and clearly identified bid packages that set the expectation for the scope of work in an attractive and clear way. Most cost overruns occur due to unidentified scope more so than price increases, etc. Through our preconstruction process, we ensure potential bidders’ understanding of the scope of work through detailed work sessions and written out bid packages that allow the subcontractors to not only see their scope of work but the balance of the teams, as well. While scopes of work are being identified, our estimating effort will also include a Design and Estimating Contingency that allows for some projected costs to be covered while not being specifically identified as we progress through the design stages. It is here where, in the event a cost overrun does occur, it gets reviewed, mitigated, or accepted into the cost of the work. At the time of bidding once all numbers are in and vetted, the Design and Estimating Contingency either moves to zero or is transferred to a construction contingency by the CMc, or is used in another manner pursuant to the Owner’s direction. Similar to cost overruns, delays are handled in a more proactive than reactive manner. Our approach is to start the project with a clear schedule that identifies preconstruction elements such as drawing development, permitting, early release of equipment, etc., as well as construction activities driven by procurement of material and equipment. We spend more time in procurement of lead items in today’s (post-pandemic) market than we have in previous years. Our teams are often communicating with second and third tier vendors to assure delivery times are met. If something unforeseen causes a potential delay, it is our team’s commitment to over communicate early and often to minimize the impact and, in most cases, reduce the impact due to relationship, alternate material/equipment selection, or revised logic to the overall schedule. As a backstop, our subcontracts have been written in such a way that requires our subcontractors to provide the required manpower and overtime needed to meet the posted project schedule. We have a formal multi-step process in our contracts that allows for this required notification and recovery process. Our contingency structure is the same on all Hagerman CMc projects. As mentioned above, we have a Design and Estimating Contingency that is established early in the scope development stage and is clearly labeled and identified throughout the preconstruction process. Also identified at a similar time is a Construction Contingency that is used by the CMc for construction related items including overtime, scope gaps between packages, or subcontractor failure. It is here where incentives can be introduced by some variation of a shared savings on this value. We have structured everything from 100% savings going back the client to a 60%/40% shared savings agreement. Everything is open and we are encouraged to make absolutely sure we find a structure that is clear and fair for all parties involved. PROJECT COSTS