Alternative Delivery Methods
'Rethinking' Latest R In School Construction

by Craig Barner

Educator Chuck Bumbales has gotten a schooling on how construction projects are delivered.

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Bumbales, assistant superintendent of operations for Community Unit School District 300 in northwest suburban Carpentersville, had a lot of learning to do after CUSD 300 in May embarked on a $226 million construction program that is expected to last five years.

The program involves new construction (a high school and three elementary schools), additions to five existing schools and renovations to each of the district's 23 existing schools. Funding was derived in part through a $185 million referendum voters approved in March.

Prior to the referendum, the district considered which delivery method to choose and picked construction management agency.

A CM agency contractor, which is usually picked for qualifications rather than low bid, was chosen for a number of reasons, including making wise choices on materials, Bumbales said.

Alternatives to copper electrical lines, for instance, were considered because of rapid price increases for the material. In November the Alexandria, Va.-based Associated General Contractors of America said the producer price index for copper and brass mill shapes had gone up 64 percent between October 2005 and October 2006. During the same period the overall PPI fell 1.6 percent.

"We took a look at construction methods and alternatives, such as aluminum alloy choices, in lieu of copper," Bumbales said. "We had to make judgments on those things in conjunction with the construction management people, architects and [mechanical, electrical and plumbing] people."

Despite the cost increases, CUSD 300 elected to go with copper lines because the longer life cycle would likely involve less cost ultimately than the alternative.

The Chicago office of New York-based Bovis Lend Lease Inc. heads the CUSD 300's new construction, and Elgin-based Lamp Inc. was selected to oversee the additions and renovations.

Population growth in the 118-sq.-mi. district serving 15 municipalities in four counties is driving the work, Bumbales said.

"We have grown an average of 500 students a year every year for the past 10 years in a row," Bumbales said. The district has 19,100 students.

Schools and Traditional Building

In the past, school districts went with convention and chose the design-bid-build method for their construction projects.

State procurement laws were the reason, said John Doherty, project executive and director of the educational business at Bovis. School districts often must bid projects competitively when they exceed a certain cost threshold.

But laws and codes are increasingly allowing for alternative delivery methods in some cases.

In July 2005, for instance, the Indiana Legislature authorized the design-build delivery method on most public works projects, including K-12 schools.

Moreover, the Illinois Procurement Code adopted in 1998 still calls for state construction contracts to be obtained via competitive bidding but allows the state's Capital Development Board to make construction purchases "without competitive sealed bidding."

There are a number of other reasons for the changes, some pertaining to K-12 construction.

School projects are increasingly becoming complicated and require a sophisticated understanding of construction and design so prudent decisions are made, said Pat Sumrow, a consultant with Lemont-based Oakwood Consulting Services Inc. who has overseen 13 school projects, some as a former school administrator in west suburban Elmhurst. These could pertain to material choices, student and staff safety, scheduling and hundreds of other factors.

"I think what is really important is that when school districts are about to do construction that they become educated in what the models are and not just put out a request-for-proposal without knowing there are four or five options," she added.

Tight budgets and the politics of getting funding via referenda are also driving districts to look at alternatives to conventional delivery.

"Districts are tight on money, and they sometimes have to wait on voters to approve projects," Sumrow said. "So when they get the OK to do the work, it can be a huge project."

Finally, metropolitan regions keep expanding, and as new land is developed quickly in these "exurbs," new schools are needed, also speedily.

In November, for instance, voters in Oswego Community School District 308 in the far southwest suburbs approved a $450 million referendum to fund 14 new projects.

At the same time, the stock of schools in inner-ring suburbs and city centers can be so decrepit that renovations or renovations with additions are needed.

Among the biggest in the Midwest is Indianapolis Public Schools' $832 million project. Each of the system's 79 schools-some of which are approaching a century of use-is getting work.

What Are the Options?

Contractors vary somewhat on what constitutes a delivery method, but the McLean, Va.-based Construction Management Association of America formally names five: design-bid-build; construction management agency; at-risk construction management; design-build; and multiple-prime contracting.

There are numerous differences among them, but key features are worth underlining.

In design-bid-build, the contractor submitting the lowest lump-sum bid is usually selected to perform the construction. In contrast, agency construction managers are usually picked for their qualifications, providing the owner advice on schedule, budget and constructability during planning for established fees.

At-risk construction management bears similarities to both design-bid-build and agency CM. Like design-bid-build, it usually involves a fixed cost via fees but the fees would be higher than agency CM.

"The dynamic switches a bit [in CM at-risk], and you go from being on the owner's side of the table to being on the other side," said Bovis' Doherty.

Like agency CM, the at-risk CM provides advice on a number of issues to the district prior to construction.

An architect gets a separate contract for all the delivery methods other than design-build. Here, the same company provides construction and design services.

Under multiple-prime contracting, the owner typically manages the schedule and budget.

Some owners, including school districts, may elect another layer of oversight, via an owner's representative or program manager, which affects project delivery but is generally not regarded as being a separate delivery method.

An owner's rep is typically hired to monitor a closely defined project element, such as the financing, Doherty said. A PM brings a more sophisticated level of involvement, such as dealing with the programming, environmental issues or purchasing strategies.

Pros and Cons

Often, the specifics of a school project may help determine which delivery method is selected.

Agency construction management generally makes a good match with complex projects because of the greater likelihood for claims, change-orders and delays, Doherty said.

"It's how they (problems) get resolved that's the difference," he added. "In a design-bid-build scenario, the school is looking at a claim and assessing whether it is worth pursuing a legal action or just paying a claim. In a CM scenario, you'll have a CM making a recommendation to the district about whether the claim is legitimate."

The single source of responsibility in the design-build delivery method is often appealing for districts involved in complex projects, said James Jenkins, associate professor in the Department of Building Construction Management at Purdue University in West Lafayette, Ind. Another benefit is that projects can be fast-tracked because construction can start while design is still under way.

But the downside of design-build is that the checks and balances that are often present when contractors and architects interact are absent.

Often districts pursue major renovation or renovation-with-addition projects.

Michael Meagher, senior vice president of Chicago-based James McHugh Construction Co., said construction management at risk would be a poor choice in part because of the unknowns involved in refurbishing an old school, even when due diligence has been done prior to construction start.

Other key considerations affecting delivery are safety approach, air monitoring, egress plans, emergency scenarios and programming.

Chuck Bumbales, for one, is showing he has learned the lessons of school delivery.

"We wanted to make sure we were building to the standard we wanted to build and that we were in control of those choices that have to be made," he said.