CONSULTATION AND VALUE ENGINEERING. The Construction Manager shall provide consultation throughout the Preconstruction and Construction Phases including but not limited to the furnishing of Value Engineering Services to identify cost effective changes in the State's specifications that will result in reducing the Contract Price without impairing essential functions or characteristics. The objective of Value Engineering is to achieve optimum value for each construction dollar spent and keep the time of completion and cost of the Work within the time and fiscal constraints set forth throughout the Contract Documents. In cooperation with the Principal Representative, the Construction Manager shall: Formulate and evaluate alternative designs, systems, materials, etc.; Provide cost estimates of the alternatives to be evaluated. Cost estimates shall include industry standard operating and maintenance costs when appropriate to evaluate life-cycle costs of the alternatives. Cost estimates shall take into consideration all cost impacts related to alternatives including but not limited to construction costs. The Construction Manager shall, at a minimum, review the cost estimate at the completion of the Schematic Design, and Design Development Phases and include an analysis and commentary as to any discrepancies observed in the report referenced in paragraph 3.2.1.4 below; Evaluate the alternatives on the basis of costs, time schedules, availability of labor and materials, construction feasibility, etc.; With the assistance of the Architect/Engineer to prepare written reports at the end of the Schematic Design and Design Development Phases summarizing the Value Engineering activities accomplished and any recommendations developed within each phase; If Estimates of Construction and/or bids received for the Work contained in any Bid Package cause the anticipated cost of the Work to exceed the then current Estimate of Construction Cost, the Fixed Limit of Construction Cost, the Guaranteed Maximum Price or Schedule of Values, the Construction Manager shall, at no additional cost to the Principal Representative unless caused by an increase in the Construction Manager 's Work requested by the Principal Representative, provide additional Value Engineering services in conjunction with any and all appropriate items in the Estimate of Construction, the Fixed Limit of Construction Cost, the Guaranteed Maximum Price, and/or the Schedule of Values for the Work; and Lead a formal Value Engineering workshop as requested by the Principal Representative, at the end of the Schematic Design, Design Development and Construction Documents Phases review and estimating tasks, bringing multidiscipline cost/construction experts to evaluate alternative designs, systems and materials. The Principal Representative shall participate in the formulation and evaluation of alternatives in the Value Engineering activity, and shall approve Value Engineering alternatives accepted in each design phase. CONSTRUCTION COSTS It is the desire of the Principal Representative to incorporate as many alternate bid items into the Project as reasonable, to maximize the scope for the Fixed Limit of Construction Cost. All parties recognize that although the availability of costs to perform the Work depend, in part, upon favorable market conditions. With thorough and careful planning, cost estimating and cooperation, funds may become available for the alternates through the procurement process at less than the Construction Manager’s estimated cost therefore. Together with savings through the unexpended portion of the bidding contingency, the Principal Representative may authorize alternates and/or additional scope, all within the Fixed Limit of Construction Cost. To accomplish the inclusion of alternates and/or increases, the project contingency shall be as follows and included in the GMP: The bidding contingency for all Bid Packages together with the construction of the Work shall be equal to two point five percent (2.5%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The construction contingency for the Work shall be equal to three percent (3%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The bidding contingency shall be allocated between the presently anticipated XX ( ) Bid Packages, equally proportionate to the value associated with each Bid Package. The Construction Manager shall notify, in writing, the Principal Representative of the allocation of the bidding contingency for each Bid Package. At the conclusion and award of the Bid Packages, all differences between the Construction Manager’s estimated cost of the Work contained within the Bid Packages, exclusive of contingency, versus the actual cost thereof as determined by bidding and award (buyouts) shall be promptly calculated and totaled. If the total of all of the buyouts exceed the Construction Manager estimated cost therefore, the bidding contingency identified in paragraph 3.4.2.1 shall be applied by the Construction Manager, after prior written notice to the Principal Representative, to cover any overrun per Bid Package. After all of the Bid Packages have been bought out, any and all savings achieved through the buyouts of the Bid Packages together with all unexpended sums remaining in the bidding contingencies shall forthwith accrue to the Principal Representative to be applied by the Principal Representative, in its sole and absolute discretion, to the inclusion of desired alternates into the Work or to otherwise increase the scope of Work to be performed by the Construction Manager, and/or to reduce the Guaranteed Maximum Price. The construction contingency shall only be used to cover costs for labor, materials, equipment and similar costs for items or Work to be furnished during the construction phase of the Project. It is not the intent of this Agreement to use the construction contingency for costs incurred during the Pre-Construction phase or bidding phase or for costs to correct any errors, omissions, mistakes or rejected Work caused by subcontractors. The construction contingency may be used to cover the Construction Manager’s costs (i) arising from estimating cost overruns in the costs of Exhibit H.4 Allowance Schedule; (ii) unexpected additional trade coordination costs incurred for Work directly performed by the Construction Manager that could not have been reasonably contemplated; (iii) items required and reasonably inferable from the Contract Documents, or items included within the Contract Documents but missed within the subcontractor buy-out which the Construction Manager can show were not specifically called out within the estimate or bid documents of the Construction Manager or any subcontractor ; (iv) losses or damages to property related to the Work not covered by insurance provided by the Construction Manager, but not including any insurance deductible(s); (v) arising from expediting or acceleration of the Project schedule where such cost is not a basis for an increase in the GMP under Article 6; (vi) Bid Package buyout overrun costs for additional Bid Packages that were not part of anticipated Construction Phases defined in 1.1.4, but only if bidding procedures contemplated hereunder were followed and the bidding contingency has been exhausted; or (vii) other costs incurred not reasonably to have been expected that are approved by the Principal Representative in the Principal Representative’s sole discretion, so long as those costs are not recovered under any insurance policy provided pursuant to this Agreement and so long as the total costs under this Agreement do not exceed the Guaranteed Maximum Price. No expenditure from the construction contingency for any matters or Work activities shall be made without the prior written approval of the Principal Representative, which approval, with the exception of item (vii) above, shall not be unreasonably withheld. Expenditures from the construction contingency shall be made only by Change Order. Construction contingency shall include all costs associated with a stated scope including, if applicable Direct Work, Insurance, Bonds, Fee, and General Conditions (if appropriate). When preparing any estimates of Construction and in development of the Schedule of Values, such documents shall include, without duplication: All labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services necessary for the proper execution and completion of the Work, whether temporary or permanent, and whether or not incorporated or to be incorporated in the Work; Any allowance designated by the Principal Representative; Any Principal Representative furnished equipment which has been designed, specified, selected or specifically provided for by the Architect/Engineer; The Construction Manager’s fee and the cost of work provided by the Construction Manager; All bonds, insurance premiums and applicable taxes; Contingencies for bidding, price escalation, and construction; Plumbing and electrical building permits from appropriate entities and any other building permits as directed by the Principal Representative; and Administrative expenses directly related to the Work. (Refer to the General Conditions of Construction Manager/General Contractor Agreement (SC-6.51) Article 12.B schedules) Estimates of Construction Cost shall not include the compensation of the Architect/Engineer and, the Architect/Engineer mechanical, electrical, plumbing, structural, civil, and any other consultants and subconsultants required in the Request For Proposal or any other sums due the Architect/Engineer and it’s consultants, and shall not include the costs of land, right of way, financing or other costs, which are the responsibility of the Principal Representative The Construction Manager, in preparing its Estimates of Construction cost and providing the Guaranteed Maximum Price, shall consult with the Architect/Engineer to determine what materials, equipment, component systems and types of construction are to be included in the Contract Documents, to make reasonable adjustments in the scope of the Work, and to include in the Contract Documents alternate items, as approved by the Principal Representative in writing, for bid so as to permit the adjustment of the Estimate of Construction Cost. The Construction Manager shall prepare an Estimate of Construction as soon as major Project requirements have been identified and update it periodically. For the Schematic Design Phases, the Construction Manager shall prepare a quantity take-off cost estimate based on building systems, assemblies, components, etc., and update periodically. During the Design Development Phase, the Construction Manager shall prepare a final cost estimate in preparation for a Guaranteed Maximum Price and update periodically. All Estimates of Construction shall include separate defined allowances for bidding and Construction price escalation. During the Construction Documents Phase, the Construction Manager shall continually monitor the cost estimates and develop a cost estimate to help assure that the cost of the Work remains within the applicable portion of the Project Budget, Fixed Limit of Construction Cost and Guaranteed Maximum Price. Estimates shall be prepared and shall be based on quantitative takeoffs whenever possible and shall be supported in sufficient depth and organization to be used in preparing budgets based on Construction Specifications Institute (CSI) Division, funding sources, sub-trades, combinations of sub-trades, building systems, Bid Packages or combinations thereof. The specific cost coding structure, estimating guidelines, assumptions, and contents of the cost estimates shall be mutually resolved between the Construction Manager and the Architect/Engineer prior to development of the first cost estimate to assure that estimates developed by all parties can be compared and reconciled. Lump sum estimates are not acceptable. During the preparations of cost estimates, the Construction Manager shall notify the Principal Representative if it appears that the Estimate of Construction will exceed the applicable portion of the Project Budget or Fixed Limit of Construction Cost as may be applicable, satisfactorily demonstrate the accuracy of its estimate in such detail as shall be reasonably required by the Principal Representative, and make reasonable recommendations for corrective action consistent with the Project Budget or Fixed Limit of Construction Cost, as may be applicable. The Construction Manager shall submit Estimates of Construction Cost to the Principal Representative for review and acceptance at each design milestone and other times as required by the Principal Representative to analyze various building systems and components. Concurrently, the Construction Manager shall provide copies to the Architect/Engineer for review and verification. The Principal Representative shall reasonably cooperate with the Construction Manager to keep the Work within the applicable portions of the Project Budget or Fixed Limit of Construction Cost, as may be applicable, including but not limited to the giving of appropriate and reasonable consideration to all reasonable recommendations of the Construction Manager, approving redesign, only for Principal Representative directed scope changes, deductive alternatives or reductions in Work, requesting additional Value Engineering, making modifications to the Contract Documents or exercising such other rights or remedies as may be available elsewhere under this Agreement including termination for convenience. However, the Principal Representative shall be under no duty to reduce the Work to accommodate for any projected costs over or beyond the Guaranteed Maximum Price that is the responsibility of the Construction Manager or allow access to the construction contingency to cover costs to correct errors, omissions, mistakes, rejected Work or warranty Work. Architect/Engineer/Construction Manager Cooperation: The Architect/Engineer, by the terms of its agreement with the Principal Representative, is obligated to provide reasonable cooperation to the Construction Manager in the development of Estimates of Construction Cost and the Guaranteed Maximum Price. Conversely, the Construction Manager, by the terms of this Agreement is obligated to provide reasonable cooperation to the Architect/Engineer in the development of Statements of Probable Construction Cost and the Guaranteed Maximum Price. Additionally, both Architect/Engineer and Construction Manager are obligated to reconcile their respective cost estimates at the completion of each design phase of the Work including the Guaranteed Maximum Price in a timely manner so as not to negatively impact the Project Schedule. OTHER PRE-CONSTRUCTION SERVICES The Construction Manager shall perform those items designated as Required Services as set forth in the Designated Services and Method of Payment schedule designated as Exhibit A. In addition, and not in limitation, the Construction Manager shall also perform the other Pre-Construction Services designated in this Article 3 together with such other services as are normally and customarily provided by a Construction Manager. Meeting Attendance: The Construction Manager shall attend all regular meetings with the Principal Representative and such additional meetings as the Principal Representative may request. All regular meetings shall be scheduled by the Architect/Engineer with the Construction Manager and approval of the Principal Representative. All additional meetings shall be requested by the Principal Representative. Copies for Review: The Principal Representative through the Architect/Engineer and consistent with the Principal Representative's contract with the Architect/Engineer, shall furnish the Construction Manager a sufficient quantity of documents required for the Preconstruction Services. The Construction Manager shall make recommendations to the Principal Representative and the Architect/Engineer regarding the Division of Work in the Drawings and Specifications to facilitate the bidding and awarding of subcontracts, allowing for phased construction and funding, if applicable, taking into conside
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CONSULTATION AND VALUE ENGINEERING. 3.3.1 The Construction Manager shall provide consultation throughout the Preconstruction and Construction Phases including but not limited to the furnishing of Value Engineering Services to identify cost effective changes in the State's specifications that will result in reducing the Contract Price without impairing essential functions or characteristics. The objective of Value Engineering is to achieve optimum value for each construction dollar spent and keep the time of completion and cost of the Work within the time and fiscal constraints set forth throughout the Contract Documents. In cooperation with the Principal Representative, the Construction Manager shall: :
3.3.1.1 Formulate and evaluate alternative designs, systems, materials, etc.; ;
3.3.1.2 Provide cost estimates of the alternatives to be evaluated. Cost estimates shall include industry standard operating and maintenance costs when appropriate to evaluate life-cycle costs of the alternatives. Cost estimates shall take into consideration all cost impacts related to alternatives including but not limited to construction costs. The Construction Manager shall, at a minimum, review the cost estimate at the completion of the Schematic Design, and Design Development Phases and include an analysis and commentary as to any discrepancies observed in the report referenced in paragraph 3.2.1.4 below; ;
3.3.1.3 Evaluate the alternatives on the basis of costs, time schedules, availability of labor and materials, construction feasibility, etc.; ;
3.3.1.4 With the assistance of the Architect/Engineer to prepare written reports at the end of the Schematic Design and Design Development Phases summarizing the Value Engineering activities accomplished and any recommendations developed within each phase; ;
3.3.1.5 If Estimates of Construction and/or bids received for the Work contained in any Bid Package cause the anticipated cost of the Work to exceed the then current Estimate of Construction Cost, the Fixed Limit of Construction Cost, the Guaranteed Maximum Price or Schedule of Values, the Construction Manager shall, at no additional cost to the Principal Representative unless caused by an increase in the Construction Manager 's Work requested by the Principal Representative, provide additional Value Engineering services in conjunction with any and all appropriate items in the Estimate of Construction, the Fixed Limit of Construction Cost, the Guaranteed Maximum Price, and/or the Schedule of Values for the Work; and and
3.3.1.6 Lead a formal Value Engineering workshop as requested by the Principal Representative, at the end of the Schematic Design, Design Development and Construction Documents Phases review and estimating tasks, bringing multidiscipline cost/construction experts to evaluate alternative designs, systems and materials. .
3.3.2 The Principal Representative shall participate in the formulation and evaluation of alternatives in the Value Engineering activity, and shall approve Value Engineering alternatives accepted in each design phase. CONSTRUCTION COSTS It is the desire of the Principal Representative to incorporate as many alternate bid items into the Project as reasonable, to maximize the scope for the Fixed Limit of Construction Cost. All parties recognize that although the availability of costs to perform the Work depend, in part, upon favorable market conditions. With thorough and careful planning, cost estimating and cooperation, funds may become available for the alternates through the procurement process at less than the Construction Manager’s estimated cost therefore. Together with savings through the unexpended portion of the bidding contingency, the Principal Representative may authorize alternates and/or additional scope, all within the Fixed Limit of Construction Cost. To accomplish the inclusion of alternates and/or increases, the project contingency shall be as follows and included in the GMP: The bidding contingency for all Bid Packages together with the construction of the Work shall be equal to two point five percent (2.5%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The construction contingency for the Work shall be equal to three percent (3%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The bidding contingency shall be allocated between the presently anticipated XX ( ) Bid Packages, equally proportionate to the value associated with each Bid Package. The Construction Manager shall notify, in writing, the Principal Representative of the allocation of the bidding contingency for each Bid Package. At the conclusion and award of the Bid Packages, all differences between the Construction Manager’s estimated cost of the Work contained within the Bid Packages, exclusive of contingency, versus the actual cost thereof as determined by bidding and award (buyouts) shall be promptly calculated and totaled. If the total of all of the buyouts exceed the Construction Manager estimated cost therefore, the bidding contingency identified in paragraph 3.4.2.1 shall be applied by the Construction Manager, after prior written notice to the Principal Representative, to cover any overrun per Bid Package. After all of the Bid Packages have been bought out, any and all savings achieved through the buyouts of the Bid Packages together with all unexpended sums remaining in the bidding contingencies shall forthwith accrue to the Principal Representative to be applied by the Principal Representative, in its sole and absolute discretion, to the inclusion of desired alternates into the Work or to otherwise increase the scope of Work to be performed by the Construction Manager, and/or to reduce the Guaranteed Maximum Price. The construction contingency shall only be used to cover costs for labor, materials, equipment and similar costs for items or Work to be furnished during the construction phase of the Project. It is not the intent of this Agreement to use the construction contingency for costs incurred during the Pre-Construction phase or bidding phase or for costs to correct any errors, omissions, mistakes or rejected Work caused by subcontractors. The construction contingency may be used to cover the Construction Manager’s costs (i) arising from estimating cost overruns in the costs of Exhibit H.4 Allowance Schedule; (ii) unexpected additional trade coordination costs incurred for Work directly performed by the Construction Manager that could not have been reasonably contemplated; (iii) items required and reasonably inferable from the Contract Documents, or items included within the Contract Documents but missed within the subcontractor buy-out which the Construction Manager can show were not specifically called out within the estimate or bid documents of the Construction Manager or any subcontractor ; (iv) losses or damages to property related to the Work not covered by insurance provided by the Construction Manager, but not including any insurance deductible(s); (v) arising from expediting or acceleration of the Project schedule where such cost is not a basis for an increase in the GMP under Article 6; (vi) Bid Package buyout overrun costs for additional Bid Packages that were not part of anticipated Construction Phases defined in 1.1.4, but only if bidding procedures contemplated hereunder were followed and the bidding contingency has been exhausted; or (vii) other costs incurred not reasonably to have been expected that are approved by the Principal Representative in the Principal Representative’s sole discretion, so long as those costs are not recovered under any insurance policy provided pursuant to this Agreement and so long as the total costs under this Agreement do not exceed the Guaranteed Maximum Price. No expenditure from the construction contingency for any matters or Work activities shall be made without the prior written approval of the Principal Representative, which approval, with the exception of item (vii) above, shall not be unreasonably withheld. Expenditures from the construction contingency shall be made only by Change Order. Construction contingency shall include all costs associated with a stated scope including, if applicable Direct Work, Insurance, Bonds, Fee, and General Conditions (if appropriate). When preparing any estimates of Construction and in development of the Schedule of Values, such documents shall include, without duplication: All labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services necessary for the proper execution and completion of the Work, whether temporary or permanent, and whether or not incorporated or to be incorporated in the Work; Any allowance designated by the Principal Representative; Any Principal Representative furnished equipment which has been designed, specified, selected or specifically provided for by the Architect/Engineer; The Construction Manager’s fee and the cost of work provided by the Construction Manager; All bonds, insurance premiums and applicable taxes; Contingencies for bidding, price escalation, and construction; Plumbing and electrical building permits from appropriate entities and any other building permits as directed by the Principal Representative; and Administrative expenses directly related to the Work. (Refer to the General Conditions of Construction Manager/General Contractor Agreement (SC-6.51) Article 12.B schedules) Estimates of Construction Cost shall not include the compensation of the Architect/Engineer and, the Architect/Engineer mechanical, electrical, plumbing, structural, civil, and any other consultants and subconsultants required in the Request For Proposal or any other sums due the Architect/Engineer and it’s consultants, and shall not include the costs of land, right of way, financing or other costs, which are the responsibility of the Principal Representative The Construction Manager, in preparing its Estimates of Construction cost and providing the Guaranteed Maximum Price, shall consult with the Architect/Engineer to determine what materials, equipment, component systems and types of construction are to be included in the Contract Documents, to make reasonable adjustments in the scope of the Work, and to include in the Contract Documents alternate items, as approved by the Principal Representative in writing, for bid so as to permit the adjustment of the Estimate of Construction Cost. The Construction Manager shall prepare an Estimate of Construction as soon as major Project requirements have been identified and update it periodically. For the Schematic Design Phases, the Construction Manager shall prepare a quantity take-off cost estimate based on building systems, assemblies, components, etc., and update periodically. During the Design Development Phase, the Construction Manager shall prepare a final cost estimate in preparation for a Guaranteed Maximum Price and update periodically. All Estimates of Construction shall include separate defined allowances for bidding and Construction price escalation. During the Construction Documents Phase, the Construction Manager shall continually monitor the cost estimates and develop a cost estimate to help assure that the cost of the Work remains within the applicable portion of the Project Budget, Fixed Limit of Construction Cost and Guaranteed Maximum Price. Estimates shall be prepared and shall be based on quantitative takeoffs whenever possible and shall be supported in sufficient depth and organization to be used in preparing budgets based on Construction Specifications Institute (CSI) Division, funding sources, sub-trades, combinations of sub-trades, building systems, Bid Packages or combinations thereof. The specific cost coding structure, estimating guidelines, assumptions, and contents of the cost estimates shall be mutually resolved between the Construction Manager and the Architect/Engineer prior to development of the first cost estimate to assure that estimates developed by all parties can be compared and reconciled. Lump sum estimates are not acceptable. During the preparations of cost estimates, the Construction Manager shall notify the Principal Representative if it appears that the Estimate of Construction will exceed the applicable portion of the Project Budget or Fixed Limit of Construction Cost as may be applicable, satisfactorily demonstrate the accuracy of its estimate in such detail as shall be reasonably required by the Principal Representative, and make reasonable recommendations for corrective action consistent with the Project Budget or Fixed Limit of Construction Cost, as may be applicable. The Construction Manager shall submit Estimates of Construction Cost to the Principal Representative for review and acceptance at each design milestone and other times as required by the Principal Representative to analyze various building systems and components. Concurrently, the Construction Manager shall provide copies to the Architect/Engineer for review and verification. The Principal Representative shall reasonably cooperate with the Construction Manager to keep the Work within the applicable portions of the Project Budget or Fixed Limit of Construction Cost, as may be applicable, including but not limited to the giving of appropriate and reasonable consideration to all reasonable recommendations of the Construction Manager, approving redesign, only for Principal Representative directed scope changes, deductive alternatives or reductions in Work, requesting additional Value Engineering, making modifications to the Contract Documents or exercising such other rights or remedies as may be available elsewhere under this Agreement including termination for convenience. However, the Principal Representative shall be under no duty to reduce the Work to accommodate for any projected costs over or beyond the Guaranteed Maximum Price that is the responsibility of the Construction Manager or allow access to the construction contingency to cover costs to correct errors, omissions, mistakes, rejected Work or warranty Work. Architect/Engineer/Construction Manager Cooperation: The Architect/Engineer, by the terms of its agreement with the Principal Representative, is obligated to provide reasonable cooperation to the Construction Manager in the development of Estimates of Construction Cost and the Guaranteed Maximum Price. Conversely, the Construction Manager, by the terms of this Agreement is obligated to provide reasonable cooperation to the Architect/Engineer in the development of Statements of Probable Construction Cost and the Guaranteed Maximum Price. Additionally, both Architect/Engineer and Construction Manager are obligated to reconcile their respective cost estimates at the completion of each design phase of the Work including the Guaranteed Maximum Price in a timely manner so as not to negatively impact the Project Schedule. OTHER PRE-CONSTRUCTION SERVICES The Construction Manager shall perform those items designated as Required Services as set forth in the Designated Services and Method of Payment schedule designated as Exhibit A. In addition, and not in limitation, the Construction Manager shall also perform the other Pre-Construction Services designated in this Article 3 together with such other services as are normally and customarily provided by a Construction Manager. Meeting Attendance: The Construction Manager shall attend all regular meetings with the Principal Representative and such additional meetings as the Principal Representative may request. All regular meetings shall be scheduled by the Architect/Engineer with the Construction Manager and approval of the Principal Representative. All additional meetings shall be requested by the Principal Representative. Copies for Review: The Principal Representative through the Architect/Engineer and consistent with the Principal Representative's contract with the Architect/Engineer, shall furnish the Construction Manager a sufficient quantity of documents required for the Preconstruction Services. The Construction Manager shall make recommendations to the Principal Representative and the Architect/Engineer regarding the Division of Work in the Drawings and Specifications to facilitate the bidding and awarding of subcontracts, allowing for phased construction and funding, if applicable, taking into conside
Appears in 1 contract
CONSULTATION AND VALUE ENGINEERING. 3.2.1 The Construction Manager Design/Build Entity shall provide consultation throughout the Design/Preconstruction and Construction Phases including but not limited to the furnishing of Value Engineering Services to identify cost effective changes in the State's specifications that will result in reducing the Contract Price without impairing essential functions or characteristics. The objective of Value Engineering is to achieve optimum value for each construction dollar spent and keep the time of completion and cost of the Work within the time and fiscal constraints set forth throughout the Contract Documents. In cooperation with the Principal Representative, the Construction Manager Design/Build Entity shall: :
a) Formulate and evaluate alternative designs, systems, materials, etc.; ;
b) Provide cost estimates of the alternatives to be evaluated. Cost estimates shall include industry standard operating and maintenance costs when appropriate to evaluate life-cycle life‐cycle costs of the alternatives. Cost estimates shall take into consideration all cost impacts related to alternatives including but not limited to design and construction costs. The Construction Manager Design/Build Entity shall, at a minimum, review the cost estimate at the completion of the Schematic Design, and Design Development Phases and include an analysis and commentary as to any discrepancies observed in the report referenced in paragraph 3.2.1.4 below; ;
c) Evaluate the alternatives on the basis of costs, time schedules, availability of labor and materials, construction feasibility, etc.; With ;
d) Enable the assistance of the Design/Build Entity’s Architect/Engineer to prepare written reports at the end of the Schematic Design and Design Development Phases summarizing the Value Engineering activities accomplished and any recommendations developed within each phase; ;
e) If Estimates of Design & Construction and/or bids received for the Work contained in any Bid Package cause the anticipated cost of the Work to exceed the then current Estimate of Construction CostDesign & Construction, the Fixed Limit of Design & Construction Cost, the Guaranteed Maximum Price or Schedule of Values, the Construction Manager Design/Build Entity shall, at no additional cost to the Principal Representative unless caused by an increase in the Construction Manager Design/Build Entity 's Work requested by the Principal Representative, provide additional Value Engineering services in conjunction with any and all appropriate items in the Estimate of Design & Construction, the Fixed Limit of Design & Construction Cost, the Guaranteed Maximum Price, and/or the Schedule of Values for the Work; and and
f) Lead a formal Value Engineering workshop as requested by the Principal Representative, at the end of the Schematic Design, Design Development and Construction Documents Phases review and estimating tasks, bringing multidiscipline cost/construction experts to evaluate alternative designs, systems and materials. .
3.2.2 The Principal Representative shall participate in the formulation and evaluation of alternatives in the Value Engineering activity, and shall approve Value Engineering alternatives accepted in each design phase. CONSTRUCTION COSTS It is the desire of the Principal Representative to incorporate as many alternate bid items into the Project as reasonable, to maximize the scope for the Fixed Limit of Construction Cost. All parties recognize that although the availability of costs to perform the Work depend, in part, upon favorable market conditions. With thorough and careful planning, cost estimating and cooperation, funds may become available for the alternates through the procurement process at less than the Construction Manager’s estimated cost therefore. Together with savings through the unexpended portion of the bidding contingency, the Principal Representative may authorize alternates and/or additional scope, all within the Fixed Limit of Construction Cost. To accomplish the inclusion of alternates and/or increases, the project contingency shall be as follows and included in the GMP: The bidding contingency for all Bid Packages together with the construction of the Work shall be equal to two point five percent (2.5%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The construction contingency for the Work shall be equal to three percent (3%) of the total Guaranteed Maximum Price, all within the Fixed Limit of Construction Cost. The bidding contingency shall be allocated between the presently anticipated XX ( ) Bid Packages, equally proportionate to the value associated with each Bid Package. The Construction Manager shall notify, in writing, the Principal Representative of the allocation of the bidding contingency for each Bid Package. At the conclusion and award of the Bid Packages, all differences between the Construction Manager’s estimated cost of the Work contained within the Bid Packages, exclusive of contingency, versus the actual cost thereof as determined by bidding and award (buyouts) shall be promptly calculated and totaled. If the total of all of the buyouts exceed the Construction Manager estimated cost therefore, the bidding contingency identified in paragraph 3.4.2.1 shall be applied by the Construction Manager, after prior written notice to the Principal Representative, to cover any overrun per Bid Package. After all of the Bid Packages have been bought out, any and all savings achieved through the buyouts of the Bid Packages together with all unexpended sums remaining in the bidding contingencies shall forthwith accrue to the Principal Representative to be applied by the Principal Representative, in its sole and absolute discretion, to the inclusion of desired alternates into the Work or to otherwise increase the scope of Work to be performed by the Construction Manager, and/or to reduce the Guaranteed Maximum Price. The construction contingency shall only be used to cover costs for labor, materials, equipment and similar costs for items or Work to be furnished during the construction phase of the Project. It is not the intent of this Agreement to use the construction contingency for costs incurred during the Pre-Construction phase or bidding phase or for costs to correct any errors, omissions, mistakes or rejected Work caused by subcontractors. The construction contingency may be used to cover the Construction Manager’s costs (i) arising from estimating cost overruns in the costs of Exhibit H.4 Allowance Schedule; (ii) unexpected additional trade coordination costs incurred for Work directly performed by the Construction Manager that could not have been reasonably contemplated; (iii) items required and reasonably inferable from the Contract Documents, or items included within the Contract Documents but missed within the subcontractor buy-out which the Construction Manager can show were not specifically called out within the estimate or bid documents of the Construction Manager or any subcontractor ; (iv) losses or damages to property related to the Work not covered by insurance provided by the Construction Manager, but not including any insurance deductible(s); (v) arising from expediting or acceleration of the Project schedule where such cost is not a basis for an increase in the GMP under Article 6; (vi) Bid Package buyout overrun costs for additional Bid Packages that were not part of anticipated Construction Phases defined in 1.1.4, but only if bidding procedures contemplated hereunder were followed and the bidding contingency has been exhausted; or (vii) other costs incurred not reasonably to have been expected that are approved by the Principal Representative in the Principal Representative’s sole discretion, so long as those costs are not recovered under any insurance policy provided pursuant to this Agreement and so long as the total costs under this Agreement do not exceed the Guaranteed Maximum Price. No expenditure from the construction contingency for any matters or Work activities shall be made without the prior written approval of the Principal Representative, which approval, with the exception of item (vii) above, shall not be unreasonably withheld. Expenditures from the construction contingency shall be made only by Change Order. Construction contingency shall include all costs associated with a stated scope including, if applicable Direct Work, Insurance, Bonds, Fee, and General Conditions (if appropriate). When preparing any estimates of Construction and in development of the Schedule of Values, such documents shall include, without duplication: All labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services necessary for the proper execution and completion of the Work, whether temporary or permanent, and whether or not incorporated or to be incorporated in the Work; Any allowance designated by the Principal Representative; Any Principal Representative furnished equipment which has been designed, specified, selected or specifically provided for by the Architect/Engineer; The Construction Manager’s fee and the cost of work provided by the Construction Manager; All bonds, insurance premiums and applicable taxes; Contingencies for bidding, price escalation, and construction; Plumbing and electrical building permits from appropriate entities and any other building permits as directed by the Principal Representative; and Administrative expenses directly related to the Work. (Refer to the General Conditions of Construction Manager/General Contractor Agreement (SC-6.51) Article 12.B schedules) Estimates of Construction Cost shall not include the compensation of the Architect/Engineer and, the Architect/Engineer mechanical, electrical, plumbing, structural, civil, and any other consultants and subconsultants required in the Request For Proposal or any other sums due the Architect/Engineer and it’s consultants, and shall not include the costs of land, right of way, financing or other costs, which are the responsibility of the Principal Representative The Construction Manager, in preparing its Estimates of Construction cost and providing the Guaranteed Maximum Price, shall consult with the Architect/Engineer to determine what materials, equipment, component systems and types of construction are to be included in the Contract Documents, to make reasonable adjustments in the scope of the Work, and to include in the Contract Documents alternate items, as approved by the Principal Representative in writing, for bid so as to permit the adjustment of the Estimate of Construction Cost. The Construction Manager shall prepare an Estimate of Construction as soon as major Project requirements have been identified and update it periodically. For the Schematic Design Phases, the Construction Manager shall prepare a quantity take-off cost estimate based on building systems, assemblies, components, etc., and update periodically. During the Design Development Phase, the Construction Manager shall prepare a final cost estimate in preparation for a Guaranteed Maximum Price and update periodically. All Estimates of Construction shall include separate defined allowances for bidding and Construction price escalation. During the Construction Documents Phase, the Construction Manager shall continually monitor the cost estimates and develop a cost estimate to help assure that the cost of the Work remains within the applicable portion of the Project Budget, Fixed Limit of Construction Cost and Guaranteed Maximum Price. Estimates shall be prepared and shall be based on quantitative takeoffs whenever possible and shall be supported in sufficient depth and organization to be used in preparing budgets based on Construction Specifications Institute (CSI) Division, funding sources, sub-trades, combinations of sub-trades, building systems, Bid Packages or combinations thereof. The specific cost coding structure, estimating guidelines, assumptions, and contents of the cost estimates shall be mutually resolved between the Construction Manager and the Architect/Engineer prior to development of the first cost estimate to assure that estimates developed by all parties can be compared and reconciled. Lump sum estimates are not acceptable. During the preparations of cost estimates, the Construction Manager shall notify the Principal Representative if it appears that the Estimate of Construction will exceed the applicable portion of the Project Budget or Fixed Limit of Construction Cost as may be applicable, satisfactorily demonstrate the accuracy of its estimate in such detail as shall be reasonably required by the Principal Representative, and make reasonable recommendations for corrective action consistent with the Project Budget or Fixed Limit of Construction Cost, as may be applicable. The Construction Manager shall submit Estimates of Construction Cost to the Principal Representative for review and acceptance at each design milestone and other times as required by the Principal Representative to analyze various building systems and components. Concurrently, the Construction Manager shall provide copies to the Architect/Engineer for review and verification. The Principal Representative shall reasonably cooperate with the Construction Manager to keep the Work within the applicable portions of the Project Budget or Fixed Limit of Construction Cost, as may be applicable, including but not limited to the giving of appropriate and reasonable consideration to all reasonable recommendations of the Construction Manager, approving redesign, only for Principal Representative directed scope changes, deductive alternatives or reductions in Work, requesting additional Value Engineering, making modifications to the Contract Documents or exercising such other rights or remedies as may be available elsewhere under this Agreement including termination for convenience. However, the Principal Representative shall be under no duty to reduce the Work to accommodate for any projected costs over or beyond the Guaranteed Maximum Price that is the responsibility of the Construction Manager or allow access to the construction contingency to cover costs to correct errors, omissions, mistakes, rejected Work or warranty Work. Architect/Engineer/Construction Manager Cooperation: The Architect/Engineer, by the terms of its agreement with the Principal Representative, is obligated to provide reasonable cooperation to the Construction Manager in the development of Estimates of Construction Cost and the Guaranteed Maximum Price. Conversely, the Construction Manager, by the terms of this Agreement is obligated to provide reasonable cooperation to the Architect/Engineer in the development of Statements of Probable Construction Cost and the Guaranteed Maximum Price. Additionally, both Architect/Engineer and Construction Manager are obligated to reconcile their respective cost estimates at the completion of each design phase of the Work including the Guaranteed Maximum Price in a timely manner so as not to negatively impact the Project Schedule. OTHER PRE-CONSTRUCTION SERVICES The Construction Manager shall perform those items designated as Required Services as set forth in the Designated Services and Method of Payment schedule designated as Exhibit A. In addition, and not in limitation, the Construction Manager shall also perform the other Pre-Construction Services designated in this Article 3 together with such other services as are normally and customarily provided by a Construction Manager. Meeting Attendance: The Construction Manager shall attend all regular meetings with the Principal Representative and such additional meetings as the Principal Representative may request. All regular meetings shall be scheduled by the Architect/Engineer with the Construction Manager and approval of the Principal Representative. All additional meetings shall be requested by the Principal Representative. Copies for Review: The Principal Representative through the Architect/Engineer and consistent with the Principal Representative's contract with the Architect/Engineer, shall furnish the Construction Manager a sufficient quantity of documents required for the Preconstruction Services. The Construction Manager shall make recommendations to the Principal Representative and the Architect/Engineer regarding the Division of Work in the Drawings and Specifications to facilitate the bidding and awarding of subcontracts, allowing for phased construction and funding, if applicable, taking into conside
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Sources: Design/Build Guaranteed Maximum Price (Gmp) Agreement