Iowa adds CM at-Risk option for public projects

8 months, 4 weeks ago

Iowa Gov. Kim Reynolds signed Senate File 183 into law June 14, 2022, to allow use of Construction Management at-Risk (CMaR) project delivery by public bodies in the state, effective July 1. The new law, Chapter 26a of the Iowa Code, enables and creates rules for use of CMaR by taxing bodies and other state government subdivisions, including K-12 school districts and community colleges.

The law does not do away with Construction Management Agency (CMa) project delivery, which previously was the only alternative delivery method available to most public entities in the state, but adds it as an option alongside traditional design-bid-build project procurement. It does prohibit use of single-contract design-build delivery for public bodies, including the Iowa Board of Regents which previously could use design-build.

With the legislation, Iowa joins many other U.S. states where CMaR delivery had previously been available to local governments. CMaR is similar to CMa in that both take equal advantage of the experience of the construction manager (CM) during the pre-construction phase in budgets, schedules and constructability review. Where the two methods differ is in the role of the CM during construction.

With CMa delivery, the construction management firm supervises the work and acts as an Owner advocate throughout the project, but does not hold the contracts with contractors or suppliers. With CMaR, the CM is in an Owner advocate role during pre-construction, but moves to a general contractor role once construction commences, and does hold supplier and subcontractor contracts. The CMaR can self-perform trade packages by either being the lowest responsive/responsible bidder, or if the owner determines the CMaR self-performing the work is in the best interest of the project. By requiring a guaranteed maximum price contract, use of CMaR delivery removes risk from the Owner and shifts it to the CM.

In addition to authorizing CMaR delivery, Chapter 26a sets up rules governing the process of selecting design services and CM services in the delivery method. In CMaR selection, the public owner must advertise statewide for requests for qualifications, and allow all qualified firms to submit fee proposals. This creates a two-phase selection process where finalists are chosen based on qualifications determined by the Owner. The owner can select the CMaR that offers the best value for the project. “Best Value” is not defined, which allows the owner to establish its own selection criteria. Also included in Chapter 26a are rules governing solicitation and award of bids to subcontractors and suppliers, who may be pre-qualified in advance of being allowed to submit bids for a project.

To learn more about CMaR delivery for construction of public improvements, or to inquire whether CMa or CMaR delivery would offer any advantages to your project, contact Carl A. Nelson & Company Vice President of Operations (Burlington) Chris Smith at csmith@carlanelsonco.com; or Director of Business Development Dan Culp at dculp@carlanelsonco.com. Or call (319) 754-8415.

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In Building Value, Carl A. Nelson & Company’s team of construction experts will address topics aimed at helping educational facility owners to get the most out of their projects before, during and after construction. Have questions? Send them to canco@carlanelsonco.com and we may answer it in an upcoming issue of the wibi newsletter.