Purpose
Provide information about the various types of Construction Contracts and how they are utilized.
Responsibility
The Project Manager should work with PCMM to determine the best method for soliciting construction services.
Timeframe
The delivery method and contract type should be identified when the preliminary scope, schedule and budget have been determined – at the end of concept design at the latest.
Process
The Project Manager should work with PCMM to determine which type of contract best fits the project goals.
Purchase Order
Purchase orders (P.O.) can be used for contracts valued at <$25,000. P.O.s for construction services must be issued by PCMM, not business offices.
Retainer Contract
Qualified contractors may be included in the OSU retainer contract program. Inclusion allows OSU to issue contracts with the following limitations:
< $50,000 – Contracts with a total expected cost of less than $50,000 may be directly procured from and awarded to any firm on the retainer list deemed capable of performing the work.
$50,000 - $500,000 – Contracts with a total expected cost between $50,000 and $500,000 require that OSU invite at least three firms to bid on a project, two of which must have MWESB certification or identify themselves as such.
$500,000 - $1,000,000 – Contracts with a total expected design cost of between $500,000 and $1,000,000 require that the bidding opportunity be open to all contractors on the retainer list.
> $1,000,000 – Contracts with a total expected cost in excess of $1,000,000 are not permitted to be procured under the retainer contract program.
Federally funded projects cannot be procured using the retainer process.
Standard Construction Contract
Projects with an estimated construction cost of over $1,000,000 follow the process for a standard advertised bid. Contracts with values between $50,000 and $1,000,000 could also use the standard contract if it’s been determined that use of the retainer contract is not in OSU’s best interests. This contract is typically used for projects with a design, bid build delivery method.
PCMM will put the project out for bid once all design documents are developed and required review processes are completed. A construction contract will be issued by PCMM to the lowest responsive and responsible bidder upon approval from the PM. (PM should discuss the decision with the funding department prior to authorizing PCMM to proceed with the contract award.)
Construction Manager/General Contractor (CM/GC)
When a project’s direct construction cost is estimated to be greater than $5 million, and/or the required completion date of the project requires an accelerated/phased construction schedule or other pertinent factors apply, the project is considered appropriate for the CM/GC process. The contractor provides consulting services such as cost estimating, scheduling and constructability analysis during the design phase, and in some cases begins phased construction, , prior to completion of the entire building design.
Contractors are selected based on qualifications, not bid price. An RFQ/RFP process is used to select the contractor. The RFQ/RFP is developed by PCMM with input from the PM. A selection committee is determined by the PM. Contractors are paid a fee for their services, in addition to a negotiated fee for preconstruction services. The contractor bids the various construction packages, but does not have to take the lowest bidder.
Design- Build
The design-build method is a project delivery system in which the design and construction services are contracted by a single entity.
Integrated Project Delivery (IPD)
IPD is a project delivery method that integrates project teams in order to take advantage of the knowledge of all team members to maximize the project outcome. All three parties (Owner, Architect, Contractor) are aligned by a single contract.