New construction law on show in Twin Falls

Twin Falls School District is preparing to start on the largest surge of construction in the district’s history. And it’s selecting a contractor without putting the project out for low bid.

TFSD has a $73.86 million bond to work with. Officials will award a contract based on contractor qualifications rather than bids.

That is a primary provision of the new Construction Manager/General Contractor legislation enacted by the Idaho Legislature on July 1. More commonly known as Construction Manager at Risk, Idaho now is among 38 states that allow government entities to employ CM/GC or CMAR for public projects, according to the American Institute of Architects.

The other major provision is the owner and the contractor agree to a guaranteed maximum price at the outset. This eliminates the inherent cost overruns and delays in countless large construction projects using the traditional design-bid-build process, said Wayne Hammon, executive director of the Idaho Associated General Contractors.

The Twin Falls School District is one of 116 public school districts in Idaho that can make use of Senate Bill 1311. So can Idaho’s 44 counties and 200 incorporated cities and various other government entities.

TFSD and the city of Boise are the first two government entities to make use of the CM/GC provisions, Hammon said. The city of Boise recently signed a contract with Boise-based McAlvain Construction for a Dixie Drain phosphorus removal project in Nampa.

Twin Falls chose the CM/GC because it allowed the district to select a contractor based on quality rather than low bid.

“It gives us the most flexibility,” said Brady Dickinson, the school district’s director of operations. “The biggest thing in our world is making sure we’re on budget and on time. We’ve been entrusted with a lot of money.”

TFSD is building two new elementary schools and a new middle school. It will also remodel one high school and expand another high school over the next year or so.

The two yet-to-be-named elementary schools will go up in the northeast and northwest portions of town. Each will be for 650 students. Construction is expected to start in April 2015.

These will be the first elementary schools Twin Falls has built since 1994, with the population growing about 50 percent since then. To deal with growth, the district a few years ago moved ninth grade from middle school to high school, and sixth grade was transferred from elementary school to the middle school.

“That bought us some time,” Dickinson said.

Construction of the 1,000-student middle school will follow in fall 2015. Renovation of Twin Falls High School, built in 1953, will start this fall. Renovations include the addition of air conditioning, new roofs, and new windows, Dickinson said.

Canyon Ridge High School was opened in 2009 and already needs expansion, he said.

The school district is negotiating with three potential construction managers, one for the elementary schools, one for the middle school and one for the high schools.

“It started to be pretty apparent why this is such a growing success in so many different states,” said Ken Fisher, owner of Paradigm of Idaho, who is advising the district as an owner representative. “It provides owners with so many options based on quality and cost savings.”

The construction manager at risk concept, as implied in the term, means the project must be completed for the price agreed to at the outset. Cost overruns are borne by the contractor, not the taxpayer, Hammon said.

“One of the big advantages is because the construction manager is at risk. He has a stake in the project being a success,” Hammon said. “He has a powerful incentive to make sure it’s done on time and correctly the first time and done on budget. With that risk comes reward. Most contracts have incentives or rewards for coming in on time and on budget or early.”

CM/GC has a built-in mechanism to increase the odds of a project finishing on time. Traditionally, there is not a firm chain of command to make sure subcontractors have coordinated schedules. Under CM/GC, the construction manager has a built-in incentive to actively manage the entire schedule to ensure an on-time delivery of the project.

“Part of the biggest risk in doing work is scheduling. Subcontractor B cant’s do work until Subcontract A is done,” said Hammon, who drafted the CM/GC legislation and shepherded it through the Legislature. “By having one person do the scheduling, you speed up projects and the risk of delay.”

Traditionally, in the design-bid-build approach, the contractor does not come on board until the architectural construction drawings are completed. The builder has to deal with whatever the architect has come up with.

With CM/GC, the construction manager at risk is brought on earlier in the process to collaborate with the architect.

“We’re bringing in the CM/GC at the time of design development so they can assist in costing to make sure the design fits into the project,” Fisher said.

Architects are dubious about bringing constructions managers into the design process, but the American Institute of Architects remained neutral on the Idaho legislation, as more than 30 states already had similar programs in place.

“Generally speaking, architects see construction managers as encroaching on a traditional role of an architect,” said Ty Morrison, president-elect of AIA’s Idaho chapter. “That being said, we’ve had a general acceptance that some clients need a separate construction manager.”