There are multiple ways to get a public project built that differ in their financial structure and the process of choosing a contractor.
These Alternative Project Delivery Methods each offer different benefits.
As a client’s program manager, we guide them through the options and provide insights to decide the best method for their project.
Outlined below are some of the top methods, including:
- Job Order Contracting (JOC)
- Competitive Sealed Proposal (CSP)
- Construction Manager At-Risk (CMAR)
- Design-Build
- Public-Private Partnerships (P3)
- Performance Contracting
1. Job Order Contracting (JOC)
Job Order Contracting or JOC offers clients an opportunity to choose from a pool of pre-qualified vendors to turn around smaller jobs at a fixed price quickly.
This mechanism is used for the majority of asbestos abatement. It can also be used on large construction projects to complete final client requests, like replacing several doors across a campus, without keeping the general contractor tied up and going through a lengthy procurement process.
JOC also provides smaller contractors with the opportunity to get experience under their belt.
Although clients may pay a premium for JOC, it significantly cuts down on time, ensuring that a job is completed swiftly.
2. Competitive Sealed Proposal (CSP)
When using Competitive Sealed Proposal or CSP, drawings are drafted and shared widely among contractors. Any contractor qualified for the job can submit for consideration, meaning clients are more likely to get a competitive price.
We help clients score contractors and evaluate them based on several factors, including those mandated by the state. These include but are not limited to their qualifications, past performance and proposal cost.
CSP often provides the best value to the client, though it’s key to develop a point system that doesn’t over-value extremely low prices above all other considerations.
3. Construction Manager At-Risk (CMAR)
In Construction Manager At-Risk or CMAR, the contractor is brought on at the beginning to work alongside the design team.
The client sets the general scope of work, including the budget and percentage fee for the contractor, as well as the type of school being built and the anticipated square footage.
They put out a request for quotation (RFQ), and contractors respond with a proposal.
Districts commonly use CMAR when renovating older schools.
Clients sometimes feel that this approach is not competitive enough and worry about getting a fair price. However, it can give control back to them and the opportunity to develop more efficient plans.
Because the contractor is working with the design team and client from the get-go, it’s a much more collaborative process.
We see those results in the designs themselves. We’re also able to do more thorough pre-construction planning with cost exercises and constructability reviews that enable us to identify and plan for potential challenges that would otherwise pop up later.
4. Design-Build
Design-Build is similar to CMAR, but the contractor and the designer partner as one.
Typically, the contractor hires the architect and their consultants to work directly for them and responds to the client’s RFQ with their price to design and build the project.
Some clients may see a downside to not having a direct relationship with the designer and feel they lack control.
But it offers a streamlined approach. The client interacts with one primary contact who oversees and implements the project.
5. Public-Private Partnerships (P3)
In Public-Private Partnerships or P3, a private institution finances a revenue-generating public project. Revenue from the facility goes towards paying off the debt.
For clients not familiar with P3, taking on off-balance sheet debt can be concerning. But that’s also the benefit. It allows them to pursue projects that otherwise may not get financed and does so without putting any money down.
Higher education commonly uses P3 for student housing. The institution leases a piece of land out to a private developer to build a student housing project. Once it opens, the institution can begin paying off the associated debt with revenue generated from rent.
School districts frequently use P3 when they need a new administration building. The public often doesn’t want to put tax dollars towards that type of initiative because they want them to go directly to schools.
So, instead of trying to get a bond passed, districts use P3 by dedicating the first floor of their administration building to retail and some other floors as office space that they can rent out to generate revenue.
Districts also use this method to build sports complexes that they can rent out to leagues.
6. Performance Contracting
Performance Contracting is an energy procurement tool meaning it’s used to replace any energy-consuming item.
These changes often create a better learning environment for students because they involve upgrades like replacing fluorescent lights with LED lights, making it easier for students to focus.
The energy-efficient upgrades enable clients to use projected savings to finance the project, making them ideal for institutions or districts experiencing budget shortfalls.
Understandably, this can sound too good to be true, so it often involves thorough discussion, but it can be a reliable method for making campus improvements.
