State: Arkansas
New transportation construction contract process: construction manager/general contractor (CMGC) form of contracting
Why the switch? liability and risks of cost overruns move to the contractor
What parameters did the Legislature put around the new contracting method?
- 3 projects only
- totaling no more than $200 million
How does it work?
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Design Phase: contractors submit requests for proposals
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After the design phase: contractor submits its cost estimate to build the project
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If that cost is within 10% of the DOT’s cost estimate, the contractor wins the bid
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Contract sets a ceiling price that the contractor cannot exceed.
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If the DOT and contractor’s cost estimates exceed a 10% difference, then the project goes through a competitive bidding process
Equipment World | Ark. DOT tries out new contracting process for road projects