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Madison project prompts delivery debate

Keith Ramus of M.A. Mortenson Co., Minneapolis, builds a wall template while setting up the foundation of the Wisconsin Energy Institute on April 5 on the University of Wisconsin-Madison campus. (File photo by Kevin Harnack)

By James Briggs

The construction-manager-at-risk project delivery method is facing renewed scrutiny after state approval of a waiver for the University of Wisconsin-Madison.

The state Building Commission granted the waiver Wednesday for a $76.8 million addition to Camp Randall Stadium and the McClain Center called the Badger Performance Center. State and UW-Madison officials argued CMAR was the best method to ensure the three-phase project meets budget and deadlines.

Sen. Dale Schultz, R-Richland Center, voted to approve the waiver but said he opposes the method because CMAR lets the state handpick a construction manager instead of awarding a contract to the lowest bidder.

Rather than complicating the UW-Madison project, though, Schultz said he would “fight this battle another day.

“While there may be a good reason to do this in this case and other cases,” he said, “I think we have to be serious about maintaining a transparent process and one that allows every contractor in the state to bid.”

But Dan Davis, senior vice president for Milwaukee-based CG Schmidt Inc., said the CMAR method could be even more transparent than multiple-prime bidding, which is the only option allowed under state law without a waiver. CG Schmidt is eyeing the Badger Performance Center project, Davis said.

Multiple-prime bidding means the state contracts with each construction discipline on a project and therefore maintains greater control from start to finish. CMAR means the contractor works as a consultant before construction begins and then as general contractor during the project. The contractor then negotiates with the state a guaranteed maximum price for the project.

Although multiple-prime bidding gives the state more oversight, Davis said, CMAR lets the state audit expenditures.

“In a lump-sum single-prime or multiple-prime, there’s a lot of black-box mystery to where the money really is spent, and the state has no access to that right now,” he said. “A CM approach, it’s all transparent and accountable — every penny.”

Schmidt is among four firms Wisconsin has selected to work on projects under the CMAR method since 2006, when the state began tracking that information, said Jeff Plale, administrator of the Division of State Facilities.

Including the Badger Performance Center, the state only has granted six CMAR waivers during that time.

With calls increasing for the state to reform its project-delivery system, Davis said, CMAR should be employed more often. Although the method mostly is reserved for the largest, most complicated projects, he said, state agencies should have greater freedom to use it even for small projects.

“We would advocate the (DSF) staff have the choice of what delivery method they should use,” Davis said. “It should almost eliminate the need for a waiver.”

Jim Boullion, director of government affairs for the Associated General Contractors of Wisconsin, also supports project-delivery reform, but said the CMAR waiver requirement should remain in place to ensure the state limits the number of projects awarded based on a subjective process.

Since the state is not selecting a contractor based on price alone under the CMAR delivery method, state staff members use a multitude of criteria, including a company’s work history, references and financial resources.

“The selection process, I think, is fair,” Boullion said. “But at the end of the day, people will question, ‘How did he get it and not me.'”

The state should make single-prime bidding available for all projects, Boullion said, but opening up CMAR to any project would go too far.

“Whoever feels they need (a waiver),” he said, “whether it’s the University of Wisconsin-Madison or anyone else, should come to the Building Commission and make their case.

“Construction-manager-at-risk is probably not a good off-the-shelf project delivery method for state construction projects. You really want open bidding as much as you can on state work.”

Widespread use of CMAR has supporters, Plale said, but he added DSF was cautious when considering which projects were prime candidates for a waiver.

“We’re sensitive at DSF, and I think the agencies are too,” he said. “There are some folks I know who would love to do CMAR (for) everything from pole barns to big capital projects and everything in between.

“But where it makes sense is when you have a project like (the Badger Performance Center) that’s very complex, it’s very complicated, it’s very big.”

But anyone seeking a CMAR waiver — or anyone who might want to change state law to include CMAR for more projects — will have to go through Schultz.

“In the end, the state is going to own and maintain these buildings, and the fact that it’s done in a transparent and efficient manner is critically important,” he said. “I will be back on this, you can rest assured.”

Previous stories from the state Building Commission

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