SECTION 260:65-17-9. Fee negotiation and contracts

(a)   In accordance with the qualifications-based ranking of firms to perform construction management services in 260:65-21, the Department shall request a fee proposal from the highest ranking firm.

(b)   Upon receipt of the written fee proposal, the Department shall hold fee negotiations in a manner consistent with the selection criteria.

(1)   The Department shall negotiate a contract with the highest qualified firm at compensation determined in writing to be fair and reasonable.

(2)   In establishing the construction management fee, the Department shall take into account the estimated value of the services to be rendered and the scope, complexity and professional nature of the services

(3)   In the event the Department is unable to negotiate a satisfactory contract with the firm considered to be the most qualified, at a price determined to be fair and reasonable, negotiations with that firm shall be formally terminated. The Department shall then undertake negotiations with the second most qualified firm, beginning with a formal request for a fee proposal from that business. Failing accord with the second most qualified business, the Department shall formally terminate negotiations with that firm. This process shall continue, with proposals received from and negotiations held with the next most highly qualified firm, until such time as a contract is signed with a qualified firm or the procurement process is terminated and a new request for qualifications is initiated.

(4)   In general, pre-construction services are required on all types of construction management contracts. The fee for these services should be negotiated as a lump sum amount and should be based on the scope and duration of services.

(5)   For Construction Management/At-Risk (CMc), there are essentially two phases of the contract.

(A)   Phase One commences following completion of fee negotiations for pre-construction services. Pre-construction services include all activities by the construction manager up to the point at which the design is far enough along for the construction manager to establish a Guaranteed Maximum Price (GMP). The point in time when the GMP can be established will vary from one type of project to another. Included in the GMP quoted by the construction manager are the construction manager's fees for administering the construction contract (project fee) and the fee to cover the General Conditions for construction. The project schedule may also dictate the amount of contingency included in the GMP.

(B)   Approval of the GMP advances the project from Phase One of construction management services to Phase Two. This is accomplished through issuance by the Department of a Notice to Proceed. Once the GMP is established, it will remain in effect through the development of the construction documents by the design consultant and the construction manager will work in conjunction with the design consultant to perform value engineering and construction coordination reviews and to develop individual bid packages for issuance to subcontractor trades.

(i)   Upon receiving the Notice to Proceed, the Construction Manager/At-Risk will be required to furnish 100% performance, payment and defect bonds, in an amount equal to the GMP or lump sum. Worker's Compensation, All Risk, Property and General Liability insurance shall be required.

(ii)   Non approval of the GMP allows the Department to terminate the services of the construction manager or to renegotiate, as required.

(iii)   When the design is complete and bid documents have been prepared for issuance of work packages to subcontractor trades, the construction manager becomes essentially a general contractor for the project, responsible for issuing and awarding individual work packages to subcontractor trades in accordance with subchapter 1, titled "Bidding Procedures", of this Chapter.

(6)   When individual work packages are bid as a lump sum, the CM's contract for that portion of the work converts from a GMP to a lump sum. Once all work packages have been bid, the construction manager's contract becomes all lump sum.

(7)   In the event that the GMP is exceeded after all bids are received from subcontractor trades, the construction manager and the Department must determine whether individual work packages need to be revised and then rebid in order to reduce cost. As an alternative, the Department may allow an adjustment to the GMP in order to allow the construction manager to award all work packages.

(8)   In administering the construction contract, the construction manager will adhere to Oklahoma public bidding laws in advertising and award of various work packages for a project. The estimated value of a work package will be published with the advertisement to bid.

(9)   Because the construction manager is "at risk" for the total contract amount, they are permitted to self-perform portions of the work, provided that they competitively bid the work as a lump sum (each work package) under the same terms and conditions as the other bidders. If the construction manager decides to bid a work package, they must declare this intent during the pre-bid meeting held by the Department.

(10)   In the award of subcontracts, the construction manager will award to the lowest responsible bidder. To be considered a "responsible bidder" the offeror must meet the minimum pre-qualification requirements, if any, that may be defined in the contract bid documents. An offeror shall meet the minimum pre-qualification requirements and complete the qualifications form that will be included as part of the bid package.

(11)   Procurement of project components costing less than the statutory amount established in 61 O.S., Section 103 may be accomplished by receipt of written bids pursuant to 61 O.S., Section 103. The Department may approve and direct the Construction Manager to prepare written bid solicitation for such items and furnish to at lease three known suppliers. The solicitation shall clearly state the requirements for products delivery and installation, if applicable, and shall require the written quotes to be returned to the Department or the Department's agent by a specified date and time.

(c)   Award of contract. The construction management contract is written and processed for award by the Department. After the contracts have been signed by all parties, and processed, copies shall be provided to the state agency and the consultant.

(d)   Changes to base contract. Changes to the base contract are permitted as long as the scope of the change is generally included within the scope of work developed for which the selection process was conducted. All changes shall be in writing and signed by all parties to the contract.

(e)   Construction Management contracts. Contracts are written by the Department in standard formats as required by 61 O.S. The Department may be contacted for development of special requirements to be included in the contracts.

[Source: Added at 31 Ok Reg 1423, eff 9-12-14]