SECTION 752:11-9-6. Fee negotiation and contracts

(a)   Once the highest-ranking construction management firm is selected, the Authority shall request a fee proposal from the firm.

(b)   Upon receipt of the written fee proposal, the Authority shall negotiate a contract including fees.

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

(d)   In the event the Authority is unable to negotiate a satisfactory contract with the selected firm, at a price determined to be fair and reasonable, negotiations with that firm shall be formally terminated. The Authority shall then undertake negotiations with the firm ranked second, beginning with a formal request for a fee proposal from that business. Failing accord with the second firm, the Authority shall formally terminate negotiations with that firm. This process shall continue, with proposals received from and negotiations held with the next ranked 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.

(e)   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.

(f)   For Construction Management/At-Risk, there are essentially two phases of the contract:

(1)   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.

(2)   Approval of the GMP advances the project from Phase One of construction management services to Phase Two. The Authority will signal a move into Phase Two through issuance of a Notice to Proceed. Once the GMP is established, it will remain in effect through the development of the construction documents by the Construction Manager and, if applicable, the Design Consultant. The Construction Manager will work in conjunction with the Design Consultant, if applicable, to perform value engineering and construction coordination reviews and to develop individual bid packages for issuance to subcontractor trades.

(g)   Upon receiving the Notice to Proceed, the Construction Manager/At-Risk will be required to furnish 100 percent 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.

(h)   Non-approval of the GMP allows the Authority to terminate the services of the Construction Manager or to renegotiate, as required.

(i)   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 3 of this Chapter. Thus, in administering the construction contract, the Construction Manager will adhere to the competitive bidding requirements for 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.

(j)   Because the Construction Manager is "at risk" for the total contract amount, the Construction Manager is permitted to self-perform portions of the work, provided that the work is competitively bid as a lump sum (each work package) under the same terms and conditions as the other bidders. The Authority must be notified of the Construction Manager's intent to bid a work package during each pre-bid meeting held to discuss outgoing bid packages or otherwise in writing to the CFMO.

(k)   When individual work packages are bid as a lump sum, the Construction Manager'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.

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

[Source: Added at 36 Ok Reg 1970, eff 9-18-19]