Columbia School Board discusses contract options for new high school

Friday, November 20, 2009 | 12:01 a.m. CST

COLUMBIA — The architect for Columbia's next public high school recommended that the Columbia School Board go with a construction management agency rather than a general contractor for construction of the school.

Andy Anderson of DLR Group in Kansas City told board members at their work session Thursday that using a construction management agency, or CM, would allow the board more flexibility in hiring locally.

“High schools tend to be $50 (million) to $100 million exercises, and there are very few general contractors that can bond a contract that big,” Anderson said.

He said typically few general contractors can take on a project the magnitude of the high school, and there is a great possibility it would be a firm outside the Columbia area. Using a construction management agency provides a more transparent process than a general contractor and allows for more flexibility to bypass an out-of-state subcontractor in favor of a local subcontractor, Anderson said.

Anderson also said districts in Fayette, Jefferson City and Ashland have used construction management agencies for construction and renovation.

The high school will be located off St. Charles Road in the northeast part of the district. Anderson said it is expected to cost between $60 million and $65 million. Voters must approve money for the project before construction can begin. Although it is not certain yet, the board is likely to put a $120 million bond issue before voters in April.

The high school is expected to take three years to build. Anderson said that's a long time for a general contractor to tie up its bonding capacity because it can’t bid on other projects during that time.

Charles Oestreich, director of building services for Columbia Public Schools, also favors a CM, saying it would allow bids to be kept locally. He said by breaking up jobs into packages, such as a concrete package or roofing package, smaller companies can bid for smaller projects, and those smaller companies are likely to be in the Columbia area.

Board member Karla DeSpain said that in light of the current economic condition, “It is incumbent upon us to make sure as much of this stays local as possible."

The School Board will continue its discussion at its Dec. 14 meeting, and it may be voted on then, although that is not certain.

Oestreich hopes the board will make a decision in December so that plans can move forward quickly. After members decide, the plans must undergo a county review,which typically takes two or three months. Oestreich wants to start the bidding process in April, pending voter approval of the bond issue.

Anderson said a CM is hired to help manage construction cost, schedule, quality and safety. The CM takes the architectural drawings and divides them into “scopes of work,” such as masonry, roofing and site utilities, and helps execute the contracts with the School Board. 

The new high school is likely to have between 30 to 35 contractors, Anderson said.

With a general contractor, there is only one contract. That would mean the School Board would not have direct contact with the subcontractors, limiting the board's ability to control who gets the jobs. A bidding process will be used in all hiring.

Board member Michelle Pruitt voiced concern about the cost of a CM versus a general contractor.  A CM is paid a fee based on a percentage of the cost of the overall project, and she was concerned this could motivate the CM to inflate the cost. With a general contractor the motivation is to bid low to get the contract. 

“Regardless of the system you choose, at least 98 percent of the dollars used will be competitively based" Anderson said.

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Jerry Jackson November 20, 2009 | 2:25 p.m.

Four or five years ago, the Jefferson City School District met with members of the Builders' Association to discuss this topic prior to that district's $35 million bond issue. The subcontractor members of that organization were adamant against the use of construction manager-agent and several of the larger subcontractors informed the JC district that they would not be bidding if the district used CM-agent. That district then chose to bid its new school to general contractors.

Reasons cited at that meeting by the subcontractors included such issues as the lack of coordination and control by an overall responsible contractor, problems with coordination of work items and documents between subcontractors who were interdependent, increases in liability and problems with lines of responsibility, scheduling responsibilities and wasted manpower, high bonding costs and others. The lines of responsibility and coordination under this method increase the costs to interdependent subcontractors and make it impossible for any subcontractor to be held to an overall schedule with liquidated damages for a set completion time.

Missouri law requires all work to be competitively bid. It does not allow the construction manager-agent to hold trade contracts or do actual construction work on the project. It also excludes construction managers from providing bonding, insurances for the project, and liability for issues such as safety or for any instructions that may prove faulty given to any subcontractor. While contracts with subcontractors are written to try to hold those entities legally liable for bad occurrences, any accident or multi-subcontractor occurrence will flow legally to the school district itself.
If the services of a construction manager are desired, those permitted by law are clearly defined in two parts in the Missouri statutes. Those services can be contracted as intended by the statutes and as originally used by negotiating a construction manager-agent contract that is independent of the bidding of the construction contract, so that a single contracting firm is totally responsible and liable for ALL construction, including that of all subcontractors, according to the architect's documents and can be held to the district's completion date(s). This is the most transparent and open process that informs the public that the work is being done without collusion or conflict of interest, and with full disclosure of the costs.

Construction law is riddled with the legal problems and related forensic costs of this very distorted CM-agent method being sold for financial gain without responsibility that removes construction liability from an overall contracting firm and places it upon the school district. Missouri school districts have been sold a very bad and costly system by people who are either ignorant of the true workings of public construction or have a substantial interest in personal gain from the system.

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