[Federal Register Volume 83, Number 217 (Thursday, November 8, 2018)]
[Proposed Rules]
[Pages 55838-55850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-24282]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 501, 536, and 552
[GSAR Case 2015-G506; Docket No. GSAR-2018-0013; Sequence No. 1]
RIN 3090-AI81
General Services Administration Acquisition Regulation (GSAR);
Adoption of Construction Project Delivery Method Involving Early
Industry Engagement--Construction Manager as Constructor (CMc)
AGENCY: Office of Acquisition Policy, General Services Administration
(GSA).
ACTION: Proposed rule.
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SUMMARY: The General Services Administration (GSA) is issuing a
proposed rule amending the General Services Administration Acquisition
Regulation (GSAR) to adopt an additional project delivery method for
construction, construction manager as constructor (CMc). The private
sector prevalently uses this type of construction project delivery
method, which allows for early industry engagement by the construction
contractor to provide reduced cost growth, reduced schedule growth and
administrative savings. The current Federal Acquisition Regulation
(FAR) and GSAR lack detailed coverage differentiating various
construction project delivery methods. GSA's policies on CMc have been
previously issued through other means. By incorporating CMc into the
GSAR and differentiating for various construction methods, the GSAR
will provide centralized guidance that eases the burden for industry to
understand and execute CMc construction contracts. Centralized guidance
will also ensure consistent application of construction project
principles across GSA. Additionally, integrating these requirements
into the GSAR will allow industry to provide public comments through
the rulemaking process.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division on or before January 7, 2019 to be
considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by GSAR Case 2015-G503 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``GSAR
Case 2015-G506''. Select the link ``Comment Now'' that corresponds with
GSAR Case 2015-G506. Follow the instructions provided on the screen.
Please include your name, company name (if any), and ``GSAR Case 2015-
G506'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division, 1800 F Street NW, ATTN: Lois Mandell Washington,
DC 20405.
Instructions: Please submit comments only and cite GSAR Case 2015-
G506 in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided. To
confirm receipt of your comment(s), please check www.regulations.gov,
approximately two to three days after submission to verify posting
(except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: For clarification about content,
contact Mr. Tony O. Hubbard, General Services Acquisition Policy
Division, GSA, by phone at 202-357-5810 or by email at
[email protected]. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat by mail at
1800 F Street NW, Washington, DC 20405, or by phone at 202-501-4755.
Please cite GSAR Case 2015-G506, Construction Manager as Constructor
Contracting.
SUPPLEMENTARY INFORMATION:
I. Background
CMc refers to a project management and contracting technique that
is one of three predominant methods used for acquiring construction
services by GSA (i.e., traditional (design-bid-build), design-build,
and CMc). The CMc model used by GSA follows industry best practices
that have been commonly used in the private sector for many years, and
has worked well for numerous GSA construction procurements. While there
is ample guidance on traditional and design-build procurements in the
FAR, there is no guidance on CMc procurement. By providing specific
contracting guidance on CMc, GSA is adopting a major project delivery
method used by the private sector and is fundamentally updating the
practice of buying construction services within the Federal Government.
This move supports the Government's shift toward category management by
providing a more robust playbook framework for efficient procurement of
construction services.
The General Services Administration (GSA) is amending the General
Services Administration Acquisition Regulation (GSAR) to revise
sections of GSAR Part 536, Construction and Architect-Engineer
Contracts, and corresponding clauses in GSAR Part 552, Solicitation
Provisions and Contract Clauses to incorporate CMc contracting, an
industry best practice readily used in the private sector for
construction. This rule will clarify, update and incorporate existing
CMc guidance previously implemented through internal Public Building
Service (PBS) policies.
Bringing existing policy into the GSAR will allow for greater
transparency and an opportunity for the public to comment on these
long-standing procedures. This rule has wide support from industry. In
response to GSA's request for public input on acquisition regulatory
reform (82 FR 24653), one leading construction industry association
requested that GSA put forward GSAR guidance on the CMc project
delivery method. In addition, bringing these policies into one location
ensures currency and consistency that will make it easier for companies
to do business with the Government and will provide better guidance to
contracting officers. The proposed rule includes a total of two new
agency unique clauses, three new alternatives to existing clauses, one
new definition and one new agency unique subpart to prescribe policies
and procedures for CMc contracting.
The CMc project delivery method models those used extensively in
the
[[Page 55839]]
private sector for large complex construction projects. Similar to
implementation in the private sector, this delivery method for GSA
engages the construction contractor during the design phase of the
project and establishes a ceiling on the eventual construction price
(i.e., the guaranteed maximum price (GMP)) before construction
documents are prepared. While the private sector and GSA share an
emphasis on technical qualifications for contractor selection, GSA also
includes price competition of the GMP before initial contract award and
provides more detail on the GMP elements. The CMc project delivery
method creates value through early collaboration between the architect
and constructor. In addition to the benefits of design phase services,
CMc offers the opportunity to begin construction prior to full
completion of the design and to reduce the total project schedule.
Similar to the private sector, GSA provides a cost incentive under CMc
contracts. Through the cost incentive approach, the constructor is
motivated to promote innovation and efficiencies that reduce costs
through the construction phase of the project.
A GSAR rewrite initiative was undertaken by GSA to revise the GSAR
starting in 2008. A proposed rule to update GSAR Part 536, Construction
and Architect-Engineer Contracts was initially published as GSAR Case
2008-G509 in the Federal Register at 73 FR 73199, on December 2, 2008.
Due to the variety of issues addressed in the GSAR 536 rewrite, and
internal stakeholder interest, the agency re-evaluated the
implementation plan for the GSAR 536 rewrite and withdrew this initial
proposed rule. The initial proposed rule withdrawal was published in
the Federal Register at 80 FR 6944 on February 9, 2015. GSAR Case 2015-
G506 is the third of several GSAR cases to separately address the
issues and update the GSAR Part 536 text.
II. Discussion and Analysis
The changes to the GSAR included in this proposed rule are
summarized below.
1. Two new clauses for construction contracts previously
implemented through internal PBS policy and currently in solicitations
and contracts will be incorporated into GSAR Parts 536 and 552. The new
clauses and a brief description are as follows:
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Name and No. Description Purpose
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552.236-79 Construction Agency unique Clause provides
Manager as Constructor. clause to guidance specific to
address a CMc project.
requirements
including the
guaranteed
maximum price,
conversion to
firm-fixed-
price, and final
settlement.
552.236-80 Accounting Records Agency unique Clause provides
and Progress Payments. clause to guidance specific to
address a CMc project.
requirements
including
auditing
accounts and
control systems.
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2. Three new alternates for existing clauses for construction
contracts previously implemented through internal PBS policy and
currently in solicitation and contracts will be incorporated into GSAR
Parts 536 and 552. The clauses and a brief description of the changes
are as follows:
------------------------------------------------------------------------
Name and No. Description Purpose
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552.236-15 Schedules for Supplemental Clause prescription
Construction Contracts. clause to FAR has no dollar
52.236-15 to threshold, which is
address more inclusive than
milestone the FAR clause that
events, cost is only required at
breakdown, and above simplified, in
requirements for order to satisfy GSA
different specific contracting
project delivery requirements.
methods.
The base clause
provides guidance
for any type of
construction
project. Alternate I
of the clause
provides guidance
specific to a design-
bid-build
construction
project. Alternate
II of the clause
provides guidance
specific to a design-
build construction
project. Alternate
III of the clause
provides guidance
specific to a CMc
project.
552.236-21 Specifications and Supplemental Clause prescription
Drawings for Construction. clause to FAR has no dollar
52.236-21 to threshold, which is
address more inclusive than
inconsistencies, the FAR clause that
and clarify is only required at
definition of above simplified, in
terms for order to satisfy GSA
different specific contracting
project delivery requirements.
methods. The base clause
Revised title and provides guidance
clause numbering for any type of
to better align construction
with the FAR, project. Alternate I
previously was of the clause
GSAR 552.236-77, provides guidance
Specifications specific to a design-
and Drawings. build construction
project. Alternate
II of the clause
provide guidance
specific to a CMc
project.
552.236-71 Contractor Agency unique The base clause
Responsibilities. clause to provides guidance
address for any type of
requirements for construction
different project. Alternate I
project delivery of the clause
methods. provides guidance
specific to a design-
build construction
project. Alternate
II of the clause
provide guidance
specific to a CMc
project.
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3. A new definition is incorporated at GSAR Section 536.102 for the
construction manager as constructor (CMc) project delivery method.
4. GSAR Subpart 536.71 is added to reflect current practices for
construction contracting using the construction manager as constructor
(CMc) project delivery method. The sections and a brief description are
as follows:
[[Page 55840]]
------------------------------------------------------------------------
No. Name Description
------------------------------------------------------------------------
536.7101...................... Scope of Subpart. Clarifies the scope
as the policies and
procedures for the
use of the CMc
project delivery
method.
536.7102...................... Definitions...... Provides a definition
for guaranteed
maximum price and
related elements.
536.7103...................... Construction Provides policies
Contract relating to
Solicitation evaluation factors,
Procedures. price realism, total
evaluated price, and
release of the
Government estimate.
536.7104...................... Construction Provides procedures
Contract Award. for award of
separate line items.
536.7105...................... Construction Provides policies
Contract relating to
Administration. guaranteed maximum
price, open book
accounting,
incentives,
allowances, early
work packages, and
conversion to firm-
fixed-price.
536.7106...................... Construction Provides procedures
Contract regarding final
Closeout. settlement and audit
for closeout.
536.7107...................... Contract Clauses. Prescribes clauses
when a CMc project
delivery method will
be followed.
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III. Specific Questions for the Public
GSA is seeking public comment on the applicability of Cost
Accounting Standards (CAS) and the structure of incentives for CMc
contracts. Feedback from industry and interested parties in Government
on these issues will be used to help inform revisions to the proposed
clauses, prescriptions, and other guidance to implement the rule.
Cost Accounting Standards: FAR Subpart 30.2 requires full CAS
compliance, which covers 19 cost accounting principles, for negotiated
contracts over $50 million. Modified CAS compliance, which covers 4
cost accounting principles, is required for negotiated contracts below
$50 million. Currently, contracts using the CMc project delivery method
apply these same CAS requirements as well as open book accounting
practices for GMP line items. GSA is seeking public comment on industry
standards for cost accounting as they relate to construction projects
and the economic impact or cost savings if GSA were to only apply
modified CAS compliance to all CMc projects regardless of dollar value.
Incentives: Currently, contracts using the CMc project delivery
method include a fee for the construction work within the GMP that is a
fixed amount for all of the contractor's indirect costs. This fee may
include overhead, profit, and general conditions. Current CMc contracts
also include a shared savings of the cost reductions realized by the
contractor as a result of completing the construction work for less
than the GMP. Public comments are invited on the way the proposed rule
structures these elements under the CMc project delivery method, and
the types of structures and incentives common in the construction
marketplace.
IV. Expected Economic Impact of This Rule
All three predominant construction project delivery methods have
merits (i.e., Design-Bid-Build (D-B-B), Design/Build (D-B), and
Construction Manager as Constructor (CMc)). CMc specifically allows for
early industry engagement by the construction contractor. A study by
the Pankow Foundation \1\ as well as GSA's own data analysis have shown
that this early engagement can provide reduced cost growth, reduced
schedule growth and administrative savings, resulting in a net economic
burden reduction compared with the other project delivery methods. GSA
welcomes comments on all aspects of this section. An Economic Impact
Analysis (EIA) has been prepared consistent with the principles of OMB
Circular A-4 and is summarized as follows:
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\1\ Leicht, R. M., Molenaar, K. R., Messner, J. I., Franz, B.
W., and Esmaeili, B. (2015). Maximizing Success in Integrated
Projects: An Owner's Guide. Version 0.9, May. Available at http://bim.psu.edu/delivery.
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1. Unquantified Benefits: There are several important economic
benefits specific to CMc that are expected to reduce burden that are
difficult to quantify. Although not easily quantifiable they
collectively represent meaningful savings to qualify this rule as
deregulatory.
Early collaboration between the CMc and architect allow for (a)
more efficient reviews of architect design submittals, (b) innovation
during design that leads to fewer change orders during construction,
and (c) identifications of conflicts or errors before work investments
are made.
Early work packages under CMc allow for firm-fixed-price
conversions and advanced execution of certain elements that provide
cost and schedule savings, especially in a tight labor or material
market.
As compared with D-B projects, CMc projects will reduce sunk costs
and lower barriers to entry for industry to submit proposals and
compete in this space.
Finally, codifying CMc requirements into one publicly-posted
location, the GSAR, will ease the burden to industry and GSA to
understand CMc requirements and execute CMc projects.
2. Reduced Schedule Growth: This rule provides Government
administrative savings resulting from reduced schedule growth and the
associated increased project management and acquisition management
efficiencies.
3. Final GMP Proposal: This rule adds minimal burden for
contractors to submit and Government to review a revised proposal to
establish the final Guaranteed Maximum Price (GMP) of the construction
work and convert the contract to firm-fixed-price (FFP).
4. Regulation Familiarization: This rule adds minimal burden for
contractors and Government to understand new requirements in this GSAR
Case 2015-G506 that are different from existing CMc policy in GSA Class
Deviation SPE-2012-04-02.
To estimate the economic impacts of reduced schedule growth, cost
to finalize the GMP proposal and regulation familiarization, data was
analyzed for GSA construction contracts completed between 2009 and 2016
that used the three predominant construction delivery methods. The
results of the analysis showed this rule will provide a net
deregulatory savings of $238,535 annually. A 7 percent discount rate
was used for the calculations.
Historic data was gathered and analyzed from GSA's Electronic
Planning Module (ePM), an internal system which was mandated as a
project management tool for construction starting in 2009. Historic
data was also gathered and analyzed from the Federal Procurement Data
System (FPDS), the authoritative source for government wide contract
award data. Based on historic data, it is assumed that five new CMc
projects will be performed each year.
A copy of the EIA may be obtained from the Regulatory Secretariat.
GSA invites comments from industry and
[[Page 55841]]
other interested parties on the expected impact of this rule.
Government Economic Impact
The EIA recognizes that Government will have administrative savings
from reduced schedule growth. CMc when compared with non-CMc project
delivery methods historically saves on average 71 calendar days (or 60
business days). This allows for increased efficiency for a senior
project manager (PM), senior CO, and journeyman CS. Based on subject
matter expertise, the PM would save 6 hours per day, the CO would save
2.5 hours per day, and the CS would save 5 hours per day. From reduced
schedule growth, the annual Government savings is 810 hours ($275,990).
The EIA also recognizes that Government will have an added burden
to review revised proposal submissions from contractors for the final
GMP. Based on subject matter expertise, a journeyman CS would spend 20
hours for each proposal review. For the final GMP proposal, the total
annual burden to the Government is 100 hours ($5,430).
Finally, the EIA recognizes that Government will have an added
burden to understand the minor policy changes in this rule from
existing guidance. The analysis accounts for a senior contracting
officer (CO) and journeyman contract specialist (CS) for each GSA CMc
construction project. Based on subject matter expertise, a CO and CS
would spend one hour annually reviewing the adjusted language for
understanding. For regulation familiarization, the total annual burden
to the Government is 10 hours ($653).
The total annual Government economic impact is a savings of 700
hours ($269,907), or ($252,250) when annualized at a 7 percent
discount.
Public Economic Impact
The EIA recognizes that contractors will have an added burden to
prepare revised proposal submissions for the final GMP. It is assumed
that large or small businesses would spend 40 hours for each proposal
submission. For the final GMP proposal, the total annual burden to the
public is 200 hours ($10,860).
Finally, the EIA recognizes that contractors will have an added
burden to understand the minor policy changes in this rule from
existing guidance. The analysis accounts for two hours for large or
small business entities to review and understand the new language
differences between existing policy. This also assumes that for each of
the contracts an estimated five entities will spend time reviewing
language during the solicitation phase in order to provide a
representative offer. For regulation familiarization, the total annual
burden to the public is 50 hours ($3,815).
The total annual public economic impact is a burden of 250 hours
($14,675), or ($13,715) when annualized at a 7 percent discount.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 supplements E.O. 12866 and emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing
rules, and of promoting flexibility. This is not a significant
regulatory action and, therefore, was not subject to review under
section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
VI. Executive Order 13771
This proposed rule is expected to be an E.O. 13771 deregulatory
action. Details on the estimated cost savings of this proposed rule can
be found in the rule's economic impact analysis detailed in Section IV
of this proposed rule.
VII. Executive Order 13777
This rule has been identified by GSA's Regulatory Reform Task Force
as a rule that improves efficiency by eliminating procedures with costs
that exceed the benefits as described in Section IV of this proposed
rule.
VIII. Regulatory Flexibility Act
GSA does not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, at 5 U.S.C. 601, et seq.,
because the proposed rule will incorporate clauses that are currently
in use in GSA construction solicitations and contracts and contractors
are familiar with and are currently complying with these practices.
However, since this is the first time these existing policies and
procedures that impact the public are being published, an Initial
Regulatory Flexibility Analysis (IRFA) has been prepared. The IRFA has
been prepared consistent with the criteria of 5 U.S.C. 604 and is
summarized as follows:
The proposed rule changes will apply to approximately 5 GSA
construction contracts per year. Of these, approximately 1 (20 percent)
contracts are held by small businesses. The proposed rule is unlikely
to affect small businesses awarded GSA CMc construction contracts as it
implements clauses currently in use in CMc solicitations and contracts.
The proposed rule does not pose any new reporting, recordkeeping or
other compliance requirements. The rule does not duplicate or conflict
with any other Federal rules. The agency determined that alternative
language is necessary for four FAR clauses. The agency determined that
supplemental language is necessary for two FAR clauses. No alternatives
were determined that will accomplish the objectives of the rule.
Bringing these regulations into the GSAR provides for transparency and
allows for public comment. Bringing these regulations into the GSAR
also consolidates policy into one area, allowing for more consistency
and efficiency in contracting for both businesses and contracting
officers.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat. GSA invites comments from small business concerns and
other interested parties on the expected impact of this rule on small
entities.
GSA will also consider comments from small entities concerning the
existing regulations in subparts affected by this rule in accordance
with 5 U.S.C. 610. Interested parties must submit such comments
separately and should cite 5 U.S.C. 601, et seq., (GSAR 2015-G506), in
correspondence.
IX. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies because
the proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat Division has submitted a
request for approval of a new information collection requirement
concerning this rule to the Office of Management and Budget under 44
U.S.C. 3501, et seq.
The information collected is used by PBS to evaluate contractor's
proposals and negotiate contract modifications during contract
administration.
Total public reporting burden for this collection of information is
estimated to average 200 total hours annually, including the time for
reviewing
[[Page 55842]]
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. The estimated burden hours to the public for
the below clauses are as follows:
The new clause at GSAR 552.236-79, Construction-Contractor-as-
Constructor, requires the contractor to submit proposals to establish
the final estimated cost of the work, to convert the contract to a
firm-fixed-price, and to determine the final settlement.
Respondents: 5.
Responses per Respondent: 1.
Total Annual Responses: 5.
Hours per Response: 40.
Total Response Burden Hours: 200.
The new clause at GSAR 552.236-80, Accounting Records, contains a
recordkeeping requirement that is subject to the Paperwork Reduction
Act (44 U.S.C. 3501, et seq.). The clause requires the contractor to
keep all relevant documents for a period of three years after the final
payment. However, the clause does not add burden to what is already
estimated for the existing FAR clause at 52.215-2, Audit and Records by
a previous information collection (see OMB Control Number 9000-0034).
Submit comments, including suggestions for reducing this burden, no
later than January 7, 2019. Submit comments to the General Services
Administration, Regulatory Secretariat Division, 1800 F Street NW,
Washington, DC 20405.
Public comments are particularly invited on: Whether this
collection of information is necessary; whether it will have practical
utility; whether our estimate of the public burden of this collection
of information is accurate, and based on valid assumptions and
methodology; ways to enhance the quality, utility, and clarity of the
information to be collected; and ways in which we can minimize the
burden of the collection of information on those who are to respond,
through the use of appropriate technological collection techniques or
other forms of information technology.
Requesters may obtain a copy of the information collection
supporting statement from the General Services Administration,
Regulatory Secretariat Division, 1800 F Street NW, Washington, DC
20405.
Please cite OMB Control No. 3090-XXXX, Construction Manager as
Constructor; GSAR Case 2015-G506, in all correspondence.
List of Subjects in 48 CFR Parts 501, 536, and 552.
Government procurement.
Dated: November 1, 2018.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of
Government-wide Policy.
Therefore, GSA proposes to amend 48 CFR parts 501, 536, and 552 as
set forth below:
0
1. The authority citation for 48 CFR parts 501, 536, and 552 continues
to read as follows:
Authority: 40 U.S.C. 121(c).
PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION
SYSTEM
501.106 [Amended]
0
2. Amend part 501.106 by adding to the table, in numerical order, GSAR
references ``552.236-79'' and ``552.236-80'' and their corresponding
OMB control numbers ``3090-XXXX'' and ``9000-0034'', respectively.
PART 536--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
0
3. Amend section 536.102 by adding, in alphabetical order, the
definition of ``Construction-Manager-as-Constructor'' to read as
follows:
536.102 Definitions.
* * * * *
``Construction-Manager-as-Constructor'' (CMc) means the project
delivery method where design and construction are contracted
concurrently through two separate contracts and two separate
contractors. Unlike the traditional design-bid-build delivery method,
under the CMc delivery method, the Government awards a separate
contract to a designer (i.e., architect-engineer contractor) and to a
construction contractor (i.e., CMc contractor) prior to the completion
of the design documents. The Government retains the CMc contractor
during design to work with the architect-engineer contractor to provide
constructability reviews and cost estimating validation. The CMc
contract includes design phase services at a firm-fixed-price and an
option for construction at a guaranteed maximum price.
* * * * *
0
4. Add section 536.515 to read as follows:
536.515 Schedules for construction contracts.
Insert the clause at 552.236-15, Schedules for Construction
Contracts, in solicitations and contracts if construction, dismantling,
demolition, or removal of improvements is contemplated. Use the clause:
(a) With its Alternate I when the contract amount is expected to be
above the simplified acquisition threshold and a design-bid-build
project delivery method will be followed.
(b) With its Alternate II when the contract amount is expected to
be above the simplified acquisition threshold and a design-build
project delivery method will be followed.
(c) With its Alternate III when the contract amount is expected to
be above the simplified acquisition threshold and a construction-
manager-as-constructor project delivery method will be followed.
0
5. Add section 536.521 to read as follows:
536.521 Specifications and drawings for construction.
Insert the clause at 552.236-21, Specifications and Drawings for
Construction, in solicitations and contracts if construction,
dismantling, demolition, or removal of improvements is contemplated.
Use the clause--
(a) With its Alternate I when a design-build project delivery
method will be followed; or
(b) With its Alternate II when a construction-manager-as-
constructor project delivery method will be followed.
536.570-1 [Removed]
0
6. Remove section 536.570-1.
0
7. Amend section 536.570-2 by redesignating the heading as 536.570-1
and revising the section to read as follows:
536.570-1 Authorities and limitations.
Insert the clause at 552.236-70, Authorities and Limitations, in
solicitations and contracts if construction, dismantling, demolition,
or removal of improvements is contemplated.
0
8. Add section 536.571 to read as follows:
536.571 Contractor responsibilities.
Insert the clause at 552.236-71, Contractor Responsibilities, in
solicitations and contracts if construction, dismantling, demolition,
or removal of improvements is contemplated. Use the clause--
(a) With its Alternate I when a design-build project delivery
method will be followed; or
(b) With its Alternate II when a construction-manager-as-
constructor project delivery method will be followed.
[[Page 55843]]
Subpart 536.70--[Reserved]
0
9. Add and reserve Subpart 536.70.
0
10. Add new subpart 536.71 to read as follows:
Subpart 536.71--Construction-Manager-as-Constructor Contracting
Sec.
536.7101 Scope of Subpart.
536.7102 Definitions.
536.7103 Construction Contract Solicitation Procedures.
536.7104 Construction Contract Award.
536.7105 Construction Contract Administration.
536.7105-1 Responsibilities.
536.7105-2 Guaranteed Maximum Price.
536.7105-3 Accounting and Auditing Requirements.
536.7105-4 Value Engineering.
536.7105-5 Shared Savings Incentive.
536.7105-6 Allowances.
536.7105-7 Early Work Packages.
536.7105-8 Conversion to Firm-Fixed-Price.
536.7106 Construction Contract Closeout.
536.7107 Contract Clauses.
536.7101 Scope of Subpart.
This subpart describes policies and procedures for the use of the
CMc project delivery method.
536.7102 Definitions.
As used in this subpart--
``CMc Contingency Allowance'' (CCA) is an allowance for the
exclusive use of the construction contractor to cover reimbursable
costs during construction that are not the basis of a change order.
These costs could include estimating and planning errors in the final
Estimated Cost of the Work (ECW) or other contractor errors.
``Early Work Package'' means a set of construction activities that
can be clearly defined and separately performed from the remainder of
the construction work. These packages are typically identified toward
the beginning of the project. Demolition is an example of an early work
package.
``Estimated Cost of the Work'' (ECW) means the estimated direct
cost of the construction work. The proposed ECW incorporated at
construction contract award is the target ECW. The final ECW is
negotiated during the design phase and is incorporated into the
construction contract through modification.
``Fee for the Construction Work'' is a fixed amount established in
the construction contract for all of the contractor's indirect costs,
including overhead and profit, for the construction work. The fee may
be proposed per phase of construction if each phase is a separate
option.
``Guaranteed Maximum Price'' (GMP) is the ceiling price described
in FAR 16.403-2. At construction contract award, the GMP for the
construction contract is established as the sum of the target ECW, the
CCA and the fee for the construction work.
536.7103 Construction Contract Solicitation Procedures.
(a) Procurement Timing. The request for proposals should be issued
only when the project design requirements have been developed to a
sufficient degree of specificity to permit competition with meaningful
pricing for the ECW. The contracting officer should obtain written
documentation for the contract file from the project manager that the
project design requirements satisfy the condition stated in this
section.
(b) Proposal Evaluation.
(1) Evaluation Factors.
(i) Except as provided in paragraph (ii) of this subsection, the
solicitation shall provide that the technical evaluation factors, when
combined, shall be considered significantly more important than cost or
price.
(ii) Subject to the approval of the HCA, the weighting of the
technical evaluation factors and cost or price may be different than
that required under paragraph (i) of this subsection. Any such written
approval shall be documented in the contract file.
(2) Price Realism. The contracting officer shall provide for a
price realism analysis in the solicitation for the purpose of
assessing, among others, whether an offeror's price reflects a lack of
understanding of the contract requirements or risk inherent in an
offeror's proposal. The solicitation shall provide offerors with notice
that the agency intends to perform a price realism analysis.
(3) Total Evaluated Price. For purposes of evaluation, the total
evaluated price shall include the firm-fixed-price for design phase
services, the construction work GMP option(s), and any other fixed-
priced line items. If advance pricing elements such as extended
overhead rates and daily delay rates are proposed, those shall also be
evaluated as part of the total evaluated price.
(c) Government Budget (e.g. Prospectus) Information. Subject to the
approval of the contracting director, the solicitation may include
information contained or referenced within a prospectus submission to
Congress for a project.
536.7104 Construction Contract Award.
In accordance with FAR 4.1001, the contracting officer shall use
the SF 1442 to identify the services or items to be acquired as
separately identified line items on a unit price or lump sum basis
including the design phase services, the construction work GMP
option(s), and any other work not included in the previously identified
items.
536.7105 Construction Contract Administration.
536.7105-1 Responsibilities.
(a) During all phases of the project, the architect-engineer
contractor that is providing design services under a separate contract
with GSA is contractually responsible for the design in the same manner
as under a traditional, design-bid-build project delivery method.
(b) The design phase services provided by the construction
contractor can include, but are not limited to, scheduling, systems
analysis, subcontractor involvement, cost-estimating, constructability
reviews, cost-reconciliation services, and market analysis.
(c) The scope of work should task the construction contractor with
reviewing the design documents and providing pricing information at
various defined milestones during the design phase.
(d) During the design phase, the architect-engineer contractor and
the construction contractor should collaborate on the design and
constructability issues. The goal of this collaboration is to establish
a final ECW that does not exceed the original target ECW.
(e) No discussions between the architect-engineer contractor and
the construction contractor shall be considered as a change to the
construction contract or design contract unless incorporated by the
contracting officer through a modification.
536.7105-2 Guaranteed Maximum Price.
(a) General.
(1) GMP. (i) The GMP is established at contract award. The GMP may
be established as one option or as multiple options through separate
line items, with a separate GMP amount for each line item.
(ii) The GMP is subject to adjustment under various standard
contract clauses, including the changes clause, differing site
conditions clause, and suspensions clause.
(iii) The contract file shall contain all documents to support any
scope changes including a separate analysis to document the rationale
for any upward or downward adjustment to the GMP.
(2) ECW. (i) The final ECW should be established prior to
completion of the design (i.e. 100 percent construction
[[Page 55844]]
documents), generally no earlier than completion of 75 percent
construction documents.
(ii) The contracting officer shall negotiate the final ECW and
incorporate it into the construction contract through a bilateral
modification prior to exercising the GMP option.
(3) CCA. (i) The CCA type of allowance may only be used as part of
the CMc project delivery method and should not be confused with other
types of allowances that may be used with other construction project
delivery methods.
(ii) The CCA is adjusted to provide for a contingency relative to a
fixed percentage of the ECW set at contract award, except for the
requirements at paragraph (c)(2) of this subsection.
(iii) The CCA will cover design errors and omissions that do not
form the basis of a change order. Design errors and omissions that do
form the basis for a change order will be settled in accordance with
GSAR 552.243-71 Equitable Adjustments.
(iv) Except as provided in paragraph (a)(3)(v) of this subsection,
the CCA should not exceed 3 percent.
(v) Subject to the approval of the HCA, the CCA may be different
than that required under paragraph (a)(3)(iv) of this subsection. Any
such written approval shall be documented in the contract file.
(4) Fee for the Construction Work. (i) The fee for the construction
work may only be adjusted for scope changes that have an impact on
schedule.
(ii) The fee for the construction work associated with a scope
change shall not be driven by a fixed percentage. The contracting
officer should determine whether the profit included, if any, in a
contractor's proposal is reasonable for the scope change work.
(b) Design Phase. (1) The GMP may be bilaterally modified upward
during the design phase only for approved additions to the scope of
work.
(2) The GMP shall be bilaterally modified downward during the
design phase for deletions to the scope of work.
(c) Exercising the GMP Option. (1) The GMP option shall not be
exercised until the final ECW is established.
(2) If the sum of the final ECW, CCA, and fee for construction work
is less than the GMP established at contract award, then the
contracting officer shall adjust the GMP downward accordingly through a
bilateral modification to exercise the GMP option.
(3) If the sum of the final ECW, CCA, and fee for the construction
work is greater than the GMP established at contract award, then the
contracting officer shall reduce the CCA while keeping the GMP amount
fixed through a bilateral modification to exercise the GMP option.
(4) The GMP option shall not be exercised if the final ECW and fee
for the construction work is greater than the GMP established at
contract award.
(d) Construction Phase. (1) After award of the GMP option, changes
in scope may be issued as an adjustment to the GMP or as a stand-alone
firm-fixed-price line item.
(2) Any changes in scope after award of the GMP option shall be
reflected by a written modification to the construction contract in
accordance with FAR Part 43.
(e) Early Work Package. (1) Early work packages (see 536.7105-7)
may be used in the procurement that are priced separately or included
in the GMP option.
(2) If any early work package exercised reduces the scope of the
construction services under the GMP option, the ECW shall be reduced,
and the CCA, fee for the construction work, and GMP shall be adjusted
accordingly.
(f) GMP Adjustment. (1) Any changes to the total GMP or individual
parts of the GMP must be incorporated in the contract through a
modification.
(2) Any modification that changes the GMP, including modifications
for early work packages and fixed price conversions, must clearly state
that it includes a change to the GMP and describe the changes to the
individual parts of the GMP components in the modification.
(3) Any modification that changes the total GMP, or individual
parts of the GMP, is subject to the requirement for a prenegotiation
objectives memo and price negotiation memo, including fair and
reasonable price determination, per FAR 15.406.
(4) The contracting officer should consult other members of the
acquisition team, including the project manager, to analyze and justify
any adjustments to the total GMP, or individual parts of the GMP.
536.7105-3 Accounting and Auditing Requirements.
(a) Cost Accounting Standards.(1) Except as provided in paragraph
(a)(2) of this subsection or through an exemption at FAR 30.201-1,
construction contracts under the CMc project delivery method are
subject to the cost accounting standards (CAS) identified in FAR Part
30.
(2) The contracting officer may request a CAS waiver in accordance
with the requirements at FAR 30.201-5 and 530.201-5.
(3) If CAS applies, the contract clauses identified at FAR 30.201-4
shall be included in the contract.
(4) If a CAS waiver is granted or if CAS does not apply, the
contract clause identified at 536.7107(b) shall be included in the
contract.
(b) GMP Option Accounting.
(1) Open Book Accounting. Open book accounting shall be followed
for financial tracking of all contract line items that are awarded on a
GMP basis. Such financial tracking may be accomplished through an audit
in accordance with paragraph (c) of this section.
(2) Payments and Reconciliation. All payments shall be reconciled
with the open book accounting records and the schedule of values
adjusted, as appropriate. Reconciliation shall occur each month and
should be coordinated with monthly progress payments. The
reconciliation shall be documented in the contract file.
(c) Auditing Requirements. In accordance with GSAM 542.102(a), for
any audit services required by this Subpart 536.71, the contracting
officer shall first request such services be performed by or through
the Assistant Inspector General for Auditing or the Regional Inspector
General for Auditing. If the Office of Inspector General declines to
perform such an audit, the contracting officer may obtain audit
services from a certified public accountant.
536.7105-4 Value Engineering.
In accordance with FAR 48.202, the clause at FAR 52.248-3 Value
Engineering-Construction does not apply to incentive contracts.
Accordingly, value engineering shall not apply to the CMc project
delivery method described in this subpart.
536.7105-5 Shared Savings Incentive.
(a) General. The incentive is a shared portion of the cost
reductions realized by the construction contractor as a result of
completing the construction work for less than the GMP. Cost reductions
may result from innovations and efficiencies during the construction
phase, such as increased labor productivity or strong material
subcontract negotiations.
(b) Share Ratio. (1) Except as provided in paragraph (2) of this
subsection, the share ratio for the construction contractor shall range
from 30 percent to 50 percent. The share ratio for the construction
contractor shall not exceed 50 percent. The complexity of the project
and the amount of risk to the construction contractor should be
considered when determining the ratio.
[[Page 55845]]
A project with greater risk to the construction contractor should
reflect a greater share ratio for the construction contractor.
(2) Subject to the approval of the HCA, the share ratio may be
different than that required under paragraph (b)(1) of this subsection.
Any such written approval shall be documented in the contract file.
(c) Incentive Calculation. The incentive amount is calculated in
accordance with the clause at 552.236-78 Construction-Manager-As-
Constructor.
536.7105-6 Allowances.
(a) Establishing a separate allowance in addition to the CCA is
only permitted pursuant to a written determination approved by the
contracting director supporting the use of any such allowance.
(b) The written determination for a separate allowance in addition
to the CCA shall consider--
(1) Alternative contracting structures, such as a separate GMP line
item or performing the work as part of the GMP option, and
(2) Ensuring conformance with all applicable rules and procedures
relating to allowances, including FAR 11.702.
536.7105-7 Early Work Packages.
(a) Construction services for an early work package must be within
the scope of the overall contract.
(b) Early work packages may be part of the initial procurement as a
separately priced line item, or the Government and the construction
contractor may agree to develop an early work package after award.
(c) Early work packages shall be definitive firm-fixed-price line
items in the contract.
(d) Early Work Packages Developed After Award. (1) The parties
shall bilaterally agree to the scope, schedule, and pricing for any
such early work package, and the contract shall be modified in
accordance with FAR Part 43.
(2) If any such early work package reduces the scope of the
construction services under the GMP option, the ECW shall be reduced,
and the CCA, fee for the construction work, and GMP shall be adjusted
accordingly.
(3) Any modification to the contract for an early work package is
subject to the requirement for a prenegotiation objectives memo and
price negotiation memo, including fair and reasonable price
determination, per FAR 15.406.
(e) Early work packages are no longer subject to open book
accounting, a shared savings incentive, or the need for determination
of final settlement.
536.7105-8 Conversion to Firm-Fixed-Price.
(a) At any time after completion of 100 percent construction
documents, the Government and the construction contractor may
bilaterally convert the whole contract to firm-fixed-price.
(b) Conversion to firm-fixed-price may occur after the contingency
risks, to be covered by the CCA, have been sufficiently reduced in the
best interest of the Government. See FAR 16.103(b) for additional
guidance for assessing risk management, profit motive, and timing
considerations.
(c) Conversion to firm-fixed-price is only permitted pursuant to a
written determination from the contracting officer to the contract file
supporting the conversion. The contracting officer should consult other
members of the acquisition team, including the project manager, to
analyze and justify the conversion.
(d) The contracting officer shall not agree to a firm-fixed-price
in excess of the GMP.
(e) In accordance with 536.7105-3(c), the contracting officer shall
obtain an independent audit of the construction contractor's costs
incurred in the performance of the contract to date.
(f) When evaluating the construction contractor's proposal for
firm-fixed-price definitization, the contracting officer should compare
the anticipated final cost to the firm-fixed-price being proposed. It
may be reasonable for the construction contractor to include a
contingency for assuming the risk associated with agreeing to the firm-
fixed-price. The contracting officer should evaluate this contingency
to ensure that the proposed amount reasonably reflects the remaining
risks being assumed by the construction contractor. This evaluation may
be informed by the history of the project, the balance of the CCA, and
other factors.
(g) The modification to convert to a firm-fixed-price is subject to
the requirement to obtain cost and pricing data unless one of the
exceptions in FAR 15.403-1 applies.
(h) The modification to convert to a firm-fixed-price is subject to
the requirement for a prenegotiation objectives memo and price
negotiation memo, including fair and reasonable price determination,
per FAR 15.406.
(i) Upon converting to a firm-fixed-price, the contract is no
longer subject to open book accounting, a shared savings incentive, or
the need for determination of final settlement.
536.7106 Construction Contract Closeout.
Unless the contract has been converted to a standard firm-fixed-
price contract (see 536.7105-8)--
(a) The contracting officer shall ensure that the construction
contractor's proposal for final settlement is accurate and reliable in
accordance with the open book accounting practices of the contract.
(b) In accordance with 536.7105-3(c), the contracting officer shall
obtain an independent audit of the construction contractor's costs.
536.7107 Contract Clauses.
(a) Insert a clause substantially the same as the clause at
552.236-79, Construction-Manager-As-Constructor, in solicitations and
contracts if construction, dismantling, or removal of improvements is
contemplated when a CMc project delivery method will be followed. This
clause is in lieu of the clause at FAR 52.216-17 Incentive Price
Revision--Successive Targets.
(b) Insert a clause substantially the same as the clause at
552.236-80, Accounting Records and Progress Payments, in solicitations
and contracts if construction, dismantling, or removal of improvements
is contemplated when a CMc project delivery method will be followed and
cost accounting standards do not apply. This clause is in lieu of the
clauses at FAR 52.230-2 Cost Accounting Standards, FAR 52.230-3
Disclosure and Consistency of Cost Accounting Practices, and FAR
52.230-6 Administration of Cost Accounting Standards.
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
11. Add section 552.236-15 to read as follows:
552.236-15 Schedules for Construction Contracts.
As prescribed in 536.515, insert the following clause:
Schedules for Construction Contracts (Date)
The requirements, of the clause entitled ``Schedules for
Construction Contracts'' at FAR 52.236-15, are supplemented as
follows:
(a) Purpose. The project schedule shall be a rational,
reasonable, and realistic plan for completing the work, and conform
to the requirements specified in this clause and elsewhere in the
contract. The Contractor understands and acknowledges that the
preparation and proper management of the project schedule is a
material component of the contract.
(b) Use of the schedule. The Contracting Officer shall be
entitled, but not required, to rely upon the project schedule to
evaluate the Contractor's progress, evaluate entitlement to
[[Page 55846]]
extensions of time, and determine the criticality or float of any
activities described in such project schedule.
(c) Submission. Prior to notice to proceed, or such other time
as may be specified in the contract, the Contractor shall submit the
project schedule.
(d) Milestones. The project schedule shall incorporate milestone
events specified in the contract, including, as applicable, notice
to proceed, substantial completion, and milestones related to
specified work phases and site restrictions. The project schedule
shall also include Contractor-defined milestones to identify target
dates for critical events, based upon the Contractor's chosen
sequence of work.
(e) Activities. The project schedule shall depict all major
activities necessary to complete the work.
(f) Schedule of values. (1) The Contractor shall prepare and
submit for approval a cost breakdown of the Contract price, to be
referred to as the ``schedule of values'', assigning values to each
major activity necessary to complete the work.
(2) Values must include all direct and indirect costs, although
a separate value for bond costs may be established.
(3) The schedule of values must contain sufficient detail to
enable the Contracting Officer to evaluate payment requests (see FAR
52.232-5 and GSAR 552.232-5).
(g) Conflicting terms. (1) If at any time the Contracting
Officer finds that the project schedule does not comply with any
contract requirement, the Contracting Officer may provide written
notice to the Contractor.
(2) Within 30 calendar days of any such written notice, or such
other time as may be specified, from the Contracting Officer, the
Contractor shall take one of the following actions--
(i) Revise the project schedule;
(ii) Adjust activity progress; or
(iii) Provide sufficient information demonstrating compliance.
(3) If the Contractor fails to sufficiently address the
Contracting Officer's exceptions to the project schedule, the
Contracting Officer may, in addition to any other remedies set forth
in the contract--
(i) Withhold retainage until the project is substantially
complete or until such time as the Contractor has complied with
project schedule requirements; or
(ii) Terminate the contract for default.
(h) Revisions to the schedule. If the Contractor proposes a
revision to the project schedule after initial approved submission,
the Contractor shall provide in writing a narrative describing the
substance of the revision, the rationale for the revision, and the
impact of the revision on the projected substantial completion date
and the available float for all activities.
(i) Updates. Unless a different period for updates is specified
elsewhere, the Contractor shall update the project schedule weekly
to reflect actual progress in completing the work, and submit the
updated project schedule by the following Monday.
(End of clause)
Alternate I (DATE). As prescribed in 536.515(a), substitute the
following paragraphs (c), (e), (h), and (i) for paragraphs (c), (e),
(h), and (i) of the basic clause:
(c) Submission. Within 30 calendar days of notice to proceed, or
such other time as may be specified in the contract, the Contractor
shall submit the project schedule, together with a written narrative
describing the major work activities, activities on the critical path,
and major constraints underlying the sequence and logic of the project
schedule.
(e) Activities. (1) The Contractor shall use a critical path method
project schedule to plan, coordinate, and perform the work.
(2) The project schedule shall depict all activities necessary to
complete the work, including, as applicable, all submittal and
submittal review activities, all procurement activities, and all field
activities, including mobilization, construction, start-up, testing,
balancing, commissioning, and punchlist.
(3) Activities shall be sufficiently detailed and limited in
duration to enable proper planning and coordination of the work,
effective evaluation of the reasonableness and realism of the project
schedule, accurate monitoring of progress, and reliable analysis of
schedule impacts.
(4) Activity durations shall be based upon reasonable and realistic
allocation of the resources required to complete each activity, given
physical and logistical constraints on the performance of the work. All
logic shall validly reflect physical or logistical constraints on
relationships between activities. Except for the first and last
activities in the project schedule, each activity shall have at least
one predecessor and one successor relationship to form a logically
connected network plan from notice to proceed to the contract
completion date.
(h) Revisions to the schedule. (1) The Contractor should anticipate
that the initial submittal of the project schedule will be subject to
review and may require revision. The Contractor shall devote sufficient
resources for meetings, revisions, and resubmissions of the project
schedule to address any exceptions taken to the initial submittal. The
Contractor understands and acknowledges that the purpose of the initial
review and resolution of exceptions is to maximize the usefulness of
the project schedule for contract performance.
(2) If the Contractor proposes a revision to the project schedule
after initial approved submission, the Contractor shall provide in
writing a narrative describing the substance of the revision, the
rationale for the revision, and the impact of the revision on the
projected substantial completion date and the available float for all
activities.
(i) Updates. Unless a different period for updates is specified
elsewhere, the Contractor shall update the project schedule monthly to
reflect actual progress in completing the work, and submit the updated
project schedule within 5 working days of the end of each month.
Alternate II (DATE). As prescribed in 536-515(b), substitute the
following paragraphs (c), (e), and (i) for paragraphs (c), (e), and (i)
of the basic clause:
(c) Submission. (1) Within 30 calendar days of notice to
proceed, or such other time as may be specified in the contract, the
Contractor shall submit the project schedule, together with a
written narrative describing the major design and construction
activities. The project schedule may indicate construction
activities in summary form prior to completion of final design
documents.
(2) Within 30 calendar days of completion of final design
documents, the Contractor shall submit a revised project schedule
depicting all activities necessary to complete construction work
activities, together with a written narrative describing the major
work activities, activities on the critical path, and major
constraints underlying the sequence and logic of the project
schedule.
(e) Activities. (1) The Contractor shall use a critical path
method project schedule to plan, coordinate, and perform the work.
(2) Activities shall be sufficiently detailed and limited in
duration to enable proper planning and coordination of the work,
effective evaluation of the reasonableness and realism of the
project schedule, accurate monitoring of progress, and reliable
analysis of schedule impacts.
(3) Activity durations shall be based upon reasonable and
realistic allocation of the resources required to complete each
activity, given physical and logistical constraints on the
performance of the work. All logic shall validly reflect physical or
logistical constraints on relationships between activities. Except
for the first and last activities in the project schedule, each
activity shall have at least one predecessor and one successor
relationship to form a logically connected network plan from notice
to proceed to the contract completion date.
(i) Updates. Unless a different period for updates is specified
elsewhere, the Contractor shall update the project schedule monthly
to reflect actual progress in completing the work, and submit the
updated project schedule within 5 working days of the end of each
month.
Alternate III (DATE). As prescribed in 536.515(c), substitute the
following paragraphs (c), (e), (h), and (i) for paragraphs (c), (e),
(h), and (i) of the basic clause:
(c) Submission. (1) Within 30 calendar days of contract award, or
such other time as may be specified in the contract,
[[Page 55847]]
the Contractor shall submit the design phase project schedule.
(2) Within 30 calendar days after establishing the final estimated
cost of work, the Contractor shall submit the construction phase
project schedule, together with a written narrative describing the
major work activities, activities on the critical path, and major
constraints underlying the sequence and logic of the project schedule.
(e) Activities. (1) The design phase project schedule shall depict
all activities necessary to complete the design work, including, as
applicable, all submittal and submittal review activities, cost
reconciliation, and establishing the estimated cost of work for the
construction phase.
(2) The Contractor shall use a critical path method project
schedule to plan, coordinate, and perform the construction phase work.
(3) The construction phase project schedule shall depict all
activities necessary to complete the construction work, including, as
applicable, all submittal and submittal review activities, all
procurement activities, and all field activities, including
mobilization, construction, start-up, testing, balancing,
commissioning, and punchlist.
(4) Activities shall be sufficiently detailed and limited in
duration to enable proper planning and coordination of the work,
effective evaluation of the reasonableness and realism of the project
schedule, accurate monitoring of progress, and reliable analysis of
schedule impacts.
(5) Activity durations shall be based upon reasonable and realistic
allocation of the resources required to complete each activity, given
physical and logistical constraints on the performance of the work. All
logic shall validly reflect physical or logistical constraints on
relationships between activities. Except for the first and last
activities in the project schedule, each activity shall have at least
one predecessor and one successor relationship to form a logically
connected network plan from notice to proceed to the contract
completion date.
(h) Revisions to the schedule. (1) The Contractor should anticipate
that the project schedule will be subject to review and may require
revision. The Contractor shall devote sufficient resources for
meetings, revisions, and resubmissions of the project schedule to
address any exceptions taken. The Contractor understands and
acknowledges that the purpose of the review and resolution of
exceptions is to maximize the usefulness of the project schedule for
contract performance.
(2) If the Contractor proposes a revision to the project schedule
after initial approved submission, the Contractor shall provide in
writing a narrative describing the substance of the revision, the
rationale for the revision, and the impact of the revision on the
projected substantial completion date and the available float for all
activities.
(i) Updates. Unless a different period for updates is specified
elsewhere, the Contractor shall update the project schedule monthly to
reflect actual progress in completing the work, and submit the updated
project schedule within 5 working days of the end of each month.
0
12. Add section 552.236-21 to read as follows:
552.236-21 Specifications and Drawings for Construction.
As prescribed in 536.521, insert the following clause:
Specifications and Drawings for Construction (Date)
The requirements of the clause entitled ``Specifications and
Drawings for Construction'' at FAR 52.236-21, are supplemented as
follows:
(a) In case of difference between small and large-scale
drawings, the large-scale drawings shall govern.
(b) Schedules on any contract drawing shall take precedence over
conflicting information on that or any other contract drawing.
(c) On any of the drawings where a portion of the work is
detailed or drawn out and the remainder is shown in outline, the
parts detailed or drawn out shall apply also to all other like
portions of the work.
(d) Where the word ``similar'' occurs on the drawings, it shall
have a general meaning and not be interpreted as being identical,
and all details shall be worked out in relation to their location
and their connection with other parts of the work.
(e) Standard details or specification drawings are applicable
when listed, bound with the specifications, noted on the drawings,
or referenced elsewhere in the specifications.
(1) Where notes on the specification drawings indicate
alterations, such alterations shall govern.
(2) In case of difference between standard details or
specification drawings and the specifications, the specifications
shall govern.
(3) In case of difference between the standard details or
specification drawings and the drawings prepared specifically for
this contract, the drawings prepared specifically for this contract
shall govern.
(f) Different requirements within the contract documents shall
be deemed inconsistent only if compliance with both cannot be
achieved.
(g) Unless otherwise noted, the drawings shall be interpreted to
provide for a complete construction, assembly, or installation of
the work, without regard to the detail with which material
components are shown in the drawings.
(End of clause)
Alternate I (DATE). As prescribed in 536.521(a), add the following
paragraph to the basic clause:
(h) For the purposes of this clause, specifications and drawings
refer only to those included among the contract documents at time of
contract award, and not to those produced by the Contractor pursuant to
its responsibilities under the contract.
Alternate II (DATE). As prescribed in 536.521(b), add the following
paragraph to the basic clause:
(h) For the purposes of this clause, specifications and drawings
refer only to the construction documents, meaning the 100 percent
complete specifications and construction drawings developed during the
design phase.
552.236-70 [Removed]
0
13. Remove section 552.236-70.
552.236-71 [Redesignated as 552.236-70]
0
14. Redesignate section 552.236-71 as 552.236-70.
0
15. Add new section 552.236-71 to read as follows:
552.236-71 Contractor Responsibilities.
As prescribed in 536.571, insert the following clause:
Contractor Responsibilities (Date)
(a) The Contractor shall be responsible for compliance with
applicable codes, standards and regulations pertaining to the health
and safety of personnel during performance of the contract.
(b) Unless expressly stated otherwise in the contract, the
Contractor shall be responsible for all means and methods employed
in the performance of the contract.
(c) The Contractor shall immediately bring to the Contracting
Officer's attention any hazardous materials or conditions not
disclosed in the contract documents discovered by or made known to
the Contractor during the performance of the contract.
(d) The Contractor shall be responsible for providing
professional design services in connection with performance of the
work or portions of the work only if this responsibility is
expressly stated in the contract, and the contract documents provide
the performance and design criteria that such services will be
required to satisfy. In the performance of such work, the Contractor
shall be responsible for retaining licensed design professionals,
who shall sign and seal all drawings, calculations, specifications
and other submittals that the licensed professional prepares. The
Contractor shall be responsible for, and GSA shall be entitled to
rely upon, the adequacy and completeness of all professional design
services provided under the contract.
(e) Where installation of separate work components as shown in
the contract will
[[Page 55848]]
result in conflict or interference between such components or with
existing conditions, including allowable tolerances, it is the
Contractor's responsibility to bring such conflict or interference
to the attention of the Contracting Officer and seek direction
before fabrication, construction, or installation of any affected
work. If the Contractor fabricates, constructs, or installs any work
prior to receiving such direction, the Contractor shall be
responsible for all cost and time incurred to resolve or mitigate
such conflict or interference.
(f) Where drawings show work without specific routing,
dimensions, locations, or position relative to other work or
existing conditions, and such information is not specifically
defined by reference to specifications or other information supplied
in the contract, the Contractor is responsible for routing,
dimensioning, and locating such work in coordination with other work
or existing conditions in a manner consistent with contract
requirements.
(g) It is not the Contractor's responsibility to ensure that the
contract documents comply with applicable laws, statutes, building
codes and regulations. If it comes to the attention of the
Contractor that any of the contract documents do not comply with
such requirements, the Contractor shall promptly notify the
Contracting Officer in writing. If the Contractor performs any of
the work prior to notifying and receiving direction from the
Contracting Officer, the Contractor shall assume full responsibility
for correction of such work, and any fees or penalties that may be
assessed for non-compliance.
(End of clause)
Alternate I (DATE). As prescribed in 536.571(a), delete paragraphs
(d), (e), (f), and (g) of the basic clause, and insert paragraphs (d),
(e), (f), and (g) as follows:
(d) The Contractor shall be responsible for providing professional
design services unless this responsibility is expressly excluded from
the contract. In the performance of such work, the Contractor shall be
responsible for retaining licensed design professionals, who shall sign
and seal all drawings, calculations, specifications and other
submittals that the licensed professional prepares. The Contractor
shall be responsible for, and GSA shall be entitled to rely upon, the
adequacy and completeness of all professional design services provided
under the contract.
(e) The Contractor's responsibilities include the responsibilities
of the Architect-Engineer Contractor, as specified in FAR 52.236-23.
(f) The Contractor shall include in all subcontracts that require
professional design services express terms establishing GSA as a third
party beneficiary. No other person shall be deemed a third party
beneficiary of the contract.
(g) The Contractor shall determine whether the information
contained in the contract documents complies with applicable laws,
statutes, building codes and regulations. If it comes to the attention
of the Contractor that any of the contract documents do not comply with
such requirements, the Contractor shall promptly notify the Contracting
Officer in writing. If the Contractor performs any of the work prior to
notifying and receiving direction from the Contracting Officer, the
Contractor shall assume full responsibility for correction of such
work, and any fees or penalties that may be assessed for non-
compliance.
Alternate II (DATE). As prescribed in 536.571(b), delete paragraphs
(d), (e), (f), and (g) of the basic clause, and insert paragraphs (d),
(e), (f), (g), (h), (i), and (j) as follows:
(d) The Contractor shall be responsible for performing the design
phase services in accordance with the statement of work. The Contractor
shall submit all deliverables and reports in accordance with the
statement of work.
(e) The Contractor shall be responsible to review all design
information (e.g. draft specifications and drawings) provided. The
Contractor shall be responsible for determining that the project as
described in the design information is constructible using commercially
practicable means and methods; that the construction work is described
in the design documents with sufficient completeness to enable pricing
of a complete project within the guaranteed maximum price; and that the
manner of presentation and organization of information in the design
documents enables accurate estimation of the cost of the work.
(f) Prior to establishment of the final estimated cost of work, the
Contractor shall bring to the Contracting Officer's attention all
instances that it has discovered or has been made aware of where
omission of design information affects the Contractor's ability to
accurately estimate the cost of the work.
(g) Where installation of separate work components as shown in the
contract will result in conflict or interference between such
components or with existing conditions, including allowable tolerances,
it is the Contractor's responsibility to bring such conflict or
interference to the attention of the Contracting Officer and seek
direction before fabrication, construction, or installation of any
affected work. If the Contractor fabricates, constructs, or installs
any work prior to receiving such direction, the Contractor shall be
responsible for all cost and time incurred to resolve or mitigate such
conflict or interference.
(h) Where drawings show work without specific routing, dimensions,
locations, or position relative to other work or existing conditions,
and such information is not specifically defined by reference to
specifications or other information supplied in the contract, the
Contractor is responsible for routing, dimensioning, and locating such
work in coordination with other work or existing conditions in a manner
consistent with contract requirements.
(i) It is not the Contractor's responsibility to ensure that the
contract documents comply with applicable laws, statutes, building
codes and regulations. If it comes to the attention of the Contractor
that any of the contract documents do not comply with such
requirements, the Contractor shall promptly notify the Contracting
Officer in writing. If the Contractor performs any of the work prior to
notifying and receiving direction from the Contracting Officer, the
Contractor shall assume full responsibility for correction of such
work, and any fees or penalties that may be assessed for non-
compliance.
(j) The Contractor is responsible to construct the project in
accordance with the drawings and specifications. The final Estimated
Cost of the Construction Work (ECW) may be determined based upon
incomplete design documents. In those instances in which the drawings
and specifications are not complete at the time the final ECW is
established, the Contractor shall exercise reasonable care and judgment
to determine the intent of the design and shall calculate the final ECW
on the basis of the quality of construction, materials, and finishes
that can be reasonably inferred from the design documents or other
specified sources.
0
16. Add sections 552.236-79 and 552.236-80 to read as follows:
552.236-79 Construction-Manager-As-Constructor.
As prescribed in 536.7107(a), insert the following clause:
Construction-Manager-As-Constructor (Date)
(a) General. Pricing for the Guaranteed Maximum Price (GMP) for
the option for construction services shall be subject to the
requirements of this clause.
(b) Definitions. The following definitions shall apply to this
clause:
``Construction-Manager-as-Constructor (CMc) Contingency
Allowance'' (CCA) means an allowance to cover reimbursable costs
during construction that are not the basis of a change order.
``Costs'' means allowable direct costs in accordance with FAR
Part 31. Marked up costs paid to subcontractors shall be deemed
direct costs of the Contractor.
[[Page 55849]]
``Cost of Performance'' means the final sum of cost of the
construction work and fee for the construction work.
``Estimated Cost of the Work'' (ECW) means the estimated direct
cost of the construction work.
``Fee for the Construction Work'' means a fixed amount for all
indirect costs, including overhead and profit.
``Guaranteed Maximum Price'' (GMP) means the sum of the ECW,
CCA, and the fee for the construction work.
(c) Guaranteed Maximum Price. This contract at award includes a
GMP.
(d) Estimated Cost of the Work. The proposed ECW incorporated
into the contract at award is a target ECW. A final ECW is
negotiated during the design phase and is incorporated into the
contract prior to exercise of the GMP option.
(e) Final Estimated Cost of the Work.
(1) Submission Requirements for Final ECW Proposal. During the
design phase, and at a time agreed by the Contracting Officer, the
Contractor shall submit the following:
(i) A detailed statement of all firm-fixed-price early work
packages in the performance of the construction work to date.
(ii) A proposed final ECW.
(iii) Sufficient data to support the accuracy and reliability of
the estimate.
(iv) An explanation of the difference between the proposed final
ECW and the target ECW used to establish the GMP.
(v) The Contractor's affirmation that--
(A) The Contractor is satisfied that the project as described in
the specifications and construction drawings is constructible using
commercially practicable means and methods;
(B) The Contractor is satisfied that the construction work has
been sufficiently described to enable it to estimate the cost of the
work with reasonable accuracy;
(C) The Contractor has disclosed to the Contracting Officer all
of its actual knowledge relating to omissions of design information
that may affect the cost of the work; and
(D) The Contractor acknowledges that the final ECW and time
established for completion shall not be adjusted on account of cost
or time attributable to known design omissions disclosed by the
Contractor pursuant to paragraph (e)(1)(v)(C) of this clause.
Unknown design errors and omissions that form the basis for a change
order may still be settled in accordance with GSAR 552.243-71
Equitable Adjustments.
(2) Establishment of the Final ECW. The parties shall negotiate
a final ECW based on the data provided under paragraph (e)(1) of
this clause. The final ECW shall be established and incorporated
into the Contract by bilateral modification. The Contracting Officer
will not accept a final ECW proposal that does not include the
written affirmation described in this clause. The Contracting
Officer will not exercise the GMP option for construction work
unless the final ECW has been incorporated into the contract.
(f) CMc Contingency Allowance. The CCA shall be __percent of the
ECW [Contracting Officer insert percentage amount].
(g) Shared Savings Incentive. The Contractor shall be entitled
to __percent of any cost reductions realized [Contracting Officer
insert percentage amount].
(h) Adjustment of ECW and GMP. The ECW and GMP shall be subject
to adjustment for changes and any other conditions giving rise to
entitlement to an adjustment under this contract. The ECW and GMP
shall be adjusted down for deletions to the scope of the
construction services through a bilateral modification.
(i) Adjustment of CCA. If the sum of the final ECW, CCA, and fee
for the construction work is greater than the GMP established at
contract award, then the contracting officer will reduce the CCA
while keeping the GMP amount fixed. Otherwise, the CCA is adjusted
relative to the percentage of the ECW set in paragraph (f) of this
clause. Prior to the use of the CCA, the Contractor shall coordinate
approval following the procedures identified in the contract.
(j) Adjustment of the Fee for the Construction Work. The fee for
the construction work may only be adjusted for scope changes that
have an impact on schedule. The fee for the construction work
associated with a scope change shall not be driven by a fixed
percentage.
(k) Conversion to Firm-Fixed-Price Prior to Final Settlement.
(1) Submission Requirements for Conversion to Firm-Fixed Price.
If the parties agree to negotiate and establish a firm-fixed-price
for construction work prior to the exercise of the GMP option, or at
the request of the Contracting Officer, the Contractor shall submit
the following:
(i) A proposed firm-fixed-price proposal for the completion of
the construction work, which shall include all markups, including
profit.
(ii) A detailed statement of any costs incurred in the
performance of the contract work to date.
(2) Establishment of Firm-Fixed-Price.
(i) Prior to Exercise of GMP Option. The parties may negotiate
and establish a firm-fixed-price for construction work prior to the
exercise of the GMP option based on the data provided under
paragraph (k)(1) of this clause; provided that the firm-fixed-price
shall not exceed the GMP. The Contracting Officer shall have the
right, but not the obligation, to bilaterally exercise the GMP
option at the firm-fixed-price within 120 calendar days of the
establishment of such price.
(ii) After Exercise of the GMP Option. At any time prior to
final settlement, the Contracting Officer may request that the
Contractor provide a firm-fixed-price proposal for the completion of
construction work in accordance with paragraph (k)(1) of this
clause. Within 60 calendar days of such request, the Contractor
shall provide such data. Within 60 calendar days of receipt of the
Contractor's proposal, the Contracting Officer shall have the right,
but not the obligation, to convert the contract to a firm-fixed-
price contract through a bilateral modification at the proposed
fixed-price or as otherwise negotiated by the parties; provided that
the firm-fixed-price, plus any costs incurred in the performance of
the construction work, shall not exceed the GMP.
(iii) If any portion of the contract is converted to a firm-
fixed-price, then that portion of the contract is no longer subject
to open book accounting, a shared savings incentive, or the need for
final settlement. If the contract is not converted to a firm-fixed-
price contract, then the final settlement of the Contractor's
compensation shall be determined in accordance with paragraph (l) of
this clause.
(3) Payments. If this contract is converted to a firm-fixed-
price contract, the Contractor shall submit a revised schedule of
values for the construction work allocating the unpaid balance of
the fixed price to the itemized work activities remaining
uncompleted, which shall be the basis for remaining progress
payments.
(l) Final Settlement. The final settlement amount shall consist
of the cost of performance and the Contractor's shared savings
incentive, if any, provided that in no event shall the final
settlement exceed the GMP. The final settlement amount shall be the
Contractor's total compensation due under the contract.
(1) Submission Requirements for Final Settlement Proposal. The
Contractor shall submit a final settlement proposal within 120 days
of substantial completion to determine the cost of the construction
work, which shall include the following:
(i) A detailed statement of all costs incurred by the Contractor
in performing the construction work.
(ii) A firm-fixed-price proposal for the performance of the
remaining work, if any, that may be necessary to complete
performance of the construction work.
(iii) An executed release of claims, which shall describe any
and all exceptions, including a description of any outstanding
claims.
(iv) Any other relevant data that the Contracting Officer may
reasonably require.
(2) Determination of the Cost of the Work. The cost of the
construction work shall be the sum of all costs incurred by the
Contractor in performing the construction work, the proposed fixed
price for performance of remaining work, if any, less the residual
value of any Contractor retained inventory. In order to determine
the cost of the construction work, the Contractor shall be subject
to an audit of the Contractor's records and/or the Contractor's
proposal. Establishment of the cost of the construction work shall
be subject to negotiation between the Government and the Contractor.
In the event that the parties are unable to reach agreement, the
Contracting Officer may unilaterally determine the cost of the
construction work, and such determination shall be subject to FAR
Clause 52.233-1 Disputes.
(3) Determination of the Shared Savings Incentive. If the final
cost of performance is equal to or greater than the final GMP, the
Contractor is not entitled to any additional compensation. If the
final cost of performance is less than the final GMP, the Contractor
is entitled to the percentage specified in paragraph (g) of this
clause, of the difference between the final GMP and the final cost
of performance, as the shared savings incentive.
(m) Subcontracts. No subcontract placed under this contract may
provide for cost-
[[Page 55850]]
plus-a-percentage of cost. Any costs incurred by the Contractor as a
result of such a subcontract shall not be included in the cost of
the construction work or the final settlement.
(n) Open Book Access. (1) At any time prior to converting to
firm-fixed-price, the Government and its representatives, including
designated auditors and accountants, shall have the right, but not
the obligation, to attend any and all project meetings and shall
have access to any and all records maintained by the Contractor
relating to the contract. The Contractor shall include this
requirement for open book access by the Government in its
subcontracts for the contract.
(2) After converting to firm-fixed-price, the Government
maintains the right to examine records under GSAR Clause 552.215-70.
(o) Termination. If this Contract is terminated, the Contractor
shall not be entitled to a shared savings incentive.
(p) The contractor agrees to incorporate the substance of this
clause in all subcontracts under this contract.
(End of Clause)
552.236-80 Accounting Records and Progress Payments.
As prescribed in 536.7107(b), insert the following clause:
Accounting Records and Progress Payments (Date)
(a) The Contractor shall keep full and detailed accounts and
exercise such controls as may be necessary for proper financial
management under this contract. The Contractor's accounting and
control systems shall meet Generally Accepted Accounting Principles
(GAAP) and provide for the following:
(1) There is proper segregation of direct costs and indirect
costs.
(2) There is proper identification and accumulation of direct
costs by contract.
(3) There is a labor time distribution system that charges
direct and indirect labor appropriately.
(b) The Contractor shall afford access to and shall permit any
authorized representatives of the Government to audit, examine and
copy any records, documents, books, correspondence, instructions,
drawings, receipts, subcontracts, purchase orders, vouchers,
memoranda, and other data relating to this contract. Records subject
to audit, examination, and copying shall include those records
necessary to evaluate and verify all direct and indirect costs,
including overhead and payroll tax and fringe benefit allocations,
as they may apply to costs associated with the contract. The
Contractor shall preserve these records for a period of three years
after the final payment, or for such longer period as may be
required by law.
(c) The records identified in paragraphs (b) of this clause
shall be subject to inspection and audit by the Government or its
authorized representative for, but limited to, evaluating and
verifying the following:
(1) Contractor compliance with contract requirements.
(2) Compliance with pricing change orders, invoices,
applications for payment, or claims submitted by the contractor or
any of its subcontractors at any tier, including vendors and
suppliers.
(d) If requested by the Government, the Contractor shall
promptly deliver to the Government or its designee copies of all
records related to the contract, in a form acceptable to the
Government. The Contractor shall provide to the Government or its
authorized representative such records maintained in an electronic
format in a computer readable format on data disks or suitable
alternative computer data exchange formats.
(e) The Government shall have access to the Contractor's
facilities, shall be allowed to interview all current and former
employees to discuss matters pertinent to the contract, and shall be
provided adequate work space, in order to conduct audits and
examinations.
(f) If any audit or examination of the Contractor's records
discloses total findings resulting in overpricing or overcharges by
the Contractor to the Government in excess of one-quarter percent of
the total contract billings, the Contractor shall immediately
reimburse the Government for the overcharges. The Contractor shall
also reimburse the Government for the costs of the audit unless
otherwise agreed to by the Government and the Contractor.
(g) The Government shall be entitled to audit all modifications,
including lump-sum modifications, to determine whether the proposed
costs, as represented by the Contractor and any of its
subcontractors, are in compliance with the contract. If it is
determined that the costs proposed under a modification, including
lump-sum modifications, are not in compliance with the contract, the
Government reserves the right to adjust the amount previously
approved and included in the modification.
(h) If the Contractor fails to comply with any conditions in
this clause, the Contracting Officer may retain a maximum of 10
percent of the amount of each payment request submitted until such
deficiencies are corrected.
(i) These requirements regarding accounting records shall not
mitigate, lessen nor change any other requirements in the contract
regarding audits, payment submissions, records, or records
retention.
(j) The contractor agrees to incorporate the substance of this
clause in all subcontracts under this contract.
[FR Doc. 2018-24282 Filed 11-7-18; 8:45 am]
BILLING CODE 6820-61-P