Why Construction Management at Risk is the Right Choice for One Connecticut Community

Why Construction Management at Risk is the Right Choice for One Connecticut Community

In June 2011, the town of Montville, Connecticut signed an agreement with Rand-Whitney Containerboard, a producer of paperboard products, stipulating that the town would help the company seek ways to improve its system for the treatment of highly acidic, chemical wastewater. Though the town explored the option of retaining Rand-Whitney’s existing treatment system, an independent engineering firm projected that upgrading the system to meet state and federal requirements would cost $32 million—far more than building new. When the time came to decide the best approach to building, the construction-management-at-risk model made the most sense for Montville.

The town applied for and received a $5 million grant from the Connecticut Department of Energy and Environmental Protection (DEEP). The grant was offered to the town this March, with another $1.5 million in funding to come from Rand-Whitney for construction of the new anaerobic digestion pre-treatment system. Montville felt strongly that a construction-management-at-risk contracting approach offered them more control and accountability than the conventional design/bid/build approach, and hired Woodard & Curran to design and build the system.

The DEEP was initially hesitant to approve the design/construction management-at-risk approach over the more familiar design/bid/build that it prefers. The systems aren’t entirely dissimilar—Woodard & Curran’s role as construction manager is comparable to the role of the general contractor in a typical design/bid/build project.

The state’s initial resistance to the construction management method mostly stemmed from other towns’ experiences where costs escalated quickly when the engineer made changes to building designs or timelines. In this case, the mayor of Montville, Ronald McDaniel, felt strongly enough that the design/construction management model was preferable that he wrote a letter to the DEEP addressing their concerns and requesting closer consideration of this model.

Ultimately, one of the things that makes this method attractive to both the state and town governments is the “at-risk” aspect of the model. This refers to the fact that Woodard & Curran holds the risk of hiring out the construction work to trade contractors after settling on a negotiated price for the project’s completion. “What we think is that, at the end of the day, we’re going to have a better model for controlling costs,” says Mayor McDaniel.

Apart from holding the financial risk, Woodard & Curran adds value to the project by offering impartial, expert advice to the project owner regarding issues that may arise with scheduling and budget. The firm is also the point of contact for the project’s multiple contractors, saving the owners time and effort: “I’m not going after 14 different contractors if something fails,” as McDaniel put it.

The DEEP’s approval of the construction management is a good indicator of the value this delivery method brings to complex, technically sophisticated projects. Not only does the owner benefit from having one point of contact throughout the project, but the construction management system allows the owner to hedge their financial risk while relieving them of the task of hiring and overseeing individual contractors. The construction manager is also accountable for schedule and budget, so the project owner doesn’t have to manage the day-to-day details. The use of this delivery method, which is designed to be advantageous to all parties, only adds to the already promising long-term benefits of Montville’s project as a whole.

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