Does the Alaska administrative code allow for project managers to build public schools?
Full Question:
Answer:
Project Management is the conventional method of construction administration. The Owner has direct contracts with both the Consultant and the Contractor. The Owner is able to retain direct control over all aspects and the quality of the project. This process allows the Owner more flexibility in decisionmaking. The Owner ultimately makes the final decisions. In addition, the Owner may realize the benefit of competitive bidding. Construction Management is a progressive, more "convenient" method of construction project administration. The Owner has only one direct contract, with the Construction Manager. The Contractor becomes a subcontractor to the Construction Manager (Consultant). The Owner is not bothered by having to make every decision and may realize a time reduction in the completion of the job. Finally, the Owner's accounts payable department only has to deal with one company.
Project Management and Construction Management are the same in many ways. First, they both involve the same three parties: the Owner, the Consultant, and the Contractor. The Consultant represents the Owner under both contracts. All communication between the Owner and the Contractor flows through the Consultant. The Contractor, along with any subcontractors, still performs all of the construction work. The Consultant will still be responsible for developing and interpreting the Construction Documents, observing the
work, performing inspections, and reviewing submittals.
The first difference between the two methods deals with the relationships between the parties. In Project Management, the Consultant and the Contractor have no formal contract between them. They do have a third party relationship which stipulates how they are to work together.
They rely on each other to perform certain duties which affect each other's work, but their contracts are only with the Owner. In Construction Management, the Contractor has a direct contract with the Consultant and does not have any direct agreement with the Owner. The Contractor now has a third party relationship with the Owner and is paid by the Consultant, not directly by the Owner. A second major difference arises in contractor selection.
Under a Project Management agreement, the Owner selects the Contractor. The Owner can use competitive bidding or negotiate a price with a specific Contractor. This, however, is
the Owner's decision to make. The Consultant can advise, but has no direct responsibility for this decision. Under a Construction Management agreement, the Consultant has greater responsibility for selecting the Contractor. The Consultant and Owner make the decision
about competitive bidding or negotiating a price once the project budget has been established. The Owner may not realize the most competitive price with this process. The Owner has delegated that responsibility to the Consultant under the framework of the Contract Budget.
The third difference falls in the matter of liability. Under Project Management, the Consultant has liability only for the design. The Contractor has liability for the actual work and and
its conformance to the Construction Documents. Under this agreement, for any decision which the Owner makes without the Consultant's approval, the Owner assumes responsibility and liability. Under Construction Management, the Consultant assumes responsibility for the
design and also for the work. If an issue were to arise, the Owner only has one entity with whom to deal. The Consultant is responsible to the Owner for any part of their Contract which is not met. The Contractor is responsible to the Consultant for their work. The final liability will be shared by the Consultant and the Contractor if the Contractor fails to perform. The Owner's direct liability under this management system is less than under Project Management.
The full text of Alaska 4 AAC 31.065 does not mention the use of project managers, only construction managers:
Selection of designers and construction managers
(a) If a school district determines that it is necessary to engage the services of a private consultant to design or provide construction management for an educational facility with money provided under AS 14.11.011 - AS 14.11.020 , or for a project approved for reimbursement of costs under AS 14.11.100 , and the estimated cost of the contract is more than $50,000, the selection of the consultant shall be accomplished by soliciting written proposals by advertising in a newspaper of general circulation at least 21 days before the proposals are due. The contract shall be awarded to the most qualified offeror, after evaluating the proposals submitted.
(b) Nothing in this section precludes a school district from retaining the services of a consultant on an as-needed basis under a multi-year contract, if the term of the contract is not more than five years.
(c) The school district shall provide a procedure for administrative review of complaints by aggrieved offerors which allows them to appeal, within 10 days after the notice of intent to award, requesting a hearing with notice to interested parties, for a redetermination and final award in accordance with law.
