2015-29028 Reso RESOLUTION NO. 2015-29028
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR AND CITY
CLERK TO EXECUTE A CONSTRUCTION MANAGER AT RISK AGREEMENT WITH
CLARK CONSTRUCTION GROUP, LLC ("CLARK"), PURSUANT TO REQUEST FOR
PROPOSALS (RFP) NO. 2015-129-ME, FOR CONSTRUCTION MANAGER AT RISK
SERVICES FOR THE MIAMI BEACH CONVENTION CENTER RENOVATION AND
EXPANSION PROJECT ("PROJECT"), WITH A LUMP-SUM PRE-CONSTRUCTION
PHASE FEE IN THE AMOUNT OF$2,594,073.
WHEREAS, Request for Proposals No. 2015-129-ME (the RFP) was issued on March 2, 2015,
with an opening date of April 9, 2015; and
WHEREAS, a voluntary pre-proposal meeting was held on March 19, 2015; and
WHEREAS, the City received one(1) proposal from Clark; and
WHEREAS, on April 15, 2015, the City Commission authorized the Administration to eliminate
the RFP Evaluation Committee and open Clark's sealed proposal, to permit the City Manager to proceed
with the due diligence process and make a recommendation to the City Commission concerning award;
and
WHEREAS, on April 29, 2015, the City Commission accepted the recommendation of the City
Manager to award the RFP to Clark and authorized the Administration to enter into negotiations with
Clark, subject to prior approval of the final agreement by the Mayor and City Commission; and
WHEREAS, the Construction Manager at Risk Agreement attached and incorporated as Exhibit
"A" hereto, provides for the Construction Manager to perform Pre-Construction Phase Services; creates a
process for the development of a Guaranteed Maximum Price ("GMP") for the Project, subject to City
Commission approval of a GMP Amendment; fixes the Construction Manager's Overhead and Profit Fee
for the duration of the Project; and establishes the contract terms and provisions that detail the City's and
the Construction Manager's rights and responsibilities with respect to the Project, including with respect to
the construction phase and post-construction phase of the Project.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF
. THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby approve and
authorize the Mayor and City Clerk to execute the Construction Manager at Risk Agreement with Clark
Construction Group, LLC attached hereto as Exhibit "A," pursuant to Request for Proposals (RFP) No.
2015-129-ME, for Construction Manager at Risk Services for the Miami Beach Convention Center
Renovation and Expansion Project, with a lump-sum Pre-Construction Phase Fee in the amount of
$2,594,073.
PASSED AND ADOPTED this ad day of 2015.
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COMMISSION ITEM SUMMARY
Condensed Title: _
A Resolution Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Approving And
Authorizing The Mayor And City Clerk To Execute A Construction Manager At Risk Agreement With Clark
Construction Group, LLC ("Clark"), Pursuant To Request For Proposals (RFP) No. 2015-129-ME, For
Construction Manager At Risk Services For The Miami Beach Convention Center Renovation And Expansion
Project("Project").
Key Intended Outcome Supported:
Improve alliance with key business sectors, namely hospitality, arts& international business with a focus on
enhanced culture, entertainment&tourism.
Supporting Data(Surveys, Environmental Scan,etc N/A
Item Summary/Recommendation:
On February 11, 2015, the City Commission elected to re-bid the Project under a Construction Manager-at-Risk
(CMR) project delivery method, an approach that allows for the continued development of the design for the
Project with the benefit of input from the Construction Manager prior to establishment of the Guaranteed
Maximum Price(GMP)for the Project,currently anticipated to occur on or about October,2015.
On March 2, 2015 a request for proposal was issued, advertised and emailed to national and local construction
management firms. Only one proposal was received from Clark Construction("Clark").
On April 15, 2015,the City Commission authorized the Administration to eliminate the RFP Evaluation Committee
and open Clark's sealed proposal, to permit the City Manager to proceed with the due diligence process and
make a recommendation to the City Commission concerning award. On April 29, 2015, the City Commission
accepted the recommendation of the City Manager to award the RFP to Clark and authorized the Administration
to enter into negotiations with Clark, subject to prior approval of the final agreement by the Mayor and City
Commission.
The Construction Manager at Risk Agreement attached and incorporated as Exhibit "A" hereto, provides for the
Construction Manager to perform Pre-Construction Phase Services; creates a process for the development of a
Guaranteed Maximum Price("GMP")for the Project, subject to City Commission approval of a GMP Amendment;
fixes the Construction Manager's Overhead and Profit Fee for the duration of the Project; and establishes the
contract terms and provisions that detail the City's and the Construction Manager's rights and responsibilities with
respect to the Project, including with respect to the construction phase and post-construction phase of the
Project.
CMR Fee Proposal
Clark initially proposed a CMR fee equating to 3.95% of the work they manage. This equated to a fee of
approximately$19 million based on the current budget. Clark has agreed to reduce their fee to 3.8%of the work
they manage,or to$18.3 million based on the current budget.
-Pre-Guaranteed Maximum Price("GMP")Services Proposal
Clark initially proposed a Pre-GMP Services Fee of$3,669,799. The Pre-GMP Services Fee has been reduced
to$2,594,073, a reduction of$1,075,726(assuming a successful GMP negotiation). If a successful GMP cannot
be reached,the City is to pay an additional$400,000 demobilization fee.
The Administration recommends the adoption of the Resolution.
Advisory Board Recommendation:
N/A
Financial Information:
Source of Amount Account
Funds: 1 $2,594,073 Fund 429—Line of Credit
! 1 2
0 B•I Total $2,594,073
Financial Impact Summary: N/A
City Clerk's Office Legislative Tracking:
Maria Hernandez, ext. 2584
Sign-Offs:
Department Dir ctor Assistant City Manager City t an.•er
MH grki JLM 1
T:\AGENDA\2015\May\MBCC\CMAR Agreement th CI Construction\MBCC CMR Agreement Execution-SUMMARY..• x
BEACH AGENDA IEM
MIAMI DATE g-2-°—(
I BE H
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members the City Co ission
FROM: Jimmy L. Morales, City Manager
DATE: May 20, 2015
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, APPROVING AND AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE A CONSTRUCTION MANAGER AT RISK
AGREEMENT WITH CLARK CONSTRUCTION GROUP, LLC ("CLARK"),
PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 2015-129-ME, FOR
CONSTRUCTION MANAGER AT RISK SERVICES FOR THE MIAMI BEACH
CONVENTION CENTER RENOVATION AND EXPANSION PROJECT
("PROJECT").
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
FUNDING
$2,594,073 Fund 429 - Line of Credit
KEY INTENDED OUTCOME
Improve alliance with key business sectors, namely hospitality, arts & international business with
a focus on enhanced culture, entertainment & tourism.
BACKGROUND
On February 11, 2015, the City Commission elected to re-bid the Project under a Construction
Manager-at-Risk (CMR) project delivery method, an approach that allows for the continued
development of the design for the Project with the benefit of input from the Construction Manager
prior to establishment of the Guaranteed Maximum Price (GMP) for the Project, currently
anticipated to occur on or about October, 2015.
On March 2, 2015 a request for proposal was issued, advertised and emailed to national and local
construction management firms. Proposals were due on April 9, 2015. Only one proposal was
received from Clark Construction ("Clark").
On April 15, 2015, the City Commission authorized the Administration to eliminate the RFP
Evaluation Committee and open Clark's sealed proposal, to permit the City Manager to proceed
with the due diligence process and make a recommendation to the City Commission concerning
award. On April 29, 2015, the City Commission accepted the recommendation of the City
Manager to award the RFP to Clark and authorized the Administration to enter into negotiations
with Clark, subject to prior approval of the final agreement by the Mayor and City Commission.
Request for Proposals (RFP) No. 2015-129-ME for Construction Manager at Risk Services
May 20, 2015
Page 2 of 5
The negotiated Construction Manager at Risk Agreement attached and incorporated as Exhibit"A"
hereto, provides for the Construction Manager to perform Pre-Construction Phase Services;
creates a process for the development of a Guaranteed Maximum Price ("GMP") for the Project,
subject to City Commission approval via a GMP Amendment; fixes the Construction Manager's
Overhead and Profit Fee for the duration of the Project; and establishes the contract terms and
provisions that specify the City's and the Construction Manager's rights and responsibilities with
respect to the Project, including with respect to the construction phase and post-construction
phase of the Project.
ANALYSIS
Key Contractual Terms
The attached contract includes the following key contractual terms:
1. Comprehensive scope of services for Pre-Construction Phase Services, Construction Phase
Services, and the Post-Occupancy/Close-out Phase;
2. Process and timeline for development of the Guaranteed Maximum Price for the Project based
on 65% completed Construction Documents, subject to City Commission approval of a GMP
Amendment;
3. Competitive "open book" trade bidding for work performed by Subcontractors and Suppliers;
4. Detailed provisions for Quality Assurance/Quality Control to ensure City's quality requirements
are met;
5. Schedule requirements and specified damages for failure to achieve key Art Basel milestones,
as well as liquidated damages in the amount of$15,000 per day for failure to timely achieve
Substantial Completion (currently anticipated to be May 31, 2018);
6. Shared savings split in the event the final cost of the Project is certified to be within the GMP,
with 75% of savings to City and 25% to Construction Manager;
7. Obligation to develop plans for local workforce hiring to maximize the employment of City of
Miami Beach and Miami-Dade County residents, with periodic reporting to measure success;
and
8. Detailed audit rights in favor of City of Miami Beach and Miami-Dade County (in accordance
with Miami-Dade County General Obligation Bond grant requirements).
CMR Fee Proposal
Clark initially proposed a CMR fee equating to 3.95% of the work they manage. This equated to
a fee of approximately $19 million based on the current budget. Clark has agreed to reduce
their fee to 3.8% of the work they manage, or to $18.3 million based on the current budget.
Initial anecdotal research indicated CMR fees typically ranged from 2.75% to 3.0%. Detailed
research has revealed that actual fees are typically higher. Below is a summary of comparable
CMR fees for local and national projects:
Request for Proposals(RFP) No. 2015-129-ME for Construction Manager at Risk Services
May 20, 2015
Page 3 of 5
Year* Const. Cost Fee
Miami Marlins Ballpark Hunt/Moss JV 2012 $620m 3.15%
Miami Science Museum Suffolk Current $109m 3.5%
Boston Conv. & Expo Center Clark/Hubert 2004 $463m < 3.95%
Hunt
Amway Center Orlando Hunt 2010 $480m < 4%
Orlando Performing Arts Center Balfour Beatty 2014 $200m < 4%
Orlando Phase V Hunt/Clark JV 2003 $520m 4%
Phoenix CC Expansion Hunt 2008 $552m 4%
Music City Center Nashville Clark 2013 $372m 4.25%
McCormick Place HQ Hotel Clark Current $335m 4.50%
McCormick Place Events Center Clark Current $142m 5.25%
MIA South Terminal Parsons- 2007 $840m 6%
Odebrecht
MIA North Terminal Parsons- 2014 $1,450m 6%
Odebrecht
*Date Completed
In cases where "<" is indicated, meaning less than, the project manager contacted could not
recall the exact fee percentage.
While the fee is higher than the City's budget of 3% or $14.6 million, the additional fee will not
increase the maximum construction budget of $500.3 million. The additional fee will be funded
from contingencies that are built into the current construction budget.
Pre-Guaranteed Maximum Price ("GMP") Services Proposal
The CMR Contract incorporates three key contractual phases:
1. The contract that the City Commission is considering focuses on; i) the CMR Fee, ii) a
fixed price to not exceed for Pre-GMP services (May 2015 through October 2015), and
iii) the general contractual terms and conditions.
2. In October of 2015, the City Commission will consider a "GMP Amendment" that will be
the result of the pre-GMP services, a five-month process to agree upon a GMP,
including Clark's long-term staffing costs to manage the construction.
3. The project will then be competitively bid over the next several months. Any savings as
a result of the competitive bidding, below the GMP, is contemplated to be spilt 75% to
the City and 25% to Clark. The $400+ million worth of construction trade subcontracts
will be competitively bid pursuant to an "open book" contracting process. In addition, the
bidding of the trades following the GMP Amendment in October, 2015 will be based on
much further-completed design packages, thereby bringing greater certainty to the bid
Request for Proposals(RFP) No. 2015-129-ME for Construction Manager at Risk Services
May 20, 2015
Page 4 of 5
process and pricing that better reflects the costs actually required to complete the
Project.
Clark initially proposed a Pre-GMP Services Fee of $3,669,799. The Pre-GMP Services Fee has
been reduced to $2,594,073, a reduction of $1,075,726 (assuming a successful GMP negotiation).
If a successful GMP cannot be reached, the City is to pay an additional $400,000 demobilization
fee. Below summarizes the changes in the Pre-GMP Fee:
Initial Proposal Negotiated Contract
$2,167,898
• Reduced hours to provide for
5/21- 10/31 only
$2,424,269 Staffing •Added senior oversight& permit
expediter for non-City permits
• $160,000 average annual comp
• $255,000 average comp + burden
•$256,271 reduction
$326,175
• Postponed trailer costs
530,530 Expenses to post GMP
• Reevaluated travel expenses
• $204,355 reduction
715,000 Fee $100,000
• $615,000 reduction
2,594,073
3,669,799 Subtotal •$1,075,726 reduction
• $2,500,000 budget
400,000
-0- Demobilization • Paid only if do not come to
agreement on GMP
$3,669,799 Total $2,994,073
$675,726 reduction
Request for Proposals(RFP) No. 2015-129-ME for Construction Manager at Risk Services
May 20, 2015
Page 5 of 5
The negotiated fee assuming a successful GMP negotiation is $94,073 higher than the City's
budget of $2.5 million. The additional fee will not increase the maximum construction budget of
$500.3 million. The additional fee will be funded from contingencies that are built into the
construction budget.
CONCLUSION / RECOMMENDATION
The Administration recommends that the Mayor and City Commission direct the Administration
to execute the attached Construction Manager At Risk Agreement with Clark Construction Group,
LLC ("Clark"), pursuant to Request for Proposals (RFP) No. 2015-129-ME, for construction
manager at risk services for the Miami Beach Convention Center Renovation and Expansion
Project ("Project").
Attachments:
Exhibit A- Construction Manager At Risk Agreement with Clark Construction Group, LLC
JLM/MT/AD/MH
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