PROGRAM MANAGEMENT AT RISK (PM AT RISK) MODEL IMPROVES DELIVERY OF MAJOR WATER AND WASTEWATER INFRASTRUCTURE EXPANSION IN CAPE CORAL
Abstract:The City of Cape Coral, Florida is the fifth fastest growing community in the country. The City's population has grown from 500 in 1959 to a current population of approximately 135,000. The population is forecast to reach 170,000 in 2010. The City is aggressively expanding its utility infrastructure to meet increased demands. In 1999, the City prepared a comprehensive utility master plan for expanding utility services through 2020. The first phase of the Utility Expansion Program (UEP) was a five-year, 178M program that extends the City's water, wastewater, and reclaimed water systems. With the completion of the first phase, the City has recently launched a subsequent seven-year 450 million program that includes further expansion of these systems as well as upgrades to two existing wastewater treatment plants and construction of new water and wastewater treatment facilities.
During the five years prior to 1999, the City of Cape Coral had selected the traditional design-bid-build (DBB) project delivery model for its wastewater collection system expansion projects including five large construction contracts ranging between 20 to 40 million in value. The City's experience with the traditional DBB model was far from positive. Major claims related to delays, design flaws and unforeseen conditions were submitted by four of the five contractors. The City, in turn, sued its Construction Manager. The net result was a series of settlements by the City totaling more than 14 million. During this period, the City was also bombarded with over 70,000 complaint calls from affected citizens and had to adjudicate over 250 formal disputes complaints from customers.
In the period after 1999, the City decided that an entirely new form of project delivery was required for future water and wastewater expansion projects. The alternative delivery model selected by the City is known as Program Management at Risk and involves a single contract with an integrated engineering and construction firm to include: (a) Program Management; (b) Engineering Services; and (c) Construction Management at Risk. The PM-at-Risk contractor holds all the engineering and construction sub-contracts under a single master contract, and provides a guaranteed maximum price (GMP) and schedule, while assuming the risk for the overall infrastructure program.
Since 1999, when the PM at Risk model was adopted and applied to the first phase of the Water and Wastewater Infrastructure Expansion Program, the City has not faced a single claim. The number of customer calls was reduced to from 70,000 to 5,000 and the number of formal complaints from 250 to 5. The infrastructure works were delivered on schedule at a budget savings of 20 million.
Document Type: Research Article
Publication date: January 1, 2005
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