Friday, February 11, 2011

Construction Management and ORB

I appreciated the Letter to the Editor from Gary Wilhelm of Grand Marais in today's Cook County News Herald.  In his letter, Mr. Wilhelm asks several thoughtful and important questions about the role ORB Management is playing in Cook County's 1% Sales Tax Projects.  I'd been tossing around the idea of going into greater detail in my blog about ORB Management's involvement in the 1% Community Center Project and welcome the prompt. I hope the following information is useful in clarifying questions and improving overall understanding of the project.

Cook County 1% Community Center Project

ORB Management Corporation has been hired by Cook County as the Construction Manager and Owner's Representative for the Community Center to be built with 1% Sales Tax Funding (the 1% Sales Tax passed by voter referendum in November 2009).   After careful study, thought and consideration, the Steering Committee and the County Board agreed it was in the County's best interest to hire a Construction Manager/Owner's Representative to be contractually obligated to look out for and advocate for the financial well being of Cook County.  This contractual relationship is vastly different from other options considered, including the more traditional design-bid-build way of using a general contractor.

Over the years, it's become commonplace for construction projects to use the traditional design-bid-build process.  More recently, Cities and Counties (and the private sector) have begun opting for a different approach, "construction management".  Minnesota Cities Magazine published a very informative article about construction management and its advantages in an article entitled "A Construction Alternative".   Cook County has hired ORB Management as their Construction Manager in an Agency Relationship as described in this article. 

As Construction Manager and the County's Owner's Representative, ORB Management will be acting as an advocate for Cook County.  ORB is representing the County, subject to the County Board's final direction and control.  Specifically, acting as our Owner's Representative ORB Management will represent the County throughout the entire Project including Pre-Construction, Design, Construction and Warranty/Start Up.  See Exhibit A thru Exhibit E for more details about the Services provided by ORB.

From my view, the most significant advantages to hiring a Construction Manager to act as our Owner's Representative are:

1.  Control over the project--The County will contract directly with ORB, the Architect and all of the individual contractors. This contractual arrangement allows the County to select the individual contractors for the job instead of having a general contractor make those decisions.  It is important to the Steering Committee and the County Board to give local contractors an opportunity to bid on this project. 
2.  Costs savings--ORB is charging 5% of the total costs of the Project construction which is lower than fees often charged by general contractors, even when combined with the Architect Fees.  At the end of the Design Phase, the Parties may agree to a lump sum payment amount.  ORB will also assist the County in estimating Operating & Maintenance of the proposed facility to ensure we don't build more than we can afford to maintain and operate.
3.  Construction Expertise & Risk Management--Our County Board and Staff does not have the construction experience or expertise required to manage a project of this complexity and magnitude.  It was a prudent decision to hire a qualified construction manager that understands the construction business to reduce the County's financial risk and ensure a quality facility.
4.  Advising the County Board--ORB Management will advise the Steering Committee, County Staff, and the County Board on a regular basis at Steering Committee Meetings and at least monthly at County Board Meetings.

Note:  The Community Center Steering Committee meets at least monthly.  These meetings are posted and the Public is welcome.  We are currently in the Design Phase of the Project, working with Meyer Group/JLG Architects.  As part of the Design Process, we will be hosting Public Meetings to solicit Public input.  These meetings are likely to be scheduled within the next month.

Other 1% Sales Tax Projects

The County Board is also considering using ORB Management on other public infrastructure projects funded through the 1% Sales Tax.  At this time, ORB's role as a consultant is undefined, but could range from assisting in the management and administration of some or all of the 1% Sales Tax Projects or expanding the role to one of Construction Management/Owner's Representative.

ORB has proposed a Master Consulting Agreement for Services to Be Provided under which a series of Sub-Agreements may be made for specific 1% Sales Tax Projects at terms to be negotiated.  ORB  is proposing a consulting fee of 2.5% of the total cost of each individual 1% Project plus reimbursables (i.e., fees on a $1M project would be $25,000).  ORB is on the County Board Agenda for February 15 to present their proposal.

Key ORB Management Personnel on both the Community Center Project and future 1% Sales Tax Projects are Tom Wacholz, Owner/President, Wade Cole, Senior Project Manager, and Rob Barse, Project Technical Manager.

As Chair of the Community Center Steering Committee, I'm passionate about the success of this project on all levels.  I'm also committed to an open and transparent process and opportunity for public input and involvement.  If you're interested in being part of the team, let me know.  We've got a couple of openings on the Steering Committee.

As always, feel free to contact me with your ideas, questions or concerns.  You may reach me by email at or 218 387 2111 (home/office) or 218 370 9833 (cell).