by Philip Calabrese, Jim Lasersohn

The Challenge

A leading Northwest healthcare system was about to embark on a new clinic construction project. Having struggled through budget and schedule problems with its previous Construction Management (CM) vendor, the search was on to find a new CM that would guide the project from start to a successful finish. Looking forward, leadership also wanted to establish a long-term contract with the CM to deliver a full range of future construction project – from small, routine rearrangements to large capital programs. The COO engaged Point B to help prepare the request for proposal (RFP) and contract documents, and to conduct an effective selection process for finding the right CM.

Looking beyond price

Point B brought our client the integrated expertise of our Property Development and Consulting groups, with a special focus on healthcare.

As we reviewed the proposed RFP and contract documents prepared by client staff and outside counsel, we found that price remained the main criteria for selecting the CM. But price alone would not ensure the quality outcome our client required. Technical capability is critical to managing large construction projects, especially complex facilities such as medical clinics.

A model for scoring success

We provided our client with a proven CM supplier evaluation methodology that systematically compares technical capabilities in addition to price. The methodology also allowed our client to choose how much weight to give technical vs. price components in selecting the CM. Due to their past challenges, and the complexity of many projects to come, our client opted to weigh technical capabilities relatively high – at 60 percent.

The 15 percent leverage

We helped our client see that adding technical criteria is especially valuable in selecting the CM role because of the impact it has on the entire construction project. While the CM's portion of overall costs is relatively low – about 15 percent – the CM has a high impact on the other 85 percent. It pays to select the CM who will bring out the best in that 85 percent.

Due diligence matters

By adding technical capabilities to the RFP and evaluation, we helped our client justify and select the most competitive supplier of CM services, regardless of whether they appeared to have the lowest bid. Our structured approach and clear documentation were also valuable to our client as they finalized a partnership with another entity. In the process of bringing aboard the right CM firm, they were able to show the due diligence of a well-analyzed sourcing effort with a logical conclusion. Very smart.