The state of Ohio is regularly utilizing a “best value” approach to select “at risk” CMs on a subjective basis to perform work on a “cost plus” Guaranteed Maximum Price (GMP) basis.
One frequent area of differing interests surrounds the establishment of a GMP after the contract has been awarded and significant pre-construction compensation paid.
The state is utilizing Supplementary Conditions to require the CM to submit a GMP proposal on the Construction Documents within a certain number of days of their completion. And if the CM fails to timely do so, the state is entitled to liquidated damages in the sum of the CM’s pre-construction stage compensation, which can run in the millions of dollars on mega projects.
CMs on large projects are well advised to modify the state’s Supplementary Conditions to provide for a more reasonable scenario should the GMP proposal be delayed.
