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discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/298333927

Comparing Construction ManagerGeneral

Contractor and Federal Early Contractor
Involvement Project Delivery Methods
Article in Transportation Research Record Journal of the Transportation Research Board January 2016
Impact Factor: 0.54 DOI: 10.3141/2573-03

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Iowa State University
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Comparing Construction Manager/General Contractor (CMGC) and Federal Early

Contractor Involvement (ECI) Project Delivery Methods
Douglas D. Gransberg, PhD, PE
Professor and Donald and Sharon Greenwood Chair of Construction Engineering
Iowa State University,
Department of Civil, Construction, and Environmental Engineering
494 Town Engineering Building
Ames, Iowa 70010
515-294-4148
dgran@iastate.edu
Submission Date:
Word Count = 5,000
Figures and Tables = 6 @ 250 = 1,500
Total Word Count = 7,500
*Corresponding author
TRB Paper #16-0774.

Final accepted manuscript; Published as:

Gransberg, D.D., Comparing Construction Manager/General Contractor (CMGC) and Federal Early Contractor Involvement (ECI) Project
Delivery Methods, Transportation Research Record, No. 2473, Journal of the Transportation Research Board, National Academies, 2016.

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Abstract
Past studies of the construction manager/general contractor project (CMGC) delivery method have
focused on its use at state and municipal departments of transportation (DOT). The literature also
includes the Federal Acquisition Regulation-based (FAR) approach to CMGC, termed Early
Contractor Involvement (ECI), which the literature classifies as merely a different name for CMGC.
The desire to use CMGC project delivery by the Federal Lands Highway Divisions stimulated a
deeper study of the restrictions placed on federal agencies by the FAR and found that while CMGC
and ECI are indeed similar, they are not identical. This paper reports the findings of that study. A
comparative analysis of the two project delivery models is presented, and the paper finds that ECI is
substantially different than CMGC due to FAR-based limitations on preconstruction services and
pricing methodology. It concludes that the use of an incentive/disincentive scheme and the bidding
of a proposed profit margin enhance competition during the ECI contractor selection process. The
results of this paper can be used outside the federal sector by state and local transportation agencies
to furnish an alternative to CMGC in those areas where industry opposition is the primary barrier to
implementing CMGC.
INTRODUCTION
A project delivery method is the comprehensive process of assigning the contractual
responsibilities for designing and constructing a project a delivery method identifies the
primary parties taking contractual responsibility for the performance of the work (1). Contractual
relationships between the various parties to the contract are different in each project
delivery method. The traditional method for delivering highway projects is called the Design-BidBuild (DBB) delivery method. This method requires the owner to complete the construction
documents using either internal design assets or outsourcing the work to a design consultant. Once
the design is complete, the DOT then advertises the project via an Invitation for Bids (IFB),
awarding it to the contractor with the lowest responsive and responsible bid (2). There is no privity
between designer and contractor, and the contractor is not involved in the design process. By
definition, DBB is not an integrated delivery method (3).
The DBB method has been in use for decades, and works well for most projects. However, lack of
contractor input limits the amount and quality of constructability that can be integrated into the final
design, and as a result, alternative contracting methods have been used to deliver projects where
constructability is an essential factor of the projects success. There are many known issues with the
traditional DBB method. For instance, the project development process is linear and sequential,
resulting in longer overall project durations. Experience has shown that DBB project delivery often
becomes adversarial during project execution and as such, research has shown that DBB projects
have a higher average cost growth than projects delivered using alternative delivery methods.
The three alternative project delivery methods used on heavy civil and highway projects are DesignBuild (DB), Construction Manager/General Contractor (CMGC) and Early Contractor Involvement
(ECI). In one study (3) compared the p e r f o r m a n c e o f t h e three delivery methods to DBB;
found that the impact of using an alternative project delivery method reduced both cost and time
growth during construction; and concluded that ECI, CMGC and DB projects tended to outperform
traditional DBB projects in most measured criteria. Other major benefits associated with
alternative delivery methods include a shorter overall project delivery time, construction contractor
input to the design, better quality construction documents, and early knowledge of costs (4).

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Background
As previously stated, highway projects are traditionally delivered using DBB. In DBB, the
owner holds separate contracts with the designer and the builder in the project delivery process.
In DBB, the Spearin doctrine imposes liability on owners for defective bidding documents (5; 6)
and as a result, is financially liable for the cost of any errors or omissions encountered in
construction. Public DBB projects are generally awarded on a low bid basis. There is no
contractual incentive for the builder to minimize the cost growth in this delivery system. In fact,
there can be an opposite effect. A builder who has submitted a low bid may need to look to
post-award changes as a means to make a profit on the project after bidding the lowest possible
margin to win the project (7).
Construction Manager/General Contractor (CMGC)
CMGC projects are characterized by a contract between an owner and a construction manager
who will be at risk for the final cost and time of construction. In this agreement, the owner
authorizes the construction manager to make input during project design. The owner will either
complete the design with its own design personnel or out-source the design work to a consultant.
Generally the contractor is chosen on a best-value basis through an RFP process, or on
qualifications based selection through a Request for Qualifications (RFQ) process (8).
CMGC project delivery involves two contracts (9, 10). The first is for preconstruction
services during design and the second is for the construction itself. Typically, CMGC
contracts contain a provision in which the CMGC contractor stipulates a guaranteed maximum
price (GMP) above which the owner is not liable if the projects scope does not change after the
GMP is established (11). Figure 1 shows the contractual relationships between the three parties.
As can be seen, there is a contractual coordination requirement between the CMGC and the
designer (12).

FIGURE 1 Construction Manager/General Contractor (CMGC)

CMGC Procurement Process
In 2010, the Federal Highway Administrations (FHWA) Every Day Counts program brought
CMGC to the attention of the highway construction sector at the national level (13). Prior to
2010, DOTs in Alaska, Arizona, Florida, Michigan, Oregon, and Utah had experimented with it
under the Special Experimental Project-14 (SEP-14) (9). NCHRP Synthesis 402: Construction

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Manager-at-Risk Project Delivery for Highway Programs (9) was also published that year and
provided a benchmark for the state-of-the practice. It found that Utah had the most experience.
Subsequently, NCHRP 10-85: A Guidebook for Construction Manager/ General Contractor
Contracting for Highway Projects (10) was initiated to provide guidance for DOTs in
implementing CMGC project delivery. Completed in 2013, that study conducted case studies on
ten more projects, which combined with the nine Synthesis 402 case studies represented nearly
every CMGC project that had been completed through 2012 by a DOT and found the following
trends in the contractual procedures and constraints/requirements:
There is a strong preference to couple outsourced design with CMGC project delivery.
The consultant design contract was modified to synchronize it with the CMGC contract
in 7 of 10 projects.
Self-performance requirements are in the 30% to 40% range for most agencies.
Weighted selection criteria are used in 9 of 10 projects.
Interviews were included in the selection process in 7 of 10 projects.
One-step procurement procedures are used by 9 out of 10 projects.
The project target budget was disclosed in 6 of 10 projects.
The CMGC contractor is selected at a level of design completion of 30% or more in all
projects. (10).
CMGC Project Pricing Structure
Pricing structures in CMGC projects are not standard across the nation. The following trends
were observed in the NCHRP Synthesis 402 and NCHRP 10-85 research findings:
Payment provisions consisted of lump sum, unit price, or a combination of the two.
Iterative pricing was used in most of the case study projects.
Some form of open books accounting was used on most CMGC projects.
The construction price (i.e. GMP) was negotiated and fixed once design had reached 80%
to 100%.
Very few restrictions were placed on the contractors selection of its subcontractors. The
main requirement found was that agency reserved the right to approve all subcontractors
prior to subcontract award.
Most projects allowed early release for construction (RFC) construction work packages.
An Independent Cost Estimator (ICE) was used to verify the contractors construction
costs in about half the cases.
Incentives for completing the project below the agreed construction price were present in
about 50% of the cases.
CMGC Summary
Taking the trends discussed above together, a typical state DOT CMGC project characterized
by a one-step procurement with some aspect of price included in a weighted criteria selection
formula. The competing contractors are usually interviewed as part of the selection, and the
design has been advanced to roughly 30% at the time the CMGC preconstruction services
contract is awarded. The final construction price is established using an iterative pricing system
with the contractor providing estimates at predetermined points in the design process (usually
30%, 60%, and 100%), and it is fixed late in design (90% to 100%). The contractor is typically
allowed to self-perform the trades that it choses and must meet a minimum of 30% to 40% of the

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total project value. The DOT normally permits the contractor to select its own subcontractors,
reserving only approval authority for the final subcontracting plan.
Early Contractor Involvement (ECI)
ECI projects are characterized by a preconstruction focus on cost control and
constructability with the construction contractor providing a Constructability Review and
Estimating (CRE) Team during the design process to assist the owner and the designer in
developing a high quality set of construction documents that have been designed within the
target budget. This approach was pioneered by the US Army Corps of Engineers (USACE) and
used extensively and with great success during the Hurricane Katrina reconstruction program
(14). The term ECI is also used in Australia and New Zealand, and the international model is
somewhat different than the USACE model in that the contractor is brought to the team before
the design consultant and often is directly involved in the environmental permitting process (15).
Additionally, the European Union maintains two different ECI models (16). The first, called
Competitive Procedure with Negotiation involves negotiating scope and price with two or
more contractors and awarding based on a best and final offer. The second type is called
Competitive Dialogue competing contractors making individual proposals for scope and then
by process of elimination the field is reduced to the two best proposers who then submit tenders
offers for their proposed scope and the lowest cost offer is selected. The remainder of the paper
will devote itself to comparing the USACE ECI model to the CMGC models found in US state
DOTs.
Figure 2 shows that the contractual structure is nearly identical to CMGC. Thus, the main
difference is what the contractor is asked to perform during preconstruction. ECI concentrates
the preconstruction input on means, methods, and constructability, using cost estimating services
to make sure that the design can be built within the current budget (14). CMGC, while including
these factors, has a much broader spectrum of potential preconstruction tasks for the contractor
(8).

FIGURE 2 Early Contractor Involvement (ECI)

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USACE defines ECI as an integrated project delivery method that develops a holistic team
consisting of the owner, designer, and contractor at the initiation of the project (17). Unlike
CMGC, which is priced using a negotiated guaranteed maximum price (GMP), an ECI contract
is priced using the process prescribed in the Federal Acquisition Regulation (FAR) 16.403-2
termed: Fixed Price Incentive Price Revision (Successive Targets) (18). This process is a twostep award process where contractors qualifications and past performance are first evaluated on
a Go/No Go basis against a set of evaluation criteria, and those that are found to be qualified
form a short list. The qualification criteria are kept to a minimum and a given contractor either
meets or fails to meet a given criterion, eliminating the subjectivity found in qualifications-based
award systems. A hypothetical example of typical qualifications criteria for a bridge project
might be as follows:
The contractor will have successfully completed a minimum of four construction projects
for the agency in the past five years.
The contractor will have successfully completed at least one seismic retrofit of a major
bridge (contract value exceeds $X.X million) in the past five years.
The contractor will have no unsatisfactory ratings in the USACE performance-based
contractor performance evaluation database (termed the construction contractor appraisal
support system or CCAS) in the past three years.
Once the shortlist is formed, the price component is then developed. USACE announces the
Ceiling Price which is the maximum amount of authorized funding for the project and provides
the technical documentation used by the Corps to reach that estimated cost. Instead of
negotiating a GMP, the competing contractors actually bid an Initial Target Price that
consists of an Initial Target Cost (ITC) and an Initial Target Profit (ITP) as shown in
Figure 3. These are compared to the Ceiling Price and the contract is awarded to the contractor
that meets all the qualification requirements and has the lowest ITP. It must be understood that
the operating term in the bid process is TARGET and that indicates that the price is expected
to change as the design is fully developed.

FIGURE 3 Typical USACE ECI Bid Form (17).

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USACE ECI uses an alternative award system for projects with a particularly complex design
where contractor means and methods will drive the final design solution. The system substitutes
an interview process for the Go/No Go evaluation (17). In this system, competing contractors
make a formal presentation that includes corporate qualifications, previous similar projects,
qualifications/experience of key personnel, project-specific issues, and preconstruction services
components. Following the presentation, each competitor responds to a pre-published list of
standard questions in the RFP. Finally, competing contractors are given a scenario exercise, in
which they have a fixed period of time to develop a solution and subsequently present it to the
evaluation committee. The winning contractor is determined using a best- value award based on
a Cost-Technical Trade-off analysis prescribed in the FAR is based on published evaluation
criteria in the RFP. Price is provided in the same manner as shown Figure 4 and is normally
assigned 50% of the weight (19).
After contract award, the winning contractor submits its proposed general conditions fee. In the
RFP, USACE includes the following technical information on the project:
Scope of work description
Preliminary plans/specifications
Construction testing matrix
Quality management roles and responsibilities
USACE makes the project delivery method selection decision during the development of the
projects formal acquisition plan and seeks to award the ECI contract at approximately 10% to
15% design completion (17, 18). Additionally, the typical federal architect/engineer (AE)
design services contract is also modified to comply with ECI delivery and typically includes:
Design packages to be reviewed by the contractors CRE team,
Design milestones to facilitate preconstruction services packages,
Requirements to incorporate/respond to CRE team constructability review comments,
Coordination of design packages with construction contractors self-performed work
packages as well as the construction subcontractor bid packages.
The ECI contractor must declare the trade bid packages it wants to self-perform and is permitted
to prequalify its own subcontractors without government interference, provided that it obtains at
least three subcontractor quotes for all subcontractor work packages over $100,000. It is also
required to get the governments approval (termed Consent to Subcontract per FAR 44.2)
before awarding subcontracts. The winning ECI contractors initial target price is revised as
design progresses to reflect both current quantities of work and market conditions. This
procedure is consistent with a progressive GMP as defined by NCHRP Synthesis 402 (9). The
final lump sum target price is determined by an incentive price revision using successive
targets as shown in Figure 4. The major components are as follows:
Construction cost including jobsite overhead,
CRE team preconstruction services fee which includes home office overhead for the
entire project.
The final project price is established around 90% design. Similar to DBB, the lump sum can be
adjusted according to projects scope changes during design or construction. ECI uses an open

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books pricing system where the owner is provided the contractors actual costs, which are then
used to determine the actual amount of profit allowed under the incentive/disincentive scheme.

FIGURE 4 Typical USACE ECI Incentive/Disincentive Scheme (17).

Benefits and Challenges of CMGC versus ECI
There are pros and cons for every project delivery method. It is no different for the CMGC and
ECI delivery methods. Each method should only be used on projects where it will offer the
most benefit to all the parties involved in the project. Gambatese et al. (21) notes that the
benefits resulting from the use of CMGC and/or ECI can be greatest for projects that:
are high risk,
possess a high level of technical complexity,
are governed by significant schedule constraints,
require complex phasing,
contain budget limitations requiring a construction cost guarantee during design, or
on which value engineering will result in substantial cost savings.
Furthermore, Schierholz et al. (22) found that the major benefits and challenges of using the
CMGC delivery method are:
Benefits
Challenges
The ability to fast-track,
Training required for agency
Contractor design input,
personnel,
Early knowledge of costs,
Contractor and designer have
Ability to bid early work packages,
different agendas,
Owner control of design,
Requires procurement culture shift,
Flexibility during design and/or construction,
Total cost not known until
construction price is fixed
Shared risk allocation.

Hoffman et al. (17) listed the following benefits and challenges for ECI project delivery:
Benefits:
Challenges
Focus on quality/safety can be
Design schedule must be well managed
maximized.
since construction contractor is engaged
Engages engineers (lead & design)
and some construction started.
[owner & consultant] directly in the
Likely limited to equipment or technology
quality, scope, schedule, and budget
of the selected construction contractor if
discussions.
there is a basic interest.
Construction technique [means &
Contract administration requires a more
methods] /materials can be better
motivated and engaged staff in all
considered during design.
functional areas of USACE than other
Detailed knowledge of equipment and
acquisition methods.
technology.
Funding and incentive/profit calculations
Better construction partnerships/trust
can be complex.
(internal and external).
Generating quantities at 10% design for the
[Owners] Design and contract
contractor to develop an Initial Target Cost
administration [personnel] develops
may be difficult in complex projects.
technical competence across functional
areas.

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Project Delivery Method Selection and Selection Factors

The CMGC and ECI delivery methods are project delivery tools for public transportation
agencies. Like all delivery methods, the agency not only needs to consider various projectspecific factors, but also agency-related factors when deciding whether to select CMGC or ECI.
Some agency-related factors to consider include current capabilities, risk aversion, and statutory
restrictions on methods. Some project- specific factors to consider include:
Schedule issues
The technical complexity of the project
Project budget control issues
The monetary size of the project
Third party interface issues with the project
Project type (typical agency project vs. non-typical agency project)
Project environmental issues
Project technical content
Project traffic control issues
Project location
Desire to include specific innovation
Project sustainability issues
A focus on quality and safety
An agency cannot just choose a delivery method at random to use on a project. Every agency
should have a procedure set in place to use when choosing which delivery method to use for a
project. This procedure must be agency specific but should include consideration of various
project and agency factors. The literature shows that CMGC is best used on projects with the
following types of requirements:

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There is a need for immediate transportation improvements;

The design is complex, difficult to define, subject to change and/or has several design
options;
There is a high coordination requirement with external agencies that make cost overruns and construction schedule a pressing concern;
The project is sequence or schedule sensitive. (23)

The literature shows that ECI is most advantageous when:

There is a need for immediate improvements to the infrastructure;
Design is technically complex, difficult to define at early stages, subject to change and/or
has several alternative solutions that require cost and schedule analysis before making a
design decision;
The requirement to coordinate with external agencies is high, making cost over-runs and
construction schedule a pressing concern;
The project is work sequence or schedule sensitive (24).
Other reasons that USACE considers when selecting ECI as the delivery method for a project
include:
Encourage constructability
Encourage innovation
Need to use in-house design assets.
Facilitate value engineering
Third party issues (permits, utilities, etc.)
Reduce/compress/accelerate project delivery period
Flexibility needs during construction phase
Establish project budget at an early state of design development
Provide mechanism for follow-on operations and/or maintenance
Constrained budget
Compete different design solutions through the proposal process
Encourage price competition (bidding process)
Innovative financing (23)
Comparative Analysis
Table 1 shows a side-by-side comparison of CMGC and ECI. The details shown in the table are
meant to portray a generalized typical case, and not to be all inclusive for every possible
variation in each project delivery method. The authors are aware that there are exceptions to the
content shown below. For example, the California DOT uses CMGC with in-house design, but it
is the only DOT in the country to do that. Thus, it is not considered typical.

Table 1: CMGC and ECI Comparison

Factor
Procurement procedure
Self-performance requirement
% Design when contractor selected
Weighted selection criteria
Weight given to price
Low bid award possible
Interviews at selection
Routine project
Complex project
Disclose budget during procurement
Modify design contract
In-house design/outsourced design
Payment provisions

CMGC
1-step QBS & 1-step
BV
30% to 40%
30% to 70%
Yes
0% to 60%
No

None
10% to 15%
Yes
50%
Yes

Yes
Yes
Yes
Yes
No/Yes

No
Yes
Yes
Yes
Yes/Yes

Lump sum
Yes
Unit price
Yes
Combination
Yes
% Design when final construction cost/GMP is set
80 % to 100%
Iterative Pricing
Yes
Open books accounting
Yes
Contractor controls design schedule
No
ICE used in pricing iterations
Yes
Owner restrictions on subcontractor selection (other than
Yes
reserving right to approve subcontracting plan)
Early release construction work packages
Yes
Convert to DBB if no agreement on final construction cost
Yes
BV = best value; QBS = qualification based selection; GMP = guaranteed maximum price

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ECI
2-step BV

Yes
No
No
90%
Yes
Yes
Yes
No
No
Yes
Yes

The table shows that the two delivery methods are very similar. CMGC has more potential
variations, and ECI endeavors to bring the contractor into the design process at a much earlier
point in design development than CMGC. The major differences of ECI from the better known
CMGC process are as follows:
ECI is focused on constructability and cost control as its primary preconstruction
activities.
ECI brings the contractor on to the project team much earlier in the design process.
ECIs pricing structure permits a low bid award for noncomplex projects.
ECIs pricing structure embodies an incentive/disincentive that supports its focus on cost
control rather than cost savings.
ECIs pricing structure simplifies the payment process using a lump sum or firm fixed
price.
ECIs two-step procurement process allows the agency to conduct a rigorous, projectspecific contractor prequalification process.
So the above comparison shows that previous studies that correlated ECI as merely a different
name for CMGC were not precisely correct. While it shares the same contract structure and
many of the same characteristics, ECI is different in many substantive ways, perhaps enough to
be considered a separate project delivery method and a potential new tool in the DOT
procurement toolbox. Accordingly, the following section provides information on the USACE

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ECI experience as a means to furnish a base from which a state DOT can decide whether the tool
is attractive for implementation within its market.
USACE ECI Outcomes
Table 2 below synopsizes a cross-section of major USACE ECI projects completed during the
Katrina reconstruction program as well as a dam project in Kansas and several military
construction projects built in Virginia. The heavy civil projects are obviously all very large, but
the Visitor Control Center was only $6.0 million and shows the range of potential projects on
which the delivery method has been successfully applied. The table shows that some projects
went up from the initial target price during design but in most cases, the final price was lower than
the initial ceiling price, which is the amount of programmed funding available at project
authorization.
Table 2: USACE ECI Project Costs Record (14, 19).
Project

Type

Location

LPV 111
LPV 145
LPV 146
LPV 148
IHNC-01
Tuttle Creek Dam
Seismic Upgrade
Central Utility
Plant
Technology Center
Visitor Control
Center
Parking Garage

Levee
Levee
Levee
Levee
Levee

New Orleans, LA
New Orleans, LA
New Orleans, LA
New Orleans, LA
New Orleans, LA

$295
$357
$280
$300
$154

$411
$488
$452
$380
$181

$342
$237
$272
$350
$164

Savings
from
Ceiling
Price
(in millions)
$69
$251
$180
$41
$17

Dam

Manhattan, KS

$206

$250

$175

$75

Fort Belvoir, VA

$100

$110

$107

$3

Fort Belvoir, VA

$78

$82

$72

$10

Building

Fort Belvoir, VA

$5.8

$6.0

$5.9

$0.1

Building

Fort Belvoir, VA
Totals

Industrial
Process
Building

Initial
Target
Price
(in millions)

Initial
Ceiling
Price
(in millions)

Final
Price
(in millions)

$77
$78
$72
$1,853
$2,438
$1,797
Apparent Savings to the Government

$6
$652
27%

Conclusions and Recommendations

Four conclusions can be drawn from the above analysis:
1. At very least, ECI is a variant of CMGC project delivery that brings the contractor on
board at the earliest practical point in the design process.
2. The ECI pricing structure permits a 2-step low bid award for projects whose scope of
work permits a reasonable opportunity to generate the quantities of work necessary for
the bidders to develop an initial target cost.
3. The ECI pricing structure requires the contractors to compete on their profit margin,
which may make it a more competitive selection process than typical CMGC.
4. ECIs incentive/disincentive scheme promotes cost control over cost savings and as seen
in the USACE experience, cost control translates into cost savings at the end of the job.
The following recommendations are made.

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DOTs in areas where the local construction industry opposes CMGC because of the
proposal and interview process (i.e. the so called beauty contest) may be able to
overcome this barrier to implementation by employing ECIs 2-step low bid award
model. Depending on the project, the qualifications step could be conducted using a
standard form and the Go/No Go evaluation.
The slopes of the cost and price lines shown in Figure 4 will require further research to
determine a reasonable formula for a state-level DOT project.

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