Ohio State University Engages in 'At-Risk' Business
The expansion of Ohio State University (OSU) Medical Center in Columbus is not only one of the largest health-care projects ever undertaken in the state, but also changing the way public projects are being built there. The $1.1-billion, multi-year development is among the first to be delivered via construction management (CM) at risk.
Until recently, state law required public entities to employ multiple prime contracting to manage their projects. In 2009, the state introduced legislation allowing for alternative methods and practices, including CM at risk, design-build, design-assist, open-book guaranteed maximum price, and subcontractor prequalification.
Begun in 2009, OSU was selected as a pilot project. While Turner Construction Co. of Columbus is the project's CM, Lend Lease Construction Inc., Columbus, is serving as associate CM.
“We now have more tools in our tool box,” says Paul Sherwood, OSU's assistant vice president of facilities, operations and development. “We can determine which method is suited to a project.”
Sherwood believes the legislation, which became permanent in June, benefit owners and construction managers alike. “Under the traditional model, the CM did the legwork, but we had to be the enforcer,” he says. “Because the CM didn’t hold any contracts, we remained in the mix to ensure all aspects of the job were coordinated and in sequence.”
By holding contracts, the CM is more actively engaged in project, joining team members during the planning stages to perform estimating and scheduling, says Sherwood. CMs must meet delivery deadlines, he adds, but receive incentives for completing work early.
“We now have the opportunity to secure the most qualified bidders, not just the lowest-bidding ones,” says Lend Lease Vice President Jeff Bryson.“We also ave the ability to negotiate with contractors. If a bid includes scope that is covered elsewhere, we can make the necessary adjustments. As a result, the owner receives a more accurate price for the project.”
Both Turner and Lend Lease have long-standing relationships with OSU. Because of the vast size of the medical center expansion, whose centerpiece is a 20-story, 1.1 million-square-foot hospital tower, they opted to pool their resources and work together. The arrangement calls for a 70%-to-30% division of labor, risk and reward, with Turner Turner holding the larger share.
The undertaking consists of five discrete projects, each with a project manager. In addition to construction of the 420-bed Arthur G. James Cancer Hospital and Richard J. Solove Research Institute and Critical Care Tower, the scope includes renovations to existing hospital facilities, the remodeling of outpatient, clinical and administrative spaces; landscape improvements and park relocation and development; and infrastructure and roadway improvements.
When completed in 2014, the medical center will be capable of accommodating a 20% increase in admissions.