The State of Missouri recently joined a majority of states allowing political subdivisions to make use of design-build and construction manager-at-risk contracts for public works projects. The new law, signed on July 1, 2016, permits political subdivisions (such as state agencies, counties, municipalities, school districts, hospital districts, and sewer districts) to utilize project delivery methods that are widely used in private construction projects.
History of Construction Delivery
Missouri political subdivisions (with some exceptions) are required to engage in traditional design-bid-build delivery of projects (i.e., the public body selects an architect based on qualifications, then picks the low-bidding contractor following completion of design). For more complex projects, public bodies could engage a construction manager, but the CM is not permitted to perform any construction or provide a price guarantee (this is commonly referred to as construction manager as agent).
The new statute allows political subdivisions to engage a construction manager-at-risk, where the contractor is engaged prior to completion of construction documents, provides preconstruction services for the owner during the design process, and typically provides a guaranteed maximum price or fixed price after the construction documents are complete. The new statute also permits design-build, where the contractor is responsible for both the design and construction of the project (and holds all of the design and engineering contracts). Public bodies now have increased flexibility in choice of delivery method, which they hope will result in time and cost savings for their projects.
Overview of New Parameters
Because the use of each construction method is only permitted under certain circumstances and procedures, we’ve created a chart that outlines the requirements of each construction method under the new statutes: Chart: Project Delivery Options Under New Missouri Statutes.
The full text of HB 2376 (2016) is available here.