CM At-Risk

Third Party Procurement

Frequently Asked Questions

Q = Question; A = Answer

Q.  A local agency has an RFP out for a CM At-risk Project, which is very similar to a design-build project in that it requires a team composed of an AE and General contractor. The RFP caps the overhead rate at 2.4. Is that legal under FTA circular 4220.1E? Please refer to the following web site under RFPs, page 16 of the General Provisions defines the Cap: http://www.mta.net/projects_plans/exposition/default.htm.

A.  At this time the Federal Government (GSA, FTA, etc.) does not treat CM At-Risk procurements as A-E (Brooks Act) procurements. The current policy is to treat this kind of contract as one for construction (or, if you prefer, as Design-Build where the preponderance of the work is construction, not A-E services). Thus the Federal approach is to use a negotiated competitive RFP (pursuant to FAR Part 15) with price proposals from the CM At-Risk offerors. This being true, there doesn't appear to be a problem with the overhead cap, as there would be if this were an A-E procurement.