Ames weighs alternative delivery for utility projects following wastewater plant cost overruns

Ames weighs alternative delivery for utility projects following wastewater plant cost overrunsCity council members held a workshop with construction firms to evaluate Construction Manager at Risk (CMAR) and other delivery methods, seeking strategies to mitigate supply chain volatility and limit change orders on complex water infrastructure.

Phase 1 of the Ames wastewater treatment plant, delivered via traditional design-bid-build, experienced cost overruns driven primarily by electrical pricing and supply chain delays.

Construction executives suggested that using CMAR for future phases could allow the city to bid out volatile electrical scopes earlier, identifying overages before full project bidding.

Contractors highlighted recent CMAR water projects in Altoona, Bondurant, and Webster City as examples of the model's growing footprint in Iowa's municipal water sector.

The city is considering hybrid delivery approaches for future utility work, potentially separating complex vertical treatment plants from horizontal distribution networks.

The City of Ames, Iowa, is exploring alternative construction delivery methods for its municipal infrastructure projects, looking to mitigate financial risks following cost overruns on its wastewater treatment plant. During a June 16 workshop, city council members and staff met with representatives from local construction firms to discuss the pros and cons of Design-Bid-Build, Construction Manager as Advisor (CMA), and Construction Manager at Risk (CMAR) models. The discussion highlighted Phase 1 of the Ames wastewater treatment plant, which utilized a traditional design-bid-build approach but came in over budget. Representatives from Woodruff Construction noted that the overages were primarily driven by skyrocketing costs and lead times for electrical components, exacerbated by supply chain demands from large private tech facilities. When asked how a CMAR approach might have altered the outcome of the wastewater project, contractors explained that it would have allowed the city to bid out the highly volatile electrical scopes earlier in the procurement process. While this would not necessarily lower the raw cost of materials, it would have exposed the overages earlier, potentially allowing the city to value-engineer other parts of the project to stay closer to budget. The use of CMAR is relatively new to Iowa's public sector, having been enabled by state legislation in 2022. However, construction executives noted that the model is already being deployed for municipal water and wastewater projects across the state, including a wastewater treatment plant in Webster City and water treatment facilities in Altoona and Bondurant. For complex utility projects, contractors advised that delivery methods do not have to be uniform across an entire program. Using the Altoona water plant as an example, a contractor noted that the city applied the CMAR model specifically to the treatment plant facility, while utilizing other methods for horizontal distribution systems and well construction. While Ames staff noted that the city has extensive experience with design-bid-build and is currently utilizing it successfully for certain wastewater efforts, the council is weighing alternative methods for future complex utility builds to help lock in guaranteed maximum prices and improve contractor accountability.