Feb 6, 2024 - News

Private companies will manage city construction projects

Illustration of a contract as an exit door with someone waving goodbye behind it

Illustration: Sarah Grillo/Axios

At least three of Des Moines' largest upcoming municipal projects will be managed by private companies rather than city employees.

Why it matters: The new process helps guarantee costs and could save DSM time on big projects like the T.M. Franklin Cownie City Administration Building, city engineer Steven Naber tells Axios.

Catch up fast: Local governments in Iowa were previously required to review bids and hire contractors for multiple phases of a project.

  • But a state a law that went into effect in July 2022 now allows them to hire a private construction manager at-risk (CMAR) to oversee projects from design through construction.

How it works: The CMAR is responsible for breaking down a project into smaller subcontracts and hiring to complete the work.

  • The method provides a guaranteed maximum price to governments, potentially holding the construction manager financially responsible if a project goes over budget.

The other side: A company hired as a CMAR is not obligated to adhere to labor union agreements for the subcontractors it hires.

  • Todd Copley, president of the American Federation of State, County and Municipal Employees (AFSCME) Council 61, tells Axios that could result in fewer skilled laborers being hired to complete government projects.
  • "I am a firm believer that you get what you pay for," Copley said.

Of note: The process may help avoid situations where a contractor must be hired by the city despite reservations about their previous work, Naber says.

  • Plus, only one manager overseeing an entire project will improve its coordination and likely result in savings, he adds.

The big picture: Multiple states already allow city governments to use CMARs, including Minnesota.

What's next: The North Side Community Recreation Center and Fire Station # 4 replacement projects are also using the CMAR process.

  • Construction of both projects is expected to begin this year.
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