Case Study: University of Iowa Hospital & Clinics North Liberty Medical Office Building

Case Study Summary

The project was contracted as Construction Manager @ Risk. The original budget was $315,000,000 with a construction budget of $180,000,000 million. During the course of construction, the budget was increased twice to $525,628,000 with a construction budget over $362,810,000.

+ 0 %
Increase to Original Construction Budget under Construction Manager at Risk

Construction Manager At Risk

The University of Iowa Facilities Management issued a Request for Qualifications for Construction Management at Risk services for the North Liberty Medical Office Building Development on November 10, 2020. The RFQ stated the project budget was $315 million with an estimated construction budget of $180 million. The University of Iowa contracted with a Construction Manager at Risk in January 2021 with a contract amount of $13,675,611.00.

The Construction Management at Risk company asked for the budget to be increased twice after being contracted. The Construction Manager at Risk did not guarantee the original budget or the first revised budget. It’s hard to believe that a 100% increase in the construction budget can be attributed to construction inflation.

Project budget was increased 2 times

The budgets were never guaranteed

Project increased from $315 million to $525 million

Original Budget 1st Budget Increase Final Budget
Construction Budget
$180,000,000
$252,374,000
$362,810,000
Total Budget
$315,000,000
$395,000,000
$525,628,000

Conclusion

The taxpayers of Iowa paid $13,675,611 to the Construction Management at Risk company. With a construction budget increase of over 100%, it makes you wonder if it was money well spent.