Part 4: Is Construction Management at Risk the Right Project Delivery Method for You?
Why does the project delivery method that you choose matter? Because as an owner, you need to know what options are available to you. That way you can select the best one to fit your project. After considering all the factors, is construction management at risk the right project delivery method for you?
As part four of the six series on project delivery methods management multi-prime focuses on five different areas:
the organization of the project team
when the project team members are typically engaged in the process
key attributes of this delivery method
Let’s dive in and see!
The Organization of the Project Team
Construction Management at Risk (CMAR, CM @ Risk) is also known by the AIA as Construction Manager as Contractor (CMc). The construction manager is brought on early in this project delivery method, often coming on early in the planning process alongside the architect. The architect then engages the engineering team and other specialty consultants and advances the design.
Towards the end of the design advancement, the construction management firm brings on its key trade partners.
In this case, they're listed on this slide as contractors. Those contractors help provide additional detail to the cost estimating and the budget and schedule that have been analyzed since the construction manager's beginning of the planning process.
The costs for construction management at risk projects are known before the end of the bidding process. And often, owners will elect the requirement of a guaranteed maximum price, or a GMP, to be established by the construction management contractor and execute the contract associated with that.
It is not required to establish a GMP, but often if an owner has a cost control concern, that's what they're doing. Then during construction, those contractors or key trade partners under the construction management firm are brought on board to execute the project.
Key Attributes of Construction Management at Risk
For construction management at risk, you have a single party, your construction manager/contractor, who provides the construction management services on pre-construction and then completes the construction during the project's construction phase.
This gives the construction manager/contractor responsibility and control over the construction work via direct contracts with the subcontractors, similar to design-bid-build.
The construction phase services are paid on the basis of cost plus a cost of the work plus a fee, either with or without the establishment of a guaranteed maximum price or GMP. With the construction manager, as an advisor and with design-bid-build, the owner warrants the sufficiency of the plans and the specifications to the construction manager.
The owner, as in all cases, has owner-direct consultants they're contracting directly with.
They're also contracting directly with the architect, who then has their consultants and sub-consultants. And then they're contracting directly with
the construction management firm a contractor. The construction management firm is then obviously contracting with their subcontractors in the project.
In a construction management at risk project, the owner, as in all cases, contracts directly with their owner-direct consultants. The owner also contracts directly with the architect who then has consultants and sub-consultants. Finally, the owner contracts directly with the construction management firm as contractor. The construction management firm then contracts with their subcontractors in the project.
Construction Management multi-prime and design-bid-build , the designer works directly for the owner. Regarding accountability, the construction manager acts as an agent of the owner. the owner warrants the sufficiency of the plans and the specifications to the construction manager.
This is very different than design-bid-build.
The construction manager is an agent of the owner in addition to being your general contractor. There is no contractual relationship between contractors and the architect.
With cost control, you have a higher level of cost control for the owner, establishing a guaranteed maximum price. You also benefit from early contractor involvement and their expertise on your project.
Regarding schedule, this is typically faster than design-bid-build. And about risk assessment, the owner, in this case, still warrants the sufficiency of the plans and specs to the construction manager.
What factors are you prioritizing on your project? Is construction management at risk the right delivery method for you?