The use of Construction Manager as form of project delivery is being utilized more frequently now than it has in the past few years. There are pros and cons to the varying forms of project delivery such as Design-Bid-Build, Design-Build, Construction Manager, and the new trends toward Integrated Project Delivery.
Suffice it to say that the private sector has embraced the use of Construction Manager delivery systems for many years. The advantages include faster schedules, joint development of design documents between the Architect and the Constructor, open and transparent cost of the work including fees, and less cost overruns (if done properly). Because of this our local government agencies are now utilizing Construction Manager methods to deliver more of their projects on behalf of their using agencies.
As with any form of project delivery the Construction Manager process must be approached differently by the Owner, Architect and Contractor. Failure to understand and adapt to the new roles each party plays will diminish any advantages offered in this delivery method. Adapting to these new roles is even more important for government agencies that have operated under the Design-Bid-Build methods for so many years.
Before we discuss the role each party plays in the CMAR delivery system, let’s take a look at the two different Construction Manager project delivery methods. Construction Manager as Advisor (CMa) or Construction Manager as Constructor (CMc). In either cases the Owner contracts with an Architect (preferably SH Architecture) to develop the design of the project, and a Construction Manager separately.
Construction Manager as Advisor (CMa)
The CMa is a party that contracts with an Owner to provide construction management services and act on the Owner’s behalf or as their Agent. The CMa is more of an Owner’s representative and does not assume responsibility to construct the work but may provide constructability expertise, cost estimating, budgeting and schedule development. In addition the CMa will advise the Owner in regards to bidding and contracting for the work.
Construction Manger as Constructor (CMc) or Construction Manager at Risk (CMAR)
The CMc or CMAR is a party that contracts with an Owner to provide pre-construction services, constructability expertise, cost estimating, budgeting, schedule development and construction management. In addition the CMc may bid the work. However, when the CMc guarantees the cost of the work they assume the risk they are commonly referred to as the CMAR. The cost of the work may be Lump Sum, Cost Plus a Fee with or without a Guaranteed Maximum Price (GMP), or any other costing structure.
All parties involved in CMAR project delivery need to understand and be well versed in the terms and conditions of the prime agreements between the Owner / Architect and Owner / Contractor. These agreements define the roles and responsibilities of each party in delivering the project. The AIA, AGC and other organizations have standard documents for use in the CMc, CMa and CMAR process. There are differences in these documents over the traditional documents used for Design-Bid-Build projects. However, they generally have similar general conditions to those used for design-bid-build projects.
Let’s take a look at the roles and issues facing each of the parties in the CMAR process.
Public Owner’s typically provide design and construction management oversight with in house design or construction professionals. They typically establish budgets, schedules, contingencies and the project’s program requirements. How they contract, enforce and manage these items with the CMAR needs to be different than the design-bid-build process. Approaching the CMAR process by the Owner in the same traditional design-bid-build ways may conflict with the CMAR’s responsibility and the risk they assume for cost, scope and schedule. Once conflicts between the Owner, CMAR or Architect arise the CMAR tends to change hats from collaboratively defining scope and budgets to the traditional design-bid-build attitude that if it is not in the Architect’s drawings it is a change in scope. This tends to create costs overruns and delays, negating the advantages of the CMAR process.
The CMAR process is flexible and allows the cost of the work to be determined or guaranteed at any point of design completion. Owners may want to wait till the plans are almost complete to execute the work, much like they would in the design-bid-build process. This is the comfort level that most Owners are used to. Whether the costs are established early in the design or near completion, the key to success is in the management of the CMAR’s contingency or being open to accepting changes in scope should there be mistakes in construction or bid packages coming in above estimated amounts. The construction process is inherently filled with risks. The risks when shared through contingencies or managed through modified scope will be minimized with the resulting savings or schedule benefits going to the Owner.
The CMAR generally will provide pre-construction services that will assist the Architect in developing the design. This may potentially create a conflict. The Architect is responsible to maintain the Owner’s quality and program requirements while the CMAR may encourage products that are inexpensive and lack performance in order to maintain costs. The CMAR’s and Architect’s ability to form a working relationship is critical to the success of the project.
The CMAR who is focused on the Owner in lieu cost above all else will fare much better under this delivery method. There will be times when the Owner will need to be saved from their choices, the Architect from theirs and the CMAR from their own. When Owners qualify CMARs, they should look for these qualities and verify them through referrals and references.
The Architect’s role during the CMAR method is similar to those provided in the Design-Bid-Build method. However, the CMAR method may reduce the Architect’s activities during construction as the CMAR’s pre-construction services should reduce design changes, site issues, RFI’s, claims, disputes and unclear scope issues. Submittal processing should be minimized as products and assemblies have been vetted out by the CMAR and the Architect during pre-construction services.
Owners may think that there should be some reduction in the Architect’s services or fees; however the Owner and Architect should recognize and understand the additional time requirements necessary in the CMAR process. Additional scope and services for the Architect may include multiple iterations of design documents, multiple bid packages, frequent changes based on CMAR input, value analysis, substitution and frequent redesign as a result.
Architects must adjust their design processes to succeed in the CMAR process. The traditional process of establishing the design (SDs), refining the design (DDs), and providing detailed designs (CDs) must be abandoned. A more iterative process of developing designs, options, variations and value analysis must be utilized to compliment the efforts of the CMAR.
Conclusion: CMAR’s values over the traditional design-bid-build process are evident. Owners are saving on budgets, cost overruns and meeting project schedules while maximizing the value in the project. Important to the success of the project is developing new positive working relationships among the Owner, Architect and CMAR. Owners must take an active role and participate early in the key pre-construction phases where the decisions effecting budgets, scope and schedules have the biggest impact. Continuing a working relationship throughout the construction phase provides a valuable quality assurance system.