Construction Management At-Risk ([email protected])
A project delivery method in which the Construction Manager acts as a consultant to the owner in the development and design phases, but assumes the risk for construction performance as the equivalent of a general contractor holding all trade subcontracts during the construction phase. This delivery method is also known as CM/GC.
In addition to providing the owner with the benefit of pre-construction services which may result in advantageous changes to the project, the Construction Management at Risk scenario offers the opportunity to begin construction prior to completion of the design. The CMR can bid and subcontract portions of the work with an approved design at any time, often while design of unrelated portions is still not complete. In this circumstance, the CMR and owner often negotiate a guaranteed maximum price (GMP) based on a partially completed design, which includes the CMR’s estimate of the cost for the remaining design features.
Furthermore, CMR may allow performance specifications or reduced specifications to be used, since the CMR’s input can lead to early agreement on preferred materials, equipment types and other project features. In addition, arrangements can be made regarding risk sharing and profit sharing if there are over-runs or under-runs in the GMP.
- Some aspects of preconstruction services are provided by a contracting entity and happen concurrently with design activities. These services often include budgeting, scheduling, construction technology and feasibility.
- Start construction before plans are complete, or even before all of requirements are known.
- Provides more flexibility for the owner to make changes at their actual audited cost.
- Can be used on jobs which are not easily marketable because of a lack of definition of scope, etc.
- Construction budget cost control can be initiated during the design development period.
- Final price known (assuming no changes in plans and specifications or unforeseen conditions).
- More work for the staffs of the owner and architect/engineer in monitoring costs, bookkeeping, and auditing.
- Responsibility of owner and architect/engineer to select a general contractor experienced in this type of contract, who will be efficient, who has management experienced to act as a team member, and who knows how to keep proper books of account.