Construction Manager at Risk (CMAR) is one of the four prominent models of project delivery. The other models include Design Build (DB), Design Bid Build (DBB) and Integrated Project Delivery (IPD).  In the CMAR model, the owner establishes two contracts: one with the owner, and one with the designer. What distinguishes CMAR, is that it entails a commitment by the construction manager (CM) to deliver the project within a guaranteed maximum price (GMP). The GMP is based on construction documents and specifications, plus any reasonably inferred items or tasks.

 

Owner Advantages of Construction Manager at Risk Project Delivery Method:

  • There is a higher level of cost control from the start. A successful CMAR project would involve hiring the CM prior to the architect and having the CM help select the architect. During the design process, the CM provides cost estimates. The architect can only move onto the next phase of the project once the CMAR estimates are in line with the established budget, thus allowing the owner to maintain budget control.
  • The owner’s risk is limited by the CMAR process, providing the construction documents are complete and proper allowances and contingencies are built into the GMP. The GMP provides the owner with the assurance that their budget will be maintained.

 

Disadvantages of the Construction Manger at Risk Project Delivery Method:

  • The CM-architect relationship can lead to some of the same issues that arise in the design-bid-build delivery process: disputes between design intent and construction feasibility. For this reason, it is recommended that the CM be involved in the selection of the architect to reduce the risk of an adverse relationship.
  • The CMAR method is better for larger projects. If your project is on a smaller scale, this might not be the best method.
  • The owner may be financially liable for the exclusions and inconsistencies in the contract documents. This is why it is recommended that the owner be well versed in construction projects, to ensure that no details are missed in the final contract documents or drawings. Having a project management team on board is also advantageous because the team offers an extra set of eyes on all contract documents and plans.

 

Watchdog Real Estate Project Management
Watchdog Real Estate Project Management is a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Management as well as additional blog posts can be found at www.watchdogpm.com
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