May 19, 2021

The “Construction Manager As Constructor” Delivery Method

Design-bid-build and design-build are still the two most common project delivery methods in construction. Alternative models, however, are gaining in popularity.

One example is the Construction Manager as Constructor (CMc) model, which has gained enough traction that it can now be used for federal construction projects. The General Services Administration added CMc to its list of approved delivery methods in December 2019 as an option to help reduce project costs and delivery timelines.

Separate contracts

The CMc model engages the general contractor before the project’s design is complete. By facilitating early collaboration between the contractor and architect, the approach enables the contractor to act as a consultant and provide timely input on constructability, cost and value engineering — ideally preventing delays and potentially contentious change orders. It also allows construction to begin before completion of the design, which helps speed up project delivery.

Hold up, you might say, isn’t that design-build? Although design-build also brings in the contractor early in the design phase, the differences between the two models begins with how work is contracted.

Under design-build, one contract is awarded to make either the architect or contractor responsible for both design and construction. So, a construction company awarded the contract would then subcontract design work to a consultant. In this scenario, the contractor may act as construction manager (CM) to represent the owner’s interests during the design phase but then revert to general contractor for the construction phase.

With the CMc model, design work and construction work are contracted out separately. Per the contract, the construction company plays the role of CM, managing construction costs and acting as consultant to the project owner through all project phases. The CM also provides a wide range of preconstruction services, such as reviewing plans for constructability, providing cost estimates while the design is developed, preparing schedules and placing orders for long-lead items.

Construction Manager at Risk

Sometimes also referred to as “Construction Manager at Risk,” the CMc agreement requires a commitment by the contractor to deliver the project within a guaranteed maximum price (GMP).

The price is typically based on a cost-plus-fixed-fee structure, where the CM calculates the actual project costs for labor and materials and charges a fixed fee for professional services on top of that amount. Any costs exceeding the GMP that aren’t change orders are the financial liability of the CM. On the other hand, the contract usually provides a cost incentive by allowing the CM to share in the savings generated from their efforts to control and reduce costs.

During the preconstruction phase, the CM isn’t yet “at risk” (financially liable). Instead, the CM refines the pricing of construction as the design progresses and provides a final GMP to the owner before beginning construction. Once the owner accepts the proposal, those terms are added as an amendment to the CMc agreement.

Suitable projects

The CMc delivery method tends to be best suited for projects with a large, undefined scope and tight time constraints. It may also be ideal for jobs that require complex integration between disciplines or have multiple construction phases. Such projects benefit from early collaboration between team members and the oversight and coordination that a CM can provide.

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