Water Design-Build Council Blog

What Is A Construction Management at-Risk Project?

Posted by Admin on Thu, Jul 17, 2014 @ 09:50 AM

With the volume of investment required to maintain and replace our nation's aging water infrastructure on the rise, Owners are searching for project delivery models that offer improved outcomes and increased delivery speed while also promoting cost efficiency. This has led to an increased focus on collaborative delivery models in which construction personnel are integrated into the design and construction process early, and the contractor is selected based on qualifications, cost, and other non-price factors.

What is Construction Management at-Risk?

Construction Management at-Risk is a collaborative delivery method in which the project design is the responsibility of an engineering firm retained by the owner. Construction is the responsibility of a separate contractor, also retained by the owner, who also performs pre-construction services during design development. The engineering firm and contractor typically work together during design development to address issues (such as constructability, scheduling and value engineering) and to mitigate risk during construction.

CMAR v. Design-Bid-Build

CMAR is contractually similar to design-bid-build (DBB) delivery in two regards, though there are significant differences. In both DBB and CMAR delivery, design is the responsibility of an engineering firm and construction is the responsibility of a separate contractor. Unlike DBB, however, the contractor in a CMAR delivery can function as the owner’s construction manager during design, as well as general contractor during construction. Moreover, in a CMAR procurement process, the construction manager/general contractor (CM/GC) is typically selected based on qualifications—rather than price, which is the standard criterion for selecting a builder in DBB procurement. In both DBB and CMAR delivery, the owner retains significant design risk. Unlike DBB delivery, however, the CM/GC is involved in the design process, which increases budget certainty and decreases design risk associated with constructability considerations.

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The decision to use CMAR should be made—and the GC/CM selected and integrated into the project team—as early as possible, but no later than when the design is 30% complete. In the early stages of design development, the use of CMAR delivery can contribute invaluable input to the site work, site layout, constructability, and general arrangements regarding structure and process. Much beyond the 30% design level, opportunities for major constructability impacts may be reduced or lost. Because it is relatively new, owners’ lack of familiarity with CMAR project delivery—as well as legislative restrictions in states where it has not yet been approved—has limited its use to date.

CMAR Distinguishing Features

Construction Management at-Risk projects are characterized by:

  • Two independent contracts: design and construction.
  • A two-phase construction contract: 1) Preconstruction services during design; and 2) construction.
  • CM/GC selected early—when design is no more than 30% complete, with selection based primarily on qualifications, and the option to consider a fee proposal.
  • CM/GC provides guaranteed maximum price (GMP) and schedule when design is approximately 60% (or more) complete. Owner may choose to reject GMP offer and proceed with DBB.
  • CM/GC becomes actively involved in review of design process once selected.
  • Owner is both buyer and project integrator.
  • CM/GC responsible only for following the design detail; not for overall plant performance. Risk for plant performance is determined between the owner and the designer. The CM/GC provides input for constructability improvement purposes, not for design, structural, or process effectiveness.

Data from surveys conducted by the Water Design-Build Council has demonstrated that the use of CMAR delivery enables owners to achieve quality projects by employing innovative practices that result in timely schedules and cost-effective methods. Given the many benefits and positive experiences reported, it is expected that the use of CMAR delivery will continue to increase.

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Topics: WDBC Admin