The idea of having a skilled construction manager involved in a project is t provide a builder perspective into the process during the design phase. Construction management delivery method is commonly divided into two types, construction management at risk (CMAR), or construction management not at risk (CM-Agent). Although the term CM-Agent is similar to CMAR, it is not much of a project delivery method. CM-Agent typically describes a type of relationship or as a project management method. “A method of managing design and construction services. A CM Agent performs the role expected of an agent in an agency relationship, acting as a representative of the owner of the project” (Gaudet & Lynch, 2018). As well as exclusively serves the interest of the owner, advises the owner, and helps the owner to make critical decisions during each stage of the project. Unlike CMAR, which is a delivery method in which the construction manager commits to an owner that they will deliver a project within a guaranteed maximum price (GMP). This means that Cm is responsible for all estimating in the project and the first one to be hired by the owner. This method is very similar to a traditional design-bid-build delivery method, but slightly faster. At the beginning of the project the owner hires both the designer and the CM Agent. Each of these firms are awarded based on their qualifications, not the lowest bid and negotiate their fees. During the design phase the CM Agent will typically assist the owner and the design firm with input on costs, cost effective construction methods, constructability, value engineering, general technical assistance, scheduling, and sequencing issues. This collaboration leads to fewer change orders down the road. During the construction phase the owner can hire the subcontractors with the CM Agent acting as a consultant representing the owner’s best interest. The subcontractor will be awarded based on qualifications. The CM Agent oversees all subcontractors on behalf of the owner, manages overall progress, quality and coordinates the inspection of the work of the various trade contractors with the Architect or Engineers. In this phase, the CM Agent would fulfill the functions of a general contractor except for providing a performance bond or a fixed price for the project. In addition, the owner is fully responsible for procuring and holding all trade contracts.
When using this method it’s important to know that the CM Agent does not take on any contractor risk regarding the project’s schedule or budget because the CM Agent does not serve as the constructor of the project. The CM Agent only provides guidance to the owner, while the owner hired the trade contractors directly (multi-prime) or with a separate general contractor to provide the actual construction of the work. “While serving in this role, the CM Agent must be mindful of its actions because it represents the governmental entity in a fiduciary capacity. This fiduciary relationship means that the Construction Manager-Agent owes the governmental entity the highest standard of care and loyalty under the law”(Gaudet & Lynch, 2018). “In contrast, a CM at Risk is a delivery method by which the CM at Risk turns into the constructor of the project when the project moves out of the design phase and into the construction phase. The CM at Risk operates as a general contractor, holding a single contract with the owner and all of the subcontracts with subcontractors. In this role, the CM at Risk takes on the schedule and monetary risks for constructing the project and maintaining the schedule” (Gaudet & Lynch, 2018). Although the CM agent does not actually commit to delivering the project, it does provide great advantages. One main advantage is that it maximizes advocacy for the owner in every stage of the project’s timeline. This helps provide scheduled delivery options allowing for a fast project delivery. In addition, it provides design and construction expertise without conflict of interest. Which in result reduces the amount of change orders. Another advantage, is that the owner has complete access to all cost information for the project including materials, vendors and subcontractors. This method allows the owner early budget input and control. Also all vendors, subcontractors and general contractors are based on qualification selection which means that these trades are most likely guaranteed to complete the project within budget and time. Unlike the lowest bid, who may provide the lost cost but necessarily have the most appropriate experience, labor capacity, and reputation to finish a project. Lastly, CM agency can be used in conjunction with other project delivery methods including Design-bid-build, multiple prime, design-build, and CM at risk.
For the CMAR, it is much like a traditional construction project, the owner hires a construction manager first. In this delivery method, the CM is in charge of giving the owner an estimate on the project, ensuring that the actual cost of the project doesn’t exceed that GMP, and help select the other members of the project, including all the subcontractors. The CM can also act as a consultant to the owner during the design and the construction phases of the project. The CM will also give their estimated GMP to the owner before any bids are received, this makes it so that the team doesn’t necessarily have to pick the lowest bid. This delivery method was designed to take as much risk off the owner as possible while still giving them the final say in the project. CMAR has many benefits to it, including ensuring a budget success. Meaning that this delivery method is a great choice if someone is trying to stay within a strict budget. This is also a very owner friendly method, as stated before, it takes a lot of risk and burden off of the owner and puts it on the CM. Another pro of choosing the CMAR is that “the cost certainty that can be provided at an early stage of the project,” (Brennan, 2020). This allows the owner to weigh their options when it comes to other services, such as surveyors, engineers, and other professionals that might come into the project later on. Along with an early estimate, this delivery method is giving the owner the final say on anything that goes on during the project. Meaning that “any changes the owner makes to the structure’s design or construction will be borne by the owner,” (Rodriguez, 2019). Though it has many benefits, this method does have some drawbacks. One is that there is a lack of contact and oftentimes, communication between the different divisions, such as the designer and engineer. Because of this lack of communication, there are also often “Disagreements regarding construction quality, the completeness of the design, and impacts to schedule and budget,” (Choosing a Project Delivery Method, 2020). Another con of using this method is that it does not work well for smaller construction projects. There are some concerns about the scope of the project between the CM and the owner before the GMP is set. The only setback that directly affects the owner is that they are going to be held financially responsible for any exclusions that occur during the duration of the project.
Nevertheless, like any other delivery method there are several factors that will work against the owner or the general contractor. The main disadvantage when using a CM Agency delivery, is that the owner holds the subcontracts and assumes the risks of delivery including cost and schedule. “It is important to note that the CM (Agency) is an advisor, but is not accountable for schedule and budget. Similarly the owner enters into the trade contracts, not the CM (Agency). Depending on how the contract is structured, the CM (Agency) may be compensated for some general condition items. This agreement places the majority of the risk during construction on the shoulders of the Owner” (Construction Delivery Methods Explain, 2018). Another disadvantage is the limitations of the CM Agent to the owner. There are several tasks a CM Agent cannot accomplish for example they are not allowed to self-perform any part of a public project such construction, rehabilitation, alterations or repairs. Many owners may prefer “an approach that guarantees delivery for a set cost over a delivery system where an agent is only providing management advice.