What is Construction Manager at Risk

What is Construction Manager at Risk?

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Introduction

Construction projects are complex and multifaceted, often requiring the coordination of numerous stakeholders, from architects and engineers to contractors and suppliers. To streamline this process and mitigate risks, many project owners turn to a specific project delivery method known as Construction Manager at Risk (CMAR). This article delves into the CMAR concept, exploring its definition, benefits, and key components.

Understanding Construction Manager at Risk (CMAR)

Definition

Construction Manager at Risk (CMAR) is a project delivery method in which the construction manager (CM) acts as a consultant to the owner in the development and design phases, but as the equivalent of a general contractor during the construction phase. The CMAR is contractually bound to deliver the project within a Guaranteed Maximum Price (GMP), which is based on the construction documents and specifications at the time of the GMP, plus any reasonably inferred items or tasks.

Key Components

1. Preconstruction Services

  • The CM provides input on budgeting, scheduling, and constructability during the design phase.

2. Guaranteed Maximum Price (GMP)

  • The CM commits to completing the project within a set budget, providing cost certainty to the owner.

3. Risk Management

  • The CM assumes the risk for construction costs exceeding the GMP, incentivizing cost control and efficient management.

Benefits of CMAR

Enhanced Collaboration

  • Early involvement of the CM fosters a collaborative environment, leading to more effective decision-making and problem-solving.

Cost Control

  • The GMP provides a cap on construction costs, reducing financial uncertainty for the owner.

Time Efficiency

  • The CMAR method allows for faster project delivery by enabling construction to begin before the design is fully completed (a process known as fast-tracking).

Quality Assurance

  • The CM’s vested interest in staying within the GMP encourages a focus on quality and adherence to project specifications.

Challenges and Considerations

While CMAR offers numerous advantages, it is not without its challenges. Selecting the right CM is crucial, as their expertise and management skills will significantly impact the project’s success. Additionally, clear communication and alignment of expectations among all parties are essential to avoid disputes and ensure a smooth process.

Conclusion

Construction Manager at Risk is a valuable project delivery method that provides cost certainty, enhances collaboration, and improves overall project efficiency. By understanding the nuances of CMAR, owners can make informed decisions that best suit their project needs and goals.

FAQs

  1. What distinguishes CMAR from traditional project delivery methods?
    • CMAR involves the CM acting as both a consultant and a contractor, with a commitment to delivering the project within a Guaranteed Maximum Price.
  2. How is the Guaranteed Maximum Price determined in CMAR?
    • The GMP is based on the construction documents, specifications, and any reasonably inferred items or tasks, and is agreed upon by the owner and the CM.
  3. What happens if the project costs exceed the GMP in CMAR?
    • The CM is typically responsible for covering any costs that exceed the GMP, incentivizing them to manage the project efficiently.
  4. Can CMAR be used for any type of construction project?
    • CMAR is suitable for a wide range of projects, but it is particularly beneficial for complex or fast-track projects where early CM involvement can add value.
  5. What are the key factors to consider when selecting a CM for a CMAR project?
    • Experience, expertise, communication skills, and a proven track record of managing projects within budget and on time are critical factors to consider.