The Construction Manager at risk

RMR’s Construction Manager at Risk delivery program is similar to our Agency based program with the added benefit of having the CM completely manage the entire project on-site.  At RMR we promote a non-adversarial management approach, combined with a strong advocacy for the owner’s interests.

This process allows a client to select a construction manager based on qualification; make the CM a member of a collaborative project team; centralize responsibility for construction under a single contract; obtain a guaranteed maximum price (GMP) proposal; produce a more manageable, predictable project; save time and money; and reduce risk for the client, the architect and the CM.

Unlike the many general contractors acting as construction managers in the industry, RMR believes it is bad practice for a CM to furnish construction labor or do any portion of the construction work while acting as an owner’s representative.  This leads to a perceived and real conflict of interest that undoubtedly does not serve the owners best interest. Following the Project Management Professional (PMP) standards, construction managers should solely be owners representatives as construction managers – not acting as CM’s with the inside tract to general contracting for profit.

When paired with a Negotiated Contract GMP program, the Owner is afforded all of the benefits as they would if the CM was a direct employee looking out for every detail and dollar on the project: full management, value engineering, competitive bidding and no risk to the Owner.  The CM is not only a collaborative member of the team, but a true employee of the owner acting in their best interest.

Similar to our Agent Program, we handle the following and more:

  • Permitting
  • At cost estimating & bid evaluation
  • Buyout and procurement
  • Value engineering
  • Contract management
  • Office management
  • Scheduling
  • Construction monitoring & inspections
  • Post construction services
  • Real estate investment and financing consultation

RMR Construction Manager as Agent

Under the standard Construction Manager as Agent delivery program, RMR Group acts as a first party manager to the owner and a third party manager of the construction process.  This delivery method utilizes an open book approach, where owners have access to all of our project documents and are made aware of aesthetic, schedule and cost trade-offs before making program and design decisions.  Owners have the opportunity to be involved at each stage of the process from pre-construction and trade contractor selection through construction and closeout.

As a CM as Agent, we are typically brought on board to help with projects where a contractor has not been selected or started the project.  We simply work as a direct arm and agent for the owner to verify and oversee all aspects of the project.  Our clients are primarily from out of town and/or a group of owners looking for a local representative with extensive construction knowledge who can look after and manage scope as well as the full program.

The team at RMR Group has the combined knowledge, experience and capacity to guide our clients’ projects from design to close-out and occupancy.  Our CM as Agent program is set up to provide the owner with the best support team available to get the most out of the construction process.

We accomplish this with project teams that are comprised of project management and site supervision professionals with support from our office management personnel: estimating, buyout/procurement, scheduling, design, and engineering with vertical & horizontal construction support. Our team can manage all aspects of the project including:

  • Permitting
  • At cost estimating & bid evaluation
  • Buyout and procurement – materials at cost
  • Value engineering
  • Contract management
  • Office management
  • Scheduling
  • Construction monitoring & inspections
  • Post construction services
  • Real estate investment and financing consultation

Our primary goal is to ensure that each member of the owner’s team of specialists collaborates in a manner that serves the owner’s overall interest.

How to hire a construction manager

Most consulting firms today offer “construction management services.” However, the interpretation of construction management and the services it entails greatly varies. According to the Construction Management Association of America, “construction management is a professional service that applies effective management techniques to the planning, design, and construction of a project from inception to completion for the purpose of controlling time, cost, and quality.”

While that definition may seem simple enough, the selection of the proper firm can make or break your project. By selecting the proper firm, you can help manage risks and control costs at every stage of the project, from preconstruction planning and complete construction oversight to post-construction services.

What Is Their Role?

Undertaking a construction project is a complex endeavor. It is critically important that public works directors and municipal leaders clearly articulate their goals for the project to all members of the design and construction team, including the architect, engineer, and contractor. Construction management firms can help by leveling the playing field between the owner and the contractor, and ensuring that everyone is informed and understands their role, expectations, and schedule for completing the project on time.

The role of a construction management firm is especially important in the public sector since many public agencies, especially smaller communities, undertake substantial construction projects—such as a fire station, library, or community center—only once a generation, whereas a construction firm that they would be working with may construct many similar projects in the course of a year. This leads to a gap in knowledge and experience. By integrating a construction management firm into the project, you can balance the experience level between the owner and the construction firm.

Yet another reason to consult with a construction management firm is that these services often are included with the architectural and engineering services as an afterthought or merely as a requirement. Unfortunately, by the time construction begins, the design team may very well see their profit margin for the project shrinking.

To accommodate the shrinking budget, it is common practice to send the rookie or team member who bills the lowest to monitor the project and provide the promised construction administration services. This person may have had little involvement on the project before this and may not feel comfortable asserting the owner’s interest to the contractor. Further, this representative may lack the necessary experience to truly be a creative problem-solver. This approach results in construction observation rather than construction management since the construction process is just being monitored—not explored for methods to control the cost and schedule.

When To Hire

Recognizing that true construction management can improve the success of your project, it is important to hire a firm whose core competency is construction management. Contrary to popular belief, the first firm hired for a project should be the construction manager, not the architect or contractor. A construction management firm is most effective when it is not only afforded the opportunity to manage the construction, but is also a part of the design, bringing value to a project even before the contractor is onsite.

By hiring the construction management firm at project inception, the firm can work with the owner to develop contract documents that are owner-friendly and can focus on preconstruction services, value engineering, and cost estimating on the front end, which will help control costs and ensure adherence to the schedule. And since the design process often takes longer than expected, which can result in a shortened construction schedule, having the construction management firm involved from the beginning can assist in keeping all phases of the project on schedule and ensure optimal results.

Early involvement also allows the construction manager to conduct a constructability review and examine the construction documents before they go out for review. With this approach, minor revisions can be made to increase efficiencies. For example, a project can be on the drawing board for several years with intimate involvement from the architect, engineers, and owners. This team then expects a contractor to review the documents and understand all the background information that led to the development of the documents in a mere four to six weeks.

It is easy for the design team to overlook certain items and not clearly articulate its goals because of the intimate involvement. However, review by a construction manager ensures that items are properly spelled out, which helps to avoid change orders and schedule delays that add cost to a project. This allows the contractor to provide the best possible bid cost and schedule.

Another area where the construction manager can offer considerable expertise is with the contract documents. Often, the contract that architectural firms use is a standard document available from the American Institute of Architects (AIA): therefore, it is ultimately serving the best interest of the architect. While these standard agreements provide a good starting point, the owner’s best interests are achieved by reviewing and altering the document to ensure the best position for the owner. For example, AIA documents are not specific about timing. The document states that the architect will review contractor questions or change orders but does not cite a time-frame for this response—a slow response can become a source of claims.

A construction manager’s expertise also extends to coordination with the contractor. Often on public works projects, the firm with the lowest bid secures the work. This philosophy provides contractors with the necessity of maximizing their profit on change-orders since they have already been asked to skinny-down their profit in the low bid. An “owner-friendly” contract can provide more specific language for the owner to control their project and limit their risk. A construction management firm can incorporate schedule milestones into the documents to provide accountability for the contractor. When goals and requirements are clearly explained in the documents, the risk of claims and change orders is dramatically reduced.

One of the most important elements to consider when hiring a construction management firm is experience. Examine the firm’s experience in projects similar to yours and be sure that it served as the construction manager for those projects, not merely as the contractor or another member of the team. Also, be sure to check references. Ask for a list of owners that the firm has worked with and contact them to evaluate performance. Finally, make sure that the firm provides comprehensive management with preconstruction, construction, and post-construction services. The proper firm will help level the playing field between the owner and contractor to ensure project success.

James Joyce – Public Works Online