By Brian Recker
The alternative approach construction management is used when a client hires a construction manager as a first step to oversee the process on its behalf, from selecting an architect to overseeing construction.
Under the traditional design-bid-build process, the client develops an RFP and hires an architect to design the building and set a budget. The client requests bids from general contractors to build the facility and selects the lowest bidder. The client builds the facility with a competitive bid general contractor, often with multiple change orders that increase costs, resulting in budget overruns.
Construction management/agency: established alternative
With the construction management/agency process, the first step a client takes is to hire a qualified and experienced construction manager, who acts as a client advocate and brings an insider’s view to the team. The services provided by a construction manager normally cost the same or less than under a traditional arrangement with a bidding general contractor. The construction manager develops individual trade bid packages and typically solicits more individual trade bids. Once the contract is awarded, the construction manager assembles the contract, and collects all trade contractor insurance certificates and bonds. When construction begins, the construction manager oversees all on-site work and construction details.
Construction management at risk: emerging alternative
This alternative involves a single contract with the construction manager. The manager assumes all of the contractual and legal risks for the project, including the work of each contractor. All pre-construction services offered with the construction management/agency approach are still provided with the at risk approach. Several clients have selected this option on recent projects. Construction management at risk requires a financially solvent firm that is both comfortable and confident to take on the risks.
No matter the type of approach you prefer – agency or at risk – construction management is an alternative approach that clients should consider for new building projects. By hiring a construction manager, the client benefits from pre-construction planning that goes above and beyond the traditional design-bid-build approach. You will have an advocate and an expert helping ensure the highest quality, the right materials and the right pricing. The building will be completed on time and on budget, to the client’s specifications and the expectations of the user.