Your Guide to Understanding CMAR Construction

This article extensively explains Construction Manager at Risk (CMAR) construction. We examine various aspects of it, including its definition, selection process, differences from general contracting, benefits and risks, and its different phases.

Construction Manager at Risk Definition

Construction Manager at Risk (CMAR) is a project delivery method in which the construction manager acts as the general contractor and provides consultation to the owner during the design phase. Unlike a general contractor, the construction manager provides input on schedules, pricing, and constructability during the design process. The construction manager then becomes the general contractor during the construction phase. The owner can benefit from the construction manager’s expertise in scheduling, pricing, and risk mitigation during design.

In CMAR, the construction manager provides a guaranteed maximum price (GMP) after the design is sufficiently complete. The GMP includes the construction manager’s fees, general conditions, and contingency. The construction manager is responsible for the overage if the final cost exceeds the GMP. This transfers risk from the owner to the construction manager. The owner benefits from cost certainty once the GMP is accepted.

CMAR is common on complex projects like healthcare, data centers, and educational or research facilities. It is also used by government entities due to its transparency and competitive selection process.

What Do Construction Managers Do?

In CMAR, the construction manager provides the following services:

  • Cost estimating and budgeting during design
  • Constructability reviews
  • Scheduling assistance
  • Coordination of design and construction phases
  • Transparency through an “open book” pricing approach
  • Management of trade contractor bidding and awards
  • Construction phase services as the general contractor

The defining aspect of CMAR is the collaboration between the owner, architect, and construction manager during design. This allows early development of the budget, schedule, and risk mitigation strategies.

Understanding the CMAR Construction Provider Selection Process

Selecting a construction manager in a CMAR project typically involves the following steps:

  1. The owner develops a Request for Qualifications (RFQ) to solicit and prequalify potential construction managers based on experience, staffing, past performance, etc.
  2. The owner sends the RFQ to a shortlist of firms and evaluates their qualifications.
  3. The most qualified firms are invited to respond to a Request for Proposals (RFP) that outlines the project scope and selection criteria.
  4. Proposals are evaluated based on the firm’s experience, key personnel, technical approach, management plan, fees, and other factors.
  5. The owner ranks the firms and negotiates a contract with the top-ranked firm, including an agreement on the construction manager’s fees.
  6. The owner enters a preconstruction agreement for the construction manager to provide services during the design phase.
  7. As the design nears completion, the construction manager provides detailed pricing and a Guaranteed Maximum Price (GMP), which the owner accepts before construction begins.

The competitive selection process allows the owner to select the most qualified construction manager and negotiate the most favorable fees and contractual terms.

Interested in taking advantage of CMAR construction for your upcoming project? SHF is the experienced provider you need to ensure your project is seamless, efficient, on time, and on budget.

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General Contractor vs. Construction Manager at Risk: Understanding the Differences

While general contractors and CMAR construction providers both execute projects, there are key differences in their roles and relationships in CMAR versus traditional contracting:

Significant Distinctions Between Contracting and CMAR Construction

Here are some of the most significant differences between using a general contractor versus a construction manager at risk:

  • In CMAR, the construction manager provides consultation during design, while a general contractor isn’t brought on until after setup is complete.
  • The CMAR acts as an agent to the owner, while a general contractor is an independent entity.
  • A general contractor is selected primarily based on the lowest bid. CMAR firms are chosen through a qualifications-based process.
  • The general contractor must adhere strictly to plans. The CMAR can provide input on materials, systems, schedules, etc.
  • The general contractor must bid competitively against other firms. CMAR trade packages can be bid openly or selectively.
  • Payment terms differ, with a contracted GMP for CMAR and change orders for general contractors.
  • The CMAR guarantees the maximum price, while the general contractor price is subject to changes.

The Role of the Project Owner in CMAR Construction

The owner has the following key responsibilities in a CMAR project:

  • Selecting the construction manager through a qualifications-based RFQ/RFP process
  • Entering into a preconstruction services agreement during the design
  • Actively participating in constructability reviews and pricing exercises
  • Monitoring the construction manager for adherence to the accepted GMP
  • Making timely payments per the contract terms
  • Approving change orders and managing the contingency fund
  • Maintaining ongoing communication with the construction manager
  • Performing project acceptance and closing out the contract

The owner remains highly involved throughout a CMAR project to align on budget, schedule, quality, and risk management. Clear communication and collaboration between the owner and construction manager is critical for project success.

The Benefits of CMAR Construction

Construction Manager at Risk (CMAR) is a project delivery method that aims to provide enhanced visibility and collaboration between the owner, designer, and builder:

Enhanced Project Visibility

One of the most significant advantages of CMAR is the increased project visibility for the owner. The construction manager is involved in design, providing detailed cost estimates and advice on scheduling, materials, and methods. This gives the owner greater insight into potential issues and costs early when changes are easier to implement. Rather than waiting until bidding when accurate estimates become available, the owner has a high level of visibility into the budget and schedule during design.

CMAR also facilitates better collaboration and communication between the designer and builder. The traditional design-bid-build method often leads to a “toss over the wall” mentality where the designer and contractor work in isolation. With CMAR, the entire team works together, identifying and resolving issues early before they become problems later.

Cost Savings and Budget Control

Involving the construction manager during design allows value engineering and preconstruction services that can yield significant cost savings.

The CMAR can suggest alternate materials, systems, phasing, or methods to reduce costs while maintaining quality and performance. Their estimating experience also helps keep the project on budget.

Improved Scheduling

The collaborative involvement of the construction manager also allows the development of a more accurate overall schedule. With contractor input on durations, workforce, and sequencing, the schedule can better coordinate design and construction activities.

This results in faster project delivery since any issues are identified while still quickly addressed in the design. Projects can reach completion weeks or months sooner compared to the traditional process.

Exploring the Phases of CMAR Construction

Let’s take a closer look at a CMAR’s role through each phase of a construction project:

  • The Design Phase

    In the design phase, the construction manager acts as an integral project team member. They provide constructability reviews, value engineering, material selection advice, cost estimating, and scheduling input. This lets designers consider construction means/methods in their drawings and specifications.

    The CMAR develops detailed cost models at various milestones (30%, 60%, 90%) as the design progresses, allowing the owner to track costs versus budget. Toward the end of design, the CMAR submits a Guaranteed Maximum Price proposal to the owner, locking in the maximum project cost.

  • The Construction Phase

    During construction, the CMAR acts as the general contractor, holding subcontracts and self-performing work like a typical GC. The GMP contract clearly defines contingency draw processes and requires owner approval of contingency use. The CMAR manages and coordinates subcontractors, logistics, QA/QC, safety, and other construction processes while closely tracking productivity and costs.

    The collaborative relationships built during design continue, with the CMAR working as part of the owner’s team to deliver the project. Open communication and transparency into schedule and budget status persist.

  • Post-Construction Phase

    After construction ends, the CMAR provides as-built drawings, warranties, manuals and facilitates training on systems/equipment. They coordinate post-construction activities like commissioning and punch lists until the owner accepts the entire project.

    A final accounting of project costs and contingency is provided. Retainage is released after all liens are cleared, and administrative closeout of the contract is completed. Lessons learned can be conducted to identify areas for improvement and best practices for future projects with the team.

Experience the Benefits of CMAR Construction With SHF International

For over a decade, SHF has provided exceptional construction services to businesses in Las Vegas and beyond. As experienced CMAR professionals, we provide the project management skills and construction expertise you need to ensure flawless execution on time and within budget. Contact us today to discuss your upcoming project.

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