Construction Management

Construction Management

Under a construction management approach to a major building project, professional expertise in the specialized areas of cost estimating, system analysis, value engineering, "constructability" review scheduling of activities, procurement, and construction coordination and supervision is added to the capabilities of the traditional project team of owner and architect.  
The involvement of a construction manager (CM) during the entire design process as a collaborative yet independent member of the design team helps ensure that every major design decision is balanced by proper analysis of its cost consequences, and impact on project schedule.  
The role of the construction manager in a building project may vary substantially, and can be performed under a variety of contractual terms.  The most traditional, and some would say "purest" form of construction management is that were the C.M. acts as the owner's agent as a consultant, providing estimating, cost control and scheduling services and undertaking administrative responsibilities during construction.  Under this arrangement, all construction contracts would be executed directly between the owner and contractors.  It can be argued that better control of the construction operations is achieved when the C.M. holds the contracts with the trade contractors and therefore has a greater degree of "clout".  This approach may permit the construction work to be broken down into a significantly larger number of trade contracts also, thereby eliminating the need for one or more "general" contractors.  (The elimination of the general contractor avoids a duplication of fees, markups and general condition costs otherwise produced).
A major benefit to the construction management approach is that, under the disciplined scheduling of the C.M.,  the project may be phased or "fast-tracked" whereby the design and construction periods are overlapped to permit an earlier start and completion of construction.  Furthermore, the owner may require the construction manger to provide a Guaranteed Maximum Cost (GMC) for construction prior to the start of any construction work, and thereby the owner receives a commitment on his maximum cost exposure at a much earlier date than under any conventional project delivery method.
What are the responsibilities of the Construction Manager and the Owner?  Click below to learn more:

Major Advantages

  1. Construction costs are identified and predicted reliably during the design phase. Team interacts relating to construction cost, completion schedule, and quality work to maximize owner’s value. 
  2. C.M. contributes to a synergistic team approach in the owner's interest. 
  3. Value engineering by C.M. can be done at this time when it can be implemented into the design. Major design decisions can be made on the basis of complete information. 
  4. C.M. early facilitates financial planning and avoids potential delays for redesign caused by budget problems recognized too late. 
  5. All records, books, estimates are "open book". 
  6. Prudent buying and value engineering with trade contractor’s results in cost savings reverting to owner, not general contractor. 
  7. Competitive bidding is retained on all work. 
  8. Flexibility to pre-qualify trade contractors for better control of schedules and costs. 
  9. The C.M., who is responsible for costs, schedule and quality, can be selected based on experience and performance record. 
  10. Schedule is controlled during design phase to ensure that design efforts are integrated with construction phase requirements. 
  11. Facilitates fast track or phased construction providing earlier completion. 
  12. Cost savings available through earlier start and pre-purchasing. 
  13. System of checks and balances exist. 
  14. Single prime responsibility for construction. 
  15. No additional owner personnel required monitoring construction. 
  16. Ability to pre-order long lead items.

Major Disadvantages

  1. Duplication of some supervision, contractors mark-ups, and bond costs, particularly if C.M. does not do any work with his forces. These costs must be offset by value engineering, etc. 
  2. Project may not be fully designed at start of construction, which may expose owner to change orders. This potential is inherent in any form of fast-track construction, but can be controlled to a minimum. 
  3. C.M. may not have same ability to directly influence construction schedule as G.C. does. 

Additional Advantages

  1. Additional advantages of a Construction Manager with Guaranteed Maximum Cost approach to design and construction services are as follows: 
  2. The owner would retain control over various aspects of the project and would continue to be involved providing overall general direction to the project and have direct access to each team member, assuring that the facility will function in the most efficient manner. 
  3. The owner can select the people from each organization: architect, consultants, and construction manager for assignment to the project based on their competence, compatibility and ability to work with other team members. 
  4. The C.M. process provides for early involvement of mechanical and electrical constructionexpertise in value engineering and scheduling to ensure that the systems are designed for economical installation and operation. 
  5. Financing arrangements may be concluded earlier, which depending upon interest rate trends, could avoid increases in financing costs. 
  6. Through the construction manager, the owner would maintain control over the bidding process. 
  7. The construction manager can assure a more thorough solicitation of sub-bids than would be achieved through the normal competitive bidding situation. This provides for increased competition and gives the owner the benefit of the best sub-bids. In addition, there is flexibility in the selection of subcontractors on the review and value analysis of sub-bids. All or most savings created through prudent purchase techniques and value analysis reductions accrue to the owner. 
  8. The owner would actively participate in the review of sub-bids and approval of subcontract awards. This offers the advantage of selecting subcontractors not only on the basis of low bid but the ability to perform within the construction manager’s schedule. 
  9. There would be better coordination and more flexibility in regard to partial occupancy of the space to accommodate the owner's schedule. The construction schedule would be structured and revised to accommodate this process. 
  10. The construction manager's personnel would assist the owner's "in-house" arrangements for work outside the construction contract, including the incorporation of owner furnished equipment in the new construction. 
  11. All cost records, books, etc. are available on a full disclosure basis. 

Advantages of using a known entity:

  1. Knowledge of site conditions
  2. Past construction previously completed by the entity
  3. Knowledge of the Owner and the Users corresponds to level of comfort when working in close quarters or sensitive areas
  4. Trust in obtaining access to spaces in off hours 
  5. Less time demanded of the Design Team and Owner throughout construction
  6. Track record – construction costs, quality of work, response to call backs (are there call backs)
  7. How many change orders were generated over the construction time period? Were they design, construction manager, unknown building conditions or Owner generated?
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