Construction Manager at Risk (CMAR) Delivery Method
Background
The Construction Manager at Risk (CMAR) is a delivery method which entails a commitment by
the Construction Manager (CM) 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. The CMAR provides professional services and acts
as a consultant to the owner in the design development and construction phases. Often times, the
CMAR also provides some of the actual construction of the project depending on the availability
of bidders and the expertise the company has. In addition to acting in the owner's interest, the
CMAR must manage and control construction costs to not exceed the GMP because
contractually any costs exceeding the GMP that are not change orders are the financial liability
of the CMAR.
Generally, the CMAR will give the Owner a GMP prior to bidding the project. Included in this
GMP is a contingency line item to take care of bid overages, reasonably inferred items and other
project related items that may arise during construction. By giving the Owner the GMP prior to
bids, the CMAR assumes the risk of bids coming in higher as he is contractually bound to deliver
the project per the plans and specifications and any additional allowances as defined in his GMP.
Owner Benefits
This delivery method has several unique benefits to the Owner, including:
A higher level of cost control from the start. A successful CMAR project would involve
hiring the CMAR prior to the architect and having the CMAR help select the architect.
During the design process, the CMAR provides cost estimates at contractually established
points. If these cost estimates are in line with the established budget, the architect then
moves on to the next phase of design. If not, the CMAR, Owner and Architect assess the
cost estimate and make design changes to bring the design back into budget alignment.
This process ensures budget success.
The CMAR is an Owner advocate and manages the project with the Owner’s best interest
in mind at all times.
The CMAR takes burden off of the Owner in managing and coordinating the project.
The Owner’s risk is limited by the CMAR process providing the construction documents
are complete and proper allowances and contingencies are built into the GMP.
Constructability and value to the Owner are afforded by the Value Engineering expertise
brought to the process by the CMAR.
Since the CMAR is at risk and gives the GMP prior to bid, he does not have to select the
low bid. Generally the thorough prequalification process minimizes the number of low
bidders that get disqualified and generally leads to lower long term costs, higher quality,
and fewer claims because only pre-qualified contractors are performing work.
CMAR services are professional services like architectural, engineering, surveying, etc.
The CMAR’s main purpose is not to construct the project, but to manage the construction
of the project. This management focus adds much value to the project.
It is important to keep in mind that an adverse CMAR-Architect relationship can lead to some of
the same issues that arise in a design-bid-build delivery method. By having the CMAR help
select the Architect, the risk of an adverse relationship is minimized.
As with any delivery method, incomplete and/or inaccurate construction drawings will result in
change orders. The misunderstanding associated with the GMP is that this maximum price will
not be exceeded in any case. It is important to understand that the GMP is based on the plans and
specifications at the time of the GMP with some reasonable assumptions made and a reasonable
contingency included. Major changes in scope will result in a change order, which increases the
GMP contract. In addition, any Owner changes to the project and scope require a change order.
By requiring the documents by 100% complete prior to receiving the GMP, the risk of
unanticipated change orders are minimized.
Project
Need
Develop
Project
Scope
Develop
Not‐to‐exceed
Budget
Develop Develop Design
CMAR RFQ Design RFQ Project
Advertise Advertise Receive
CMAR RFQ Design RFQ GMP from
100% CD
Analyze
Qualifications
Analyze Commission
Design RFQ
Design RFQ Approval
Interview/select
CMAR
Execute
Interview/
Construction
select firm
Negotiate Contract
scope/fee
Negotiate
scope/fee Construct
Commission Project
Approval
Commission
Approval Project
Execute Closeout
Pre‐Construction
Contract
Execute
Warranty
Design
Period
contract
Construction Manager at Risk (CMAR) Process
Figure 1
