Examples of Construction Manager at Risk

construction manager at risk

A Construction Manager (CM) project delivery system is based upon an owner’s agreement with a qualified construction firm to provide construction leadership and perform administration of the project as well as management within a defined scope of services. The construction management project delivery system is further refined by the amount of risk the CM assumes in performance of those services.

It takes a collaborative effort by the owner, architect and construction team to bring a project to a successful completion. This is the key to achieving the desired result for every construction project since each situation is unique unto itself. Projects often fail because of a lack of communication between the governing bodies, which brings up the subject of coverage for a construction manager at risk. The CM will often take the blame when a project undergoes lengthy delays.

The architect and the owner can also be responsible, due to poor planning or lacking the necessary funds to complete a project in a timely manner. When such issues present themselves, a good line of communication can often be a remedy to what might otherwise become a volatile situation. No one want to be considered at fault when they in fact had no control over certain events, but this often happens when one hand doesn’t know what the other hand is doing.

How conflicts expose flaws in the management process

When conflict between the owner versus either the contractor or architect exists, this is the type of situation that can ultimately affect project delivery. The alternative is construction manager at risk (CMR), a delivery method that is designed to align designer and builder to collaboratively serve the owner’s best interests.

With construction manager at risk, a contractor is under contract by the owner during the entire design process to assist in pre-construction project management services and then also to act as a general contractor during the construction process. The architect is on a separate, parallel contract with the owner, making sure that the product fits within any predetermined specifications.

In summary, the contractor is responsible for the execution and control of the work and subcontractors are bound by subcontracts to them. Examples of construction manager at risk would include performance and financial stability of subcontractors and vendors, fluctuations in material prices, schedule adherence, weather, construction means and materials, quality and other non-reimbursable general contractor delays. For questions and concerns, speak to an agent familiar with the inner workings of the construction industry.

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