Construction Management At-Risk (CMAR) is a method of construction management that provides the lowest risk to the owner. The typical design-bid-build method is ideal for the owner who may not be ready for assuming the risk associated with a design-build procurement. CMAR is a more collaborative delivery process than design-bid-build. CMAR and design-bid-build delivery methods start in a similar fashion, with the owner first selecting and retaining a design firm that the owner has evaluated and selected based on their needs and project criteria.
The difference in the CMAR delivery approach is that the designer begins the early stages of the design process with the plan of a construction management firm joining the collaboration process within the first or second third of the development process. By performing the first design step with the purpose of the second construction-manager step in mind, the owner can maintain oversight of the entire process while ensuring the selected CMAR firm and selected designer create a strong collaborative relationship that will benefit the owner in schedule realism and cost reductions without compromising quality.
Involving a CMAR firm early in the procurement process has the added benefit of a qualified construction consultant, who can complete much of the requirements package, such as cost estimating, reviews for constructability, and value engineering. Creating the right basis for your project will facilitate that the project reaches a maximum potential bidder pool with requirements clearly defined, resulting in more accurate bids. Another good reason to involve a CMAR firm early is to create the opportunity to overlap the design and construction phases, accelerating construction timetables and getting early starts underway before the final design is created. The CMAR works closely with the designer and the owner to determine the desired “bid packages” for all aspects of the project - ranging from items such as landscaping and architectural finishes to process equipment, mechanical and electrical disciplines.
More advantages of CMAR include early and consistent cost controls, with contractors required to provide a Guaranteed Maximum Price (GMP) as early as 60 percent into the design phase. By receiving a GMP early, the “at risk” portion of CMAR really showcases its benefits. This GMP is assembled from subcontractor bids, plus contingencies and allowances, to the CMAR firm. The CMAR firm then uses those bids to convey a GMP based off the design in-hand, but shifts the risk of financial liability from the owner to the CMAR firm if the project exceeds that GMP amount. However, if the final cost of the project is less than the GMP, there is usually a cost-sharing agreement in place to provide incentive to complete the project under the GMP.
In the event of a scope change or a change order that would increase the GMP, it can easily be discussed between the owner and the CMAR firm’s project lead to adjust the GMP accordingly. Because the CMAR is financially at risk, they have the option to select pre-qualified subcontractors that may not be the low bidder, but can offer superior quality and complete their portion of the work on time. Some CMAR firms may even use their own resources and self-perform portions of the work, which could ultimately benefit the overall project. Of course, because laws and regulations vary from state to state, the CMAR may be precluded from self-performance. Even so, it is important to note that the CMAR, the owner and the designer work collaboratively in selecting the desired subcontractors for each of the individual bid packages.
The project owner and/or financier can also see all costs associated with the project through the “Open Book” process, with the CMAR firm providing all information related to subcontractor contracts and billing. These records are always available as part of the CMAR collaborative process, which helps to build trust between the owner-designer-CMAR relationships.
A CMAR project process most often results in a collaborative relationship that is more trusting and non-adversarial, which is especially beneficial if you are looking to construct a complex project on a tight schedule, with minimal risk to you.