(CM@Risk) Delivery Method from an Owners Representative Perspective (The Good, The Bad and The Ugly)
SECOND EDITION
By Kevin M. Wills, CCM, LEED AP
and
Steve R. Pancham, CCM
McDonough Bolyard Peck, Inc. (d/b/a MBP),
Virginia, USA
Abstract
This paper is based upon lessons learned from Owner’s Representative perspective managing and auditing over 60 construction management at-risk (CM@Risk) projects for public owners over the past 10 years. The paper provides an overview of the benefits, risks and lessons learned to owners associated with the CM@Risk delivery method from selection through construction to closeout. Our discussion will provide insightful solutions to manage the process efficiently, to guide the owner, and to provide a check that will keep the project on the right path. Owners want to keep projects on schedule, under budget, and to have high quality, so our solutions mentioned in this paper will help facilitate trust amongst the parties of the project through transparency (not only the Good aspects of a project, but also the Bad and Ugly and how to openly address them in a collaborative and tactful manner). Our discussion also provides a unique perspective, gathered from lessons learned from the auditing of public CM@Risk projects.
Introduction
CM@Risk delivery method has been utilized for over 30 years and continues to be used as a popular method for construction project delivery. Like all project delivery methods, there are pitfalls, benefits, costs, and risks. The objective of this paper is not to provide a comparison of the various delivery methods, but rather to examine the use of CM@Risk delivery method for the owner’s benefit and discuss what issues and challenges can be anticipated in its use. The information presented is based upon lessons learned developed as an Owner’s Representative on CM@Risk projects and providing financial auditing of CM@Risk projects. The result is a list of recommendations and solutions to assist owners in this delivery method for achieving better results and better outcomes for construction projects that employ this method of delivery.
Definition of CM@Risk
The Association of General Contractors (AGC) defines CM@Risk as:
“A specific variation of construction management in which the public owner engages both a project designer and a qualified construction manager under a negotiated contract to provide both preconstruction services and construction. The CM@Risk (CM/GC) provides consulting and estimating services during the design phase of the project and acts as the general contractor during construction, holding the trade contracts and providing the management and construction services during the construction phase. The degree to which the CM/GC provides a cost and schedule commitment to the public owner is determined during the negotiation of the final contract. (This is a risk issue. If there is no risk involved, it is not CM/GC.)” [1]
The Construction Management Association of America (CMAA) defines CM@Risk as:
“A delivery method which entails a commitment by the construction manager to deliver the project within a Guaranteed Maximum Price (GMP). The construction manager acts as consultant to the owner in the development and design phases, but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner’s interest, the construction manager also protects him/herself.” [2]
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Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 6th Annual University of Maryland PM Symposium in May 2019. It is republished here with the permission of the author and conference organizers.
How to cite this paper: Wills, K. and Pancham, S. (2019). Construction Management at Risk (CM@Risk) Delivery Method from an Owners Representative Perspective (The Good, The Bad and The Ugly); presented at the 6th Annual University of Maryland Project Management Symposium, College Park, Maryland, USA in May 2019; PM World Journal, Vol. VIII, Issue IX, October. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Wills-Pancham-construction-management-at-risk.pdf
About the Authors
Kevin Wills
Virginia, USA
Kevin Wills, CCM, LEED AP MBP, is a Senior Project Manager at McDonough Bolyard Peck, Inc. (d/b/a MBP). Kevin brings 33 years of experience in program management, construction management, inspection, scheduling, cost estimating, and claims analysis. His breadth of experience includes hospitals, prisons, k-12 schools and higher education buildings, heavy civil construction, environmental mitigation and remediation, and maintenance for new construction and the renovation of existing facilities. Kevin can be contacted at kwills@mbpce.com
Steve Pancham
Virginia, USA
Steve Pancham, CCM MBP, is Vice President, Service Executive at McDonough Bolyard Peck, Inc. Steve brings 32 years of experience in transportation, utility infrastructure, and new building and renovation projects. Steve has served as project engineer/manager in charge of more than $500 million in highway and building construction projects. Claim to fame -Steve was on the San Francisco Bay Bridge during the 1989 Loma Preita earthquake and was part of the earthquake response team inspecting bridges for the California Department of Transportation (CALTRANS). Steve can be contacted at spancham@mbpce.com
[1] CM/GC Guidelines for Public Owners, second edition 2007 by the Association of General Contractors and the National Association of State Facilities Administrators.
[2] CMAA: Construction Management Standards of Practice 2003
