Although the hard bid is still the dominant method of executing construction projects, the construction management at risk delivery method has become popular for many projects, particularly hard-to-define renovation projects. As in a design/build approach, the construction manager works closely with the client and the design team early in the process. At some point in the process, the owner and Construction Manager (CM) will negotiate a Guaranteed Maximum Price (GMP) to cover estimated costs, general conditions and a CM fee.
In an effort to maximize quality, maximize value and manage project cost controls, the owner and construction manager typically collaborate in an open-book approach to identify and select project subcontractors. (As opposed to the hard bid structure where success is often defined by the lowest price which may not always return a successful project.) In a construction management project, owners often rely heavily on the construction manager’s expertise and may be involved as much or as little as desired. The construction manager assumes responsibility for leadership and oversight of the project, while the owner’s early input allows for value and cost controls and a customized, personalized approach at every stage of the process.