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Construction Manager at Risk Pros and Cons: A Guide to Protect You

When thinking about the various construction project delivery methods, the Construction Manager at Risk (CMAR) approach has garnered significant attention for its unique advantages. However, it can also come with some challenges that require extra knowledge.

The American Institute of Constructors (AIC) is built on the idea that supporting each other helps strengthen the field as a whole. That’s why we offer guidance to current and future construction managers as they navigate through the complexities of project execution.

In this guide, we will examine the Construction Manager at Risk pros and cons, while offering insights to safeguard you on and off the job site.

What is the Construction Manager at Risk (CMAR) Model?

Before we discuss the benefits and challenges of CMAR, it’s important to have a clear definition of this project delivery method.

This project delivery model is used in construction projects where the construction manager (CM) commits to completing the project within a guaranteed maximum price (GMP). In this approach, the manager is involved early in the design phase. They collaborate closely with the project owner, architects, engineers, and other AEC stakeholders to provide input on the project design, costs, and constructability.

Early involvement allows for better cost control and project management, as the manager can make more informed decisions on materials, labor, and methods. During the construction phase, the manager acts as the general contractor, taking on the risk of meeting the agreed-upon price and schedule.

This model is designed to promote transparency and a collaborative relationship between the owner and the manager, which can lead to a more efficiently managed project that meets the required budget and timeline requirements.

Pros of Construction Manager at Risk

Working with the CMAR model has several positive aspects. Empowering construction managers with collaboration opportunities, risk management strategies, and improved cost control are just some of the ways teams can navigate complex project landscapes.

Early Collaboration and Input 

Construction managers become involved earlier in the project’s planning and design phases. By collaborating with the owner and design team from the outset, the construction manager can provide valuable input regarding constructability, cost estimation, and scheduling.

This proactive approach helps identify potential issues early. The result is minimizing costly redesigns and delays that can negatively impact project completion.

Risk Mitigation 

As the name suggests, CMAR places the construction manager in a pivotal role in dealing with project risks. By assuming responsibility for construction and risk management, the CMAR fosters a culture of accountability and transparency.

This arrangement incentivizes the construction manager to proactively address challenges, leading to improved project outcomes and client satisfaction.

Cost Certainty and Control 

Another notable benefit of CMAR is the enhanced control over project costs. The construction manager can provide more accurate cost projections by engaging in detailed cost estimating and value engineering exercises during the preconstruction phase.

Additionally, CMAR’s open-book approach fosters transparency in pricing, allowing owners to clearly understand project expenses and make informed decisions accordingly.

Cons of Construction Manager at Risk

Even though CMAR is a popular project delivery method with many positives, it can also pose some challenges that construction managers must face. From potential conflicts of interest to increases in admin work, getting this model to work for you requires a strategic approach.

Potential for Conflicts of Interest 

One key criticism leveled against CMAR is the potential for conflicts of interest. Since the construction manager is involved in both the preconstruction and construction phases, there may be instances where their interests conflict with those of the owner or other project stakeholders.

This inherent conflict can raise concerns regarding fairness in decision-making processes. So, it’s important to be mindful of ethical dealings throughout the process of following the CMAR delivery method.

Increased Administrative Burden 

Implementing CMAR requires careful coordination and management of various contractual relationships. From negotiating contracts with subcontractors to overseeing contract documents, the construction manager’s administrative burden can significantly increase. 

Also, navigating the complexities of multiple contracts and legal obligations adds another layer of complexity to project execution. As you can see, this method requires critical thinking skills and the support of other team members to stay on track.

Limited Design-Bid-Build Opportunities 

The transition to CMAR may pose challenges for construction managers accustomed to traditional project delivery methods like Design-Build or Design-Bid-Build (DBB).

Since CMAR involves early contractor involvement, there are fewer opportunities for construction managers to bid on completed design and construction projects. This limitation may restrict options available to construction managers seeking new projects.

Construction Manager at Risk Pros and Cons in the Real World

Despite its inherent complexities, CMAR remains a popular choice for many construction projects. Knowing the benefits and risks of the Construction Manager at Risk method is the first step toward mitigating potential pitfalls and maximizing.

Furthermore, construction managers must adopt a proactive and strategic approach by following some of these important guidelines:

  • Embrace Collaboration: Foster open communication and collaboration among project stakeholders, including owners, designers, and subcontractors. By building strong relationships and leveraging collective expertise, construction managers can navigate challenges more effectively.
  • Prioritize Transparency: Maintain transparency in all project dealings, particularly concerning costs, schedules, and project risks. Establishing clear communication channels and regularly updating stakeholders on project developments fosters trust and ensures alignment of expectations.
  • Invest in Expertise: Equip yourself with the necessary skills and knowledge to navigate the complexities of CMAR effectively. Continue to seek professional development opportunities to stay abreast of industry trends and best practices.

Level Up Your Career with AIC

Knowing more about the popular CMAR delivery method will help you become a well-rounded construction manager. Follow this guide to navigate the landscape with confidence, and you’ll be able to increase the success of projects.

Want to learn more about Construction Manager at Risk pros and cons and other critical topics in the industry? Follow AIC on LinkedIn!

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