Construction Manager at Risk (CMAR): Definition and Benefits
Cost overruns, unforeseen construction difficulties, and changing whims can cause final amounts to balloon far beyond an initial estimate. The construction manager at risk (CMAR) delivery method was created to address this issue by placing the burden of broken budgets onto the contractor.
CMAR 101
The CMAR process is a project delivery method that puts a construction manager (CM) in the role of the property owner’s representative and the owner’s consultant and expert.
The owner communicates their vision to the CM and places them in charge of seeing that vision through to completion. Once the project parameters and costs have been agreed upon, they create a guaranteed maximum price (GMP).
Definition
The term is “construction manager at risk” because the cost of the project cannot exceed the GMP. If it does, the CM is responsible for any additional expenditures.
Responsibilities
Since the CM acts in the stead of the owner, they also play the role of liaison.
If the architect has a new idea or certain materials need to be changed, the CM can discuss these changes with the owner to seek final approval. Of course, this depends on the level of control given to the CM. Sometimes, they don’t need to bother the owner with such details.
The CM also creates timelines and feasibility studies, using their expertise to build models and craft presentations. These can be to demonstrate concepts and ideas to the owner and other contractors and vendors. The CM must also meet with the owner and provide updates on the project status.
Benefits
The main positive of the CMAR process is that it keeps costs in check.
The CM can’t run rampant with the owner’s budget because they’re on the hook for additional costs. Placing the CM as the main point of contact also gives a clear hierarchy to the project. Since the CM is essentially a proxy for the owner, other players in the project know that the CM’s word is final.
Ironically, even though CMAR stands for “construction manager at risk,” the CMAR process reduces overall risk. The budget is final, and vendors know the exact amount that can be spent. This also reduces stress, as no one has to play hardball about any aspect of the construction project and preconstruction process.
Challenges
With the CMAR process comes new details that must be ironed out. Before the project begins, the owner must ensure that the contract is accurate, lest they incur unexpected expenses. They must also be exact in explaining their vision to the CM to avoid ambiguity or misunderstanding.
Establish the GMP after careful planning, and be upfront about the parameters of what constitutes pre-GMP work. The hours spent developing the GMP contract will have to be figured into the cost.
CMAR vs. Design-Build
The CMAR process seeks to give more weight to the CM’s expertise than the design-build process.
The owner has more control over the construction in design-build, but they may not be able to manage the project to the same standards as an industry professional. Furthermore, any additional costs that arise will be squarely on their shoulders, and the owner may find they have some conflicts of interest given their multiple roles.
Looking for Houston design build contractors? Contact Constructable today!
Tips for a Successful CMAR Project
First and foremost, find an experienced CM you can trust.
Once you have, ensure that the estimate you give them is as accurate as possible. Lay out your expectations so there’s no muddiness regarding roles and responsibilities, and make sure you communicate constantly. The CM, owner, architect, labor team, and vendors must all be on the same page.
Learn More About Constructable’s CMAR Services
If you’re looking for a skilled, responsible CM, you’ve found one in Constructable. We bring all the aspects of a contract under one roof, giving owners a single transparent source of accountability. See how Constructable’s CMAR services provide you with peace of mind throughout the lifetime of a new build. From sustainable building design to two story metal building construction, we’ve got you covered. Contact us today at (832) 844-0500 to learn more about our design-build firm in Houston.
