An Owner’s Guide To Construction Management

1 An Owner s Guide ToConstruction ManagementAssuring Project SuccessUnder Any Delivery MethodCopyright 2002 The Construction Management Association of America, Rights Reserved18 Construction Management ASSOCIATION OF AMERICAACKNOWLEDGMENTSC onstruction Management Association of America7918 Jones Branch Drive, Suite 540 McLean, VA gratefully acknowledges the time and efforts of those who served as contrib-uting editors in developing this Owner s Guide to Construction the collective efforts of these individuals, this document would not havebeen Gravallese, Daniel, Mann, Johnson & MendenhallBlake V.

2 Peck, , CCM, McDonough Bolyard PeckBob Fraga, Postal ServiceChris Reseigh, Parsons Brinckerhoff Construction ServicesEdward Mislavsky, Project Planning Group, Henk, Transportation Corridor AgencyHerb Saunders, Parsons Brinckerhoff Construction ServicesJerr y Gold, O Brien KreitzbergJoe McAtee, , Urban Engineers, Whitehouse, Construction Management Services, Swanson, DLR GroupNeil F. Katz, Hill InternationalRichard Cullerton, Metropolitan Washington Airports AuthorityRick Fennema, GREYHAWK North America, LLCR obert Wilson, , Gilbane Building CompanyRobert York, The JCM GroupRon Pennella, StructureToneThomas Quaranta, Parsons Brinckerhoff Construction ServicesConstruction Management evolved as a professional practice distinct from design andconstruction in the early 1960 s in response to increasing complexities in the construc-tion industry.

3 Highly sophisticated Construction systems led to the specialization of bothdesign and Construction professionals. Additionally, increasing regulatory mandates,litigation and other risks created a need for a new professional to be an advocate for theOwner and bridge the gap between the Owner, the Designer and the Contractor. Today, Construction Management is well established, and recognized around the world as anindispensable Construction Manager (CM) provides the Owner with specialized knowledge,experience and resources to navigate through the complexities of a Construction programor project.

4 Construction Management services may be tailored to satisfy the needs of thenovice or sophisticated Owner. The CM adds value by providing the resources andexpertise needed to manage quality, cost, schedule, scope and risks associated withdesign and Construction to help the Owner achieve its major Construction effort is a complex and risk-laden venture. It involves theexpenditure of a large sum of capital as well as the application of technologies of whichmany are aware, some are conversant, but few are expert. It requires the Owner to dobusiness with several groups of people whose interests are not its own and to venture intoa field with its own set of rules, some of which are not written down anywhere.

5 It is anintensive process demanding constant attention in order to achieve federal government has a Construction budget that is measured in billions ofdollars and a plan for accomplishment that is measured in decades. Many state govern-ments have Construction efforts of hundreds of millions of dollars and multiple the federal and state governments have standing staffs to manage their typicalconstruction program, they often need specialized expertise or supplemental staff to helpmanage certain government organizations are like smaller businesses, having the sameorganizational needs for Construction expertise matched against an equal need to reduceexpenses.

6 Moreover, many times the smaller private Owner cannot afford to build a staffand fully develop sufficient expertise to embark upon a Construction use of professional Construction Management services to oversee all or parts ofthe planning, design and Construction process is recognized in both the public andprivate sectors as an effective and efficient means of achieving successful delivery ofconstructed projects under any contract Construction Management Association of America (CMAA) presents thisdocument as a Guide to public and private Owners in selecting a critical component ofthe Construction project: the Guide will benefit those Owners who will embark on a Construction project andwho will seek expertise in the planning, design and Construction process.

7 It introducesthe Construction Management practice and describes how it can enhance the success of Defining Construction 3 The Project Participants .. 3 Needs of the Project .. Contracting and Project Delivery 6 Contracting Methods .. 6 Project Delivery Systems .. Why Construction Management ?.. 8CM as Agent or At Risk .. 8 Role of the CM .. Selecting the 10 Preliminary Decisions and Information .. 10 Qualification Based Selection of CM .. 11 Methods of Paying for Services .. 14 Standard Contract Forms .. 15 OWNER S GUIDE1 Professional CMs can be instrumental in achieving successful constructionprojects and may be used in a variety of contracting methods and projectdelivery are many issues an Owner must consider in undertaking a project,such as time and cost constraints, the need for flexibility, pre-constructionservice needs, design process interaction, and financial constraints.

8 The projectteam should enhance and reinforce the strengths of the Owner to provide acomprehensive set of resources and skills to accomplish the a wide and somewhat bewildering variety of ways to organize aproject have been developed to satisfy the needs of Owners and projects, allshare the same basic set of players: the Owner, the CM, the Designer, otherconsultants, Contractors, and Subcontractors. Regardless of resources, Ownersmust choose a particular organization, contract and award, and combine theminto a desired and appropriate contracting method for each Management is a professional services discipline applied to theplanning, design and Construction process of capital improvement CMs address the needs of projects and Owners by providingmanagement services and expertise tailored to project needs and independent ofthe chosen contract format or project delivery method.

9 It is this managementapproach that makes Construction Management unique. CMs apply and integratecomprehensive project controls to help manage the critical issues of time, cost,scope, quality and an Owner, it is necessary to choose a project delivery method andcontracting format that efficiently delivers the project. A contracting format is anarrangement for the distribution or allocation of Construction project risk (mostfrequently cost or performance risk) between the parties to a contract. A projectdelivery method is designed to achieve the satisfactory completion of a construc-tion project from conception to occupancy.

10 Construction Management has beenused successfully in all contracting and delivery systems by Owners who do notcontinuously maintain the staff expertise or numbers necessary to deal with thecomplex responsibilities involved in the Management of major projects. Inaddition, the CM usually helps the Owner identify which delivery system is bestfor the number of contracting formats exist including fixed price, guaranteedmaximum price, cost plus fixed or variable fee, and unit price projects in the United States have traditionally been deliveredthrough the design-bid-build project delivery method.