It seems that this method of project delivery is becoming increasingly prevalent, though not as common as Stipulated Sum. It is characterized by a construction manager acting only as an advisor to the owner (e.g. under a CCDC 5a Construction Management contract – for Services) or as an advisor and a contractor for the Owner (e.g. under a CCDC 5b Construction Management contract – for Services and Construction).
An ability to start construction earlier and more importantly bringing constructability and market advice early to the project team can provide great advantages where a true collaboration occurs among the construction manager, architect/consultants, and owner. Project cost management can also be better than Stipulated Sum in such a situation, however, if the relationship between parties is strained or unclear, it can be highly complex, difficult to manage and result in inefficiencies in all phases - less cost certainty, and greater additional costs (real or perceived).
The scope of an architect’s/consultant’s services can be quite complex and much more involved under Construction Management.
- For example, in the preparation of Construction Documents one must establish and carefully consider requirements for sequential bidding and phased construction, if any. Is the architect/consultant team responsible for each complete bid package including the front end documents, or are they only responsible to prepare CDs for a smaller number of more extensive bid packages with no front end, while the construction managers themselves then review and re-apportion to prepare sub-bid packages?
- Construction Procurement is not a single phase, but is ongoing for a significant portion of the duration of the project, and decisions that are made in any one bid package are likely to have impacts in previous and forthcoming packages creating under/overlap. This requires an increased level of coordination and it is paramount to establish the process roles far in advance of the first bid package.
- Construction Administration is also greatly impacted by decisions relating to procurement method. While there may be a single contract to administer (between construction manager and owner). With every bid package and additional contract or subcontract: site review can become more complicated and the schedule of values becomes more involved. There is potential for multiple completions and releases of holdback; etc.
Crucial to a successful Construction Management project, with appropriate compensation for services, are roles and processes which are clearly established at the outset. A project comes to mind wherein a construction manager and architect were hired near the same time, separately, and began working with one another at the beginning of Design Development for a project that was to be phased construction. The construction manager understood that the architect/consultant team would prepare each individual bid package in its entirety, whereas the architect understood that only several ‘larger’ bid packages would be prepared with the construction manager completely responsible for sub-bid packages. Aside from complicating relationships and roles, and creating additional work for one or the other, this resulted in confusion between what was issued by the architect/consultant team and what was tendered, causing great difficulty in tracking where scope may or may not fall between the packages. The most straightforward methodology would have been to require each bid package be prepared in its entirety by the architect/consultant team.
In a small to midsized project, the writer recalls a construction manager who was not particularly in a hurry or forthcoming in providing and updating the cost estimate, nor in soliciting competitive bids. Work had started without an overall value for the project cost being firmly established, which was cause for some concern in managing the overall project cost. In this situation and to give more certainty, it may have been useful to exercise the Stipulated Price Option to convert the Construction Management contract into a stipulated price contract to compel the construction manager to provide complete costing and thus yielding the benefit of both methods of project delivery (i.e. CCDC 5b, Article A-8.)