What Keeps me up at Night Mar/Apr 2009 – Construction Management & Project Success
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Offner |
In our industry today, there are more than 1,300 recognized CM professionals, each distinguished by the CCM credential after their name.
What is construction management?
The Construction Management Association of America states, “The cost and complexity of today’s capital projects, the importance of time, and the need to deal with unanticipated events and unforeseen conditions all argue the need for an integrated and managed approach to planning, design and construction of the built environment.”
In today’s marketplace owners have a variety of project delivery options: design-bid-build, design-build and other processes born out of contracting-for-construction necessity. Each has its virtues and weaknesses in terms of risk and outcome.
The construction management process is intended to help the owner ensure the best project delivery method is taken, the highest degree of real value is captured and risk is allocated to the party best able to assume the responsibility and control it.
With the end goal of ensuring that all owner expectations are met in the most effective and efficient manner, the professional CM should recommend only those services vital to project success.
What does a CM do?
Few owners maintain the in-house staffing resources or expertise necessary to pay close, continuing attention to every detail on a project, but those details can make or break the project.
The CM’s role on a particular project cannot be defined until the scope of services is set, the CM contract is finalized and the roles and responsibilities of every project participant is clearly defined. Many owners use the CM in an advisory capacity where the CM will observe and make recommendations.
The CM can augment the owner’s staff, providing pre-planning, design, construction, engineering and management expertise, and a managed approach to quality, cost, time and scope to ensure successful achievement of the project objectives and the best possible project outcome. Regardless of the role, construction management offers a variety of services that can be utilized through every phase of construction projects and programs.
CM agency is a professional service that can be applied to all delivery methods, where the CM acts as a consultant in the management of a project or program, making observations and recommendations on budget, schedule and quality.
The CM represents owner interests in dealings with other design and construction professionals and project stakeholders and may be tasked with deeper responsibility for hands-on management of the planning, design, construction and post-construction phases.
CM agent services include recommendations on the optimum use of funds, scope of work, project scheduling, risk mitigation and claims avoidance, management of delays, changes and disputes, project design and construction quality, and contracting and procurement of services.
CM-at-risk — or CMc in the government sector — is a delivery method that requires a commitment by the construction company to deliver the project within a guaranteed maximum price. The contractor acts as consultant to the owner during the development and design phases, managing scope and budget development to capture the best possible value for the owner.
Once the GMP is established the relationship morphs into the equivalent of an at-risk contractor — bound to the GMP, the interest of the owner is no longer the CM’s first priority — and many owners employ a watchdog to oversee the CM.
In today’s marketplace, owners confront complex issues in every area, including project development, budget preparation, architectural and engineering selection, site preparation and technology infrastructure. Construction projects place huge demands on time and require skills and expertise that few owners possess in-house. A CM provides owners with specific expertise for all facets of the delivery process (pre-bond, planning, design, construction, etc.).
A professional CM strives to give owners more effective control of complex construction projects and can support client objectives with a strategy to deliver the best possible project, on time and within budget. The CM becomes an advocate, combining detailed technical knowledge, project experience and a commitment to meet the client’s needs and objectives.
By involving a professional construction manager from the earliest stages of your project, you maximize the chances for a trouble-free construction process that delivers the required outcome.
How to hire a CM
Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners.
Selection of a CM should be based on an objective evaluation of the qualifications of competing firms and an evaluation of the people proposed to lead and support your project.
An effective selection process should be driven by a clear expression of owner expectations and desires, and a systematic approach that includes:
• Describe the project, including size, purposes and goals; your schedule and budget expectations; and your internal procedures. This enables prospective firms to assess the level of commitment and type of skills required.
• A selection committee, including your organization’s project representative (with authority for overall and day-to-day decisions), should be formed to learn as much as possible about the project before the CM evaluation process.
• Publish a request for a statement of qualifications (RFQ) for firms with project type-specific experience. Most firms will respond with a federal standard form, but be sure to require references.
• Reduce the competition to a manageable level with a short list of the best-qualified firms, which are invited to submit a technical proposal (your request for proposals should contain a degree of project detail that enables firms to offer information about their project leadership, approach, experience and resources).
• Evaluate the firms. Compare technical proposals, ranking them in numerical order, and interview the top candidate. If you don’t feel comfortable, interview the next firm, and so on.
CMAA standards of practice, which have become the recognized industry standard, can be used as a general guide to the functions typically provided by a CM. The owner and selected CM should negotiate and agree a scope of services document, which should include deliverables or tangible methods for measuring performance. Once finalized, this will serve as the cost base for development of the CM fee.
Remember CMAA certification is a reliable indicator of professional competence and expertise and the availability of CCM to lead your project should be a weighted factor in your evaluation and selection.
How much does it cost?
How much you pay for CM services is no barometer of the standard of service you will receive — unless you pay too little. Construction management is a people service and senior level CM’s can earn a base $50 to $100 per hour. An hourly billing rate for experienced staff at a multiplier of two and one half times their payroll expense or higher is not unusual in competitive markets.
CM fees can also be fixed based on a percentage of construction cost, or construction cost can be used as a metric for benchmarking fees. Services fees, depending on the project scope and tasks, can range from 0.5 percent of the construction cost for single tasks, such as monthly schedule reviews, to more than 5 percent for full services and CM-at-risk assignments.
Many firms can provide a variety of management services suited to your budget and the savvy firms should be able to save you their fee in risk mitigation, claims avoidance and detailed contract management. I know that is what we focus on when we serve our clients, and when we deliver a managed approach oriented for successful outcomes, our clients get as good a night’s sleep as me.
Gregory J. Offner, CCM, is vice president of AECOM Design in Arlington, Va. He is a member of the Correctional News Editorial Advisory Board.