According to the Construction Management Association of America (CMAA – www.cmaanet.org), Construction Management is a professional service that applies effective management techniques to the planning, design, and construction of a project from inception to completion for the purpose of controlling time, cost and quality.
Construction Management is a discipline and management system specifically created to promote the successful execution of capital projects for owners. Since the projects requiring a CM can be highly complex, few owners maintain the staff necessary to pay close, continuing attention to every detail – yet these details can “make or break” a project.
When design firms market Construction Management as a service offering, it is important to have a clear understanding of what is being provided to the client. From an insurance perspective there are two types of CM that can be provided to an owner – “Agency” and “At-risk”. The Professional Liability underwriter needs to have an understanding of the services being provided by the design firm to offer the proper insurance.
“Agency” Construction Management
Agency CM is when the owner selects a construction manager to assist in all phases of project delivery from pre-design to final construction. As the owner’s eyes and ears on the project, the Agency CM oversees and advises on such areas as:
• Control of the scope of work
• Cost control
• Project management,
• Utilizing the skills and talents of the consulting firm for avoidance of delays, changes and disputes.
In this scenario the Agency CM is effectively functioning as an independent professional consultant, and is not performing construction work with their own staff nor subcontracting to contractors.
“At-risk” Construction Management
At-risk CM is where the construction manager assists with all the pre-construction services, represents the owner’s interest in managing the project, but also takes responsibility for the performance of the work, including contracting with all the contractors that will perform the construction on the project.
In that instance the At-Risk CM is effectively functioning as a General Contractor during the construction process. Their role prior to construction commencing may closely mirror Agency CM duties such as value engineering, constructability reviews, cost estimation, design consultation and a wide variety of activities in their scope of services.