What is Construction Management At Risk?
Project owners have a variety of contracting methods available to them for obtaining professional design and construction services to implement a project. Along with design-bid-build and design-build, construction management at risk is one of the most commonly used project delivery methods.
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Definition
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In "Primer on Project Delivery," published by the American Institute of Architects and Associated General Contractors of America, construction management at risk is described as a project delivery process where a contractor is engaged by the owner during the design process to assist in pre-construction project management support services, and then acts as a general contractor during the construction process. The architect or engineer for the project is retained under a separate contract with the owner.
Contracting Parties
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Similar to a traditional design-bid-build delivery process, construction management at risk involves two contracts -- one between the owner and the contractor and one between the owner and the architect or engineer. This differs from a design-build contract where the owner contracts with a single design-build entity composed of the designer and contractor.
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Meaning of At Risk
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The "Primer on Project Delivery" cites two meanings for the expression at risk. In one sense, the contractor may be asked to provide a guaranteed maximum price for the construction of the project, and incurs the risk of cost overruns. In another sense, as general contractor, the contractor is responsible for the performance of the construction project, including all trade contractors.
Construction Manager/General Contractor
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Some prefer to refer to construction management at risk contracts as Construction manager/general contractor or CM/GC contracts to minimize confusion over the expression at risk. In "CM/GC Guidelines for Building Construction in the Public Sector," the Associated General Contractors of America notes that the two contracting methods are similar but not synonymous as there can be certain legal requirements unique to each method.
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References
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