GLOSSARY

Construction Manager at Risk (CMAR)

Construction manager at risk (CMAR) is a project delivery method in which the owner hires a construction manager during design to provide preconstruction services, and that firm then commits to a guaranteed maximum price (GMP) and builds the project, taking on the risk of cost overruns above that price.

CONSTRUCTION MANAGER AT RISK: WHO DOES WHAT, WHENOWNERDESIGNERCM AT RISKSELECT CMDECISIONSOVERSIGHTSCHEMATIC, DD, CONSTRUCTION DOCSSUPPORTPRECONSTRUCTIONBUILD, BID TRADESGMP SET, OFTEN AT 50 TO 90 PERCENT DESIGNThe CM prices, schedules and checks constructability while design is still changing.
The CM joins during design under a preconstruction agreement, then commits to a guaranteed maximum price and becomes the builder. Timing of the GMP varies by project. Illustrative.

CMAR keeps two separate contracts, as in design-bid-build: the owner hires the designer directly and the construction manager separately. What changes is timing. The builder is chosen early, usually on qualifications and fee rather than a construction price, and works alongside the designer on cost, schedule and constructability before the design is finished. In transportation the same method is often called CM/GC.

How it works

  • Selection. The owner picks a construction manager on experience, team and fee, often while design is at the concept or schematic stage.
  • Preconstruction. Under a services agreement, the CM estimates cost, plans phasing, checks constructability and flags long-lead items as the design develops.
  • The GMP. When the documents are far enough along, often somewhere between 50 and 90 percent, the CM proposes a guaranteed maximum price. The owner can accept it, negotiate, or in many contracts take the design to bid instead.
  • Construction. The CM becomes the builder, usually competing the work among trade contractors and holding those subcontracts.

CMAR vs other methods

  • Compared with design-bid-build. The builder is involved during design instead of after it, and the price is negotiated against estimates instead of set by low bid.
  • Compared with design-build. The owner still holds the design contract and controls the design directly; in design-build one firm holds both. See also progressive design-build.
  • Compared with agency CM. An agency construction manager advises and carries no cost risk. A CM at risk holds the trade contracts and the price guarantee.

What to watch

  • The GMP is only as good as its exclusions. Allowances, assumptions and clarifications define what the guarantee covers.
  • Open book needs auditing. Cost of work is reimbursed, so owners need audit rights and someone to use them.
  • Designer and builder still have separate contracts. Disputes over design errors can land back on the owner.

The Parkonomics view

CMAR is the method of choice when an owner wants builder input early but is not ready to hand over the design. For parking, that early input matters most where systems meet structure: conduit for PARCS, power for EV charging, and floor-to-floor heights. A CM at the table during design can price those decisions while they are still cheap to change.

Related terms: Guaranteed Maximum Price, Construction Manager, Design-Bid-Build, Design-Build, Progressive Design-Build (PDB)

Further reading: Procurement Is Still Buying the Past While Parking Has Moved On