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Specifications for Construction Manager at Risk Projects

By Kevin O'Beirne, PE, FCSI, CCS, CCCA, CDT posted 05-06-2022 02:35 PM

  

A popular, alternative project delivery method is construction manager at risk (CMAR), also known as “construction manager as constructor” (CMc) and “construction manager as general contractor” (CM/GC). CMAR project delivery is used for both private projects and, where enabled by statute, for public work.

This article presents a high-level overview of what owners and design professionals should know about construction documents for CMAR projects.

What is CMAR?

Typical participants in a CMAR project are shown below. In the figure, solid lines between boxes represent lines of contractual privity between participants. The principal participants’ roles are discussed below.

In a CMAR project, the roles and responsibilities of the owner and design professional are the same as in a design-bid-build (D-B-B) project. The design professional is responsible for the project’s design, represents the owner, and performs construction stage services similar to its responsibilities in D-B-B.

CMAR is a halfway house between traditional D-B-B and design-build (D-B) project delivery, because CMAR has elements of both D-B-B and D-B. In a CMAR project, the owner retains the design professional to design the project and prepare construction drawings and specifications, as in D-B-B. Also like D-B-B, under a separate prime contract, the owner retains the construction contractor (i.e., the construction manager at risk). During the project’s construction stage, the construction manager at risk will serve as the project’s general contractor; it may self-perform certain work and will, under appropriate subcontracts and purchase orders, retain trade subcontractors and suppliers.

In contrast to D-B-B, on a CMAR project, the owner retains the contractor (i.e., the construction manager at risk) early in the design process, so the construction manager at risk can furnish design stage advice, consultation, and other services to the owner, including consultation with the owner-hired design professional. CMAR thus encourages preconstruction collaboration and cooperation somewhat similar to D-B. The construction manager at risk’s design stage services typically include furnishing advice on likely construction means and methods, as they will affect the design; constructability reviews; cost estimating; and scheduling. Like D-B, CMAR is intended to foster increased coordination between the contractor and design professional and thereby promote a project environment that is more-collaborative and harmonious than is often the case on D-B-B projects.

Although the construction manager at risk participates in the design process, in accordance with applicable US and Canadian laws and regulations governing licensure of the design professions, for CMAR projects, the design professional retains full responsibility for the design and the project’s technical (i.e., engineering, architecture, geology, and other design professions) matters, and possesses the professional liability for the completed project as a functioning whole.

As is typical for “progressive D-B” projects, construction managers at risk are often hired based either partly or entirely on their qualifications, experience, and approach, rather than based on the lowest-priced bid. Depending on the requirements of the owner’s request for proposals, the initial proposal submitted by a prospective construction manager at risk may include selected price-based information, such as the proposed compensation for the construction manager at risk’s design stage and procurement stage services, proposed markups for overhead and profit for construction, and perhaps pricing rates for “field overhead” costs, such as site mobilization, field offices, superintendence, site maintenance, and similar costs. Performance and payment bonds, when required, are typically furnished just prior to the start of construction, rather than with the initial proposal at the project’s outset.

When the design is sufficiently advanced, the construction manager at risk will prepare and submit to the owner its price proposal for completing the work, including construction. When the project is fast-tracked, as discussed further below, the construction manager at risk will typically submit a separate price proposal for each separate “work package”. The construction manager at risk’s price proposal is typically “open book” and thus subject to scrutiny by the owner, design professional, and other owner-hired consultants, if any. When the owner and construction manager at risk agree on the completion price, the construction manager at risk will be authorized to proceed with procurement of materials and equipment from suppliers, and subcontractor services, and to perform the construction. If the parties cannot agree on completion pricing, then the owner-construction manager at risk contract will allow the parties to terminate for convenience (often termed an “off-ramp”). When the owner takes the “off-ramp”, the CMAR contract will allow the owner to proceed with the construction as a D-B-B project, and the construction manager at risk will be paid for its services performed, in accordance with the contract, through the effective date of the termination for convenience.

A common feature of CMAR projects is “fast tracking”, in which the design professional prepares and issues the construction drawings and specifications in multiple “work packages”, to coordinate with the construction manager at risk’s construction progress schedule. Fast tracking often involves construction of certain, early-start activities at the site, such as site preparation, excavation, and foundation construction, while the design professional is still preparing the construction documents for other parts of the project.

CMAR projects may also include a separate, owner-hired construction manager as advisor, often termed an “owner’s representative” or “owner’s authorized representative” to reduce the potential to be confused with the construction manager at risk. An owner’s representative is often retained on larger, more-complex CMAR projects. Possibly as many as half of all CMAR projects include an owner’s representative.

At their core, construction documents for CMAR projects are essentially the same as those for D-B-B; these basic elements are illustrated below.



However, there are several considerations of which owners and design professionals should be aware before budgeting and preparing construction contract documents for a CMAR project.

Division 00 Documents for CMAR Projects

The owner should select the project delivery method early, optimally in the project’s conception stage, and advise the design professional whether the owner intends to retain the services of an owner’s representative. The construction documents should not be prepared in ignorance of the project delivery method or whether an owner’s representative will be involved. A change in these matters after the design professional has started to prepare the construction documents should typically include an associated amendment for the design professional, to account for the substantial additional  time and effort required for a change in delivery method and the project’s principal participants.  For advice on drafting specifications for a project that involves an owner’s representative, see “Specifications for Projects with a Construction Manager as Advisor”, previously published on this blog.

Division 00—Procurement and Contracting Requirements, of the owner-construction manager at risk prime contract should be appropriate for CMAR project delivery and, when applicable, should address the owner’s representative’s involvement. Such documents will typically indicate the construction manager at risk’s design stage and procurement stage responsibilities, and should expressly identify both the design professional and owner’s representative and their respective, high-level responsibilities as they relate to the construction manager at risk.

Widely-used standard contract documents for CMAR projects include:

  • American Institute of Architects: AIA Construction Manager as Constructor (CMc) Family 2019.
  • Engineers Joint Contract Documents Committee: EJCDC Construction Manager at Risk (CMAR-Series) Documents 2022.
  • Associated General Contractors of America ConsensusDocs: ConsensusDocs 500-Series 2017.
  • Construction Management Association of America: CMAA Construction Manager at Risk Documents 2013.

Of the foregoing, CMAA’s CMAR documents are not commonly used in projects but are an important resource for CMAA’s popular professional certifications. EJCDC’s CMAR-Series (to be published in the second half of 2022) is perhaps the most complete set of the alternative CMAR documents available but is also the newest. ConsensusDocs’ 500-Series has been revised only once since its initial publication in 2007. AIA’s CMc Family has been published for many years and is widely accepted for vertical construction; however, AIA’s CMc Family lacks critical documents for the owner’s procurement of the construction manager at risk’s services.

Many project owners may not possess their own CMAR contracts and, in some cases, may rely on the construction manager at risk to propose an appropriate form of contract. The owner should always retain its own legal counsel, experienced with CMAR and construction contracts, to review and provide advice to the owner when the source contract will be furnished by others, such as the construction manager at risk. For such projects, the design professional and owner’s representative should have the opportunity to review and comment on the owner-construction manager at risk prime contract before it is finalized and signed. Among other matters, the owner, design professional, and owner’s representative should:

  • be included in the contract’s indemnification obligations.
  • be additional insureds on the construction manager at risk’s liability insurance (except for workers’ compensation insurance and professional liability insurance, where additional insured status is not available); and
  • be included in the contract’s provision requiring the builder’s risk insurance carrier to waive its subrogation rights.

The foregoing are very important, basic risk management protections. Applicability may vary by jurisdiction, depending on laws and regulations governing insurance.

Specifications for Fast-Track Projects

Fast-tracking is among the most important differences between CMAR specifications and specifications for design-bid-build (D-B-B) projects. Fast-tracking is relatively common on projects implemented using CMAR, design-build (D-B), and integrated project delivery (IPD).

When the project is fast-tracked, the design professional will typically need to prepare multiple “work packages”, rather than one issuance of a complete, comprehensive set of construction documents as is typical on D-B-B projects.

Drawings and specifications issued for each work package are part of the owner-construction manager at risk contract documents. Accordingly, the drawings and specifications for each  work package need to be coordinated with each other and with those of prior work packages.  It is inevitable that revisions to previously issued specifications and drawings will be necessary in later work packages. To the extent practicable, the design professional should endeavor to anticipate what will likely be required under subsequent work packages and develop the earlier work packages to reduce the potential for conflicting requirements.

Considering the likely needs of future work packages is not always easy in the rush to issue early-start work packages. However, a few extra minutes of consideration and effort in the early-start work packages’ development will likely save considerable time and effort during preparation of the later work package(s) and construction.

For example, the Division 01 specifications for early-start work packages should be as complete as possible, even for the later work packages.  While the Division 01 specifications can be amended and supplemented for later work packages, as a practical matter, it is often challenging to revise administrative and procedural requirements, and requirements for temporary facilities, once construction at the site is already underway.

As another example, a common work result required in many work packages is concrete. Rather than issuing Division 03—Concrete, specifications unique to the early-start work package(s), the design professional should consider, while developing the Division 03 specifications for the early-start work package(s), requirements for concrete that will likely be necessary in later work packages. In addition to concrete, there are many other examples of specifications common among multiple work packages on the same project.

As a practical matter, when a specifications section issued in an early start work package is revised for a subsequent work package, the revisions must be expressly shown. For example, deletions should be indicated using strikeout text, and added text should be indicated using either underlined text or bold text. Because color blindness is common, avoid using colored text or highlighting to indicate changes. It may be appropriate to identify, via a right margin comment, the specific work package for which each revision was made.

Similar to how drawings typically include, in their title block, a table to indicate revisions to the drawing, it is appropriate to include in each specifications section a table indicating the document’s revision history, when the project will include multiple work packages. The section’s revision history table can be located either at the top of the section’s first page or at the end of each section. When section revision history tables are used, each section should include a revision history table, even when it is anticipated the section will be issued on only one work package. An example of such a revision history table is:

Revision History – Section 03 31 00

Work
Package No.

Date Design Prof. in Responsible Charge Description of Revisions
1 4/05/2022 Angela Hayes, PE

Initial issuance for site preparation.

2 6/03/2022 Angela Hayes, PE Added requirements for mass concrete concrete for foundations
3 10/01/2022 Angela Hayes, PE

Added fast-setting concrete for structure construction


Other Matters Relative to CMAR Specifications

In most other respects, construction specifications for CMAR projects are the same as specifications prepared for design-bid-build (D-B-B) projects. Indeed, the source documents for specifications for many CMAR projects are either the design professional’s own D-B-B master specifications or commercial master guide specifications written for D-B-B.

Because CMAR is intended to foster design stage collaboration between the construction manager at risk and the design professional, in which the construction manager at risk provides advice on constructability, materials selection, construction cost, and construction time, potential may exist for blurring of lines of responsibility for certain aspects of the design.  Design professionals should always bear in mind that the design professional possesses the architecture, engineering, or other design profession licensure and professional liability for the completed project. Thus, the design professional should resist being pressured by the owner or construction manager at risk into incorporating design elements, materials, or methods in which the design professional is not confident. Construction managers at risk should avoid presenting design-related advice that may have potential to transfer professional liability to the construction manager at risk.

As with any construction contract, the specifications and drawings must be closely coordinated with the Division 00 documents in the owner-construction manager at risk contract (see: “Specifying Practices Coordinated is the Fifth ‘C’”).

Where a CMAR project will include an owner’s representative, considerations applicable to projects involving a construction manager as advisor (CMa) apply (see: “Specifications for Projects with a Construction Manager as Advisor”).

Where either the construction manager at risk or the owner’s representative will prepare some of all of the Division 01 specifications, the design professional must either have supervisory control over their preparation and final control over their content, or obtain from the owner a contractual waiver of any need to seal and sign such specifications, consistent with laws and regulations governing the subject design professions (see: “Sealing and Signing Divisions 00 and 01: Is it Architecture or Engineering?).

During the construction manager at risk’s procurement of subcontractors and suppliers and the ensuing construction stage, the project’s participants should avoid pressuring the design professional to revise the design to accomodate construction means and methods for the convenience of the construction manager at risk, unless the design professional is appropriately compensated by its client, the owner.

Conclusions

Division 00 of the owner-construction manager at risk contract should be appropriate for the project delivery method and properly address the roles, responsibilities, and risk management  for the owner, design professional, and owner’s representative (when involved). Specifications for CMAR projects are generally similar to those for design-bid-build projects, but often require special considerations regarding fast-tracking and issuance of drawings and specifications in multiple work packages. The specifications must be properly coordinated with the Division 00 documents used for the project, and other considerations may apply when either the construction manager at risk or an owner’s representative will prepare all or part of Divisions 00 and 01.

Additional Resource: Readers may also be interested in this writer’s article, “Specifications for Design-Build Projects”, published in the March 2021 issue of Construction Specifier magazine.

Copyright 2022 by Kevin O’Beirne

The content of this blog post is by the author alone and should not be attributed to any other individual or entity.

Kevin O’Beirne, PE, FCSI, CCS, CCCA is a professional engineer licensed in NY and PA with over 30 years of experience designing and constructing water and wastewater infrastructure for public and private clients.  He is the engineering specifications manager for a global engineering and architecture design firm.  He is a member of various CSI national committees and is the certification chair of CSI’s Buffalo-Western New York Chapter.  He is an ACEC voting delegate in the Engineers Joint Contract Documents Committee (EJCDC) and lives and works in the Buffalo NY area.  Kevin O’Beirne’s LinkedIn page

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08-16-2022 06:34 PM

One note to this:  the CMAR will often draw themselves a job description that does not involve many responsibilities of a typical GC on a project.  On one notable project, we were asked to address all spec sections to the "Trade Contractor" and put all coordination requirements onto the individual trade contractor sections rather than in the Division 01 documents.  (eventually, some overall project responsibilities were provided by the CMAR).  And, the reporting relationship between the CMAR and the Owner's representative required a restructuring of our reporting responsibilities.