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Construction Management at Risk: Make Sure Your Back is Covered

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Construction managers start with clear targets for quality, cost, and schedule for their projects, but in order to be successful and profitable, they must first be able to skillfully navigate the inevitable fog created by changes and unforeseen conditions.

A frequently used delivery method is what is known as Construction Management at Risk (CMAR), in which the project “Owner” engages with a Construction Manager (CM) to deliver a project with a defined schedule and price. In these instances, the CM will typically provide preconstruction feedback to the Owner during the design phase and will then become the general contractor during the building phase.

This delivery method has three distinct phases: Design, Bid and Build. However, nearly every project has a scope of work that has not been fully designed or priced when the actual work commences. Each of these elements will require close collaboration by the project team over the course of the project to ensure that such remaining issues do not jeopardize the work.

Let’s take a closer look at the three phases:

Design

Design is the responsibility of the Project Owner who contracts the design team members such as the Architects and Engineers. In such scenarios, the Owner is responsible for the details of the design, including any gaps created between the plans and specifications of the project and the Owner’s requirements for the performance of work.

Bid

During the bid phase, the CM will begin to solicit quotes from qualified trade subcontractors and suppliers in order to price and schedule all of the various elements that comprise the scope of work. It is common for the Owner and CM to collaborate closely during this phase, jointly selecting the various trade subcontractors and suppliers on a “best value” (not necessarily low bid) basis. Quotes submitted by the selected subcontractors and suppliers then become the basis for the CM’s Project Budget.

Build

The build phase is comprised of the actual building of the project as defined by the scope of work. It is during this time that you will see the most change in the form of requests for information (RFI’s) and change orders. As we all know, it is also the phase with the most risk. Mobilization planning goes a long way in identifying potential sources of risk, but it’s not a 100% guarantee. Changes and unforeseen conditions are a fact of life and if you don’t have a solid change management system in place, you risk losing control of the job.

RedTeam is well versed in helping CMs manage the complexities of CMAR projects including tracking both internal contractor changes and external customer changes, job costing, managing negotiated unit pricing rates, and in-depth reporting that focuses attention on exposure areas for both CMs and Owners.

“In the old days, our potential change log was kept on spreadsheets. The process was haphazard and the history was disconnected once a change order was manually prepared and posted into our accounting system. The way RedTeam supports the change order process is perfect, in my opinion.”

– Rick Huckestein (Director of Operations, T&G Constructors)

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RedTeam Software is a cloud-based  construction project management and construction financials solution. RedTeam drives dramatic increases in performance for all team stakeholders of any type of construction project.

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