Page 240 - Urban Construction Project Management

Contracts 195
5. Construction management (at risk)
a. Procedures
• Usually works on a CM’s out-of-pocket expenses plus a fee basis.
• Fee is higher than at no risk.
• CM is the contractor for the project.
b. Advantages
• Construction documents are reviewed and evaluated for constructability, cost,
and schedule.
• Subcontractors for bidding are selected on a pre-qualified basis.
• Professional CM organization is used for the management of the project.
• Value engineering and cost control can be maintained throughout the project.
• Fast track method of construction can be utilized.
• Pre-ordering of long lead items can take place early.
• Coordination of all drawings is accomplished throughout all phases of the project.
• Change orders should be kept to a minimum.
• QC should be higher.
• Cost of the project is guaranteed by the CM.
• Open book relationship between the owner and the CM.
c. Disadvantages
• Risk could be high for the CM.
d. Suggested use
• When expediting of project is required.
• Owner does not have the resources to manage the project.
• Large projects.
• Complicated projects.
• Fast tracking required.
• When there are critical long lead items.
6. Unit price or time and materials (T&M)
a. Procedures
• CM/GC submits cost based on unit prices or labor time and materials used.
• In some cases, the units are taken off by a quantity surveyor (British method),
and then the CM/GC fills in the unit prices.
• Total price is based on the addition of all the quantities plus the cost for the
general conditions.
b. Advantages
• The owner only pays for the materials that are actually installed and the labor
that is expended.
• Easy to calculate any changes.
• Easy to evaluate bids.