INTRODUCTION TO CONSTRUCTION MANAGEMENT CONTRACTS

The Construction Management Contract is essentially a team approach to the Construction Process. The concept joins the Owner along with the Architect and /or Engineer (s) , and Construction Manager in a team concerned with the common objective of providing the Owner with the desired project within the shortest possible time, consistent with budget limitations.

This form of contract differs from more traditional forms in that the Construction Manager is selected by the Owner when a decision to undertake a project is made, or simultaneously with the appointment of the Architect and /or Engineer(s). In this way all the knowledge skills and experience possessed by a Construction Manager are used to full advantage during the design phase of the project. These firms, once selected, together with the Owner, form the Construction Management Team with each member of the team having precedence and exercising leadership in his own field of operations. The Architect and /or Engineer(s) have prime responsibility for concept, functional use of space, aesthetics, quality of design and production of drawings and specifications. The Construction Manager's role during the design stage is to advise the Architect and /or Engineer(s) on alternative methods of construction and materials that would satisfy the Owner's needs and offer an approach that is more economical to construct. From his up-to-date knowledge of building costs, he is in a position to provide accurate budget figures in the various stages of design and thus exercise overall budget control. Additionally he can provide information and guidance on Government approvals, safety requirements, bonding and insurance, and realistic time schedules for the construction phase. Additionally, because of a Construction Manager's knowledge of the industry he is in a position to recommend the Trade Contractors best qualified for a particular project.

Because the Construction Manager is part of the team, he is placed in a position to act in the best interest of the Owner. His fee is established at the outset for the responsibilities and services as outlined in the Agreement. The advantages of competitive bidding are not lost since all the major portions of the work are tendered on the regular lump sum basis to specialty contractors.

During the construction phase, the Construction Manager's role differs very little from the normal role of a General Contractor. He provides on-site organization and supervision over all phases of the project, updates schedules checks shop drawings and change orders, provides cost statements, budget status reports and progress billings.

Under the Construction Management method there is less chance of dispute over the cost of changes in design or additions or deletions to the work as the Trade Contracts are called progressively thereby giving the Owner more time to select his requirements. This, of course, makes it an ideal contract where it is advantageous to start work before the design and drawings are complete, or where it is recognized that methods may have to be adopted as work progresses to meet the demands of keeping an existing facility in service; where jobs are difficult to estimate; or where existing labour agreements are due to expire midway through the project; or for crash programs in general.

This introduction does not deal with PROJECT MANAGEMENT. A PROJECT MANAGER is generally considered to be a manager who commences with the initiation of policy, programming, design, costs, and carries through a single complete service to the client from the initiation of study to the completion of the construction work on the site. With slight variations this method has such terminology as Design-Build Projects, Turnkey Projects, Package-Builder Projects etc.

The main difference between PROJECT MANAGEMENT and CONSTRUCTION MANAGEMENT is that the Project Manager has a contract with a client and in turn employs the Architectural and Engineering Consultants to form this group, whereas under the Construction Management aspect the owner engages the Architectural and Engineering Consultants, and at the same time or shortly afterwards engages the services of a Construction Manager. The Owner forms this team usually under his own chairmanship.