Construction Management at Risk Contract: An Overview
Construction projects are complex and involve many moving parts, which can lead to delays, cost overruns, and other issues. To mitigate these risks, many construction projects use a construction management at risk (CMAR) contract. This article will provide an overview of what a CMAR contract is, its benefits and drawbacks, and how it differs from other types of construction contracts.
What is a CMAR Contract?
A CMAR contract is a construction project delivery method in which the owner hires a construction manager to act as an advisor throughout the project. The construction manager provides input on design, cost, and scheduling, and is responsible for managing the project from start to finish. The construction manager also assumes some of the risks associated with the project, such as cost overruns and delays.
Benefits of a CMAR Contract
There are several benefits to using a CMAR contract for a construction project. First, the construction manager is involved in the project from the beginning, which means they have a better understanding of the project`s goals, timeline, and budget. This can lead to a more streamlined construction process, with fewer delays and cost overruns.
Second, because the construction manager assumes some of the risks associated with the project, they are incentivized to work efficiently and effectively to keep costs under control. This can be especially beneficial for owners who are concerned about project cost.
Finally, the CMAR contract allows for a collaborative approach to construction, with the owner, architect, and construction manager working together to ensure the project is completed on time, within budget, and to the owner`s satisfaction.
Drawbacks of a CMAR Contract
While there are many benefits to using a CMAR contract, there are also some drawbacks to consider. One potential drawback is the increased cost of hiring a construction manager. Because the construction manager assumes some of the risks associated with the project, they typically charge higher fees than a traditional contractor.
Another potential drawback is the potential for conflicts of interest between the construction manager and the owner. Because the construction manager is responsible for managing the project, they may be tempted to make decisions that benefit them, rather than the owner.
Finally, because the construction manager assumes some of the risks associated with the project, they may not be as willing to take on complex or innovative projects. This can limit the owner`s options when it comes to selecting a construction method.
How a CMAR Contract Differs from Other Contracts
A CMAR contract differs from other construction contracts in several key ways. For example, a design-bid-build contract involves the owner hiring an architect to design the project, then hiring a contractor to bid on and build the project. In contrast, a CMAR contract involves the owner hiring a construction manager to oversee the entire project, from design to construction.
Another example is the design-build contract, which involves the owner hiring a single entity to both design and build the project. In contrast, a CMAR contract involves the owner hiring a construction manager to oversee the project, but hiring separate entities for design and construction.
A CMAR contract can be an effective way to mitigate the risks associated with construction projects. By hiring a construction manager to oversee the project, owners can ensure that the project is completed on time, within budget, and to their satisfaction. However, there are also some drawbacks to consider, such as the increased cost of hiring a construction manager and the potential for conflicts of interest. Owners should carefully consider the benefits and drawbacks of a CMAR contract before deciding whether to use it for their project.