Construction Management (Agency): CM as Advisor
In the form of construction management known as agency, the owner selects a construction manager, as well as an architectural firm, who then work together as a team to advise, coordinate, and inspect during project design and construction. Contractors are selected through hard, select, or negotiated bids.
Typically, owners pay construction management firms a fee to act as their agents or advisors for a construction project.
Contractor Selection and Added Services
The construction management firm guides in the evaluation and selection of a general contractor or subcontractors, as well as advising on the construction process, feasibility, and possible cost and time savings through value engineering and other analysis.
If a general contractor is hired, the owner signs an agreement directly with the general contractor. If no general contractor is retained, then the owner contracts directly with subcontractors.
Owner Advantage #1: Save Money
- The construction management firm provides input on cost during the design phase, allowing stakeholders to evaluate the cost of various designs during conceptual development.
- Because people are working as a team, professional services fees tend can be more effectively managed and determined early in the process. Professional services include architectural and engineering fees, contractor fees, and legal fees.
- Construction costs are minimized, thanks to the construction manager’s input on the effectiveness of the means, methods and techniques to be employed during construction.
- If the owner contracts directly with the trade contractors, then the owner saves the fees and markup associated with the general contractor.
- The fee for the construction management firm is clear and determined early in the process.
Owner Advantage #2: Save Time
- Fast tracking and a reduced schedule are possible, because construction activities can begin before all aspects of the design are completed.
- Project completion dates are realistic and less likely to be delayed.
Owner Advantage #3: Get Better Service
- The owner can benefit from special services: feasibility study, life-cycle cost analysis, and value engineering.
Owner Advantage #4: Experience Better Relationships Through Teamwork
- Stakeholders in the process work together as a team to complete design and construction for the benefit of the owner.
- Stakeholders produce better results thanks to the team approach to completing the project.