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The Trusted Alternative for Construction Contracts

September 6, 2017

By Brad Barickman, RJM Construction

Although not new in the construction industry, a growing trend in Minnesota over the last 10 years has many cities teaming up with Construction Managers to construct their projects. So why are cities such as Andover, Chanhassen, Chaska, Coon Rapids, Eden Prairie, Edina, Elk River, Maple Grove, Medina, Plymouth, Rogers, St. Louis Park, Shakopee, Shoreview, Woodbury, and Worthington all choosing to deliver their projects with a Construction Manager (CM)? The easy answer is they want a trusted partner that can aid in the navigation through highly-complicated construction projects and they want to save money while doing so.

It is important for consumers to understand what they are getting for their money and what are the differences and benefits of delivering a project under the CM model.

Two Contract Methods

There are two methods in which a construction management contract can be delivered: Construction Management Agency (CMa) and Construction Management at Risk (CMr). Both methods have many similarities as well as differences. 

In both scenarios, the CM offers multiple pre-construction services for fees that are typically the same or less than fees in a traditional general contract. Both methods require the same bidding process, which is administered by the CM to ensure all state statutes for bidding and contracting are met. The CM drafts the bid packages prior to bid day and they qualify each bid received. The key difference between the two delivery methods begins after contracts have been awarded by the city council. 

In the CMr delivery, another motion and action are passed that reassigns all awarded contracts to the CM. The CM then becomes contractually responsible for the performance of all contractors on the project. There is a single contract between the city and the CM, which allows the city to focus on their daily responsibilities and not feel the burden of administering multiple contracts, payment applications, lien waivers, warranties, etc. A good CM will act as an extension of a city’s business. 

Furthermore, there could be a potential savings for the city under the CMr method by reducing the need to utilize a third-party representative to assist in management and administration of a general contracting project. 

Ideal CM Projects

Construction Management may not be right for every project. The larger and more complicated projects, such as large facility additions, multi building complexes to name a few, tend to be ideal Construction Management candidates. 

For example, RJM recently completed the Shakopee Community Center expansion project, which utilized the CMr method. The 13-month project was completed in multiple phases, beginning with construction of a two-sheet ice arena. Renovations to the existing facility included changing the current ice arena to an aquatic center, enhancing the fitness center and studios and adding an indoor play area, senior lounge and large community room.

A CM’s role during pre-construction on a project like this is invaluable, working through constructability issues, analyzing cost and benefits, and creating a construction schedule and that efficiently phases the work.

Your Next Project

I would encourage cities to take an open-minded approach on their next project and seriously consider the benefits Construction Management can offer, such as pre-construction services, accelerated construction schedules, and having an industry expert partner on your team through the entire process. You will no longer have to worry about your facilities being built on time and on budget, allowing you to focus on your community.

Negotiated GC, Design Build, Construction Management Process

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