What is CMAR? Construction Manager at Risk Explained

The construction industry is constantly evolving, and so are the methods used to deliver projects efficiently. One such method making waves is Construction Manager at Risk (CMAR). In fact, according to industry trends, alternative delivery methods like CMAR now account for a significant portion of large-scale projects, reflecting a shift away from traditional approaches.

But what exactly is CMAR, and why are more project owners turning to it? Let’s explore how CMAR works, its key advantages, and when it’s the right choice to ensure your project’s success.

What is Construction Manager at Risk?

Construction Manager at Risk (CMAR) is a project delivery method that focuses on teamwork, risk control, and cost management. In this approach, the construction manager is brought on board early in the project, often during the design phase. Unlike traditional methods, where contractors are only hired after the design is complete, CMAR integrates the construction manager into the planning process from the start.

If you’re curious about how CMAR compares to other approaches, check out this comprehensive Project Delivery Methods guide to find the best fit for your project needs.

Core Elements of CMAR

To understand how CMAR works, it’s important to break it down into its three main elements: pre-construction services, the Guaranteed Maximum Price (GMP), and collaboration.

Pre-construction Services

The construction manager joins the team early, often during the design phase. Their role is to guide the project owner and designer on budgeting, scheduling, and construction strategies. They also help identify risks and propose solutions before construction begins. This proactive approach reduces delays and unexpected costs.

For example, in a recent hospital construction project, the CMAR approach allowed the team to identify potential bottlenecks in the procurement of specialized equipment. By addressing these challenges early, the project avoided delays that could have impacted the opening timeline.

Guaranteed Maximum Price (GMP)

The GMP is a financial safeguard. It’s the maximum amount the project will cost, as agreed between the owner and the construction manager. If costs go over this limit, the construction manager absorbs the difference. This ensures budget predictability for the owner while pushing the construction manager to keep expenses in check.

According to data from the Construction Industry Institute (CII), projects using GMP agreements experience an average reduction of 15% in cost overruns compared to traditional fixed-bid projects.

Collaboration

Collaboration is the foundation of CMAR. The project owner, designer, and construction manager work as a unified team from the start. This teamwork fosters open communication, quicker decisions, and smoother problem-solving, all of which contribute to a successful project.

For instance, during the design phase of a large-scale infrastructure project, the CMAR model facilitated weekly coordination meetings between stakeholders. This proactive approach minimized miscommunications and allowed for real-time adjustments to the design.

These elements—early planning, cost control, and teamwork—make CMAR a reliable and effective choice for complex projects.

The CMAR Process: Step-by-Step

The CMAR process simplifies project management by fostering collaboration and proactive planning. It unfolds in three essential stages: selecting the construction manager, planning during pre-construction, and managing the construction phase. Each step is critical to delivering a smooth, cost-effective, and successful project.

Step 1: Hiring the CMAR

The first step in the CMAR process is choosing the construction manager. This is a crucial decision since the CMAR plays a central role in the project.

Owners can select a CMAR in two ways. One option is a qualifications-based selection, where the decision is based on the construction manager’s experience, skills, and past performance. The other is competitive bidding, where multiple candidates submit proposals, and the choice is based on cost and qualifications. Finding the right CMAR ensures the project starts on the right foot.

Step 2: Pre-construction Phase

Once the CMAR is on board, they begin working closely with the project owner and designer during the preconstruction phase. This stage involves creating accurate budgets, developing schedules, and assessing the feasibility of the project. The CMAR also conducts value engineering, offering cost-effective solutions without compromising the project’s goals.

Risk assessment is another critical task in this phase, where potential challenges are identified early, and strategies are developed to handle them. This collaborative planning sets the stage for a smooth construction process.

Step 3: Construction Phase

The construction phase is where the plan comes to life, and the CMAR takes the lead. They oversee all construction activities to ensure the project stays within the Guaranteed Maximum Price and on schedule.

The CMAR also manages subcontractors, coordinates their efforts, and resolves any issues that arise. Their role is to keep everything running smoothly, from start to finish, ensuring the project is completed on time, within budget, and to the desired quality standards.

Benefits of Using CMAR

After understanding the CMAR process, it’s easy to see why this approach is gaining popularity. With its focus on collaboration, cost control, and risk management, CMAR delivers a range of benefits that set it apart from traditional project delivery methods.

Stronger Project Alignment

CMAR fosters a unified approach to project planning and execution. By bringing the construction manager on board early, all stakeholders—owners, designers, and contractors—align their goals and priorities. This shared focus creates a streamlined process where everyone works toward the same outcomes, reducing confusion and ensuring smoother coordination.

Cost and Time Savings

CMAR helps save both money and time by addressing potential issues early. During the preconstruction phase, the construction manager identifies risks, offers cost-saving alternatives, and ensures the design is practical and efficient. This proactive approach reduces costly change orders and delays, keeping the project on track and within budget.

Risk Mitigation

The Guaranteed Maximum Price (GMP) in CMAR protects the project owner from unexpected costs. If the project exceeds the agreed-upon price, the construction manager absorbs the extra expenses. This arrangement shifts much of the financial risk to the construction manager, giving the owner peace of mind and budget stability.

A study from FMI Corp highlights that CMAR projects typically experience fewer disputes related to cost overruns compared to traditional delivery models.

Improved Quality Control

By involving the construction manager early, CMAR ensures that quality is a priority throughout the project. The manager reviews designs, materials, and construction methods to ensure they meet the project’s standards. This attention to detail minimizes errors and improves the overall quality of the finished product.

Final Thoughts on CMAR in Construction

Construction Manager at Risk (CMAR) is an innovative project delivery method that brings significant advantages to the construction industry. By integrating the construction manager early in the design phase, CMAR fosters collaboration, mitigates risks, and ensures better cost control. While it’s not without challenges, such as balancing relationships and negotiating contracts, its proactive approach and focus on teamwork make it an excellent choice for complex or high-stakes projects.

Whether you’re a project owner, designer, or contractor, understanding the CMAR process can help you determine if it’s the right fit for your next project. By prioritizing communication, selecting the right construction manager, and leveraging early collaboration, you can unlock the full potential of this effective delivery method.