A Look at a Construction Manager at Risk Arrangement

construction manager at risk

Construction management firms generally hire the architect, engineer and other sub-consultants to oversee the work on their projects and design and deliver the jobs in a timely and professional manner. The firm can be held accountable if any of the individuals that they hire doesn’t perform up to standards. While general contractors aren’t engaged in the designing of the project, they are still likely to be held liable for the actions of those under their authority.

Construction manager at risk relates to the degree of responsibility for reviewing or overseeing construction services. A construction manager (CM) is guaranteeing services will be performed at a guaranteed maximum price (GMP) and takes responsibility for any cost overruns. Therefore, the scope of the work performed can be tailored to meet the needs of different owners depending on the type of project and delivery method.


More design professionals offering CM services

While more architects and design professionals are throwing their hat into the ring, determining professional and contractor liabilities associated with these constantly changing services are somewhat of a concern. Those familiar with construction management at risk issues are constantly looking at ways of managing those risks in order to avoid losses resulting from poor judgment or unrealistic goals.

The construction team consists of three primary players. There is the owner, the design professional, and the construction manager. The CM constructor’s duties include being responsible for tasks of management as well as construction, holding all subcontracts for construction, and taking responsibility for the entire construction project, from permits and bids, to the job itself. In addition, the CM makes a promise to the owner of a guaranteed maximum price, while assuming the same risks as a general contractor, which includes operating a safe job site.

One concern that your client, operating as a CM should have, is understanding that he or she has a substantially greater risk of being cited for job site safety violations by OSHA. AS a CM they generally assume responsibility for developing or reviewing job site safety programs or procedures of contractors, monitoring all safety plans, ensuring that the proper training has taken place, along with any other safety requirements.