Masonry Magazine September 2002 Page. 39
Construction Management
The construction management (CM) approach involves all phases of the building process including bid solicitation, job management and accounting. There is generally a closer alliance between the CM and the owner than evident with the GC and owner. Of course, this type of relationship generally requires the CM to gain the owner's trust, a quality that often is only obtained after years of interaction and positive experience between the two.
In general, the CM doesn't keep many, if any, full-time, permanent tradespeople as employees. Virtually all of the hierarchy below the CM's administration level is made up of independent contractors and suppliers. The administration of employee benefits is avoided in this way, but it could be argued that the CM loses an element of control over the construction process from not having developed closer ties and loyalties with the workers.
The CM seldom becomes involved in the classic competitive-bid scenario where a lump sum price if offered to the owner for the complete project. If there is competition, it's generally between the fees, often a percentage above the direct cost for the project, of the competing CM's.
The CM works directly with each sub-contractor and supplier-and even with a general contractor to come up with value-engineering ideas that maximize cost savings to the owner. Individual contracts and purchase orders are issued to all of the separate trades and suppliers, and the CM then oversees their work throughout the course of construction.
The conventional owner-wisdom is that the mark-up taken by the GC on sub-contractors and suppliers is avoided through the use of the CM, but in actual practice, this likely isn't the case. The net cost to the owner above and beyond the actual direct project cost would need to be considered to properly compare the two.
If the CM's overall fee is the same as the GC's profit plus overhead, which includes the sub-contractor and supplier mark-ups, there will be little saved by going with the CM. Basically, it turns into the same old shell-game of "where do we hide the numbers now?"
Architectural services may or may not be supplied by the CM. The CM may even have architects and engineers on staff; otherwise, the owner may bring his or her own architect to the table.
CM's are generally used for larger dollar-volume construction projects where the economics of incorporating a CM into the mix tends to make more budgetary sense.
Conclusion
THE MAIN DIFFERENCE then between the GC and CM appears to be more a product of administrative structure and employee relationships than about the actual techniques of the construction project itself. In fact, within any given locale, it's likely the same mason and electrician will be used regardless of whether the lead player is a GC or a CM. This way, the final end products, regardless of project leader, would end up being virtually identical to one another.
That being said, an owner's reason for choosing between the GC and the CM often may have more to do with the quality of the individuals running the firm and the owner's experience with that firm, and less to do with the structure of the firm itself.
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Design by Drafting and Design Solutions Nov 2001