Project Delivery - CM Agency or Multi-Prime

Project Owners can minimize the markups for overhead and profit (OH&P) by contracting directly with the specialty contractors and hiring a Construction Management (CM) firm to work as their agent.

D. Brown Management Profile Picture
D. Brown Management
January 13, 2019 2 minute read
Share

This project delivery method is called CM Agency or CM Multi-Prime.

CM at Risk: Project Delivery Methods - Definition of CM Agency and pros and cons.

The role of the CM is expected to be the same as the CM at Risk method but without direct ties to the contractors. This eliminates conflicts of interest for the CM with the intention of allowing the CM to act 100% for the benefit of the project owner.  

While the OH&P savings can be substantial and the conflict of interest concern for the CM role is minimized, there are downsides that must be weighed to ensure this delivery method is best for the project.  

  • The CM does not have the financial or other risks of construction, which are all passed directly to the Project Owner. This makes the selection process for the right CM firm very critical.
      
  • Between no early involvement of key specialty contractors and the CM not having the financial risk of financial overruns against a Guaranteed Maximum Price (GMP) can lead to change orders and schedule delays similar to the Design-Bid-Build method. 
Project Delivery - CM Agency or Multi-Prime
The preferred project delivery method. There is a reason 100 of ENR's Top 400 General Contractors use CMAR as the project delivery method for over 75% of their work. Leverage CMAR as part of your growth strategy....
Previous Next Go To Series
Related Insights Series
Project Delivery - CM Agency or Multi-Prime
The preferred project delivery method. There is a reason 100 of ENR's Top 400 General Contractors use CMAR as the project delivery method for over 75% of their work. Leverage CMAR as part of your growth strategy....
Previous Next Go To Series
Related Insights Series
Management System Improvements (4 Interlinked Phases)
Many improvements fall short of expectations because steps are skipped in the earlier phases. Following these four phases will result in faster overall adoption of the changes, better outcomes, and most importantly, development of the team.
Related Article
Lean Principle - Value Stream
A contractor’s value stream is every step required to take raw materials and information then deliver a completed project to the waiting hands of a customer. Deep understanding of this value stream is the foundation for major productivity improvements.
Related Article
TOOL: Leader Standard Work (LSW) Template for Field Managers
Excel format that you can use to standardize work across your field managers and synchronize that work internally and externally for optimal effectiveness. This tool will help develop your team faster and deliver projects more consistently.
Related Article