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

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
Can't Learn to Swim Without Getting Wet
Most everything we learn to do in the field for construction comes down to hands-on practice. When we move people into supervision and management roles we often forget the need to truly practice hands-on to get great at doing something.
Related Article
Profitability and Predictability
Contractors who are consistently improving their scoreboard, including profitable growth, focus on making the behaviors and actions that LEAD to profitability consistent habits.
Related Article
Building Your Target Talent Model
Talent is the most constrained resource in the construction industry through at least 2030. With the industry's growth outlook, the contractors with the best Talent Value Streams (TVS) will dramatically outperform. Sadly, there will also be failures.
Related Article