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.

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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

CM at Risk
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....

CM at Risk
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....

Levels of the Value Stream
For contractors to unlock maximum value during business development, preconstruction and project execution it is critical to understand the broader value stream of the project beyond their scope. 10 levels of granularity in the construction value stream:
Winston Churchill - Success, Failure and Enthusiasm
When there are no clear answers, it is critical to experiment, learn, and rapidly scale up those things that work. "Success consists of going from failure to failure without loss of enthusiasm." - Winston Churchill
Planning is Useless
Planning how to build a project and planning how to build a contracting business are VERY different and must be approached with a different mindset. When planning ‘how’ to build a project the ‘what’ is mostly known.