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
Retirement Onboarding - Over Involvement
As construction business owners go through succession and their own retirement onboarding, it is important that they stay involved in the business and industry at some level.
Related Article
Be Specific About Problems
The business of construction is filled with constant problems. It’s not that great contractors don’t have problems, it's that great contractors have learned how to troubleshoot first, which allows them to learn from their problems faster.
Related Article
Laws Control the Lesser Man
Growing construction businesses need processes and accountability systems the same way society needs laws, police, courts and jails. As a contractor starts growing leadership needs to put some processes in place to keep things running smooth.
Related Article