Construction Management

• Construction Management Basics
• Selecting a Construction Manager
• Prequalification
• Permits
• Procurement and Bidding
• GMP Negotiation
• Contracts and Administration
• Insurance, Surety, and Safety Management
• Closeout
• Claims and Disputes
• Other Considerations
• Summary
• Footnotes and References

Construction Management Basics

Historically, college and university owners had a limited role in managing their campus projects. Usually an inspector or clerk of the works was assigned to monitor and inspect the work and to serve as a liaison between the contractor and the campus. However, as campus projects became more complicated and challenging, colleges and universities realized that a more professional campus manager was necessary.

In the 1970s, many large general contractors and architectural/engineering firms recognized the growing need for professional construction managers (CMs) and began offering construction management services. Since that time, the market for construction management services has experienced continued growth and demand. Many colleges and universities have turned to outside construction management firms to augment their campus facilities' staff. Others, usually those with a steady or large workload of projects, have established their own construction management departments.

Definition of Construction Management

The Construction Management Association of America defines construction management as follows: “Construction management is a professional management practice consisting of an array of services applied to construction projects and programs through the planning, design, construction and post construction phases for the purpose of achieving project objectives including the management of quality, cost, time and scope.“¹

Construction management is a discipline and management system specifically created to promote the successful execution of capital projects for owners. These projects can be highly complex. Few owners maintain the staff resources necessary to pay close, continuing attention to every detail, yet these details can "make or break" a project. A professional CM can augment the owner's staff with preplanning, design, construction, engineering, and management expertise that can ensure the best possible project outcome no matter what type of project delivery method is used.

Agency construction management is a professional service that can be applied to all delivery systems where the CM acts as the owner's principal agent in the management of a construction project or program, where the CM is responsible to the owner for managing the planning, design, construction, and postconstruction phases, or portions thereof. The CM represents the interests of the project in dealings with other construction professionals, and with other private and public entities, and has the following duties:

• Determine optimum use of available funds.
• Control the scope of the work.
• Schedule the project.
• Determine optimum use of design and construction firms' skills and talents.
• Avoid delays, changes, and disputes.
• Enhance project design and construction quality.
• Determine optimum flexibility in contracting and procurement.

Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners from construction management.

Most large institutions have established construction management departments that deliver services similar to those of outside construction management firms. In addition, a trend toward in-house construction management has developed among smaller schools that recognize that funding a construction management staff has a favorable payback in terms of project cost avoidance and/or cost containment.

Institutions should consider outside construction management firms if they undertake an unusually large and/or complex project, lack the resources to establish their own construction management department, or have significant variability in their construction workload. The process for selecting a CM is covered later in this chapter. The remainder of this chapter will focus on the role of a college or university's staff in managing contracts and construction projects. The key personnel are defined as follows:

Construction manager: Contractually referred to as the owner's representative, this individual has primary day-to-day project management responsibilities during construction. In some cases the CM is also responsible for the design phase of the project and thus has responsibilities throughout the project life cycle. In other cases, the CM works for an organization or unit specifically charged with the management of contract construction work.

Construction contract administrator: This individual, usually the construction management department head or facilities director, has administrative responsibilities over the entire construction program.

Architect/engineer: This is the design consultant responsible for preparing plans and specifications and interpreting these documents during construction.

The profiles and duties of these positions vary among institutions. For example, at smaller schools one person may perform the roles of both the CM and construction contract administrator. At other institutions, the architect/engineer may serve as the owner's representative, with a more active role in managing day-to-day construction activities.

In fact, the American Institute of Architects (AIA) standard construction contract documents identify the architect as the owner's representative. If institutions choose to shift these responsibilities to their own CM, they must be careful where to draw the lines of authority. Because the architect/engineer is performing a professional service requiring a license based on years of schooling and professional practice, the CM should seek direction from the architect/engineer on all design clarifications or interpretations. The seal on the drawings and specifications places a duty on the architect/engineer that should not be breached by the CM or construction contract administrator.

The Construction Manager

In an organization in which a project manager retains primary responsibility for the design phase of the project and a separate individual serves as the CM, the roles of project manager and CM need to be clearly defined and delineated. The client and the architect/engineer must understand the respective roles and expertise of both the project manager and CM to establish an effective working relationship with each.

The project manager and the CM manage two discrete phases of the project. The baton of project management should pass to construction management somewhere between bid opening and contract award. This transition should not be viewed as a complete handoff of project responsibilities, but rather as an exchange of primary and secondary management roles.

The CM should be involved during the design phase to help influence the construction phase that is to follow. The project manager should be involved during construction to monitor progress toward the established program and design objectives, and to assess the quality of the design. The degree to which the project manager remains involved during construction will vary from institution to institution, but simplicity is preferred. Focusing the client and architect/engineer on one project manager, instead of two, during construction will yield a more efficient project management process.

CMs should be empowered with a broad range of project responsibilities. Empowering these individuals with the authority to act and make project decisions for the institution not only will give them ownership of the project but also will ensure that project decisions are timely and conclusive. Perhaps nothing threatens the progress of a campus construction project more than having to wait for bureaucratic or committee-based decisions.

To enhance their effectiveness in managing the project, CMs should be the central contact point for all project communications during the construction phase. All communications between the contractor and architect/engineer should pass through the CM. Just as important, any communications from the campus client, future occupants, or other involved campus departments also should flow through the CM.

CMs should be given responsibilities and authority that position them as equal peers and partners with the project managers of contractors and architect/engineer firms. If these powers are weakened or restricted, owners will become bystanders while the contractors and architect/engineers manage the project on their own terms. An effective way to establish the authority of CMs is to make them the first level of approval on contractor and architect/engineer billings during construction.

The CM's responsibilities should be broad and should cover all aspects of construction contract administration, including the following:

• Review of contract documents during the design phase
• Negotiations, where applicable, with the contractor during the contract award phase
• Management of the project budget
• Management of the project schedule
• Inspection of the work for adherence to the contract
• Liaison between the architect/engineer, contractor, campus client, and other campus departments
• First-line negotiator of contract disputes

Institutions will have different policies governing the extent of authority delegated to the CM. However, establishing the authority of CMs to make decisions in the field, within established limits, will enhance their effectiveness in meeting the project goals and objectives.