Construction Manager at Risk

Core components

• Two-stage engagement: Preconstruction Services Agreement (during design phase) followed by Construction Services Agreement (Guaranteed Maximum Price contract)
• Preconstruction services scope: constructability review, cost estimating at progressive design milestones (SD, DD, CD), value engineering proposals, scheduling input, trade contractor pre-qualification, materials and long-lead-item management, BIM coordination input
• Selection method: typically qualifications-based selection (QBS) with subsequent fee/price negotiation rather than low-bid (substantial contrast with DBB)
• Guaranteed Maximum Price (GMP): contract price ceiling agreed when design is sufficiently developed, with cost savings (subject to contract terms) shared, returned to owner, or kept by CM depending on contract structure
• Open-book accounting: CM's actual costs typically transparent to owner
• Self-perform versus subcontract treatment: AIA forms address whether CM may self-perform portions of the work and the conditions
• Trade contractor selection: typically competitive bidding of major trades by the CM, with owner approval rights
• Risk allocation: design risk remains with designer (architect-engineer hired by owner), construction-execution risk shifts to CM upon GMP execution, schedule and means-and-methods risk borne by CM
• AIA contract documents: A133 (CMAR with GMP), A134 (CMAR without GMP), A201 (general conditions)
• Common variations: CM-as-Agent (no construction risk, advisory only), CMAR with self-perform GC variants

Primary use case

Construction-delivery method for projects benefiting from early CM involvement, typically: complex projects (healthcare, laboratory, research facilities) where constructability input substantially improves design; schedule-critical projects where overlap of design and construction reduces total duration; projects with significant cost-uncertainty where early estimating informs design decisions; public-sector projects with CMAR enabling statutes (varies by state) — particularly state DOTs, K-12 school districts, higher education, healthcare authorities; private-sector commercial projects, corporate facilities, industrial projects; compatibility with Lean Construction practices (Last Planner System, Target Value Design, big-room collaboration); academic and professional reference in construction management, project management, and public-procurement literature; growing use through 2010s-2020s as alternative-delivery methods displace DBB market share.

Common criticisms

• CMAR's preconstruction-services compensation has been substantially debated — separating preconstruction-services compensation from construction-phase compensation creates incentive complexity, with concerns that CMs may inflate construction-phase pricing to compensate for preconstruction services or vice versa, and preconstruction-services-only engagement (without subsequent construction commitment) producing limited incentive for substantive constructability input
• the GMP setting timing involves substantial design risk — if GMP is set too early (before design is sufficiently developed), CM faces substantial scope-uncertainty risk and may include large contingencies
• if set too late, the CMAR's overlap-design-and-construction benefit is lost
• subcontracting and trade-selection processes can be argued to lack the competitive-bidding discipline of DBB, with owners depending on CM's good-faith trade selection rather than direct competitive process
• open-book accounting requirements vary across CMAR implementations and the practical transparency of CM costs is sometimes contested in dispute
• the qualifications-based selection method (vs. low-bid) has been substantively debated in public-sector procurement — supporters argue QBS produces better project outcomes while critics argue it reduces price-competitive pressure and enables favoritism
• CMAR enabling statutes vary substantially across US states, producing fragmented procurement landscape for multi-state public-sector owners
• interaction with prevailing-wage and minority-business-enterprise (MBE) requirements in public projects produces compliance complexity
• sole-source selection concerns when public agencies have established CM relationships
• documented project-cost-overrun and schedule-overrun rates for CMAR projects are mixed in empirical research, with some studies showing CMAR outperforming DBB on schedule and others showing limited or no improvement
• the growth of Design-Build and IPD alternatives produces ongoing competitive pressure on CMAR's market share in commercial construction.