Construction Management – What Is It and Why Use It?

Construction management, (CM), can take many forms and is used for small projects as well as very large projects. Construction Managers can take the place of a general contractor, a sub-contractor, or work with these people to build something large or small. Some construction management firms will also provide architectural or engineering services in addition…

Construction management, (CM), can take many forms and is used for small projects as well as very large projects. Construction Managers can take the place of a general contractor, a sub-contractor, or work with these people to build something large or small. Some construction management firms will also provide architectural or engineering services in addition to the management of the construction. Typically construction managers are paid by, and represent, the owner of the property where the construction is about to take place. This is what they do. The construction of a project will usually follow along these lines:

  1. Some money to get the ball rolling
  2. Have a place to build
  3. Rough budget estimates
  4. Preliminary engineering if needed
  5. Architectural or rough drawings
  6. Final engineering
  7. Obtain estimate of costs
  8. Seek financing if needed
  9. Get permits
  10. Engage general contractor and / or subcontractors
  11. Establish building schedule or completion times
  12. Refine cost estimates
  13. Start construction
  14. Monitor progress and quality of work and materials
  15. Make progress payments to all subs
  16. Finish project and obtain a certificate of occupancy (CO)

The Construction Manager can help you in most of these areas with the possible exception of, “some money to get the ball rolling.” And I would not rule that out completely. The CM will have a contractual relationship with the owner to oversee and, in some cases perform, most of the above tasks. The amount of money charged to the owner will depend upon what parts of the above mentioned work the CM must complete. Typically the CM will charge between 4% and 6% of the total construction costs should they be required to manage, and have input into, all of the construction related tasks. Basically the CM will keep the owner informed of needed construction sequences and co-ordinate the various contractors including the architects and engineers into a smoothly functioning group who will operate in a cohesive manner. The CM will closely observe the progress of the construction, the quality of material and the workmen-ship correcting any deficiencies as they occur. That is what the general duties of the CM will be. Now, why would you want to use a CM rather than letting the general contractor perform most of these duties. Easy answer, “COST.” Money, Dinero. The general contractor will usually charge 20% to 30% of the construction costs as a markup to the owner for profit and overhead. So do the math on a $ 100,000.00 construction project. 5% fee for construction Manager $ 5,000.00 20% fee for General Contractor $ 20,000.00 I call that a significant savings that could have been used to upgrade your project or kept in your bank account. This is why people use Construction Managers.