Construction Management is a specialized management practice consisting of an arrangement 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 and time. It is also a faster pathway procurement method which enables work to begin on the early stages of construction while the design and documentation of later trade packages are being finalized. For instance, a client engages a construction manager to organize, let and supervise the trade packages. Construction management is useful in unstable economic and industrial climates by helping to reduce the time and cost of project delivery. Clients can change the specifications of later trade packages according to changing project requirements.
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Construction management is a discipline and management system specifically created to promote the successful execution of capital projects for owners. These projects can be complicated. The construction manager seeks to achieve a smooth inter face between trade contractors. This is an important factor as the successful completion of one trade package is to a large degree of reliant upon the satisfactory implementation of earlier or related packages. The construction manager must plan the works to ensure continuity and avoid possible delay claims against the principal.
Construction management is perhaps best summed up as the procurement route whereby designers design, trade contractors detail and deliver their packages, and where the construction manager manages the process, leaving the client to lead and accept the risk on a project for which they are ultimately responsible. The situation, responsibilities and risks may vary significantly between construction managers.
The Advantages of Construction Management
The implementation of these management activities turns the planning, design and construction process into one which generates value and maximizes control. These activities add predictability to the outcome of the project from the planning phase to the completion of construction. A more professional Service is provided. Construction Management (CM) is recognized as a “professional service”. Therefore, even in public projects, the owner has the right to select a CM firm based on the company reputation and personal qualification. Responsibility is also stand an important issue in construction management. A construction manager is often selected early in the budget development process before the design team is selected to aid the owner in establish a budget and schedule that will be used to protect all financing, and then secure suitable and competitive design proposals.
In addition, it also improves the concern between the contractor and the owner. Generally, a general contractor typically is less motivated to work with the owner to improve quality and costs, and is more focused on maximizing their profit. A greater teamwork is formed in this project. Normally, the owner selects the team such as project manager to represent the owner under the construction management based upon their track record. The relationship of a construction manager with a client is usually as an addition of the client’s staff hired for the purpose of promoting project teamwork besides cost, schedule and quality control on the project. Greater staff flexibility is also one of the advantages of construction management. For instance, a construction manger can give an owner greater flexibility in dealing with income and relocation of workers within the owner’s staff.
The implementation of construction management improved the cost control and provides greater reliability and creativity. A construction manager typically provides cost estimating during the initial owner budgeting process, and further cost estimating and value engineering during the design phase of a project, costly and time consuming. Value engineering and cost reduction ideas are identified when they can still be implemented into the design. It also improved the communication within the team. For example,that construction managers often work for owners on subsequent projects, lessons learned as a team on one project are applied to future work.
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Disadvantages of Construction Management
While Construction Management may be beneficial in some circumstances, owners should recognize that it may also have some disadvantages. The most significant disadvantage of many Construction Management contracting arrangements is that significant portions of the total services for which the Construction Manager is remunerated are not subject to competitive bidding. Consequently, it is much less likely that the Owner will be charged the lowest possible ‘market rates’ for these services. A second commonly seen disadvantage is the open-ended nature of many Construction Management contractual arrangements, which unnecessarily expose the Owner to the risk of unanticipated cost increases. Depending on how the Construction Manager is to be remunerated, there may be a built-in disincentive for the Construction Manager to minimize costs (e.g. if there is a cost plus a percentage component in the Construction Management services contract). There can also be a built-in disincentive to complete the work as quickly as possible (e.g. if the Construction Manager is paid additional money for additional time spent on the project). Contractual arrangements that may have this effect should be avoided.
Alternatively, under CM as Constructor, and especially when no fast-tracking is intended, these concerns can be mitigated by establishing a guaranteed maximum price, or by converting the Construction Management services contract to a stipulated price construction contract prior to the commencement of construction. Unless and until this happens, Owners should be aware that the Construction Manager is not contractually committed to the construction cost estimate and that there exists the potential for significant unanticipated cost increases. (This may be somewhat offset however by the Construction Manager’s desire to maintain a reputation for meeting budgets.) While the security provided by a guaranteed maximum price, or a stipulated price, is often attractive to Owners, it should be borne in mind that this security comes at a price, since the guaranteed maximum price or stipulated price will invariably include a ‘cushion’ to cover risks which may or may not materialize.
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