Looking at the numbers, ENR's Top 100 CM-at-Risk firms had the best year in 2001, with overall revenue rising 10.8% over 2000's mark, and 12.8% domestically. This has been a long-term trend as risk-shifting by owners, coupled with the need for closer management of the overall project, has placed increasing emphasis on design-build and CM at-risk.

Part of the surge in CM at-risk even beyond that of the much-touted rise in design-build may be attributed to the move in the public sector toward alternate project delivery. "Private clients have always demanded contractor intervention from the start of the project," says Chuck Cianciaruso, senior vice president for business development at J.E. Dunn Group. "But now there is an unbelievable amount of work in the public sector where the demands are the same." He says that Dunn had a big year in 2001 but, judging from the numbers in the first quarter, 2002 will be even bigger.

 

 

In many states, enabling legislation has gone a long way to boost CM at-risk. "CM at-risk is being embraced in the Southeast and the Southwest," says Bruce D'Agostino, executive director of the Construction Management Association of America. He notes that three Atlanta-area schools systems–in the city of Atlanta, Fulton County and Gwinnett County–have about $2 billion worth of work under way or planned, and all of it is CM at-risk.

But CM at-risk in the public sector isn't limited to the big, sophisticated agencies. "On the at-risk side, we are seeing a lot of smaller cities going to negotiated CM at-risk," says Jeff Hoopes, executive vice president of Swinerton. He is seeing new opportunities for CM at-risk in Arizona now that the state has authorized alternate project delivery in the public sector. "Most of the public projects now are going CM/general contracting or CM at-risk," Hoopes says.

In some states, CM at-risk may be the only choice for alternate project delivery. "There's a handful of states where it is difficult to use design-build for most public projects," says Jeffrey Beard, CEO of the Design-Build Institute of America. "Some state procurement systems simply can't get beyond the low-bid mentality."

DBIA is pushing for equal footing for delivery systems. As part of this push, DBIA and CMAA plan to meet with the National Association of County Executives in July to get increased exposure for CM and design-build, says Beard.

Beard also says that the surge in CM at-risk is the first step for many owners toward design-build. "Some owners aren't willing to take the plunge right away," he says. "CM at-risk is a way of getting the contractor on board at an early stage. It's a way to get their toe in the water on design-build."

But not everyone is convinced that design-build is always appropriate. While Swinerton provides design-build, CM at-risk, agency CM and general contracting services, Hoopes sees CM as the best bet for the really complicated projects. "For the most complicated projects, it is probably better to bring in a CM firm early to work through the value engineering and design documents," he says. "Design-build is a tough choice for the really complicated jobs, but good where more standardized designs are involved."

The big concern is to educate owners about CM. "Not everyone can do CM at-risk," D'Agostino says. "Unless you get up-front consulting services, all you are getting is general contracting." That's why he is pleased that owners make up the fastest growing membership group within CMAA.

But much of the growth in CM at-risk is because particular markets that prefer it are particularly hot at this time. "Some of our traditional clients, like colleges, universities and hospitals, still want to go with CM at-risk," says Bob Fortune, vice president of BBL Construction Services. "Many of these clients have long-term relationships with particular architects and don't want to contract with us to supply the design," he says.

It often is this client insistence that will move a project away from design-build to CM at-risk. "Our customers typically prefer a single-source approach," says John McKenzie, vice president of construction for design-build specialist Opus Northwest. "But occasionally, a client will come in with an existing relationship with an architect, and go along with that," he says.

Some construction firms prefer to stick with CM at-risk, rather than going with design-build. "We are not seeing as much design-build as we thought we would," says Allen Rudolph, CEO of Rudolph & Sletten. "However, we are seeing a lot of design-assist, bringing the electrical and mechanical contractors in early in the process. We prefer the three-legged stool: the owner, the designer and the contractor. There may sometimes be bumps in the road, but projects work best where the owner is actively involved in the process."

The construction process has evolved over the years but the ultimate goal has not. "I've been in the business for 30 years," says Fortune of BBL. "When I look at a building, I am surprised to see that not much has really changed in the building itself. What has changed is the project delivery systems. The important thing in the whole process is that owners need to know they are getting value, no matter what the delivery system. That's what it is all about."