The construction process in the past couple years has been fraught with risk for owners and contractors. Materials and labor price escalation has sent shock waves through the industry. This has led owners to look for new means of project delivery to manage, if not transfer, risk. And many are turning to construction management on an at-risk basis.
However, CM-at-risk doesn’t mean that CM firms are willing to shoulder unreasonable risks. “Our model is fairly consistent,” says Mark LaVoy, executive vice president and South region manager for Hunt Construction Group. He says that requiring a guaranteed maximum price (GMP) early is not a good idea. “We like to wait until the bid packages are issued and construction documents are 100% complete,” he says. That’s when prices can be locked in. He notes that some owners prefer a GMP as early as when the design documents are complete, “but in those cases, you end up with a lot of narrative describing the contract assumptions because there are so many uncertainties at that point.”