Construction Manager at Risk (CMAR) projects allow GCs to be involved in design and preconstruction to help prevent delays and unnecessary changes during construction. Moreover, construction risk management and risk mitigation takes priority from the start. But to successfully deliver CMAR projects, you need strong preconstruction processes.
Here are 5 steps to help general contractors master preconstruction and set your CMAR projects up for success.
1. Establish your value and set expectations in your proposal
Laying the groundwork for successful CMAR projects starts before you win the work—it starts when you respond to a request for proposal (RFP).
Owners need to know that you can manage their budget while contributing to the project’s design and functionality. So, when meeting with owners and architects, ask questions about the project’s vision. Reflect that vision in your proposal to establish your value and set your contracting firm apart from the competition.
Your proposal should also define your approach. Be explicit about how often and how long your meetings will be. Provide details on the number of pricing scenarios and design changes included.
The key to exceeding expectations is to set them upfront.
Create precise and effective GMP proposals with RedTeam Flex
With construction management software like RedTeam Flex you can negotiate Guaranteed Maximum Price (GMP) proposals. Our software allows for highly configurable proposal forms, enabling you to detail negotiated rates and unit prices.
This allows you to set clear expectations from the outset and becomes particularly useful when addressing change orders downstream. Plus, all cost and estimate data included in your proposal seamlessly transitions from bidding to construction management. This maintains consistency and clarity throughout your project lifecycle.
2. Optimize subcontractor selection for CMAR projects
Work with the owner and design team to establish a list of trusted subcontractors early in the project. (The earlier you create the list, the more the subs can inform design decisions.) A collaborative approach starts building a culture of teamwork and also widens your pool of qualified vendors.
Once you have the list, create detailed bid packages. Include important details like:
- Scopes of work
- Insurance stipulations
- Safety protocols
- General requirements
- Bidding guidelines
Then, set parameters to level each bid. Pay close attention to included and excluded scopes of work, to choose the subcontractors who can best work to your terms.
Streamline bid management in RedTeam Flex
RedTeam Flex simplifies the process of requesting, managing and comparing bids. Bid packages allow multiple cost codes, so vendors can bid on specific items, the full package or even add items outside of scope as part of their bid.
Bid leveling functions compare vendor quotes side-by-side and automatically evaluate bid scope overlap. This provides you with an “apples to apples” comparison in a fraction of the time it takes to do so manually.
3. Include all general conditions in your initial GMP
You need to reflect the general conditions for the total project in your preliminary GMP accurately. Here’s why:
Once you establish an initial GMP, the owner and architect begin designing toward that number. They won’t be happy later if they need to cut design features to accommodate any miscalculated indirect expenses or overhead. You’ll erode the trust you’ve built and get the project off to the wrong start.
To avoid this, outline the entire project timeline as you build your team. This will give you a more precise picture of your general conditions costs. Moreover, your budget will begin to show an accurate total cost from the start.
Get an accurate view of CMAR budget financials in RedTeam Flex
You can select cost codes and assemblies to build out a comprehensive cost estimate. Additionally, you can add supplemental markups for pass-through costs, as well as price markups for overhead and fees.
Using RedTeam Flex, you can create your Schedule of Values (SOV) directly from the estimate and link it to your Project Budget. So the SOV automatically updates as the budget is adjusted and any changes are authorized.
4. Become a true value engineer when running CMAR projects
Value engineering goes beyond cutting costs. True value engineering techniques optimize project costs—to achieve maximum quality and functionality within budget.
A fundamental concept to remember is V=F/C, or value equals function divided by cost.
So, keep the project’s value proposition in mind while looking for cost reductions. Don’t wait until your only option to meet the budget is to cut finishes.
Collaborate with architects, engineers and subcontractors early and often. This allows you to find solutions that keep costs down without impeding design and function.
Engineer value with RedTeam Flex
The Online Planroom in RedTeam Flex is a convenient way to share your project documents with stakeholders outside your company. So everyone can raise concerns and give ideas to create value and keep costs down during preconstruction.
5. Mitigate as many risks as possible before design completion
As Frank Lloyd Wright famously said, “You can use an eraser on the drafting table or a sledgehammer on the construction site.”
CMAR projects give you access to the drafting table.
Therefore, monitor and reassess project risks throughout preconstruction. Then, collaborate with the owner and design team to adjust and prevent problems downstream.
For example:
- Reviewing plans to correct errors and omissions lessens the need for future change orders
- Stay on top of material lead times from the beginning. Order materials with long lead times as quickly as possible to prevent scheduling delays
- Investing in systems that give real-time access to the most current documents reduces rework in the field
Mitigate risks with RedTeam Flex
RedTeam Flex is a single source of truth for all your project data. It alleviates manual errors and keeps records organized. Moreover, all stakeholders gain access to the information they need to make informed decisions.
CMAR projects are won at preconstruction
Some project delivery methods lock GCs out of the design phase. But CMAR projects offer you the opportunity to inform and guide construction as early as conceptual or schematic design.
This early collaboration creates more opportunities for you to manage construction risks. This prevents unnecessary headaches during the building phase—not just for your clients but for your team, too.
Learn more about the tools in RedTeam Flex that create more predictable outcomes on CMAR projects.
