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CM/GC – A Brief Overview

The Construction Manager/General Contractor (CM/GC) delivery method is similar to Design-Bid-Build in terms of separation of design and construction work packages and the Owner's control of the design process; but the Contractor is engaged earlier than in a DBB
CM/GC's scope is performed in two phases:
- Pre-construction: Constructability reviews of the designs prepared by the Designer; risk management; progressive build-up of construction schedule and final construction price, typically on a Guaranteed Maximum Price (GMP) or Firm Fixed Price (FFP) basis, when an acceptable level of design (typically 60–95%) is achieved
- Construction: Constructability reviews of the final designs prepared by the Designer (if not completed as part of pre-construction); and construction, testing, and commissioning through to final acceptance of the work
Early works packages and multiple Notices to Proceed (NTPs) may be used to advance long lead items and progressively agree and commence packages of the construction work early to accelerate schedule and mitigate delivery risks
Depending on its legal authority, the pre-construction services may be performed under an initial pre-construction services agreement, with the construction contract executed following successful negotiations of that phase

CM/GC delivery model diagram showing the relationship between Owner, Designer, and CM/GC contractor across pre-construction and construction phases

View full-size CM/GC graphic

CM/GC – Advantages and What it Does Well

As compared to Design-Bid-Build

Schedule acceleration: ability to use early works packages to commence construction of discrete scope elements or geographic segments early
Schedule optimization: ability for the Owner to work collaboratively with the Contractor to define the construction schedule before the price is agreed
Transparent / open-book pricing, allowing the Owner to more clearly identify (and work with the Contractor to mitigate, where applicable) the key cost drivers for the Project
Construction Contractor involvement in the design review process and performance of constructability reviews to minimize issues/claims arising during construction
Potential for innovations in construction means and methods

As compared to Design-Build (for example, fixed price or progressive)

Owner maintains control of design, which may be necessary for some projects, for example, where there is a high degree of prescribed design requirements and minimal opportunity for design innovation - it also provides a more straightforward path forward if construction pricing and terms cannot be agreed and the Owner has to "off-ramp" the CM/GC and re-procure the construction work

CM/GC – Challenges and Lessons Learned

Construction pricing is negotiated after Contractor selection
Risk that an Owner has to exercise an off-ramp if agreement cannot be reached on construction terms and pricing and risk of delay
Resource-intensive for Owner
Owner manages the design interface — this requires high levels of engagement by the Owner to ensure that the Designer resolves the CM/GC's constructability comments
Less opportunity to incorporate innovation and manage complex integration issues in design compared to a design-build (fixed price or progressive)
As with design-bid-build or design-build, the Contractor's focus is on constructability of the designs and the construction means and methods, rather than lifecycle cost, long-term maintainability and asset renewal - it is up to the Owner to work with its Designer and the Contractor during the pre-construction phase to ensure that the designs and the construction means and methods meet their lifecycle cost and long-term O&M objectives

CM/GC – Summary: When to use this Delivery Method

CM/GC – When is it typically used

Contracts where the Owner needs to retain full control of the design.
Where the Owner has sufficient capacity and sufficient time in the schedule to manage multiple procurements and multiple contracts.
Value engineering / innovation opportunities in construction means and methods.

CM/GC – When is it not suitable

Affordability challenges or complexity requiring value engineering and innovation in design / integration of design and construction risk.
Contract scope involving proprietary technologies.
Where private financing is required.

Explore CM/GC in more depth

Members will soon gain access to detailed CM/GC statutes, sample procurement structures, project case studies, and lessons learned from recent California projects.

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Legal Disclaimer: The information included in this Online Resource Center is summary information provided as an introduction to the delivery methods referenced. It does not constitute legal advice and is not intended to provide a comprehensive review of the delivery methods nor the related law and practice, nor is it intended to cover all aspects of each delivery method referred to. Please take legal advice before applying anything contained in these materials to specific issues or transactions. If you are a member and would like more information, please reach out to CALINFRA to enquire about scheduling a training session.

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