What is CMAR? Construction Manager at Risk Explained

Jamie Cerexhe
By
Jamie Cerexhe
Jan 3, 2025
What is CMAR? Construction Manager at Risk Explained

The construction industry is constantly evolving, and so are the methods used to deliver projects efficiently. One such method making waves is Construction Manager at Risk (CMAR). In fact, according to industry trends, alternative delivery methods like CMAR now account for a significant portion of large-scale projects, reflecting a shift away from traditional approaches.

But what exactly is CMAR, and why are more project owners turning to it? Let’s explore how CMAR works, its key advantages, and when it’s the right choice to ensure your project’s success.

TL;DR

CMAR is a project delivery method that integrates the construction manager early in the design phase to enhance collaboration, control costs, and manage risks. This approach ensures streamlined execution, up to 15% fewer cost overruns, and higher-quality outcomes for complex construction projects.

What is Construction Manager at Risk?

Construction Manager at Risk (CMAR) is a project delivery method that focuses on teamwork, risk control, and cost management. In this approach, the construction manager is brought on board early in the project, often during the design phase. Unlike traditional methods, where contractors are only hired after the design is complete, CMAR integrates the construction manager into the planning process from the start.

If you’re curious about how CMAR compares to other approaches, check out this comprehensive Project Delivery Methods guide to find the best fit for your project needs.

Core Elements of CMAR

To understand how CMAR works, it’s important to break it down into its three main elements: pre-construction services, the Guaranteed Maximum Price (GMP), and collaboration.

Pre-construction Services

During the pre-construction phase, the construction manager at risk (CMAR) collaborates with the project owner and design team to ensure the project is set up for success. Their key responsibilities include:

  • Cost Estimation and Budget Management: Providing detailed and accurate cost estimates to help the owner manage the project budget effectively.
  • Value Engineering: Offering suggestions to optimize design and construction methods, reducing costs without compromising quality.
  • Risk Identification and Mitigation: Assessing potential risks such as procurement delays, regulatory challenges, or site-specific issues, and proposing proactive solutions.
  • Schedule Development: Creating a realistic construction timeline to ensure efficient workflow and alignment with project goals.
  • Coordination Among Stakeholders: Facilitating communication between the project owner, design team, and contractors to maintain alignment and avoid misunderstandings.

Guaranteed Maximum Price (GMP)

The GMP is a financial safeguard. It’s the maximum amount the project will cost, as agreed between the owner and the construction manager.

If costs go over this limit, the construction manager absorbs the difference. This ensures budget predictability for the owner while pushing the construction manager to keep expenses in check.

Team Collaboration

Team collaboration is at the heart of the Construction Manager at Risk (CMAR) method. This approach brings the project owner, designer, and construction manager together early in the process as a unified team. By working closely and building trust, they can tackle challenges early and ensure the project meets its goals.

In CMAR, decisions are made collaboratively. From planning and design to construction, each team member contributes their expertise to improve efficiency, control costs, and maintain quality. Clear communication and regular meetings keep everyone on the same page and ensure transparency throughout the project.

This teamwork also creates a problem-solving mindset. By addressing risks and challenges early, the team can avoid delays and manage costs effectively. This integrated approach not only delivers better results but also strengthens relationships among everyone involved.

These elements—early planning, cost control, and teamwork—make CMAR a reliable and effective choice for complex projects.

The CMAR Process: Step-by-Step

The Construction Manager at Risk (CMAR) process streamlines project delivery by emphasizing collaboration, detailed planning, and proactive management.

CMAR involves four key stages: selecting the construction manager, setting a Guaranteed Maximum Price (GMP), planning during pre-construction, and managing the construction phase. Each step is essential for ensuring a successful, cost-effective outcome.

If you want to know more about how CMAR compares to other project delivery methods, check out our blog on CMAR vs Design-Build.

Step 1: Selecting the Construction Manager

Choosing the right construction manager is the foundation of a successful CMAR project. Owners evaluate potential candidates based on their experience, expertise, and track record. A qualifications-based approach prioritizes these factors, while competitive bidding introduces cost considerations alongside qualifications.

In some cases, the CMAR can also assist with selecting an architect or engineer, fostering early collaboration and alignment between key stakeholders. This ensures the team is well-equipped to meet the project’s goals from the outset.

Step 2: Setting the Guaranteed Maximum Price (GMP)

After selection, the construction manager works closely with the owner and design consultant to determine the Guaranteed Maximum Price (GMP). This figure includes the construction cost, the CM’s fee, and contingencies, representing the maximum price the owner will pay unless the project scope changes.

The CMAR uses their expertise to align the GMP with the project’s scope, budget, and requirements. By providing this financial framework early, the GMP minimizes cost uncertainty and establishes accountability throughout the project.

Step 3: Pre-construction Phase (Planning and Design)

During the pre-construction phase, the CMAR takes a proactive role in planning and design. They collaborate with the owner and design consultant to refine the project, offering cost-saving alternatives through value engineering and conducting constructability reviews.

This phase also involves detailed scheduling, budgeting, and risk assessments to identify potential challenges and develop mitigation strategies. These efforts ensure the project design is both efficient and feasible from a construction perspective, setting the stage for a successful build.

Step 4: Construction Phase

With the GMP finalized, the design completed, and subcontractors procured, construction begins. The CMAR serves as the project’s central point of contact, coordinating efforts between the owner, subcontractors, and design team.

Throughout construction, the CMAR ensures the project stays on schedule, adheres to the GMP, and meets quality standards. They manage issues that arise, maintain communication among stakeholders, and oversee contract close-out.

At project completion, the CMAR ensures all final documentation—such as warranties, permits, and inspections—is in place.

Stair-step diagram showing the CMAR process: Selecting the Construction Manager, Setting the GMP, Pre-construction, and Construction Phase.
The four key steps of the CMAR process: Selection, GMP setting, Pre-construction, and Construction.

Benefits of Using CMAR

After understanding the CMAR process, it’s easy to see why this approach is gaining popularity. With its focus on collaboration, cost control, and risk management, CMAR delivers a range of benefits that set it apart from traditional project delivery methods, like Design-Bid-Build.

Stronger Project Alignment

CMAR fosters a unified approach to project planning and execution. By bringing the construction manager on board early, all stakeholders—owners, designers, and contractors—align their goals and priorities. This shared focus creates a streamlined process where everyone works toward the same outcomes, reducing confusion and ensuring smoother coordination.

Cost and Time Savings

CMAR helps save both money and time by addressing potential issues early. During the pre-construction phase, the construction manager identifies risks, offers cost-saving alternatives, and ensures the design is practical and efficient. This proactive approach reduces costly change orders and delays, keeping the project on track and within budget.

Moreover, throughout the design phase, cost estimates are provided at key milestones to ensure the project stays aligned with the established budget. This iterative review process enhances financial control and helps prevent budget overruns before they occur.

Risk Mitigation

The Guaranteed Maximum Price (GMP) in CMAR protects the project owner from unexpected costs. If the project exceeds the agreed-upon price, the construction manager absorbs the extra expenses. This arrangement shifts much of the financial risk to the construction manager, giving the owner peace of mind and budget stability.

Improved Quality Control

By involving the construction manager early, CMAR ensures that quality is a priority throughout the project. The manager reviews designs, materials, and construction methods to ensure they meet the project’s standards. This attention to detail minimizes errors and improves the overall quality of the finished product.

Final Thoughts on CMAR in Construction

Construction Manager at Risk (CMAR) is an innovative project delivery method that brings significant advantages to the construction industry. By integrating the construction manager early in the design phase, CMAR fosters collaboration, mitigates risks, and ensures better cost control. While it’s not without challenges, such as balancing relationships and negotiating contracts, its proactive approach and focus on teamwork make it an excellent choice for complex or high-stakes projects.

Whether you’re a project owner, designer, or contractor, understanding the CMAR process can help you determine if it’s the right fit for your next project. By prioritizing communication, selecting the right construction manager, and leveraging early collaboration, you can unlock the full potential of this effective delivery method.

FAQs About CMAR in Construction

A key difference lies in the involvement of the contractor and the use of a Guaranteed Maximum Price (GMP). In traditional methods, contractors are typically engaged after the design is finalized, which can lead to misalignment and increased risks. In contrast, CMAR involves the construction manager early in the design phase, fostering collaboration and allowing for the establishment of a GMP.
The GMP provides financial certainty by capping project costs. If expenses exceed the agreed-upon amount, the construction manager absorbs the difference, reducing financial risk for the owner.
CMAR is best suited for complex or large-scale projects, such as hospitals, infrastructure developments, or facilities with tight deadlines. It's less commonly used for smaller or simpler projects where traditional methods may suffice.
Jamie Cerexhe

Written by

Jamie Cerexhe

Jamie Cerexhe is the Chief Technology Officer at Mastt and has a wealth of experience in software development and project management. As a dedicated problem-solver, Jamie has been pivotal in delivering innovative solutions that meet business needs and enhance user experiences. His goal is to continue leveraging technology to drive progress and create value. Outside of work, Jamie enjoys exploring new tools and trends in the tech world, always staying ahead of the curve.

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