Some projects need flexibility. Others need cost certainty. The managing contractor model offers a middle ground—giving clients early contractor involvement while keeping control over trade contracts. This approach is common in large, complex projects where collaboration and risk-sharing are key.
But is it the right choice for your project? In this guide, we’ll break down how the managing contractor model works, how it compares to other Project Delivery Methods, and what you need to consider before using it.
What is the Managing Contractor Model
The Managing Contractor Delivery Model is a project approach where a contractor is engaged early to oversee the planning, procurement, and management of construction work. Instead of carrying out the construction themselves, the managing contractor coordinates trade contractors, ensures timelines are met, and manages project risks on behalf of the client.
This model provides a structured way to control costs and decision-making while keeping the project moving efficiently.
Key Characteristics of the Managing Contractor Model
The Managing Contractor Delivery Model has distinct features that set it apart. These characteristics help ensure flexibility, transparency, and effective project management.
- Early Contractor Involvement (ECI) – The managing contractor is engaged during the early planning stage to provide input on design, cost, and risk management.
- Two-Stage Approach – The project is delivered in two phases: pre-construction, where planning and procurement happen, and construction, where trade contractors are engaged and managed.
- Open-Book Cost Transparency – The client has visibility into costs, as trade contracts and expenses are managed transparently.
- Collaborative Risk Management – Risks are identified early, and responsibilities are shared between the client and managing contractor to prevent cost blowouts and delays.
How Does the Managing Contractor Model Work?
The Managing Contractor Delivery Model operates in two key stages: pre-construction and construction. This phased approach allows for early planning, risk management, and flexibility in project execution. The managing contractor takes on a leadership role, overseeing coordination and ensuring that trade contracts are executed efficiently.
Stage 1: Pre-Construction Phase
In the pre-construction phase, the managing contractor is brought on board early through a negotiated contract. Their primary role is to assist with planning, budgeting, and risk management before construction begins. They work closely with the client and design team to refine project details, ensuring feasibility and cost control.
A key part of this phase is trade contractor procurement. Instead of locking in all costs upfront, the managing contractor helps tender subcontractor packages in a transparent, competitive process. This allows flexibility to adjust scope and pricing as needed while maintaining cost visibility for the client.
Stage 2: Construction Phase
Once the project moves to construction, the managing contractor takes charge of managing the site and trade contractors. While they don’t perform the actual construction work, they ensure that everything runs smoothly by overseeing schedules, budgets, and quality control.
Another key responsibility is handling project variations and unforeseen challenges. Since trade contracts are directly held by the client, adjustments can be made without significant cost markups. The managing contractor facilitates decision-making, keeping the project on track while ensuring compliance with safety and regulatory requirements.

Pros and Cons of the Managing Contractor Model
The Managing Contractor Model offers a unique balance between flexibility and control, making it a popular choice for complex projects. However, like other alternative delivery methods, it has both benefits and challenges. Understanding these can help clients decide if it’s the right fit for their project.
Advantages of the Managing Contractor Model
- Early Contractor Involvement – The managing contractor provides expert input on design, costs, and risk management before construction starts, reducing costly changes later.
- Flexibility – The model allows for adjustments to scope, trade packages, and design elements without causing major disruptions, making it ideal for evolving projects.
- Cost Transparency – Clients hold trade contracts directly, ensuring full visibility into pricing and expenses while minimizing excessive markups.
- Stronger Collaboration – The managing contractor works closely with the client, designers, and subcontractors, creating a team-driven approach that improves risk management and decision-making.
Disadvantages of the Managing Contractor Model
- Higher Client Involvement – Since the client holds trade contracts, they must actively participate in approvals, variations, and risk-sharing, which requires strong internal project management.
- Less Cost Certainty – Unlike fixed-price contracts, final costs may fluctuate based on project changes, material prices, and unforeseen conditions.
- Potential for Disputes – Clear contract terms and strong collaboration are essential; poorly defined responsibilities or risk allocation can lead to delays and conflicts.
Overall, the managing contractor model is best suited for clients who value flexibility, transparency, and early contractor input. However, it requires an engaged client, well-structured contracts, and strong communication to be truly effective.
Managing Contractor vs. Other Project Delivery Methods
Each project delivery method offers a different balance of control, risk, and flexibility. While the Managing Contractor model provides early contractor involvement and cost transparency, other methods like CMAR, D&C, and EPC take different approaches to risk and project execution.
Managing Contractor vs. CMAR (Construction Management at Risk)
- Risk Allocation – Construction Management at Risk provides cost certainty through a Guaranteed Maximum Price (GMP), while Managing Contractor keeps costs open-book, with the client retaining financial risk.
- Trade Contracts – In CMAR, the contractor holds the trade contracts, while in the Managing Contractor model, the client holds them, ensuring full cost transparency.
- Flexibility – CMAR offers some scope flexibility early on but locks in costs with a GMP. The Managing Contractor model allows continuous design adjustments as the project progresses.
Managing Contractor vs. D&C (Design & Construct)
- Scope and Responsibility – D&C or Design-Build bundles design and construction under a single contractor, reducing client involvement. The Managing Contractor model keeps design and construction separate, with the contractor managing trade packages.
- Cost Certainty vs. Control – D&C locks in a fixed price early, giving cost predictability but limiting flexibility. Managing Contractor provides more design freedom and cost transparency but requires ongoing client input.
- Risk Management – In D&C, the contractor assumes most of the risk, while in the Managing Contractor model, risk is shared between the client and the contractor.
Managing Contractor vs. EPC (Engineering, Procurement & Construction)
- Project Delivery Approach – EPC is a turnkey solution, where the contractor takes full responsibility for design, procurement, construction, and commissioning. Managing Contractor focuses on project oversight and coordination, without taking on direct execution.
- Risk and Guarantees – EPC contracts typically include fixed pricing and performance guarantees, shifting all risk to the contractor. Managing Contractor keeps costs flexible and requires active client involvement in trade procurement.
- Best Use Case – EPC is ideal for large-scale industrial projects (e.g., oil & gas, power plants) where the client wants a single point of responsibility. The Managing Contractor model works better for complex commercial or infrastructure projects where cost transparency and flexibility are priorities.
Real-World Projects Utilizing the Managing Contractor Model
The Managing Contractor Delivery Model has been effectively employed in several large-scale projects, particularly in Australia and the UK. This approach allows for early contractor involvement, flexibility in design, and efficient management of complex construction activities. Below are detailed examples of notable projects that have adopted this model:
1. New Bundaberg Hospital (Queensland, Australia)
The Queensland Government appointed CPB Contractors as the managing contractor for the new Bundaberg Hospital, a project valued at AUD 1.2 billion. This six-story facility is designed to enhance healthcare services in the Wide Bay region, offering expanded emergency departments, acute medical and surgical units, and mental health services. The managing contractor model was chosen to facilitate early contractor involvement in design development, ensuring flexibility to meet evolving healthcare needs. Construction is expected to be completed in the second half of 2027.
2. Queensland Country Bank Stadium (Townsville, Australia)
Completed in 2020, the Queensland Country Bank Stadium is a 25,000-seat multi-purpose venue delivered under the managing contractor model. BESIX Watpac served as the managing contractor, overseeing the project's design and construction phases. This approach allowed for effective coordination among various subcontractors and stakeholders, ensuring the project met its objectives in terms of quality, budget, and schedule. The stadium has since become a landmark in Townsville, hosting numerous sporting and entertainment events.
3. Royal Liverpool Hospital (Liverpool, UK)
The redevelopment of the Royal Liverpool Hospital utilized the managing contractor model to handle its complex construction requirements. This approach facilitated early contractor involvement, allowing for collaborative design development and efficient management of subcontractors. The managing contractor was responsible for coordinating various aspects of the project, ensuring that the hospital's construction met the specified standards and was completed within the projected timeline.
Final Thoughts on Managing Contractor Model
The Managing Contractor Delivery Model provides a structured yet flexible approach to construction, balancing early contractor involvement, cost transparency, and collaborative risk management. It works best for large, complex projects where scope may evolve, and careful coordination of trade contractors is essential.
While this model offers greater control and adaptability, it also requires active client participation and well-defined contracts to be effective. Choosing the right project delivery method depends on the level of risk, flexibility, and oversight a client is willing to take. For projects that demand a balance of structure and agility, the managing contractor model remains a strong option.