In Plain English
Quick Answer
A delivery method where the construction manager provides design advice and then takes financial responsibility for building the project at or under a guaranteed price.
Definition
Definition
Construction Manager at Risk is a project delivery method in which the construction manager acts as a consultant during design and then takes on the role of general contractor for construction, assuming financial risk for delivering the project within a guaranteed maximum price. CMAR contracts allow the owner to benefit from the CM's preconstruction expertise—estimating, scheduling, constructability review—while the CM is incentivized to control costs because it bears risk beyond the GMP. CMAR is widely used for complex public projects and healthcare construction.
Context
Why It Matters in Bidding
CMAR changes how estimators work because pricing happens collaboratively during preconstruction, culminating in a guaranteed maximum price the CM is contractually bound to honor. The estimator's takeoffs, subcontractor buyout, and contingency assumptions directly set the GMP and the risk the firm carries, since overruns above the GMP come out of the CM's pocket. Accurate early estimating and disciplined buyout are essential to protecting margin under this model.
Example
Example
Engaged early as CMAR on a hospital, the construction manager runs constructability reviews and progressive estimates during design, then commits to a guaranteed maximum price before locking in subcontractor buyout.
See Also
Related Terms
FAQ
Questions Contractors Ask
How does CMAR differ from design-bid-build?
In design-bid-build the GC bids on completed documents and isn't involved during design. In CMAR the construction manager joins during design as a consultant, providing estimating and constructability input, then transitions to builder under a guaranteed maximum price. This overlaps preconstruction and pricing, reducing surprises but requiring trust and open-book accounting.
What is the guaranteed maximum price in a CMAR contract?
The GMP is the ceiling the CMAR commits to deliver the project for, typically set once design reaches sufficient completeness. Costs above the GMP are generally the CM's responsibility, while savings below it may be shared with the owner. It is built from detailed estimates, subcontractor pricing, contingencies, and the CM's fee.
Why do owners choose CMAR for complex projects?
Owners value early cost certainty, the CM's preconstruction expertise, and a single party accountable for delivery within the GMP. The overlap of design and pricing helps catch constructability issues and budget problems before construction. It's common on public, healthcare, and institutional work where complexity and the risk of overruns are high.
Need more than definitions?
Get AI-powered bid alerts, automated form filling, and proposal drafting.
Start Free Trial