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What Is a Construction Manager at Risk Contract

A construction manager at risk (CMAR) contract is a type of construction contract that is becoming increasingly popular in the construction industry. A CMAR contract gives the owner greater control over the construction process and provides the owner with a single point of accountability for the construction project.

Under a CMAR contract, the construction manager is responsible for providing preconstruction services, such as design consultation, estimating, scheduling, and value engineering. The construction manager is also responsible for managing and coordinating the construction process, including subcontractors and suppliers.

The key feature of a CMAR contract is that the construction manager provides a guaranteed maximum price (GMP) for the construction project. The GMP is established during the preconstruction phase, and it includes all costs for the construction project, including the construction manager`s fee. The GMP is a ceiling on the cost of the project, meaning that any cost overruns are the responsibility of the construction manager.

A CMAR contract benefits the owner by providing greater control over the construction process. The owner has a single point of accountability for the construction project and can rely on the construction manager to manage the project within the established budget. The construction manager is also responsible for managing the risk associated with the construction project.

Under a CMAR contract, the construction manager is selected based on qualifications and experience, rather than on the lowest bid. This ensures that the owner gets a construction manager with the expertise required for the specific project. The construction manager is also incentivized to work collaboratively with the owner and other project stakeholders to deliver a high-quality project within the established budget.

In summary, a construction manager at risk (CMAR) contract is a type of construction contract that provides the owner with greater control over the construction process and a single point of accountability for the construction project. The construction manager is responsible for providing preconstruction services, managing and coordinating the construction process, and providing a guaranteed maximum price (GMP) for the construction project. This type of contract benefits the owner by ensuring that the project is managed within the established budget and that the owner gets a construction manager with the expertise required for the specific project.

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