Construction projects typically involve three phases: planning, design, and construction. On a design-bid-build project, these phases run sequentially: a designer prepares a fully detailed design for the project, construction bids are solicited on the 100 percent complete bidding documents, and the selected contractor – the lowest eligible and responsible bidder – then begins construction. The contractor has no involvement in the process until the construction stage.
Under the CM at risk method, the owner typically selects the CM at risk firm, which will later serve as the project general contractor, at the outset of or early in the design stage. After conducting a selection process that focuses on qualifications and fees, the owner executes an initial CM at risk contract with the selected CM at risk firm. As the design progresses, the CM at risk firm provides construction management services, such as constructability reviews of the design, construction scheduling, and project cost estimates, to the owner. At some point during the design stage, the owner and the CM at risk firm negotiate a guaranteed maximum price (GMP) for the project. When the contract is amended to include the GMP, the CM at risk contract becomes a cost-plus contract with a GMP, and the CM at risk firm assumes responsibility for the performance of the work, including the work performed by project subcontractors. The owner pays the CM at risk firm the actual cost of the work plus the agreed-upon CM at risk fee up to the GMP; change orders resulting from scope changes and unanticipated site conditions encountered during construction may increase the final contract cost.
CM at Risk Application
To use CM at Risk on a building project of $5 million or more, an awarding authority (not including DCAM, the Massachusetts Port Authority (Massport), the Massachusetts Water Resources Authority (MWRA), the Massachusetts State College Building Authority, and the University of Massachusetts Building Authority) must submit an application to the Office of the Inspector General, The Office has prepared an application form to be completed, pursuant to Chapter 149A. Two copies of the application must be submitted to: Office of the Inspector General, One Ashburton Place, Room 1311, Boston, MA 02108. If you have any questions regarding the application contact Mary Kolesar, Senior Analyst, Legal and Public Policy Division at (617)722-8809 or email@example.com or Nicholas Read, Deputy General Counsel at (617) 722-8852 or firstname.lastname@example.org.
CM at Risk Projects
Since 2005, the OIG has received over 70 applications from local and state entities to use CM at risk, totaling approximately $3,501,471,435 in project costs.
CM at Risk Report to the Legislature
In October 2009, the Office filed a legislatively mandated report on the CM at risk alternative delivery method. The study provides public owners with an interest in using M.G.L. c.149A with valuable data, procedural information, lessons learned, and practical advice.
CM at Risk Training
To provide guidance to public officials and others interested in learning more about the CM at risk delivery method, the Office of the Inspector General has developed a one-day course entitled "Construction Management at Risk Under M.G.L. c. 149A: Legal Requirements and Practical Issues. The course includes a discussion of design-bid-build and CM at risk; a description of the role of the construction manager on a CM at risk project; an overview of the procurement process, including the owner's project manager procurement requirements, the two-phase selection process, and contracting requirements; and a segment on planning the CM at risk project organization and monitoring the CM at risk contract.
CM at Risk Model Documents
The Division of Capital Asset Management (DCAM) has developed model documents for CM at risk projects, which are available for downloading at: