FAQ
How does the construction management at-Risk (CM at-risk) method under M.G.L. c. 149A differ from the design-bid-build method under M.G.L. c. 149 for construction procurement?
In design-bid-build, (M.G.L. c. 149), projects follow a linear and sequential process: planning, design, then construction. The owner completes the design, solicits competitive bids, and awards the contract to the lowest responsible bidder. The general contractor is only involved during construction.
CM at-Risk (M.G.L. c. 149A) is an alternative method where the owner selects a CM at-Risk firm early in or before the design stage through a qualifications- and fee-based selection process. The CM at-Risk firm provides preconstruction services and later acts as the general contractor. Alongside the owner’s project manager (OPM) and designer, they collaborate throughout planning, design, and construction.
May public jurisdictions in Massachusetts use CM at-Risk instead of design-bid-build for construction projects?
Yes, but with restrictions. Under M.G.L. c. 149A, §§ 1-13, CM at-Risk is only allowed for building projects estimated at $5 million or more. It is not permitted for projects below this threshold or for public works (non-building) projects.
Does my jurisdiction need to obtain permission to use CM at-Risk?
Yes, most public jurisdictions must apply for and receive advance approval from the Massachusetts OIG under M.G.L. c. 149A, § 4(d) before using CM at-Risk for projects estimated at $5 million or more. Download the CM at-Risk application.
The following agencies are exempt from project-specific approval but must submit their CM at-Risk procedures to the OIG for annual review:
- Division of Capital Asset Management and Maintenance
- Massachusetts Port Authority
- Massachusetts Bay Transportation Authority
- Massachusetts Water Resources Authority
- Massachusetts State College Building Authority
- University of Massachusetts Building Authority
What if the OIG does not approve my jurisdiction’s application to use CM at-Risk or my jurisdiction’s CM at-Risk procedures?
Your jurisdiction may submit a corrected application or corrected procedures to the OIG for reconsideration. Otherwise, you may procure the building project by following the design-bid-build procurement process required by M.G.L. c. 149, §§ 44A-44J.
Does the CM at-Risk firm bid on the construction project?
No. The CM at-Risk firm is selected before the design is completed and bidding occurs. Initially, the contract includes only fees for preconstruction and construction services. After schematic design, the owner and CM at-Risk firm negotiate a Guaranteed Maximum Price (GMP) amendment, which sets the maximum cost for construction, general conditions, and fees. The GMP is based on available project details at the time and must include all relevant drawings, specifications, assumptions, and clarifications, as required by M.G.L. c. 149A.
Is the GMP guaranteed even if there are changes to the project after the GMP is established?
No. The term “guaranteed price” can be confusing. The initial GMP is based on the drawings, specifications, and other information in the GMP amendment. If these change, the GMP can and often does change as well. For example, if the project scope or requirements the GMP was based on are modified, or unforeseen site conditions are encountered during construction after execution of the GMP amendment, the public jurisdiction is required to approve a change order. The dollar value of the change order will be added or subtracted from the previously established GMP.
What are some examples of the preconstruction services that a CM at-Risk firm typically provides during the project’s design stage?
Depending on the scope of services specified in the CM at-Risk services contract, the firm typically advises the public jurisdiction about issues such as project siting, value engineering, and constructability. The contract may also require the CM at-Risk first to develop one or more project cost estimates. A 2009 legislatively mandated report found public owners regarded the CM at-Risk preconstruction services as a major benefit.
Is an owner’s project manager (OPM) required by M.G.L. c. 149A for CM at-Risk projects?
Yes, public jurisdictions using CM at-Risk must contract with or assign a qualified OPM to a CM at-Risk project.
Why is an OPM required on a CM at-Risk project, given that the CM at-Risk firm provides construction management services?
It is important to understand the differing roles of the CM at-Risk firm and OPM. M.G.L. c. 149, § 44A½ requires the OPM to serve as the owner’s agent during the planning, design, and construction stages of the project, meaning the OPM is legally required to represent the owner’s interests on the project. Accordingly, the OPM must be independent of the other project participants, including the designer and the contractor.
Although the CM at-Risk process allows for greater cooperation among the parties, the CM at-Risk firm and owner can have competing contractual interests. The CM at-Risk firm is not obligated to consider the owner’s interests if they conflict with their own. Monitoring the CM at-Risk firm’s performance is thus essential, and the OPM does this on the owner’s behalf.
How are the subcontracts on a CM at-risk project procured?
Under M.G.L. c. 149A, all subcontracts estimated to cost $25,000 or more require competitive bidding. Subcontracts in the 18 filed sub-bid categories identified in M.G.L. c. 149 are called “trade contracts.” These must be procured using a formal prequalification process followed by a competitive bid process that resembles the M.G.L. c. 149 bid process. Other subcontracts are awarded through a less formal prequalification and bidding process managed by the CM at-risk firm.
What are some of the risks of using CM at-Risk instead of design-bid-build on a public building project?
Unlike design-bid-build, CM at-Risk requires the public jurisdiction’s review and ongoing monitoring of the project costs. The public jurisdiction is also responsible for negotiating a GMP with the CM at-Risk firm. Without the necessary expertise to assist with these tasks, public jurisdictions may incur unnecessary or inflated project costs.
Other disadvantages of CM at-Risk include a lack of a firm construction price until later, lack of risk borne by the firm when the GMP is negotiated late, and difficulty countering public misconception that the GMP increases costs to the project owner.
What are some of the benefits of using CM at-Risk instead of design-bid-build on a public building project?
Unlike design-bid-build, CM at-Risk allows the public jurisdiction to select the CM at-Risk firm. They also serve as the general contractor for the project, based primarily on qualifications. The CM at-Risk firm can bring valuable expertise to the project, and their collaboration with the project designer can result in fewer disputes and change orders during construction than on a design-bid-build project.
The CM at-Risk firm’s early involvement allows for a more fast-tracked project than on a design-bid-build project. The transparent cost-plus CM at-Risk contract is beneficial in contrast to the fixed-price design-bid-build contract. Public jurisdictions are more likely to capture the benefits and minimize risks by investing resources in project oversight by in-house staff and an experienced OPM.
How should I decide whether to use CM at-Risk on a building project?
CM at-Risk is not appropriate for every public jurisdiction or for every building project. There are several factors to consider when deciding between CM at-Risk and design-bid-build:
- Is your jurisdiction able and willing to assign qualified staff or contract for necessary expertise to provide more extensive project oversight, including financial, required by CM at-Risk in comparison to design-bid-build?
- Are there complex logistical challenges that could be accomplished by fast-tracking and other phasing methods?
- Will your jurisdiction’s stakeholders support a project that will not have a firm price until late in the timeline?
Your decision will hinge on the characteristics of both the project and public jurisdiction responsible for it.
Where can I learn more about using the CM at-Risk method?
The OIG’s manual, Designing and Constructing Public Facilities, provides detailed guidance on using CM at-Risk under M.G.L. c. 149A.
The OIG Academy offers the CM at-Risk Under M.G.L. c. 149A on a periodic basis.
You can find additional information on using CM at-risk at the websites of the Office of the Attorney General, the Division of Capital Asset Management and Maintenance and the Massachusetts School Building Authority.
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| Date published: | July 12, 2023 |
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| Last updated: | April 29, 2025 |