Under construction management (CM) at-risk, the awarding authority uses a two-phase selection process to contract with a construction manager who will also serve as the project’s general contractor. The contract is a cost plus fixed fee contract with a guaranteed maximum price.
- This page, Learn about CM At-Risk, is offered by
- Office of the Inspector General
Learn about CM At-Risk
Table of Contents
About CM At-Risk
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 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.
To use CM at-Risk on a building project of $5 million or more, an awarding authority (not including exempt agencies) must submit an application to the Office of the Inspector General (OIG).
As of March 2023, the OIG has reviewed over 270 applications to use the CM at-risk delivery method for building projects and issued a "Notice to Proceed to Use CM at-Risk" letter. An approval letter is conditioned upon the awarding authority using a CM at-risk firm and trade contractors that have been certified by the Division of Capital Asset Management and Maintenance in accordance with M.G.L. c. 149, § 44D, and that have submitted update statements.
The awarding authority and contractors must comply with the prevailing wage law.
These agencies are exempt from the requirement to obtain prior OIG approval for CM at-risk contracts, but they are required to submit their CM at-risk procedures to the OIG for review and approval:
- The Massachusetts Port Authority (Massport)
- The Massachusetts Bay Transportation Authority (MBTA)
- The Massachusetts Water Resources Authority (MWRA)
- The Massachusetts State College Building Authority
- The University of Massachusetts Building Authority
Report to the Legislature
In October 2009, the OIG filed a legislatively mandated report on the CM at-risk alternative delivery method entitled "Experience of Massachusetts Public Agencies with Construction Management at Risk Under M.G.L. c. 149A." 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.
To provide guidance to public officials and others interested in learning more about the CM at-risk delivery method, the OIG's Massachusetts Certified Public Purchasing Official (MCPPO) Program 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:
- 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
- A segment on planning the CM at-risk project organization and monitoring the CM at-risk contract
The Division of Capital Asset Management and Maintenance (DCAMM) has developed model documents for CM at-risk projects, including sample contract templates and forms.
The Massachusetts School Building Authority (MSBA) has developed model contracts for Owner's Project Manager Services and Designer Services on CM at-risk projects.
One Ashburton Place, Room 1311
Boston, MA 02108