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.
CM at-risk application
To use CM at-Risk on a building project of $5 million or more, an awarding authority (not including DCAMM, the Massachusetts Port Authority (Massport), the Massachusetts Bay Transportation Authority (MBTA), 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.
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DCAMM, the Massachusetts Port Authority (Massport), the Massachusetts Bay Transportation Authority (MBTA), the Massachusetts Water Resources Authority (MWRA), the Massachusetts State College Building Authority, and the University of Massachusetts Building Authority are exempt from the requirement to obtain prior OIG approval for CM at-risk contracts; however, these exempt agencies are required to submit their CM at-risk procedures to the OIG for review and approval.
CM at-risk projects
As of December 2018, the OIG has reviewed and approved over 190 applications to use the construction management at-risk (CM at-risk) delivery method for building projects and has issued a "Notice to Proceed to Use CM at-Risk" letter. An approval letter is conditioned on 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. During the selection of the CM at-risk firm, the awarding authority must require that a certificate of eligibility and an appropriate update statement be submitted during the prequalification phase for CM at-risk firms and during phase two at the time required for submission of technical proposals by CM at-risk firms. Also, the awarding authority must require that a certificate of eligibility and an update statement be submitted during the prequalification of trade contractors and separately at the time specified for opening of bids. An awarding authority must reject as invalid any statements of qualifications, proposals or bids that do not provide such certificates of eligibility or update statements. The awarding authority and contractors must comply with the prevailing wage law.
For a listing of all approved CM at-Risk projects for non-exempt entities, see Construction Manager at-Risk Project List.
Note: The information presented is from the application. Actual project data will vary.
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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.
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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 and Maintenance (DCAMM) has developed model documents for CM at risk projects, which are available for downloading at:
The Massachusetts School Building Authority (MSBA) has developed model contracts for Owner's Project Manager Services and Designer Services on CM at-risk projects.