CM at-risk is a delivery method which entails a commitment by the construction manager to deliver the project within a Guaranteed Maximum Price (GMP), in most cases. The construction manager acts as consultant to the owner in the development and design phases, (often referred to as “Preconstruction Services”), but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner’s interest, the construction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM company.
CM at risk is a global term referring to a business relationship of Construction contractor, Owner and Architect / Designer. Typically, a CM At Risk arrangement eliminates a “Low Bid” construction project. A GMP agreement is a typical part of the CM and Owner agreement somewhat comparable to a “Low Bid” contract, but with a number of adjustments in responsibilities required by the CM.
There are two core types of Construction Managers: Construction Manager at Risk and Agency Construction Manager. A CM at-risk is a core functional member of the team in the Construction Management delivery system. Agency CM firms act as agents to the Owner, but typically will not have the inherent risk that a CM at-risk absorbs in their role. When a Agency CM is on the project, it is typically within another delivery system, and the firm acting in this role should be listed as “Agency Construction Manager” on a Dodge Report.