New Risk Management Documents Available from the Leading Engineering Trade Associations
Washington, DC – New 2023 Construction Manager at Risk Series documents are now available from the Engineers Joint Contract Documents Committee (EJCDC), a joint project of the leading engineering trade associations. The 27 new documents include contracts, bonds, contractor-procurement documents, and administrative forms, and are intended for use on projects in which the owner retains a construction manager at risk (CMAR) to provide preconstruction services and then construct a project.
The documents are available for purchase and download from EJCDC’s three sponsoring organizations: American Council of Engineering Companies, American Society of Civil Engineers, National Society of Professional Engineers.
The Construction Manager at Risk method of delivering projects evolved from traditional design-bid-build by involving the construction contractor early in the project. The CMAR delivery process adds value by:
- Having the contractor involved in the design phase of the project, by performing services such as constructability reviews, providing advice on material availability and selection, estimating and scheduling, assessment of risk factors and mitigating strategies, development of procurement strategies, and organization of the work into efficient work packages;
- Taking advantage of opportunities for early procurement of materials and equipment, especially in volatile markets; and
- Starting construction before the design of the entire project is complete (fast tracking).
The CMAR delivery method has been widely used on private-sector construction projects for many years and is currently also being used on many public-sector projects. The new EJCDC CMAR Series is suitable for both public and private work.
The series features several documents used for the project owner’s selection of the CMAR, such as a model Request for Qualifications, Statement of Qualifications, and Request for Proposals.
The EJCDC CMAR selection process is flexible enough to allow either a purely qualifications-based selection, or a two-step process in which qualifications are used to establish a short-list of qualified CMAR candidates, which are requested to submit proposals that include prices for the CMAR Fee (which will be applied to the Cost of the Work) and for certain defined cost categories, such as Construction Support Costs (sometimes referred to as “general conditions costs”).
EJCDC supports the price proposal process with standard spread sheets to be completed and submitted by the short-listed proposers.
One of the core documents in the EJCDC CMAR Series is EJCDC® CMAR‑525, Agreement between Owner and Construction Manager. This comprehensive document includes the contract’s initial price and schedule provisions, procedures for finalizing price and schedule, and a comprehensive description of the services that the CMAR will provide in support of development of the design, and to procure construction labor, materials, and subcontractors. The Agreement addresses the CMAR’s compensation for providing services, as well as compensation for the construction itself, based on Cost of the Work plus a Fee principles.
The new documents emphasize the organization of the construction into distinct work packages, and the use of fast-tracking through individual work authorizations.
The contract price develops as work is authorized, using CMAR‑545, Work Authorization, and the CMAR obtains bids from subcontractors (or agrees to self-perform work at competitive prices).
The 2023 CMAR Series features Standard General Conditions (CMAR‑700) and Supplementary Conditions (CMAR‑800) documents that are based on their industry-standard counterparts in the EJCDC 2018 Construction Series documents but have been customized to address the nuances of a CMAR project. Several other CMAR documents have also been modeled on the corresponding 2018 Construction Series forms.
Although the CMAR will contribute its construction experience and expertise to enhance the development of the design, the design itself is the responsibility of an independent design firm (the Engineer), just as in traditional design-bid-build.
The CMAR Series includes a standard Owner-Engineer agreement, CMAR‑500, based on EJCDC’s flagship professional services agreement, EJCDC® E‑500 (2020), and tailored for use on a CMAR project. The terms and conditions of CMAR‑500 closely track those of the traditional E‑500; however, CMAR‑500 notably contains a modified scope of services that highlights coordinated Engineer-CMAR activities during the design phase (for example, organization of the work design into logical work packages) and modified administrative roles during the construction phase, while at the same time preserving the Engineer’s control over design and technical issues throughout the project.
The CMAR documents assume that the project owner will be assisted in selecting the CMAR, and in administering the CMAR contract, by an Owner’s Advisor. This advisory role may be performed by the same firm that provides the design services; commonly, however, the Owner’s Advisor is an independent firm or individual with experience in CMAR projects.
The duties and obligations of the Owner’s Advisor are set out in the Agreement between Owner and Owner’s Advisor, CMAR‑501. The scopes of services that will be provided by the Engineer, the Owner’s Advisor, and the CMAR itself are carefully coordinated in exhibits to the governing agreements—these exhibits may be modified to fit the needs of the specific project.
The application for payment form in the new CMAR Series is based on spreadsheet options that take into account various cost and compensation categories.
EJCDC continues to publish and encourage the use of Owner-Engineer professional services agreements (such as E-500 2020, Agreement between Owner and Engineer for Professional Services) and construction contract documents (specifically the 2018 EJCDC Construction Series documents) that fit the traditional design-bid-build framework in which the Engineer completes the design, the work is competitively bid by general contractors, and the design engineering firm provides construction contract administration services.
This framework continues to be required for many public works projects, is typically an efficient and seamless approach, and is well suited to a broad array of engineered facilities projects. The Construction Manager at Risk Series is offered for those projects where an alternative is appropriate—most notably when construction expertise is needed during the design phase, and fast-tracking of work packages will allow for early completion and cost-effective construction.