Jim explains that project management with the use of an in-house construction manager or a third party construction management firm, is a decision that is independent of an owner's choice in project delivery methods.
- Let's get started by discussing the term construction manager. Depending on the context, this term can take on different meanings and a construction manager can play many different roles. Construction managers are people that have knowledge and experience related to both business management and what I call building science. On the business management side of things, a construction manager needs to understand planning and scheduling. They need to have some knowledge of supply chain management and how it affects a construction project, and they need to understand how things are priced, purchased, and built.
Now over on the building science side, they need to understand how a structure goes together, how the materials work, and how they interact with each other. They may not be design professionals, but they understand how a design works and how different materials are integrated into a design. A construction manager understands how to take a project from design to reality by combining their business knowledge and their building science knowledge to interpret those plans and specifications, procure materials and services, and schedule installation and construction in a manner that results in a project being delivered safely, on time, in budget, and to specifications.
Now in addition to working for construction companies, a construction manager may work for a project owner. Over on that owner side of things, a construction manager may be an in house employee or an owner may use the services of a third party construction management firm. For example, an owner or a company that builds many projects on a continuous basis might directly employ one or more construction managers to oversee aspects of the projects they build. Someone like a healthcare company, they might have a construction management staff to oversee different aspects of constructing hospitals and healthcare facilities that they build throughout their region.
In this case the designer would probably interact with healthcare managers and medical professionals during the programming phase where they determine the future facility's needs, but the owner's construction management staff would also be involved to oversee things like preliminary budgets and forecasting construction schedules. Now as employees of the owner, they may also act as the owner's agent during construction, meaning that one or more of these construction managers would be the point of contact for the designer and for the general contractor once the construction process starts.
An owner that doesn't build many structures or facilities probably does not have any in house construction management employees, so they may elect to hire a third party construction manager or a construction management firm, and they'll act as their consultant during design or act as their agent during construction. It's also common for an owner to not utilize a construction manager at all, instead utilizing the architect to act as their agent, and just relying on the expertise of the general contractor that they select to build the project.
As this course progresses, I'll talk about several different types of project delivery methods. Keep in mind that an owner might utilize a construction manager as a consultant or an agent in any of these methods. The benefit of this would be that the owner is employing a person or a company with experience in construction to act in their best interest, and this is what we mean when we use the term agency contract. When a project owner hires somebody under an agency contract, that entity has a legal obligation to act in the best interest of that project owner.
This is different and very separate from an owner just hiring a general contractor to build the job. A general contractor hired to build a job is really just obligated to follow plans, specs, and other contract documents, but they stay an independent company working to build a project per the documents they've been given, and they act in the best interest of their own company, but because of the obligations involved in an agency contract, a construction company can probably act as either a construction management agent for the owner or as a general contractor that gets paid to build the job, but they typically can't act as both at the same time.
There's too many conflicts there. The decision an owner makes on who to use as its agent during construction, whether that's in house personnel, a construction management firm, or the architect, should be thought of as a management process as opposed to a project delivery method. This really means that every owner has to make two choices as they plan their future construction projects. They need to make decisions regarding the management process they'll employee, and they need to choose a project delivery method. Now that we've discussed the roles a construction manager can play and we've defined the process of a management process, let's continue and define what is meant when we talk about a project delivery method.
- Payment and procurement methods
- The design-bid-build method
- The design-build method
- Construction manager at risk (CMAR)
- Integrated project delivery (IPD)
- Selecting a project delivery method
- Procurement laws
- Delivering the best value to the owner
- Qualifications-based selection
- Changes in the way you are paid