Chapter 2 Notes: What Is Construction Management?

What is Construction Management?

Construction is more than materials; Construction Management (CM) coordinates plans, land, materials, manpower, and equipment to guarantee price, schedule, and quality while avoiding accidents or errors, under varying conditions and unforeseen events.
The CM team’s job is planning, organizing, and problem-solving to transform a dream into reality.
Construction happens in a dynamic environment with inherent risk; decision-making and problem-solving are crucial.
The chapter focuses on the construction process and the unique management functions within it.

Construction Management Defined

Definition from Charles Patrick, Construction Project Planning and Scheduling: CM entails the planning, scheduling, evaluation, and controlling of construction tasks to accomplish objectives by effectively allocating labor, material, and time resources to minimize costs and maximize owner satisfaction.
CM is not a single task; it comprises several tasks and is delivered by a CM team. An individual performing any CM function is performing construction management.
CM services can be delivered in different ways:-
- Traditional: CM is provided alongside actual construction services when an owner hires a general contractor (GC). The GC uses CM skills to keep the project on time, on budget, and in line with plans. If errors/omissions in plans are discovered after construction starts, the contractor is not liable for cost overruns or delays.
- Separate professional service: CM contracted by the owner as a separate service to review plans and specs before construction, reducing oversights.
NOTE: The term construction manager, project manager, or constructor refers to any entity delivering CM services (GC, CM team, CM firm, or an individual trained in CM).

The Construction Project

Unlike factory-built products, construction projects are one-of-a-kind, on different sites, with variable weather and environmental/topographical conditions; no full-scale pre-testing.
Labor is typically transient and composed of various trades; labor is still largely hand-based, despite automation.
Materials are natural or weather-reactive (lumber, concrete, steel).
The CM challenge is to deliver a high-quality facility on time, within budget, and accident-free.
Primary objective: manage three values: time, cost, and quality (the “three-legged stool”).
Safety is the foundation; without safety, time, cost, or quality gains are hollow.

Project Values: The Six Dials (and Safety)

CPI introduced the six dials of project value: cost, time, quality, safety, scope, and function.
Traditional CM focus covers: cost, time, quality, safety. Scope and function are typically owner/design-team defined, though some methods bring CM in early to assist with scope and programming.
Interdependence: dials are interconnected; adjusting one affects others. Examples:-
- Increasing time (faster completion) typically raises cost.
- Increasing scope typically increases both time and cost.
The CPI notes (no longer active) highlighted how to monitor and optimize these dials throughout the project.
The goal is to optimize these values to meet owner requirements while managing risk.

The Owner Sets the Stage

No project without an owner; owners articulate needs in terms of project values and architectural requirements.
Architectural programming is the owner’s task, often aided by architects or programming specialists, to develop the program and scope of work.
Architectural program defines design parameters and sets the stage for contractor scope.
Scope of work: the parameters defining the contract work, communicated via plans and written specs.
A typical architectural program includes:-
- Building site constraints
- Primary function and required square footage
- Types of spaces and their adjacency
- Who will use the spaces and activities involved
- Mechanical and electrical needs
- Aesthetics and architectural image
- Any unique or special requirements
NOTE: The term owner is broad; it can mean the financing party, end users, or stakeholders with an interest in the project. Understanding the owner’s breadth of responsibility is essential.
Scope definition links architecture to construction; the design defines the scope as executed by the contractor.

Scope Definition and Delivery

The architectural program forms the design basis; design then defines the contractor’s scope.
Scope of work is specified in plans, blueprints, and written specs; it defines layout, site work, square footage, number of rooms, materials, dimensions, equipment, storage, and more, and it sets the quality level.
The CM challenge is ensuring the scope is delivered as defined:-
- Contractors must include the full scope in estimates.
- Materials, quantities, and installation must align with the plans and specs.
- Ongoing design details must be checked against contract requirements.
A well-defined scope reduces risk and helps avoid surprises; owner planning and professional help are critical before starting.

Project Delivery Methods

Project delivery is how design and construction are organized and contracted; the owner chooses the method based on project needs.
Four primary methods: (1) Design-Bid-Build (DBB) (2) At-Risk Construction Management (CM/GC) (3) Design-Build (DB) (4) Integrated Project Delivery (IPD)
All four require CM-type functions, but only Design-Bid-Build is traditionally called out as CM; other methods incorporate CM differently.
Key differences among methods:-
- Number of contracts
- Roles and relationships among parties
- When the contractor is involved
- Ability to overlap design and construction
- Who warrants the sufficiency of plans/specs
Core players: owner, designer (architect/engineer), contractor; additional players join as subs or partners depending on method.
Each method has pros/cons; owners should assess based on project goals and risk tolerance.

Design-Bid-Build (DBB)

Owner holds two separate contracts: design contract with architect/engineer and construction contract with GC.
Design progresses through schematic, design development (DDs), and contract documents (CDs); designer typically selected by qualifications and paid a fee or percentage of building cost.
GC is selected by low bid based on contract documents; GC may subcontract portions of work.
In this method, the owner interfaces with designer and GC separately; no direct designer-contractor contract.
The owner warrants the sufficiency of plans/specs to the contractor; gaps or errors become owner responsibility; contractors may request change orders.
Constructability reviews can help prevent design-related surprises.

Construction Management Delivery (CM) – Two Main Options

CM can be delivered as a professional service independent of construction work, with two primary interaction models:

Option 1: Agency CM

Agency CM: CM acts exclusively for the owner; provides advice and management oversight; no financial risk for construction delivery.
Three contracts: owner–designer, owner–contractor, owner–CM.
CM is not a project delivery method by itself; it’s a service layer on top of the DBB framework or other delivery types.

Option 2: At-Risk CM (CM/GC)

At-Risk CM (CM/GC): CM commits to delivering the project within a GMP (Guaranteed Maximum Price).
CM acts as a consultant in design phases, then as the general contractor during construction; essentially CM assumes construction risk.
Two contracts: owner–designer and owner–CM (or CM/GC arrangement includes CM as GC).
In some cases, owners bypass a GC and use multiple prime contracts with specialty contractors; the CM oversees these.

Other CM/Prime Concepts

Multiple prime contracts: owner bypasses GC and contracts directly with specialty contractors; CM may manage them.
CM decisions can shape early cost, schedule, and constructability outcomes.

Design-Build (DB)

DB is single-source: one contract between owner and a design-build entity responsible for both design and construction.
Often called single-source project delivery; enables faster procurement and integration of design and construction.
Fast tracking: overlapping design and construction to speed delivery; particularly used in DB and CM-based delivery.
Design-builder warrants sufficiency of plans/specs to owner; responsible for performance against owner requirements.
Early contractor involvement is a key advantage; continuous cross-team communication improves efficiency.
Progressive Design-Build: owner and design-builder engage early before design/pricing is set; applied to large, complex projects.
Progressive Design-Build Primer available through DBIA for more detail.

Integrated Project Delivery (IPD) and IFOA

IPD emphasizes collaboration; contractor on board early in design to optimize constructability, costs, labor, scheduling, and other factors.
IPD can be implemented via various contractual forms; formal IPD uses multiparty agreement and broader team beyond the owner–designers–constructor triad.
Integrated Form of Agreement (IFOA): multiparty contract among owner, design professional, and constructor sharing liability for both design and construction; aligns all parties for project performance.
Benefits of IPD/IFOA: enhanced collaboration, reduced waste, improved value, and shared risk/reward; enables more proactive problem-solving and design optimization.
IPD teams can include members beyond the classic triad, expanding the collaboration network.

Trends in Project Delivery

Increasing shift toward collaborative methods like IPD and integrated design-build; early involvement of construction professionals reduces risk and improves outcomes.
Bringing CM to early planning stages saves money, reduces conflicts, and can shorten delivery time.
The cost-influence curve demonstrates how early involvement reduces lifecycle costs and improves quality, even if upfront costs may be higher.
The emphasis is on collaboration, trust, and cross-disciplinary teamwork to handle complexity and scale.

What Does a Construction Manager Do?

The CM role centers on cost, time, quality, and safety, with additional focus on scope and risk management.
Eight basic CM functions are introduced, expanding to ten when fully enumerated:-
1) Managing the project team
2) Performing pre-construction services
3) Estimating the project
4) Administering the contract
5) Managing job site and construction operations
6) Planning and scheduling the project
7) Monitoring project performance
8) Managing project quality
9) Managing project safety
10) Assessing and managing project risks
The CM functions are typically performed by a team of trained professionals; a single seasoned individual can handle multiple CM functions.
The owner’s process includes getting the work first, then executing the work, while keeping score against time, cost, and quality.

The Functions in Detail

Managing the project team: assembling the right people, aligning them with project goals, and creating a productive culture; leadership often sits with a project executive, PM, or superintendent.
Performing pre-construction services: reduces risks by guiding material selection, costs, scheduling, site logistics, safety, and constructability during design; enables early problem identification.
Estimating the project: pricing materials, equipment, and labor; used to win work and to monitor cost against estimates; variances trigger corrective actions.
Administering the contract: handling the paperwork and business aspects of the contract; submittals, change orders, timecards, payroll, inspections, etc.
Managing job site and construction operations: logistics on the site—tools, equipment, deliveries, parking, storage, safety, waste management, and more; critical for productive progress.
Planning and scheduling the project: sequencing activities to move from groundbreaking to occupancy; schedules communicate plan and are continuously monitored.
Monitoring project performance: two key metrics are cost and time; measuring actuals against estimates and adjusting plans to recover.
Managing project quality: quality standards come from plans/specs; contractor implements a quality control plan with inspections, tests, and documentation to verify compliance.
Managing project safety: creating and maintaining a safe on-site environment; safety planning and proactive management are essential due to high risk in construction.
Assessing and managing project risks: risk identification, allocation to the party best able to manage it, and development of schedules and plans to mitigate risk.

What It Takes to Be a Construction Manager

General requirements (Bureau of Labor Statistics/OOH):-
- Flexible and able to work in a fast-paced environment; decisive under pressure
- Ability to coordinate multiple activities while solving problems; understand engineering/architectural drawings
- Strong oral and written communication; leadership skills; ability to work with owners, designers, supervisors, and craft workers
Additional traits from experience: strong work ethic, enthusiastic, highly motivated, tenacious, results-oriented, risk-tolerant; hands-on building experience is valuable.
Recommended experience: industry work experience plus formal training; internships or summer jobs are common prerequisites.
Business knowledge and technology: construction is a business; familiarity with computers and software is vital for CM work.

Typical Career Track

Common titles and progression (illustrative path from entry to senior roles):-
- Field Engineer
- Office Engineer
- Project Engineer
- Quantity Surveyor
- Estimator
- Lead Estimator
- Senior Estimator
- Chief Estimator
- Area Superintendent
- Project Superintendent
- Project Manager
Each role has specific responsibilities and contributes to overall project delivery; growth often leads to leadership roles in business development, risk management, and executive leadership.
Note: many CM executives started in field roles (e.g., laborers) and advanced through hands-on experience.

Fitness for the Career: FMI Aptitude Quiz

FMI Corporation’s 21-question aptitude quiz assesses traits relevant to CM success; rated on a 1–7 scale (1 = Strongly Disagree, 7 = Strongly Agree).
Sample scope includes: attention to detail, communication skills, leadership, teamwork, persistence, willingness to work hard, problem-solving, and resilience.
Scoring: sum responses, divide by 21; average score $\ge$ 4.0 suggests suitability for a CM career. The quiz is descriptive, not prescriptive; many different personalities can succeed in CM due to the variety of roles.
Note: the quiz reflects industry data from FMI and is intended as a self-assessment rather than a gatekeeper.

Terms to Know

agency CM: Construction Manager acts exclusively for the owner, provides advice and management oversight, and has no financial risk for construction delivery. This setup involves three contracts: owner–designer, owner–contractor, owner–CM.
design-build: A single-source project delivery method with one contract between the owner and a design-build entity responsible for both design and construction, enabling faster procurement and integration of design and construction.
architectural programming: The owner’s task, often aided by architects or programming specialists, to develop the program and scope of work, defining design parameters and setting the stage for contractor scope.
fast tracking: The process of overlapping design and construction activities to speed up project delivery, particularly used in Design-Build and CM-based methods.
at-risk CM: Construction Manager commits to delivering the project within a Guaranteed Maximum Price (GMP), acts as a consultant during design phases, and then as the general contractor during construction, thereby assuming construction risk. This typically involves two contracts: owner–designer and owner–CM.
integrated project delivery (IPD): A project delivery method that emphasizes collaboration, often involving the contractor early in design to optimize constructability, costs, labor, scheduling, and other factors, frequently implemented via multiparty agreements.
constructability reviews: A process of reviewing plans and specifications for a construction project to identify potential issues, improve construction efficiency, and prevent design-related surprises before or during construction.
multiple prime: A contracting strategy where the owner bypasses a general contractor and contracts directly with several specialty contractors for different portions of the work. A Construction Manager may be hired to oversee these multiple prime contractors.
construction management: As defined by Charles Patrick, it entails the planning, scheduling, evaluation, and controlling of construction tasks to accomplish objectives by effectively allocating labor, material, and time resources to minimize costs and maximize owner satisfaction. Broadly, it's the coordination of all project elements to guarantee quality, cost, and schedule while avoiding errors.
scope of work: The parameters defining the contract work, communicated through plans and written specifications, which outlines the layout, materials, dimensions, equipment, and required quality level for a project.
design-bid-build (DBB): A traditional project delivery method where the owner holds two separate contracts: one for design with an architect/engineer and another for construction with a general contractor. The general contractor is typically selected by low bid after the design is fully complete.
progressive design-build: A variant of Design-Build where the owner and design-builder engage in iterative collaboration early in the planning process before design and pricing are fully set, often applied to large and complex projects.
value engineering: A systematic method to improve the 'value' of goods or projects by examining the function and aiming to achieve the necessary functions at the lowest cost without sacrificing quality or performance, effectively increasing value by improving function or reducing cost.
integrated form of agreement (IFOA): A multiparty contract typically used in IPD, signed by the owner, design professional, and constructor, where parties share liability for both design and construction, aligning their interests for overall project performance and shared risk/reward.

Review Question Answers

1) Distinguish between construction management as a function and construction management as a project delivery method.
- As a function, construction management involves skills such as planning, scheduling, evaluation, and controlling construction tasks, allocating resources, minimizing costs, and maximizing owner satisfaction. An individual performing any of these tasks is doing construction management.
- As a project delivery method, CM refers to specific contractual arrangements, such as Agency CM or At-Risk CM (CM/GC), where an owner formally contracts with a construction manager or firm to provide these services as a dedicated part of the project's organizational structure, either as an advisor or taking on construction risk.

2) Identify at least three characteristics that make the construction project unique from other industry sectors.
- Construction projects are one-of-a-kind, each on a different site with variable weather and environmental conditions, and without full-scale pre-testing.
- Labor is typically transient, composed of various trades, and largely hand-based despite automation.
- Materials are often natural or weather-reactive (e.g., lumber, concrete, steel).

3) Name the four primary project values to be managed, monitored, and controlled.
- The four primary project values are cost, time, quality, and safety. Safety is considered the foundation upon which the other three values are built.

4) Why is scope definition so important in the construction process?
- Scope definition is crucial because it links architecture to construction, forms the design basis, and specifies all parameters of the contract work. A well-defined scope reduces risk, prevents surprises, ensures accurate contractor estimates, and guarantees materials and installation align with plans and specifications.

5) What is meant by the term project delivery?
- Project delivery refers to the comprehensive system or method by which the design and construction of a project are organized and contracted. The owner chooses this method based on the specific needs and goals of the project.

6) Identify the four primary project delivery methods and discuss how they differ contractually.
- 1. Design-Bid-Build (DBB): The owner holds two separate contracts: one with the architect/engineer for design and another with a general contractor for construction. The owner warrants the sufficiency of plans and specifications to the contractor.
- 2. At-Risk Construction Management (CM/GC): The owner typically holds two contracts: one with the designer and one with the Construction Manager. The CM commits to a Guaranteed Maximum Price (GMP) and assumes construction risk, effectively acting as the general contractor during the construction phase.
- 3. Design-Build (DB): The owner holds a single contract with a design-build entity responsible for both design and construction. The design-builder warrants the sufficiency of plans/specs to the owner.
- 4. Integrated Project Delivery (IPD): Often utilizes a multiparty agreement, such as an Integrated Form of Agreement (IFOA), signed by the owner, design professional, and constructor, where they collectively share liability for both design and construction and align for shared project performance.

7) Explain how agency CM is different from at-risk CM.
- In Agency CM, the Construction Manager acts exclusively as an advisor and manager for the owner, providing oversight without taking on any financial risk related to the actual construction delivery. This method involves three separate contracts (owner-designer, owner-contractor, owner-CM). In At-Risk CM, the Construction Manager commits to a Guaranteed Maximum Price (GMP) for the project and transitions into the role of general contractor during construction, thereby assuming financial and performance risk. This method typically involves two contracts (owner-designer, owner-CM).

8) What is meant by the term fast tracking?
- Fast tracking is a project management technique that involves overlapping the design and construction phases of a project. This allows construction to begin before the entire design is complete, with the aim of significantly speeding up the overall project delivery timeline.

9) Name the three basic ways in which a design-build entity may be configured.
- The three basic ways a design-build entity may be configured are: contractor-led Design-Build, designer-led Design-Build, and full-service Design-Build.

10) Identify the 10 functions of construction management.
- The 10 functions of construction management are:
1. Managing the project team
2. Performing pre-construction services
3. Estimating the project
4. Administering the contract
5. Managing job site and construction operations
6. Planning and scheduling the project
7. Monitoring project performance
8. Managing project quality
9. Managing project safety
10. Assessing and managing project risks

Additional Reference Points (from the transcript)

GMP = $\text{Guaranteed Maximum Price}$
IPD is defined as a process that integrates people, systems, business structures, and practices to optimize project results and reduce waste by collaborating across phases of design, fabrication, and construction.
IFOA = Integrated Form of Agreement; a multiparty agreement among owner, design team, and constructor sharing liability for design and construction.
Progressive Design-Build: owner–design-builder collaboration early in planning; enables early input on design and pricing.
Design-Build variants include contractor-led, designer-led, and full-service design-build, each with different contractual configurations and risk allocations.