Construction project management is the professional building services provided by an expert construction company for the contracting delivery of a project.
The construction company traditionally creates a construction management team that is given complete responsibility for all activities required to execute the assigned project.
These construction project management (CPM) responsibilities can be defined as (onsite) construction management activities and (offsite) administration management activities.
Administrative management services include all offsite activities such as procurement, contracts & insurance administration, cashflow & financial controls and back-office support for onsite tasks.
Construction management (CM) services include all onsite activities such as quality control, labor & material logistics, scheduling, inspections and document control.
In most construction management contracts, the owner maintains the financial risk of the project and the construction team answers to the owner for the progress, budget updates and contracting execution performance.
There are a variety of reasons that owners desire to use construction management services instead of a general contractor company. But generally speaking, the owner wants to maintain the ultimate financial control over the results of the building project.
Construction project management services are utilized for contracting for commercial, residential and industrial construction. Primarily these services are commonly utilized by commercial and industrial developments.
When these services are used for the residential sector, they are normally employed for large luxury home construction properties with many unique design and products, which make them difficult to accurately bid for fixed price contracts.
Building this type of uniquely designed luxury house is very labor intensive and time consuming for an at-risk general contractor. A project of this type can last upwards of 2 to 3 years from the design phase.
I am asked regularly why should anyone use a construction management firm instead of a traditional architect and general contractor. The answer lies in the owner’s design / build objectives and risk assessment for their property construction.
The most common reasons are the emotional and complication factors that affect the building process of a large uniquely designed luxury house make the building time very unpredictable and therefore nearly impossible to bid competitively. In most cases, this fact alone will motivate the owner to use the construction management delivery method.
Learn about the different types of construction project management service available for special situations
We will explore some of the different types and situations that promote the use of construction project management services.
Full Service Construction Project Management
Project management (PM) at it’s very definition involves any and all matters associated with the design and construction contracting of a building project.
This service provider by its inherent nature is a trusted adviser in all affairs including service contracts, payment schedules and risk management as mentioned.
By the very nature of the PM firm responsibility, these represents the interest of the owner without any associated conflict of interest.
They can be a direct hire as a design-build service firm, but traditionally a project management firm are retained to oversee the betterment of the client’s interest.
During the design phase of the home planning process, the PM will facilitate a feasibility study for the owner in the form of a conceptual budget for their architectural design. This can be done before the owner hires an architect and/or during the actual design phase to insure budget conformity with design.
This provides the owner the time saving features required from a major redesign due to unexpected budget surprises.
One of the significant advantages of retaining a professional PM firm is their ability to close gaps in contractor’s scope of work for the services and products provided on the project during the contract awarding.
These scope of work gaps often lead to unplanned budget expenses and scheduling conflicts that cause time delays and price creep on the overall construction cost.
Another common responsibility is confirming or creating a detailed critical path progress schedule.
These design and construction schedules provide essential information concerning construction trade activities and product delivery events that have an impact on the projects progress.
One of the important aspects of the PM team other than the monitoring of the project’s execution is the associated administrative task essential for verification of the project’s execution compliances.
There are tremendous quantities of documentation to review, process and properly catalog on a large project. The creditability of the quality control and reduction of inherent risk in each project is directly dependent on this commonly overlooked responsibility.
Without the proper document requirements and controls the contracting process can spin out of control and leave the owner personally liable for unexpected financial consequences.
Advisory / Consulting Services
If you ask a dozen owners that have previously built a major project what the experience was like, you will likely get a dozen different answers.
There is a fundamental reason for this outcome, designing and building a property is a very personal journey. I like to use the comparison of the luxury one-of-a-kind home building process to financial or legal process matters.
When faced with challenging legal or financial matters, the vast majority of people will hire a professional adviser.
This is also the primary motivation that owners will hire a professional PM team, to oversee the owner’s interest throughout the building execution process.
The extent of the services needed is directly associated with the time restrictions and risk reduction goals of the property owners. The more unique and complicated the design the higher the risk associated with an unwanted issue or result.
PM services range from a 1 on 1 professional discussion with your adviser before and/or during important decisions to full-service construction financial and operational construction services.
One of the most common needs for CPM services as a professional adviser is when an owner will hire the PM firm to oversee a general contracting company that has been hired as a prime contractor.
In this case, the owner may not have the time or skill to watch over the construction progress, so they hire a PM firm to represent their interest.
Supplemental Project Management Services
Supplemental project management services are al carte services that owner builders use to shore up areas of their design build team that they feel is insufficient or has greater exposure than they are willing to accept.
These service items include the vast amount of the administrative tasks from insurance and financial monitoring to onsite testing and inspection reports to full project quality control.
Additional al carte task includes, feasibility studies, budget and cost estimation, plan and engineering reviews.
The supplemental PM services are most effective for the owner when the owner has an architect and general contractor that are having issues or when the owner has confidence concerns about the prime contractor’s good faith effort.
For the owner having a professional to act as a go between, allow the owner to have an open conversation the prime contractor without the emotional interference can be of great benefit and comfort for the owner.
These services can also be useful for an owner who would like another layer of quality control and quality assurance.
Third party inspections and testing are an excellent preventative measure in avoiding undetected future problems.
Project Recovery Services
Construction project management required for a poorly performing or distressed project requires a special set of skills beyond the traditional PM skills.
In most project recovery assignments, they dictate a redevelopment of the contracting leadership team and often additional redesign of some architectural details.
This transitional period usually results in reduced building progress as all related contractors are evaluated and contracting issues are addressed.
The key to a successful project recovery transition is the cooperation of the owner. Many of these troubled jobs are the consequence of cutting corners on proper pre-construction due diligence or the owner’s efforts in attempting to save money from a ballooning building budget.
Regardless of the reasons for the nonperformance, it is essential for the PM team and the owner to be aligned in the commitment to the methods and means to correct and advance the contracting performance.
As you can see hiring a PM firm to facilitate your needs is completely associated with the property owners project goals and personal situation.
These services fit many owners needs especially owners that do not have the time required to get intimately involved in each phase of the construction experience.
The construction project management delivery method is a vital and important function in the building process for the various needs we have presented.
Conclusion
The construction project management approach is an effective alternative building delivery alternative for challenging and undefined project scopes of work.
This process provides the owner complete transparency of the operations cost and documents throughout the progress of contracting.
The CPM is a building process that serves the owners interest more than any other contracting delivery method.
