In construction project delivery, we have developed specialized approaches that align the interests of all stakeholders. Construction Manager at Risk (CMAR) is one of our most effective strategies for managing complex projects. As general contractors, we serve as the construction manager and take financial responsibility for delivering the project within a Guaranteed Maximum Price (GMP) while providing professional guidance during the design phase.
By implementing CMAR, we engage early—often during schematic or concept design—creating a seamless integration between our team, the owner, and design professionals. This early involvement allows us to provide critical constructability input, value engineering suggestions, and cost estimating expertise when these contributions are most impactful. Unlike traditional methods where contractors enter after design completion, our CMAR approach fosters a collaborative environment from the start.
The key element that distinguishes our CMAR services is our assumption of financial risk for project costs exceeding the GMP (except for approved change orders). This arrangement protects owners from unexpected cost overruns and ensures we are incentivized to manage the project’s budget, schedule, and quality effectively. Developed in response to the adversarial relationships often created by traditional methods, CMAR has proven particularly successful for complex projects like healthcare facilities, educational institutions, and infrastructure development where specialized construction expertise during design pays significant dividends.
How Does the CMAR Process Work?
The Construction Manager at Risk (CMAR) delivery method follows a structured pathway that balances owner oversight with contractor expertise throughout project development and execution. This approach is implemented through two clearly defined phases that optimize both design and construction outcomes for developers and property owners.
Phase 1: Pre-Construction Services
During this initial phase, we engage early in the project lifecycle, working collaboratively with owners, architects, and engineers while designs are still taking shape. Unlike traditional design-bid-build approaches where contractors see plans only after they are finalized, our CMAR team provides valuable input when changes are still economical to implement.
Our pre-construction responsibilities typically include:
- Conducting thorough constructability reviews to identify potential design conflicts before they become costly field issues
- Developing detailed cost models at key design milestones (typically 30%, 60%, and 90% completion) with increasing accuracy
- Facilitating value engineering workshops to identify alternative materials, systems, or methods that maintain quality while reducing costs
- Creating realistic project schedules that consider material lead times, weather conditions, and logical construction sequencing
- Identifying and procuring long-lead items to prevent schedule delays
- Performing site investigations to uncover hidden conditions that might impact construction
The culmination of this phase is the development of a Guaranteed Maximum Price (GMP) proposal. The GMP represents the ceiling price we commit to for completing the project, giving owners financial certainty while appropriately allocating risk. The GMP includes direct construction costs, general conditions, our fee, and contingencies for unforeseen conditions.
In the current construction climate, more projects benefit from establishing the GMP at the 60-75% design stage rather than waiting for 100% completion. This approach allows us to begin early work packages such as site clearing or foundation work while final design details are still being refined, potentially compressing the overall project timeline.
Phase 2: Construction Services
Once the GMP is accepted and approved, we transition to the construction phase under a separate contract that reflects the parameters established during pre-construction. Far from a typical general contractor role, we maintain heightened responsibility and accountability throughout this phase.
Our construction phase responsibilities include:
- Serving as the primary point of contact for all construction activities and coordination
- Managing the bidding and procurement process for all subcontractors and suppliers
- Implementing robust quality control systems to ensure work meets or exceeds specifications
- Maintaining detailed documentation of all project activities, submittals, and changes
- Providing regular budget and schedule updates to keep owners fully informed
- Coordinating with regulatory agencies for inspections and approvals
- Managing any additional site requirements such as traffic control, noise mitigation, or public safety measures
During construction, we operate with transparency regarding costs, supplying open-book accounting that allows owners to see exactly where their money is being spent. This approach creates trust and aligns with our commitment to serving as an extension of the owner’s team rather than simply an outside contractor.
The financial structure during this phase is particularly advantageous for owners. If the actual costs come in below the GMP, those savings typically revert to the owner or are shared according to terms established in the contract. Meanwhile, we bear the risk for any costs exceeding the GMP (outside of owner-directed changes), providing significant financial protection.
Key Differences from Traditional Delivery Methods
The CMAR process differs significantly from traditional design-bid-build methods in several important ways. Most notably, our involvement begins much earlier in the project lifecycle, which helps establish more accurate budgets and timelines. Instead of receiving a set of completed drawings and simply pricing the work, we actively influence design decisions to improve constructability and control costs.
Unlike design-build approaches where a single entity handles both design and construction, CMAR maintains the owner’s direct relationship with the design team while still leveraging contractor expertise during design development. This arrangement gives property owners greater control over design decisions while still benefiting from our construction knowledge.
In practice, we find the CMAR approach particularly valuable for complex projects with tight budgets, challenging sites, or aggressive schedules. For instance, on a recent mixed-use development project, our early involvement identified a foundation system alternative that saved nearly $400,000 without compromising structural integrity—the kind of opportunity that would typically be missed in a traditional delivery method.
The collaboration inherent in CMAR also allows us to develop contingency plans for potential challenges. For example, when material shortages threatened a multi-family housing project, we were able to identify and secure alternative products early enough to prevent schedule impacts, demonstrating how the CMAR process enhances project resilience in today’s volatile construction market.
What Are the Key Benefits of Using CMAR?
Transferred Risk and Financial Certainty
One of the key advantages of the Construction Manager at Risk (CMAR) delivery method is its ability to shift financial risk from the owner to the construction manager. The term “at risk” highlights this benefit. By establishing a guaranteed maximum price (GMP), the construction manager assumes responsibility for costs exceeding the agreed-upon budget.
This financial certainty provides owners with an upper limit on what they’ll pay for project completion, protecting them from constant concerns over change orders, delays, and other factors that often increase costs. If the project exceeds the GMP threshold, we, as the construction manager, are accountable for the difference—creating a strong incentive for us to manage costs diligently throughout the project lifecycle.
When Hurricane Ian caused material prices to spike across Florida in 2022, contractors under traditional contracts passed those increases directly to owners. With our CMAR agreements, we absorbed those market fluctuations while maintaining project timelines, providing our clients peace of mind during a volatile period.
Enhanced Collaboration and Owner Advocacy
CMAR fosters a collaborative environment where we serve as a dedicated advocate for the owner from design through completion. Unlike traditional delivery methods, where contractors engage only after design completion, we join the team during the preconstruction phase, offering critical input on everything from site logistics to material availability.
This early involvement aligns design intent with construction reality. We coordinate daily with architects, engineers, and specialty contractors to prevent disconnects that lead to costly rework. For developers exploring multi-family housing in today’s complex regulatory landscape, this collaboration means fewer surprises and smoother approvals.
The single-point-of-contact nature of CMAR significantly reduces the owner’s management burden. Property owners can focus on their core business while we handle day-to-day coordination of all project stakeholders—architects, engineers, subcontractors, and material suppliers—ensuring seamless communication.
Constructability Expertise and Value Engineering
Our early engagement in the CMAR process brings practical construction expertise during design development. We conduct thorough constructability reviews to identify potential conflicts or inefficiencies before they become expensive problems. This proactive approach saves time and money while improving overall project quality.
Value engineering is another significant benefit, where we evaluate design choices against construction costs and performance. Rather than cutting corners to reduce expenses, true value engineering optimizes the relationship between cost, function, and quality. For example, we might suggest alternative mechanical systems that deliver comparable performance at lower lifecycle costs or identify opportunities to prefabricate components off-site to accelerate the schedule.
Our hands-on experience with current market conditions allows us to provide realistic cost and schedule projections, helping owners make informed decisions about project scope and features. In today’s volatile construction market with lingering supply chain issues, this real-world input is invaluable in preventing budget overruns.
Transparency and Incentive Alignment
The “open-book” nature of CMAR creates transparency in project finances. We provide owners with complete visibility into subcontractor bids, material costs, and all other project expenses. This transparency builds trust and gives owners confidence that they’re getting fair market value for their investment.
Many CMAR contracts can be structured with shared-savings provisions that incentivize us to find cost efficiencies throughout the project. When we identify opportunities to complete work under budget, the savings are split between owner and contractor according to predetermined ratios. This creates a strong alignment of interests—we’re motivated to maximize value rather than cost.
The combination of early involvement, ongoing collaboration, and financial transparency makes CMAR particularly well-suited for complex projects where conditions may evolve during construction. Owners gain the security of knowing that their construction partner is committed to delivering a successful project on time and within budget.
What Challenges Should You Consider with CMAR?
While we advocate for the Construction Manager at Risk model for many projects, we have encountered several significant challenges that demand careful attention. The initial investment in CMAR usually surpasses traditional methods because the construction manager is involved during the design phase—this early engagement adds initial costs but aims to prevent more expensive problems later.
One of the most persistent challenges is the potential for designer-contractor conflicts. When our construction team reviews designs with an eye toward constructability and cost containment, it can create tension with architects focused on design integrity and innovation. These competing priorities require active relationship management and clear communication protocols to prevent project delays.
The quality control dynamic presents another significant consideration. Since we bear financial responsibility for cost overruns beyond the Guaranteed Maximum Price (GMP), there’s an inherent conflict of interest that must be carefully managed. The arrangement creates pressure that could incentivize cutting corners on materials or workmanship to stay under budget, especially as projects approach their financial limits.
Managing Risk and Quality Simultaneously
Our experience has shown that the CMAR delivery method creates a unique tension between risk management and quality control. When our team is financially accountable for overages, we must balance the pressure to minimize costs against our commitment to quality standards. Following the record material price fluctuations that occurred during the pandemic, this balancing act has become increasingly challenging as we manage uncertainty in our supply chains.
Subcontractor relationships can become strained under the CMAR model. As we approach GMP thresholds, there is increased temptation to exert downward pressure on subcontractors through aggressive back charges or scope disputes. This dynamic can lead to payment disputes, mechanics lien claims, and deteriorating project relationships if not properly managed through transparent communication and fair practices.
The administrative burden of CMAR shouldn’t be underestimated. Managing multiple contracts with designers, specialty consultants, and numerous subcontractors creates a complex web of responsibilities and interfaces. Each relationship requires careful documentation, clear expectations, and ongoing management to prevent miscommunication and contractual disputes.
Single Point of Failure Concerns
CMAR projects rely heavily on the capability of the construction manager. When we serve as the CM, the entire project’s success hinges on our team’s expertise, communication skills, and ability to forecast accurately. Without experienced personnel who understand both design and construction processes, CMAR projects can quickly encounter difficulties that undermine their intended benefits.
Contract negotiations in CMAR require specialized expertise beyond typical construction agreements. Defining the GMP requires precise scoping, comprehensive risk assessment, and clear delineation of responsibilities. Contract terms must address potential changes in scope, design refinements, and mechanisms for resolving disputes without derailing the project schedule.
Construction managers must possess exceptional communication skills to bridge the often different perspectives of owners, designers, and subcontractors. When we implement CMAR projects, we need team members who can translate technical issues into clear concepts that stakeholders with varying levels of construction knowledge can understand and act upon confidently.
Despite these challenges, we find that thoughtful planning, transparent communication, and experienced project leadership can overcome many of the inherent difficulties in the CMAR model. By acknowledging these potential pitfalls upfront and implementing proactive management strategies, we create CMAR projects that deliver their intended value to all stakeholders.
When is CMAR Most Appropriate for Your Project?
As general contractors serving developers and property owners, we regularly evaluate which project delivery methods will best serve our clients’ objectives. Construction Manager at Risk (CMAR) offers unique advantages for specific project types and situations, but determining when this approach makes the most sense requires careful consideration of your project’s characteristics.
Complex and Large-Scale Projects
We’ve found CMAR to be particularly effective for projects with significant technical or logistical complexity. Infrastructure projects like bridges, stadiums, and transit facilities benefit from the early contractor involvement that CMAR provides, allowing us to address constructability issues before they become costly field changes.
Scale often drives the decision toward CMAR as well. Recent examples include the Tennessee Titans Stadium—a massive $1.2 billion project being executed by a joint venture that includes Turner Construction—and the Austin Convention Centre Redevelopment, which will nearly double the facility’s capacity. These projects involve multiple stakeholders, intricate systems coordination, and substantial budgets that benefit from CMAR’s collaborative approach.
For developers undertaking large commercial developments or mixed-use projects, the complexity often exceeds what traditional design-bid-build can efficiently manage. We leverage CMAR to bring our construction expertise to the table early, helping identify potential conflicts between architectural vision and practical execution when changes are still relatively inexpensive to implement.
Projects Requiring Specialized Construction Expertise
When your project requires specialized construction knowledge—such as healthcare facilities with complex MEP systems, data centers with critical infrastructure requirements, or manufacturing facilities with precise technical specifications—CMAR allows us to contribute our expertise during the design phase. This early involvement helps ensure that specialized systems are designed with installation, maintenance, and operational efficiency in mind.
The value of having construction professionals involved in design review becomes particularly apparent in projects where small details can have significant impacts on functionality or long-term operations. We’ve seen this play out in laboratory and research facilities, where seemingly minor design decisions can dramatically affect construction sequencing, system performance, and project timelines.
By bringing our specialized construction knowledge to the table during design development, we help architects and engineers create documents that account for real-world construction constraints, resulting in more buildable designs and fewer unexpected challenges during execution.
Time-Sensitive Projects
For developers and property owners facing tight market windows or specific occupancy deadlines, CMAR offers significant schedule advantages. The method enables fast-tracking, where we begin early work packages—such as site preparation, utilities, and foundations—while design is still being completed on later elements of the project.
This phased approach can dramatically compress schedules compared to traditional delivery methods that require complete design before construction begins. We coordinate closely with the design team to develop logical work packages that allow construction to progress efficiently without compromising quality or creating rework.
Fast-track projects require exceptional communication and coordination, which is why our CMAR approach emphasizes transparent information sharing across the entire project team. Digital tools for model coordination, real-time document management, and collaborative decision-making become essential on these accelerated timelines.
Projects With Significant Risk Factors
When your project involves substantial unknowns or potential complications—such as renovations of existing structures, brownfield developments, or sites with difficult access or environmental considerations—CMAR provides a structured approach to risk management. As your construction manager, we identify potential risks early and develop mitigation strategies that can be incorporated into the design.
The guaranteed maximum price (GMP) structure of CMAR contracts provides developers with cost certainty while ensuring we remain motivated to find efficient solutions to challenges that arise. This alignment of incentives creates a more collaborative atmosphere than traditional contracting methods where risk allocation often becomes adversarial.
We evaluate subsurface conditions, existing structure integrity, market volatility for key materials, and other risk factors during preconstruction, allowing us to develop realistic contingency plans and pricing that accounts for the specific challenges of your project. This proactive approach to risk management helps prevent the surprises that often derail schedules and budgets.
The most successful CMAR projects leverage the construction manager’s expertise throughout the entire project lifecycle—not just during construction. Our experience with material procurement, subcontractor availability, and construction sequencing informs design decisions that improve both constructability and long-term performance.
For developments where flexibility may be needed as the project evolves, CMAR provides a framework for collaborative decision-making that keeps the project moving forward while accommodating necessary adjustments. This adaptability, combined with the cost control mechanisms inherent in the CMAR approach, creates an effective delivery system for projects with dynamic requirements.
While CMAR offers numerous advantages, it requires an experienced contractor with strong preconstruction capabilities and transparent communication practices. Our team’s approach to CMAR emphasizes collaborative problem-solving, proactive cost management, and schedule optimization—all focused on delivering exceptional value to developers and property owners on complex, time-sensitive projects.
Conclusion: Making CMAR Work for Your Construction Project
Construction Manager at Risk (CMAR) delivery offers developers and property owners a strategic framework for balancing collaboration, risk allocation, and budget certainty. Through our experience with CMAR projects, we’ve seen how this approach aligns construction management expertise with owner objectives. The transfer of financial risk beyond the GMP incentivizes us to protect your interests while delivering exceptional quality.
Success with CMAR depends on several critical factors we’ve refined through implementation. Clear contract documentation sets expectations from the start. Early collaboration during design development helps identify constructability issues before they affect the field. Transparent cost reporting provides visibility into project finances, and our streamlined communication protocols keep all stakeholders informed. Efficient change management processes are crucial—when changes are necessary, our systems ensure minimal disruption to project momentum.
Whether you’re planning a complex healthcare facility, mixed-use development, or institutional building where quality standards are paramount, we can help you determine if CMAR aligns with your project goals and risk tolerance. Contact EB3 Construction to discuss how our CMAR approach can deliver certainty for your next project.
