How can a combined Designer-Construction Manager benefit your project?

By Arun Parsons, P.E. and Tod Woodson 

Your project is advancing through design and you’re thinking ahead to construction. How do you select the right Construction Manager (CM)? Do you go out into the marketplace and solicit proposals from uninvolved consultants? What if your design firm also offers CM services? What are the benefits of having a combined designer/CM on your project? Let’s explore.

First, let’s define the project roles. The project owner is the person or entity who owns the project. The owner hires a designer, including engineers and architects, to define the project on paper and develop construction documents. Once the design is finalized, the project moves into the construction phase. At some point prior to construction, ideally during design, the owner hires a Construction Manager (CM). The CM provides insight during design, and then oversees the project construction, coordinating the Owner, Contractor and Designer, and leading the resolution of any issues that might arise during construction.

Resolving issues during construction is a key function of construction management. Issues that arise, such as a deviation from expected site conditions, a design error, or a delay in material availability, typically threaten the project’s schedule and cost. It’s the CM’s job to assess the issue, identify responsibility for the issue, and work with the team to solve the issue and keep construction on track. As project size and complexity increase the cost impact of change becomes greater making fair and accurate change management by the CM critical.

As an Owner, selecting a CM that is committed to and capable of managing change is extremely important. In this regard, a good CM has two key principles: 1) By definition, a CM’s responsibility is, first and foremost, to the Owner and the successful project, regardless of the project delivery model or CM affiliation; 2) To be effective, a CM must be fair, impartial, and transparent to earn the credibility necessary to orchestrate and lead the Owner, Designer, and Contractor through construction.

With this important functionality in mind, how do you select the right CM for your project? You can choose to hire an independent (third party) CM who has not had previous project involvement, or you can choose a CM who has already been a part of the project, commonly affiliated with the design team. This decision is influenced by several factors and can usually be boiled down to: A CM team with prior project involvement brings benefits of deeper project understanding and an existing project relationship. But a CM team with no prior involvement has a stronger claim to being impartial in the management of construction issues.

The design firm already has intimate knowledge of your project – and not just how it’s designed; they also know the stakeholders, the drivers, the importance of the project, and what issues are likely to keep you awake at night. These are nuanced issues that are understood from months or years of collaboration on the planning and design of your project – such nuanced issues will be hard for a third-party CM to pick up on. Hiring a CM from the same firm as your design team also means more open and streamlined communication between the designer and CM, using established intra-firm relationships, channels, and methods.

So, since there are significant benefits to having the design firm also do CM, how can you ensure that your CM will be impartial, credible, and prioritize the Owner and project over their affiliation with the design team? It’s an important question, and there are some simple steps to ensure there’s no actual or perceived conflict of interest between the CM and the Designer.

Step one: Set up a “firewall” between the CM and design teams. The firewall in this context is not a complete separation; the CM and the Designer are supposed to collaborate during construction. What the firewall does is to create a separate CM team with independent functionality and ensures that the design team sticks to its role. Some key aspects of this arrangement include:

• Key individuals on the CM team must be separate from the design team, such as the Construction Manager, Resident Engineer, and Contract Administrator. These key individuals effectively are ‘third party’ and they bring a fresh set of eyes to identify problems and find solutions.
• The Construction Manager must report directly and independently to the Owner.
• The project’s document control system during construction should be managed by the CM team, with the design team having no more access or privileges than would be typically provided to a design team during construction.

Step two: Engage an independent panel to review important change orders. This might take the form of a 3-person panel of experts who are not affiliated with the Owner, Designer, or Contractor. These experts would be identified and contracted with the Owner at the start of construction. The CM contract can specify thresholds at which potential change orders are reviewed by the independent panel, such as a dollar amount or duration of impact. The CM would still do the work to assess such potential changes and make recommendations, and the independent panel would provide review and comment directly to the Owner. Implementing this framework clearly illustrates to stakeholders that important decisions are being independently reviewed. It goes a long way to maintaining positive perception.

In conclusion, the benefits of having your CM from the same firm as your design team are significant. The CM team joins the project with an established relationship with both the Owner and Designer, and shares the historical experience of the project, drivers, and stakeholder concerns. The established intra-firm relationships and lines of communication between the designer and construction manager is also a big plus. Finally, this solution saves time and money if the CM work is incorporated into the design contract; there’s less contract management and paperwork for the Owner to perform. When taking this approach, we recommend you incorporate the safeguards above to avoid actual or perceived conflicts of interest in change management.

To learn more about the benefits of a combined Designer-CM, contact us at: aparsons@geiconsultants.com, or twoodson@geiconsultants.com