Construction management: appointing the construction manager

Construction management is a procurement route in which the works are constructed by a number of different trade contractors who are managed by a construction manager but are contracted to the client. The construction manager is generally appointed early in the design process so their experience can be used to improve the cost and buildability of proposals as they develop as well as to advise on packaging and the selection of trade contractors. Within this plan we suggest the construction manager is appointed on completion of concept design. Earlier or later appointment might result in some activities being re-allocated between the consultant team and the construction manager (for example the role of cost consultant).

The construction manager might be an individual with limited responsibilities, or could be a large organisation taking full responsibility for cost planning, packaging and tendering trade contracts as well as managing construction. For a description of the services a construction manager might offer, see: Construction management.

[edit] Agreeing the procedure that will be adopted

The client may decide that they require advice from independent client advisers or member of the consultant team to help them make the appointment. If this requires a new appointment, go to the work stage: Construction management: appointment .

The client determines the selection procedure that will be adopted. This might be a process of recommendation, research and interview, open competition, selective competition, or an existing relationship such as a framework agreement.

The client may have to follow a pre-determined procedure if; there are in-house rules governing appointments, if they are a local authority or other public body, or if the project will be publicly funded. Such procedures may include assessing whether OJEU procurement rules are likely to apply which can cause significant delays unless implemented early in the project.

[edit] Agreeing the nature of appointment required.

The client should agree the wording of any adverts that are required (such as OJEU adverts) and if appropriate prepare a pre-qualification questionnaire.

The client should prepare documents describing the nature of the development (if the construction manager is appointed very early in the project, this might simply be the strategic brief, whereas if they are appointed later, it could include the project brief and concept design).

The client should define the schedule of services that will be required (pre-construction and construction services), selection criteria, form of agreement and contract terms for the appointment.

Construction managers are likely to be paid based on reimbursable costs (such as site facilities, staff costs, statutory fees, offices and so on) and a management fee, comprising pre-construction and construction fees, which may be fixed, or calculated based on an agreed formula. It is important to establish what is included in the construction manager's price (for example insurance requirements or payment of statutory fees) and to agree the limit of the construction managers delegated authority in issuing instructions which affect the cost of the project. As construction managers tend to be appointed early in the project, their appointment is unlikely to include a completion date. Construction managers may be required to hold professional indemnity insurance and to provide collateral warranties for tenants, purchasers or funders. There is merit in incentivising the construction manager to achieve key performance objectives set by the client. Any such mechanism should be clearly set out in the appointment contract.

The client should agree the form of proposal that will be requested from candidates.

The client prepares the construction management appointment documents. These are likely to include: the construction manager's appointment; the trade contract; the construction manager's warranties (eg purchasers, tenants or funders) and the trade contractor's warranties (eg purchasers, tenants or funders).

The client prepares a formal request for proposals.

[edit] Preparing a list of possible candidates.

The client prepares a long list of possible candidates, either from recommendations, existing relationships or expressions of interest received in response to adverts.

The candidates may be required to complete a pre-qualification questionnaire, or there may be some other assessment procedure (such as interviews) that results in the preparation of a short list that will be invited to submit proposals. Such assessments may include assessing experience and capability, checking professional indemnity insurance, assessing CDM competence and BIM competence, checking references and so on.

The client should put in place procedures for responding to queries from candidates.

Short-listed candidates are invited to submit proposals in response to the client's request for proposals.

[edit] Selecting the preferred candidate and making the appointment.

The client collates responses to queries from candidates and issues these responses to all candidates.

The client receives and opens the candidates' proposals and makes a record of the fee proposals of each candidate. In some circumstances, fee proposals may be submitted in a sealed envelope and opened separately from the rest of the proposals so that the assessment procedure is not initially prejudiced by the fee (which it may be possible to negotiate down).

The client assesses the candidates' proposals (including the personnel the construction manager will use on the project). The client may seek advice from existing consultants or independent client advisers.

The client invites the candidates to interview, identifies the preferred candidate(s) and opens negotiations with the preferred candidate(s).

The client appoints the selected candidate and arranges a start-up meeting with the construction manager and the consultant team.

The client informs other candidates that they have been unsuccessful. It is best practice to give clearly thought-out, specific feedback to unsuccessful candidates as they have take the time to prepare proposals often for no fee. Candidates greatly appreciate this feedback and will be more likely to express interest in future projects.