Last edited 17 Aug 2016

Construction manager

Construction management is a procurement route in which the works are constructed by a number of different trade contractors. These trade contractors are contracted to the client but managed by a construction manager.

Construction management differs from management contracting, in that management contractors place contracts with works contractors (equivalent to trade contractors in construction management) direct, whereas construction managers only manage the trade contracts, the contracts are placed by the client. Construction managers are effectively acting as a consultant to the client, the client takes the risk for the trade contractors' performance. In legal terms the management contractor is acting as a principal whereas the construction manager is acting as an agent.

As the client is required to place and administer the trade contracts (of which there may be a large number) and perhaps to accept price uncertainty, construction management is only appropriate for experienced clients.

The construction manager is generally appointed early in the design process so that their experience can be used to improve the cost and buildability of proposals as they develop, as well as to advise on packaging, the risks of interfaces between packages, and the selection of trade contractors. Construction manager's are often appointed at the end of the concept design stage.

Appointing a construction manager enables some trade packages to be tendered earlier than others, and sometimes, even before the design is completed. For example piling might commence whilst the detailed design of above ground works continues. This can shorten the time taken to complete the project, however it means that there will be price uncertainty until the design is complete and all contracts have been let.

The services provided by a construction manager might include:

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 manager's delegated authority in issuing instructions which affect the cost of the project.

As a construction manager performs a consultancy and management role (unlike a traditional contractor) their appointment may be on similar terms to the consultant team. They may be required to hold professional indemnity insurance and to provide collateral warranties for tenants, purchasers or funders, and collaborative working with the consultant team will be vital to the success of the project.

As construction managers tend to be appointed early in the project, their appointment is unlikely to include a completion date.

NB The Chartered Institute of Building (CIOB) created a new profession of 'Chartered Construction Manager' in 2013. CIOB's use of the term 'construction manager' is a much broader one than the contractual definition described above. They describe construction management as, 'Management of the development, conservation and improvement of the built environment'. This might involve any role managing construction activities, rather than the specific role of managing trade contractors who are contracted to the client.

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For detailed descriptions of the tasks performed on a construction management project see the construction management: outline work plan.

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The Privy Council have given the Chartered Institute of Building consent to establish the Chartered Institute of Construction Managers as from March 2014. It is open for any member of the CIOB to exchange their membership to the CICM if they feel it is more appropriate.

In this and its related articles the title is wrong - it is about the Construction Management process - which does indeed include the appointment of a construction manager.