Construction Manager at Risk
The American Institute of Architects supports the alternative
project delivery method of construction management at-risk. The AIA
believes that alternatives to traditional project delivery offer
licensed architects expanded opportunity. The AIA urges state
legislators to support alternative delivery methods such as
construction management at-risk. However, such projects should not
impede the ability of architects and engineers to work in their
traditional design role or disallow them from serving in the role
of a construction manager if they so choose.
The CM at-risk delivery method is an alternative procurement
process similar to long-standing private sector construction
contracting. It allows the client to choose the CM before the
design stage is complete. The CM is chosen based on qualifications,
and then the entire operation is centralized under a single
contract. The architect and CM work together in order to cultivate
and assay the design. Then, the CM gives the client a guaranteed
maximum price, and coordinates all subcontract work. Cost savings
can be realized in a number of ways. By hiring the CM during the
design phase, early coordination is possible, which can increase
the speed of the project and strengthen coordination between the AE
and the CM. Since the client hires the construction manager based
on qualifications, it ensures a construction manager with a strong
allegiance to the client, because their business relies on
references and repeat work. Finally, transparency is enhanced,
because all costs and fees are in the open, which diminishes
adversarial relationships between components working on the
project, while at the same time eliminating bid shopping.
Due to the fact that legislation is changing on a constant basis,
we have compiled information on the states which have construction
manager at-risk laws, links to those laws, and additional resources
related to construction management at-risk.
If you have any questions or comments, e-mail Brooks Rainwater,
Manager, State and Local Issues and Programs, at brainwater@aia.org.
Construction
Manager at Risk Laws in the States
The following map displays states (in green) that allow the
alternative project delivery process of construction management at
risk
 |
Green = States that have passed construction
manager at risk legislation
White = States that have not passed construction manager at risk
legislation
The law regulates who can act as a CM, and it favors general contractors. Architects can serve as CM, if registered or licensed to do so. Also, architects can serve as CM on projects for which they are the Design Professional.
This law passed in 2004. It regulates who can act as a construction manager at-risk, and defines the parameters of the delivery process. A provision is included which mandates that by January 15 of each year any agent that uses construction-management-at-risk to procure construction services shall submit a report to the secretary of state on the benefits associated with the use of the procurement methods, including the number of projects completed in the previous year and cost savings and other benefits realized.
HB2579—Emergency measure making numerous changes and additions to the statutes governing the procurement of professional and construction services. Governor Signed 4/20/05
California law does not regulate construction management. However, for public works, QBS law states that construction managers must be selected according to qualifications at a negotiated fee and construction management services must be provided by an architect, engineer, or general contractor.
Public Contract Code §10510.4 to
10510.9
Govt. Code §4525 to 4529.5
Business and Profess. Code §7139 to 7139.10
There is no definition or regulation as to who may offer
construction management services.
There is an exception though, the state and the City & County
of Honolulu use an annual application for professional services. CM
is considered a "professional service" based on internal agency
practice rather than a "construction service." If a professional
service provider wants to be considered for CM contracts, a box
must be checked. The review committee then decides if the provider
is professionally qualified to be on the list of those to be
considered for cm contracts.
Traditionally, architecture or engineering firms are hired for cm
contracts, with most going to engineers. Based on a review of local
historic practice, it seems that cm has been a professional service
due to professional services long being considered "non-bid
contracting."
Illinois does not currently regulate CM services but there is agreed upon language pending in the legislature that defines CM services (as agent, not at-risk – SB0518), ensures that professional practice acts are not superceded, and outlines a QBS process for hiring CMs. The so-called self performance prohibition is in the language and would apply to a/e's and contractors.
Indiana restricts who may offer construction management
services, in 5-16-10
Section 2:
(a) A unit of local government may not employ the
architect or engineer who provided design services on a public
construction project or his affiliate to be the construction
manager on the project he designed.
(b) A unit of local government may not let a
general contract, or separate trade contract, to perform work on a
public construction project to the construction manager of the
project.
This law was established in 1981. There is currently enabling
legislation for Design Build pending and this law is causing some
confusion as it relates to Designer-led Design Build.
Statutue 5-16-10
This law regulates construction management at-risk as it relates
to education projects within the state. The bill defines the
process, as “the services provided by a firm which has entered
into a contract with the board of regents to be
the construction manager at risk for the value and schedule of the
contract for a project.”
Firms engaged in construction management at-risk contracts with the
state are encouraged to submit annual reports to the secretary of
administration that include qualifications and performance data.
When the board of regents chooses to use a construction manager
at-risk they must notify the state building advisory commission.
The state building advisory commission prepares a list of at least
three and not more than five qualified firms for the project.
A bill passed in Kentucky in 2001 stating that architects cannot
do CM on local government projects for which they are also the
architect. This does not apply to private projects or state work
(only local government projects).
There is no regulation of construction management service
providers—no definition of qualifications or any licensure or
certification.
Statute 45A.030
Statute 65.025
SB49—A bill reorganizing the executive branch of government. Includes provisions for procurement of design services using alternative delivery methods including c-m at risk. Establishes procedures for procurement in which c-m at risk may be used after first examining design-bid-build and finding that an alternative delivery method would offer better value to taxpayers. Signed by the Governor 3/16/05
HB239—The bill deals specifically with financing the state’s community and technical colleges. It contains a provision allowing for alternative delivery methods in capital construction projects, including c-m at risk and others. Projects delivered on the design-build basis or construction management-at-risk basis shall be procured in accordance with KRS 45A.180. Signed by the Governor 3/8/05
The construction-manager-at-risk method must be consistent with the agreement between an owner and a construction manager when the construction manager is also the constructor as recognized by national architect or general contractor organizations. The state must also publish request for qualifications in at least two newspapers, and create a short list of three to five firms to choose from.
The use of construction management at-risk is referenced in an
education statute as a form of alternative project delivery
arrangement.
Statute 4-126
The state’s recently passed (this past summer) Construction
Reform states: (this requirement is mandated for any municipal
project over $1.5M)
"Owner's project manager", an individual, corporation, partnership,
sole proprietorship, joint stock company, joint venture, or other
entity engaged to provide project management services on behalf of
a public agency for the construction and supervision of
construction of a building project. Any individual assigned by the
owner's project manager to provide the project management services
for the building project shall be a person who is registered by the
commonwealth as an architect or professional engineer and has at
least 5 years experience in the construction and supervision of
construction of buildings of similar size and complexity; or a
person who is not so registered and has at least 7 years experience
in the construction and supervision of construction of buildings of
similar size and complexity. A public agency may utilize a member
or members of its staff as owner's project manager provided such
staff meets the required qualifications. The owner's project
manager shall be independent of the designer and the construction
management at risk firm. "Public Agency", shall have the same
meaning as found in section 44A of chapter 149.
Statutes (ALM GL ch. 149A, § 2 (2005),ch. 149A, § 7ch. 149A, § 13)
The statutes do not address CM. The contractors have been able
to administratively require CM’s to be licensed contractors in
order to provide CM services.
CM at risk is not legal, however there is a pilot project from the
2004 special session that will allow two CM at risk projects.
CM is being offered in the public arena as a service. That allows
the CM to be directly selected on qualifications, some times using
a QBS process. It is a form of CM at agency.
At this time the question of CM licensure has not been raised with
the contractors board, but clarifications may come about with the
pilot program.
This law passed in 2005. It regulates state construction contracts, and includes a provision allowing alternative project delivery processes, including construction management at-risk, to be chosen by the commissioner pursuant to established rules.
Statutes 2005 Minn. ALS 78, Chapter Law 78, S.F. No. 1335
SF1335—Bill regulating state construction contracts. The commissioner may choose to use design-build or construction manager at risk as long as it accords with sections 16c.32 and 16c.33. As it relates to UMN the trustees, rather than the commissioner will follow this ruling. Governor Approval 5/24/05
Alternative project delivery is applicable only to school building projects.
AIA-NM along with AGC and ACEC worked on the language of this legislation, SB952. The CM at risk as defined in this legislation is a General Contractor with an appropriate license in the state.
Statute 13-1-40.1
Statute 13-1-100.1
NYS does not regulate construction management services or construction managers. New York’s licensing law does state that construction managers are not required to be architects.
This law defines construction management at-risk and the services related to the process. It specifies that design services for the project must be performed by a licensed A/E and that the A/E will have a separate contract with the owner. All bids in the process must be open and recorded.
Construction management is allowed, but construction management at-risk is not authorized.
Construction management is allowed, but construction management at-risk is not authorized.
This law defines construction management at-risk. This delivery process must have the written approval of the Director of Central Services or an act of the legislature specifying cm at-risk for a project. Whenever cm at-risk is used construction administration shall be performed by the State Construction Administrator, the Administrator's designee, or otherwise by contract or contract provision approved by the Director of Central Services.
Construction management is allowed, but construction management
at-risk is not authorized.
Construction management is allowed, but construction management at-risk is not authorized.
Construction management at-risk is defined within a larger statute, which defines construction management and services associated with this process.
Statute 5-18-45
Statute 46
Statute 47
Statute 48
Statute 49
This law passed in 2005. The statute defines the parameters under which construction management at-risk may be used.
Parameters include, qualifications, experience, staff availability, technical approach, minority participation and cost, as deemed appropriate by the authority. A 10 day period is established, from public advertisement of the request for proposals to consider the evaluation factors set forth. The contract shall be awarded to the best proposer, using the evaluation criteria set forth.
Statute Tenn. Code Ann. § 12-10-124 (2005)
Construction management at-risk is expressly authorized for school districts. It is also authorized for use in other public projects for the construction, rehabilitation, alteration, and repairs of facilities. Procedures for this process are duly ascribed by the appropriate government agent.
Statute § 44.038
Statute § 51.782
Statute § 2166.2532
Statute § 271.118
Statute § 60.462
HB2828—A navigation district or port authority may use
alternative project delivery, including c-m at risk for projects
costing over $25,000 to construct, rehabilitate, alter, or repair
facilities. Sent to the Governor 5/24
Under the definitions of Architect, Utah does include the
“administration of construction contracts:” as a
component of the practice of architecture.
Utah does not seem to limit who can do construction management
services, but does include the construction management services
under the definition of a “contractor”, including an
entity that performs management and counseling services on
construction projects.
Construction management is allowed, but construction management at-risk is not authorized.
It is believed that construction management services are not
defined or regulated by statute or administrative rule. There have
not been attempts by contractors to restrict architects from
offering CM services.
There is currently a working group, that is moving forward slowly,
trying to tackle alternative project delivery methods.