By Andy Fulton
The triangle below shows the separate but interdependent nature of a CM-at-Risk (CMAR) contract (commercial terms) with Lean practices (the operating system), which is a collaborative style of management vs the traditional top-down command and control nature of construction, and the project team (organization).
Regarding commercial terms, Integrated Project Delivery (IPD) is hands-down the gold standard. CMAR falls somewhere on the spectrum between IPD and Design-Build (DB). CMAR has the POTENTIAL for a lot more financial transparency as compared to most DB contracts. And with a lot of the project teams I’ve seen, that is precisely what is missing and what makes for a very dysfunctional run-up and “aftermath” to the development of the Guaranteed Maximum Price (GMP) which is one of the usual features of the CMAR contract. I’ve seen similar experiences with teams using Progressive-Design-Build which also uses a GMP.
What’s missing is the operating system.
Teams say, “let’s progress toward a GMP”; but they have no process for how to do it. I’ve read the DBIA literature, and, it is mostly lacking compared to Lean’s processes including Target Value Delivery utilizing Set Based Design, Continuous Estimating, and deliberately formed cross-functional cluster teams to increase collaboration across silos. Also often missing is another Lean process (The Last Planner System®) that provides a purposeful and structured approach to iterating towards the GMP. It is highly effective but has a high bar for implementation because of the training and “setup”; required that can be challenging to do in the incredibly fast paced world that Pre-Con/Design has become as well as most teams lack fully educated/trained project leaders to make the push early-on to set things up properly.
For those committing to CMAR as their project delivery method, perhaps the most viable solution to the “missing piece” is to add the Lean Addendum known as ConsensusDocs 305 which incorporates Lean Design and Construction’s tools and techniques. In fact ConsensusDocs recommends using it with CMAR:
“The ConsensusDocs’ 305 is most applicable for parties interested in getting the benefits of lean tools and techniques but not ready to use a pure integrated project delivery (IPD) agreement. The underlying prime agreement the Lean Addendum would coordinate best with is a Construction Manager (CM) At-Risk agreement, such as the ConsensusDocs 500 CM At-Risk agreement.”
So, in summary, I’ve seen great collaborative teams using all kinds of contract models, CMAR is solid choice, I do really like a GMP, but without a good operating system, Lean, there is often a lot of infighting, politics, and strife.