Northcentral Expectations, Essay Example

Introduction

Construction project management is undergoing unprecedented change. In addition to new regulations and environmental challenges to traditional building methods, state and local governments, facing substantive fiscal constraints, are trying innovative new methods to pay for construction projects. Construction management at-risk is at the forefront of payment reform: Construction management at-risk shifts a portion of risk to the contractor who is responsible for managing the project in the initial design stages, and then transitions into the traditional vendor (building) role after the design component.

Although numerous states have adopted regulations supporting construction management-at-risk projects, the adoption of the model has not been universal across states or across industries. The efficacy of construction management at risk versus other project management models is a seminal question in the mind of state policymakers and construction firms looking to explore the model in greater depth.

Statement of the Problem

The problem being addressed in this study is in which industries construction management at-risk is typically employed and efficiently used versus other commonly used construction management methodologies. This problem is important because although the management technique has emerged as a plausible alternative in private project management, some state and local governments are researching its plausibility for public projects. The study will use a qualitative study to explore the topic.

The concept of construction management at risk (CMAR) has fundamentally changed how construction projects are managed in numerous industries (AIA, 1996). Unlike the methodology prescribed in other popularly used methods such as design-bid-build, CMAR focuses on one individual serving as a building consultant (agent) during the pre-construction phase of the project, who then transitions to a traditional management role during the building phase (Transportation Research Board of National Academies, 2010). The management system has afforded construction managers new flexibility regarding how and when decisions are made in the construction process; construction managers also assume higher levels of risk than they would under another management system (Kenig, 2000). CMAR has introduced a new set of construction management innovations that have not been fully explored in a robust comparative context. (Minchin, 2009; Minchin, Thakkar, & Ellis, 2007).

With an increasing number of state governments contemplating whether to consider CMAR bids for construction, the specific problem to investigate is in which industries does CMAR evidence a more cost-efficient and successful building process (Minchin, 2009; Kenig, 2000). This problem is particularly interesting due to the existing bifurcation between public and private use of CMAR: CMAR has a longer history of use in private projects, while public adoption of the construction model is gradually gaining acceptance (Tulacz, 2002). Greater knowledge about where CMAR has proved successful would be useful in many different circumstances. Construction companies could bid more effectively and competitively in certain industries where the model is used successfully; policymakers could regulate construction bidding more effectively knowing where CMAR bids are likely to be more successful than other projects (Walewski, Gibson, & Jasper, 2001; Minchin, 2009).

Purpose of the Study

The purpose of this qualitative study is to determine why construction managers use construction management at-risk and the advantage and disadvantages of such a model.

The qualitative part of the study will focus on surveying project managers in order to find out their understanding of why construction management at-risk may or may not be a more efficient and cost-effective method to manage projects. This is particularly important because management at-risk is only used in certain states, and one key question is whether the putative success of the method can and should be allowed in other states. I

In order to explore this question, a survey will be given to 150 project managers to states in which construction at-risk management is used. The rationale behind limiting the survey to project managers in states that use construction management at-risk is the following: They will have experience in understanding the advantages and disadvantages of the project management in different situations- this will be useful in exploring questions of generazability of the management style to other states.

Regarding the content of the survey, there will be two main sections: The first section will be used to capture demographic information regarding the respondent including which type of construction firm the respondent works for and the experience of working the construction at-risk project method. The second section will be a qualitative section that will feature fill-in-the-blank section that allows the respondent to give extensive feedback, based on their experience, regarding the advantages and disadvantages of using the construction management at-risk for projects. Grounded theory, and potentially qualitative software, will be used in order to interpret the results from this qualitative research.

Research Questions

The following questions will be explored in the study

Q1.Is the construction management at-risk project management method more efficient (on average) and less expensive than other project management methods?

Brief Review of the Literature

The concept of construction management at risk is a practical method of procurement that emphasizes a bidder’s particular qualifications for a project rather than a single focus on price (AIA, 1996). Unlike a traditional project management scheme that focuses on a singular, unchanging role throughout the project, the role of the construction manager changes in construction at risk depending on the stage of the project. In the initial stages, the construction manager serves as a consultant to the project’s owner; he or she provides consulting services during the development and design phases. Once the “pre-construction” phase has finished, the construction manager changes back into the traditional role: the general contractor during the building phase of the project (AIA, 1996). The flexibility of the construction manager during the project is one of the key advantages of this management method that has advantages and disadvantages.

There are a number of advantages and disadvantages to the construction management at risk form project delivery. As the Transportation Research Board of the National Academies points out based on an existing literature search, there are five main advantages. First, the constructor (or whichever entity controls the process) can have substantial decision making power throughout the process; this includes making substantive input to the design and implementation of the project (Transportation Research Board of the National Academies, 2010). Other potential advantages include: (a) the enhanced ability to accelerate the delivery’s project schedule; (b) enhanced cost certainty at an earlier point in the design process than design-bid-build; (c) the ability to dampen volatility inherent in the project management process due to changing prices; and (d) the owner holds natural control over the pace and scheduling decisions of the project (National Transportation Board, 2010). The four most commonly cited disadvantages were: (a) Reconciling potential conflicts between the construction manager at risk and the designer; (b) The owner must administer two contracts- a design and a construction contract; (c) There is uncertainty regarding the final price until it is finished; (d) Related personnel must be trained to understand and properly implement elements of the CMR project delivery (Transportation Research Board of the National Academies, 2010)

Although this type of project management is new, it has already been used in a number of different settings: (a) traffic project procurement, (b) school building procurement, and (c) general building procurement (Cunningham, 2005). The National Transportation Board (2010) states that numerous states and department of transportation’s across the country have either undertaken projects with or experimented with portions of projects that included CMR project delivery.

Research Method

The study uses a qualitative methodology to answer the posited research questions. The qualitative methodology will include use of survey responses and grounded theory to answer the question.

References

AIA (1996).Handbook on project delivery.AIA, Sacramento, CA. Kenig, M. (2000).Clarifying CM. vs. CM At-Risk.School Construction News (3)1, 12.

Minchin, R.E. (2009). Fall and rise of the largest construction manager-at-risk transportation construction ever. Journal Construction Engineering and Management. 135(9), 930-938.

Minchin, R. E., Thakkar, K., and Ellis, R. D. (2007). “Chapter 3: Miami Intermodal Center—Introducing `CM-at-risk’ to transportation construction.”Alternative project delivery, procurement, and contracting methods for highways, K. R. Molenaar and G. Yakowenko, eds., American Society of Civil Engineers, Reston, Va., 46–59.

Sanvido, V., and Konchar, M. D. (1998).Project delivery systems: CM at risk, design-build, design-bid-build, Construction Industry Institute.

Transportation Research Board of National Academies (2010).Construction manager-at risk project delivery for highway programs. Policy Paper. Available at: http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_syn_402.pdf.

Tulacz, G. (2002, June 17). Owners’ risk-shifting boosts CM-at-Risk firms. Engineering News Record. Available at:http://enr.construction.com/features/bizLabor/archives/020617d.asp

Walewski, J., Gibson, G.E., Jasper, J. (2001). Project delivery methods and contracting approaches available for implementation by the Texas