As the construction industry continues to grow, clients and contractors alike are seeking ways to mitigate risk, streamline communication, and ensure successful project completion. One way that industry professionals are addressing these concerns is through the use of construction management contracts.
A construction management contract is a type of agreement between the owner of a construction project and a construction management firm. Under this contract, the construction management firm is responsible for overseeing the project on behalf of the owner. This can include tasks such as managing the budget, hiring subcontractors, and ensuring that the project is completed on time and to the owner`s satisfaction.
While there are certainly advantages to using a construction management contract, there are also some potential downsides. In this article, we`ll take a closer look at the pros and cons of construction management contracts.
Pros of Construction Management Contracts
1. Improved Communication
One of the biggest advantages of using a construction management contract is the improved communication between the construction manager and the owner. Because the construction management firm is responsible for all aspects of the project, they are able to act as a single point of contact for the owner. This can help to streamline communication and ensure that everyone is on the same page.
2. Reduced Risk
Using a construction management contract can also help to reduce risk for the owner. The construction management firm is responsible for ensuring that the project is completed on time and within budget, which can help to minimize the risk of cost overruns or delays. Additionally, the construction management firm is typically responsible for managing any disputes that arise during the project, which can help to mitigate the risk of legal action.
3. Increased Efficiency
Because the construction management firm is responsible for managing all aspects of the project, they can help to increase efficiency. This can include tasks such as coordinating subcontractors, managing the schedule, and ensuring that the project stays on track. By streamlining these processes, the construction management firm can help to ensure that the project is completed as efficiently as possible.
Cons of Construction Management Contracts
1. Higher Cost
One of the biggest potential downsides of using a construction management contract is the higher cost. Because the construction management firm is responsible for managing all aspects of the project, their fees can be higher than if the owner were to manage the project themselves. Additionally, because subcontractors may be hired through the construction management firm, their fees may also be higher than if they were hired directly by the owner.
2. Limited Control
Another potential downside of using a construction management contract is the limited control that the owner may have over the project. Because the construction management firm is responsible for managing all aspects of the project, the owner may have less control over the day-to-day decisions. This can be a disadvantage for owners who want to be heavily involved in the project.
3. Potential for Conflicts of Interest
Finally, there is the potential for conflicts of interest to arise when using a construction management contract. Because the construction management firm is responsible for both managing the project and hiring subcontractors, there may be a conflict of interest if the construction management firm chooses a subcontractor based on their own financial interests rather than the best interests of the owner.
In conclusion, while there are certainly advantages to using a construction management contract, there are also some potential downsides. Ultimately, whether or not a construction management contract is right for a particular project will depend on a variety of factors, including the size of the project, the level of involvement desired by the owner, and the experience and reputation of the construction management firm.