Head-to-Head: CM-at Risk and Design-Build

Posted on April 18, 2011

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CM-at Risk (CM) was developed as the first major improvement over Design-Bid-Build (DBB); CM generally provided greater cost and quality control, while also delivering a project faster. CM-at Risk and Design-Build (DB) have a lot in common; yet CM is more accepted as a project delivery method, mainly because it is more familiar. 

I cannot think of one benefit CM offers that DB does not. In fact, as I see it DB has five major advantages over CM-at Risk.

  1. Design-build has closer and earlier integration with the architect. It is commonly said that the earlier the architect and contractor start interacting, the more the project benefits. CM can get both on board fairly quickly sometimes, but they are never simultaneously teamed like in DB. The sooner the architect and contractor start talking, the more strongly they can pull toward the owner’s common goal, thus increasing efficiency, avoiding conflict and saving money. With integrated design-build (IDB), where the architect, engineers and contractor are all part of the same company, the additional familiarity creates magnifies the DB team’s value for the owner.
  2. Design-build provides continuous cost modeling.  Accurate estimates are, arguably, the major goal of integration between architect and contractor; they help guide the owner’s value decisions. CM typically prices a project at major milestones like 30, 60 and 90% complete construction documents. These prices are isolated events which take a long time. By the time the price is pulled together at 60%, the drawings are now at 75% and it is obsolete. DB offers more frequent and updated estimates (at least monthly) so program and design decisions can be made real-time for maximum impact. In addition, IDB offers another level of comfort since there is a greater understanding of quality, familiarity and expectation among all team members; they know each other’s standards.
  3. Design-build offers a sooner guaranteed maximum price (GMP).  The earlier the GMP is derived and agreed to, the less financial risk the owner takes on.
  4. Design-build removes risk of escalation.  Perhaps CM’s greatest flaw is that the CM works for a percentage fee with no incentive to keep the price low because all increases are passed on to the owner. Therefore, any re-design is pushed back on the architect, which is essentially the owner’s responsibility to pay for—along with any time delay and associated costs.
  5. Design-build offers innovation and flexibility throughout project.The construction manager and the architect are purposefully separate entities with CM-at Risk. With DB, the design-build team can do things the CM does not have the freedom to do, like break apart the design into bid packages for fast-track construction. Ideas like this speed the project up and save the owner money.This list is by no means exhaustive, but hopefully provides a little more insight into how related CM-at risk and Design-build are. Just as CM was the ‘new and improved’ DBB, Design-build is the ‘new and improved’ CM—except it is not new; it is just now hitting its stride after 50 years of fine tuning.
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Posted in: Design-Build