Guilford County school officials announced that they might use the “CM At-Risk” method of school construction to rebuild Eastern Guilford High School, the school that caught fire a few weeks ago.
There is a lot of debate about the at-risk method, which employs a construction manager (CM) to oversee all aspects of the construction process, from design to hiring contractors. The CM is “at-risk” because he or she must absorb any costs that exceed the total price they guarantee for the project, called the Guaranteed Maximum Price (GMP).
At-Risk construction does not usually save a school district money, and, in fact, it can actually cost more to build a school this way than the traditional design-bid-build process. There are several reasons why this is the case, but the truth is that there is little incentive for a construction manager to be frugal, especially during the design phase when a CM can work with an architect to value engineer the building. Costs can also rise because the CM has the power to select the contractors, and he or she may not be inclined to select the contractors who offer the lowest bid.
If you have read this far, thank you. I do not know how you did it. Anyway, I speculate that school districts find CM At-Risk appealing because it is less work for the facilities folk. In the end, there is little empirical evidence that the CM At-Risk method can produce a higher quality building or reduce construction time, as proponents claim it does.
