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Management Contracts In Construction – What Are They?

management contracts in construction

A construction management contract is a type of procurement method certain job owners use to source materials and services to carry out the building of their project.

If you’ve read our previous posts on other procurement routes like design-build and design-bid-build, you’ll know that it’s a procedure every job owner must go through to acquire the right managers and supplies to ensure their project is a success.

But what makes construction management contracting so different? Well, we’re about to tell you!

Keep reading to discover what management contracts in construction are, some of their advantages and disadvantages, and who usually uses them.

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What Is Construction Contract Management?

Construction contract management’s definition is pretty self-explanatory; it’s when an individual or firm is hired to handle all aspects of the project from start to finish for the job owner. 

The chosen manager doesn’t do any of the building as such; their main objective is to oversee each stage of the project and coordinate various aspects where needed.


What Are Some Of The Responsibilities Of A Construction Contract Manager?

Even though a construction manager doesn’t carry out any of the physical building of a project, they do have a lot of responsibilities that are crucial to the success of the job.

Here are some of them:

  • Planning of the project budget, schedule, and design.
  • Appointing of position/s for sub contractor/s.
  • Ensuring safety and quality standards throughout each stage of construction.
  • Communication between the owner, the general contractors/project manager, and any other stakeholders.
  • Maintaining compliance with all local and national regulations.
  • Organizing any documents or forms required for submission between stakeholders.

Advantages And Disadvantages Of Management Contracts In Construction

The construction management contract model has many advantages and disadvantages associated with it.

Let’s examine them.


Advantages Of Management Contracts

  • There’s a high chance of bringing the overall costs down since the managing contractor will bring negotiation skills to the table.
  • It gives job owners time to focus on other areas of the project.
  • Managers usually have connections in the industry that may benefit the outcome of the construction aspect.
  • Fast delivery compared to other procurement methods.

Disadvantages Of Management Contracts

  • Possibility of unaligned goals between the job owner and the manager over aspects such as budget.
  • A job owner may become reliant on the manager, especially if they don’t have much experience in the field. 
  • If one party doesn’t communicate effectively, it may have a catastrophic outcome for the overall project due to confusion.

Who Are Construction Management Agreements Suited For?

Construction project management agreements aren’t suited for every job. Some owners will benefit much more than others, but that doesn’t mean you shouldn’t look into them.

The following are instances where construction management contracts are suitable:

  • Projects that need to be turned around as soon as possible.
  • Projects where the owner doesn’t have much experience.
  • Projects with owners who want to work with a minimum amount of people.
  • Tricky projects.
  • Projects with specific requirements that require a great deal of attention.

A Final Note On Construction Management Contracts

We hope our brief explanation of what construction management contracts are will assist you in choosing whether it’s the right approach for your job.

The procurement process is an essential part of every project, big or small. Selecting a suitable route will determine how the building process will look in the end.


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