There has been a lot in the media recently about Construction Management. There has been advice to the government that some Carillion projects should be converted to Construction Management.
But what is Construction Management, and what does it mean?
Most builders these days, whether large or small, subcontract a large part of their work. Keeping a large workforce on their books, undertaking expensive trades like electrics, isn’t cost effective. Whilst the number of specialist trades such as zinc roofing or AV means there are just too many trades to employ everyone.
That’s on top of the HR issues of looking after a large workforce. Construction companies are, to a large extent, a management operation. However clients see building as risky and are keen to dump that risk on somebody. That somebody is typically the builder.
This main contractor or builder route looks like this:-
An alternative, Construction Management version of risk allocation looks like this:-
The Construction Manager here takes on the responsibility for the management of the operations, but not for the operations themselves. These are being done by the trades. You’ll need to pay the Construction Manager a fee, but you’re saving the premium that you used to pay to the Builder.
The attractiveness of this arrangement depends on how risky you think construction is.
We find that this Construction Management arrangement appeals to three types of clients, as they tend to have a different attitude to the risk:-
- Clients who already know a number of the trades they want to use by reputation.
- Clients who are buying a chunk of the work from a trade directly – e.g. timber frame suppliers.
- Clients where the only way a scheme can proceed is if they reduce the construction costs by cutting out the Main Contractor margin.
Here at CLPM we do not champion any one particular delivery route over another. Each has its merits. We see our job as discussing procurement options with clients, and giving them the knowledge to take the decisions that suit their circumstances. We are comfortable working on Main Contractor or Construction Management sites.
If you’d like to find out more about how CLPM can help you with your building project then get in touch.
Call 01923 896550, email email@example.com or complete a contact form.