The Benefits of Construction Manager / General Contractor Services (CMGC) versus Design-Build Project Delivery

What if someone could make your imagination come to reality? It may sound like a miracle, but that’s exactly what CMGC or Design-Build will do for you.

Whether you are planning to build a residential dream house or a commercial space for business, one of the most crucial decisions you will have to make is who to trust with your money, time, and effort. That is why, it is important to first carefully consider the following options before making the final bet.

(1) CMGC Construction Manager/General Contractor or

(2) A Team of Design-Build Project Delivery Method

Both Construction Manager/General Contractor and Design-Build are forms of Alternative Project Delivery (APD) models. Alternative delivery models are characterized by their emphasis on integrated collaboration among all parties, including design and construction elements, to achieve project efficiency and equal risk allocation. Construction Manager at Risk, Progressive Design-Build, IPD/Alliance, and Public-Private Partnership are among the other common alternative project delivery methods.

In this blog, we will explore CMGC and Design-Build models and their contribution to commercial construction services. In addition, we will learn the key differences between CMGC and a popular variation of the traditional DB, i.e. progressive design-build.

What is Construction Manager/General Contractor (CM/GC)?

The project delivery method that optimizes efficiency in terms of design, schedule, and cost for complex or technically challenging projects is known as Construction Manager/General Contractor (CM/GC). The CM/GC method is otherwise known as the Construction Manager at Risk (CMaR or CMR) project delivery method.

CMGC construction managers are professionals hired by the project leader or owner of a construction project to provide necessary feedback through all commercial construction phases. They oversee all project phases, including permits, site work and preparation, commercial construction costs, and finishing. They oversee all project phases, including permits, site work and preparation, commercial construction costs and finishing.

The owner approaches a general contractor to receive their propositions over the design and then negotiates the price with them. Possibly, the owner can open the project for other interested contractors to put their bids on. “Though, the construction manager will still have a competitive edge over others due to their familiarity with the project, and may charge more for the preconstruction works without a guarantee of the contract award”, tells attorney George Meyer to the Construction Dive.

The construction management / general contracting process includes two contract phases:

1. The Design Phase – This is the first contract phase wherein the contractor works with the project owner or designer to identify the possible risks, provide an estimated commercial construction cost, and finalize the project schedule. In this process, both the project owner and the contractor negotiate the construction’s total contract price. If both parties agree, then proceed to the second phase.
2. The Construction Phase – This is the second phase wherein the commercial construction of the project begins.

Though we often use the term CMGC, there is a difference between a construction manager and a general contractor.

The General Contractor oversees the commercial construction project in all senses. As such, they manage all phases of the construction and handle the entire range of tasks connected with completing the construction work.

The GCs take over a project once the plans are designed and approved. In contrast, a construction manager is part of a project from conception to completion and plays a very active role in the pre-construction phase.

What are the Benefits of CMGC Construction Manager/General Contractor?

Following are some of the benefits of CMGC according to the Department of Transportation State of Minnesota:

• Promotes innovation:

It is highly encouraged that the CM/GC contractor and the project owner collaborate on all the best possible options, including creative solutions that can save time and cut commercial construction costs. It also promotes creativity and innovation in design, schedule, budget, and other areas while fostering teamwork.

• Risk reduction:

All projects have potential issues, however, construction managers allow multiple perspectives to observe, anticipate, and hopefully eliminate these risks during the design process. The construction manager’s feedback during this phase can significantly reduce commercial construction costs because the owner understands the process and starts to mitigate the identified risks.

• Refinement of the design:

A better understanding of how the CMGC contractor wants to stage the work leads to a more cost-effective design for staging, thus minimizing disruptions during the commercial construction project. The construction project manager provides feedback by carefully reviewing the chosen drawings, answering queries about the procedures, and making adjustments that can reduce commercial construction service issues.

• Improvement in cost control:

In CMGC, the general contractor can provide cost estimates during the design phase instead of stranding that responsibility on the design team. Value Engineering is an integral part of the CMGC during the design phase. This is where the owner makes an in-depth decision considering the contractor’s proposal about the alternatives offering the most cost-effective approach. The knowledge and experience of the owner, designer, and general contractor contribute to a successful project with lower risk, enhanced designs, improved schedules and greater cost control.

• Optimization of the construction schedules:

The CMGC contractor can begin planning the construction schedule during the design phase of the commercial construction process. This allows them to see how building work will affect traffic and adjust their schedule accordingly. It enables the team to identify the right-of-way and other utility issues on the design process’s critical path, giving a better picture and focusing on those details that can affect the proposed schedule.

Suppose a CM/GC was hired for the construction project of a multi-storey office building located in a populated neighborhood. As the construction manager entered the project at an early stage, they ordered specialized cladding and glazing systems, a long-lead item, before the design process began. The construction management company also developed project schedules during the initial phases which minimized obstructions to the commuters.

Challenges of Working with CMGC Construction Manager/General Contractor

Many owners may be reluctant to choose a CMGC contractor before the design is complete because they have no idea of the total commercial construction cost. But the sooner an owner selects a construction project manager, the better.

Owners who delay hiring a CMGC contractor until the drawings lose out on the contractor’s experience during the early stages. The construction manager has the most significant ability to align the owner’s budget with the intended drawings during the very early phases of the design.

Now that you understand what CMGC is let’s review the Design-Build Project Delivery.

What is a Design-Build Project Delivery?

Design-Build Project Delivery is a method that delivers a project in which the designer and the commercial construction services are both in contract with a single entity called the design-build contractor or design-builder. In contrast to the CMGC, the design-build contract endows the sole responsibility on a single entity- the construction service. As a result, it offers the most precise contract solutions for you.

What are the Benefits of Design-Build Project Delivery?

Following are some of the benefits of DB according to the Design-Build Institute of America (DBIA):

• Risk reduction:

When the contractor is involved with the design, practical considerations for the build-out of the project are addressed during the planning stages, not at the construction site. This results in reducing the risks that may arise during commercial construction. About 79% of the project owners use Design-Build contracts to minimize the risks involved in the process.

• Cost-effective:

Cost savings are intrinsic to the design-build model. The design-build contract brings all aspects of design and construction under the roof of one design-builder, increasing efficiency and reducing costs on projects. The DB project delivery method saves about 6.1% of the total commercial construction cost compared to the other conventional approach.

• Speeds up the process:

Design-build process helps reduce the time spent jumping through hoops in a project. The design-builder is solely responsible for all the decision-making and coordination which avoids delays, miscommunication and speeds up the commercial construction project. Design-build projects are 12% faster than the traditional approach. The ability to fast-track projects without compromising quality is one of the reasons to consider using a design-build delivery method.

• High-quality projects:

A design-builder meets performance requirements rather than minimum design requirements, delivering an improved project than originally anticipated. DB continues to outperform traditional project delivery in various categories such as callbacks, startup, interior and exterior, O&M, equipment, and environment.

• Adapts to innovation:

In a design-build project, the designer and builder collaborate and communicate on how to achieve the project’s goals, solve the complexities, and bring the desired results to the owner. This collaborative approach is what ‘enhances innovation’. Many project owners continue to leave traditional project delivery because of its lack of collaboration and innovation.

• Highly flexible:

Design-build firms work on commercial construction projects from their inception to their completion, which adds efficiency and effectiveness to the process. It provides flexibility and competitive bidding through different contracting and procurement approaches, including selecting the best value, qualification-based selection, and extensive design-build growth, among others.

Challenges of Working with Design-Build Project Delivery

The design-bid-build requires thorough involvement on the part of the project owner. With a design-bid-build process, the price, project clarity, and control are much more under control. However, not all owners are happy with such a high level of involvement.

The process also requires a high level of trust and communication. You have to keep in mind that low transparency in bidding may result in higher prices than in competitive bidding.

The extensive planning, time for value engineering and more cost-effective approaches, can extend the overall timeline of the project.
Now that you know about CMGC and DB Project Delivery, let’s compare them and learn the best option that can help you with your commercial construction project.

CMGC Construction Manager vs Design-Build Project Delivery

Construction Manager/General Contractor	Design-Build Project Delivery
The construction manager will work with your design team to suggest commercial construction methods and materials to reduce the commercial construction cost and improve overall quality.	It is cost-effective. The designer and contractor are working under commercial construction service as a team throughout the process. Therefore, less litigation, fewer changes, and fewer claims.
It may save your time, but in case of any issue, the designer and construction manager blame one another for the commercial construction cost overruns or schedule changes, often leading to litigation and delays, which add to the commercial construction cost.	The project delivery can be much faster than the conventional method as only one person is accountable.
You must manage two separate contracts, which often creates an adversarial relationship between the designer and the contractor.	It has a better structure, with a one-way communication flow and can improve project coordination.
The construction manager must possess qualifications that are essential for the project's success. The owner must strongly emphasize the selection process on the capabilities.	The design-builder must possess qualifications and knowledge of all the phases and roots of the commercial construction services. Therefore, you must choose a qualified, skilled and experienced design builder.
You will have to cooperate and coordinate with both the designer and CMGC construction manager.	The owner must be very cooperative with the Design-Build team in handling the details of the chosen design.
You will have to listen and consider the perspective of both your designer and contractor. It may be challenging when there is a difference in their opinion.	You must have the capacity to do the mental shift to a different approach to delivering the project.

Does this mean that the Design-Build Project Delivery method outperforms the other conventional method?

There is a more in-depth discussion about their pros and cons. Although each method offers a unique means of saving the project owner’s time, money, and effort, it still pays to visit a trusted commercial construction company for a personal consultation and business proposals. Here’s a diagram to help you understand the design and construction schedule of these two methods.

The Revisiting Project Delivery Performance 1998-2018, authored by Keith Molenaar and Bryan Franz, compared two samples – one from 351 projects in 1998 and the other one from 212 projects in 2018 – after 20 years. The study showed that Design-Build projects tend to deliver faster results and with greater reliability in schedule and commercial construction cost performance.

Progressive Design-Build vs Construction Manager/General Contractor

Progressive Design-Build (PDB) is today an increasingly popular project delivery method that embodies a combination of traditional DB and CMGC. Here too, the general contracting service providers and designers work under a single contract, however, they are introduced to the project at the earliest possible stage. Typically, the selection of the design-build firm in PDB is Qualification Based Selection (QBS) instead of price based.

Once the contract has been awarded to a suitable company, the owner and the design-builder negotiate and ‘progress’ toward the final construction price until the construction drawings are 50 to 75% completed and a Guaranteed Maximum Price (GMP) is established. In case the two parties could not agree to a GMP, then the owner can ‘off-ramp’, meaning they can take the construction documents and move forward with another contractor through design-bid-build method.

Difference between PDB and CMGC

While the project development and delivery procedures of Progressive Design-Build and CM/GC are almost the same, there are certain points of differentiation between the two. They are –

Contractor’s Entry Point – With PDB, the owner can engage with the design-builder at the earliest possible stage, sometimes, even before the design development. This is possible with CMGC too, though in most cases, the CMGC contractor is brought on board at a later point, which is design or construction phase.

Early Collaboration – Progressive design-build enables the design-build company to provide their expertise early to optimize the design process, permit activities, or other critical pre-construction tasks. As mentioned earlier, owners using CMGC delivery method who delay hiring a construction manager lose out on the contractor’s expertise in various stages of the project.

When Scope and Costs are Uncertain – When the owner has limited knowledge of the construction costs and scope of work, progressive design-build is a more appropriate choice than construction management method. The reason for this is that the former delivery method integrates the owner, contractor, and designer during the planning and development phase itself.

Flexibility – In progressive design-build, there is greater room for adjustments in terms of project features, constructability, and design decisions all this while evaluating cost-effective alternatives. Once the contractor establishes a GMP, there is no chance of unpleasant surprise costs. Though, construction management may not offer the owner the opportunity to alter decisions if the CM/GC is not hired early.

Spearin Liability – A noteworthy point of difference between PDB and CMGC is – owner’s control of the design contract. Because the owner doesn’t hold the design contract in PDB, they are not liable for any errors or omissions present in the construction contract documents. Whereas in CMGC, the owner controls the design contract and is exposed to legal liabilities. This legal principle based on the owner’s liability is called the ‘Spearin Doctrine’.

Both the progressive design-build and construction management methods have their own advantages and disadvantages. PDB offers owners higher flexibility and creativity in designs while CM/GC enables collaboration on project costs, schedules, and risk mitigation. The verdict on which delivery method is better depends on the owner’s priorities and complexity of the project.

Conclusion

Since the rapid growth of the design-build project delivery over the past decade, it continues to deliver nearly half of America’s building projects.

Regardless of which of the above you choose- CMGC construction manager or DB delivery, keep in mind that your individual team members have a greater impact on the success of your project than the way your contracts are organized – although both are crucial.

The owner of a building project should thoroughly vet the candidates for the designer and general contractor by comparing their qualifications and contacting their references. Verifying references not only saves time but also prevents costly rework.

In addition to gaining insight into the potential team members, you will also gain valuable wisdom from other owners’ past experiences.

Voila! It’s time for you to transform your ideas and dreams into spaces that you will enjoy for a lifetime.

Partner With Us

If you are looking for design-build services, then you can take advantage of our cost and time-saving design-build services. We help you get the best value and simplify your construction process. Throughout your commercial construction project, our construction teams work together with you in a streamlined manner to bring you unmatched value-engineered solutions.

For more information about how Constructive Solutions can help your commercial building project, contact us.

FAQs

What is the hiring process for a Construction Manager / General Contractor?

Qualifications-Based Selection (QBS) is used for hiring a CMGC. Based on the experience and expertise addressed in response to a Request For Qualifications (RFQ), a suitable contractor is awarded the contract.

What does a Construction Manager do?

CMGC or Construction Managers offer preconstruction services, project management services, budget estimating services, design stage assistance, general contracting services, and construction management services.

What kind of construction project is appropriate for a CM/GC project delivery method?

Projects that require high technical complexity, accelerated schedules, risk management solutions, and budget efficiency will be best suitable for a CM/GC project delivery method.

Relevant Resources:

• How Design-Build Works: Decreasing Risk While Maximizing Efficiency
• Here are 10 Important Lessons Learned from Challenging Design-Build Projects