Author: Hollie Docherty
Construction management has fallen out of favour in recent years, but with the possibility of both cost savings and cash flow benefits on offer, is it worth reconsidering construction management as the procurement method for your project?
What is construction management?
Construction management is a procurement method for managing construction works. It became popular during the 1980s and was used to procure a number of high profile developments including the Broadgate development and the Tate Modern.
The client appoints a construction manager. The construction manager is responsible for procurement of the trade contractors (who carry out the works) and the co-ordination and programming of the construction works. The role is akin to a contractor procuring and managing its sub-contractors. This is why main contractors are often appointed as construction managers. There are also consultants with construction management expertise who are appointed as construction managers.
Unlike most other procurement methods where the client appoints one contractor, with construction management the client appoints a series of trade contractors for packages of works. The client has a direct contractual relationship with the trade contractors who can be appointed at any time during the project. In practice the construction manager arranges the procurement of the trade contractors on behalf of the client. The client also appoints the design consultants such as the architect and structural engineer.
Who uses construction management?
Construction management tends to be used by clients with prior development experience on large scale projects.
Why should we reconsider construction management?
As noted above, construction management can offer both time savings and cash flow benefits.
Issues with construction management
Construction management does have its downsides. The construction industry generally became more wary of using construction management following the Great Eastern Hotel case in 2005 which highlighted the short comings of construction managers.
The downsides of construction management can be mitigated with well drafted contract documents and robust management processes being put in place by the construction manager (and overseen by an informed client).
So in answer to the question posed at the start of this article, the answer is yes. It is worth reconsidering construction management as a procurement method for your project. For the right clients and the right projects construction management can offer both time savings and cash flow benefits.
Hollie Docherty, Associate, Fladgate LLP (firstname.lastname@example.org)