Should you hire a construction manager?

By GARRY STRUTHERS
Garry Struthers & Associates

Your company, located in the beautiful Northwest, is growing by leaps and bounds and the CEO recently cut a deal absorbing a small specialty firm just 10 miles away. The staff level that is currently at 300 employees will increase to 375 with the acquisition.

Now more than ever before, you need to be team building. Integrating this initially shell-shocked group of 75 is of critical importance. Your company specializes in computer software and you have some of the best products available in the business. The time has come to plan, build and move to a new facility that will accommodate existing and anticipated growth.

The management team has a diverse set of needs and is lobbying for the best of everything. You and the board have set a budget of $1 million. The director of finance would love to run the project because of the large capital cost, yet you know that he has absolutely no experience in design or construction. Also, the CFO and other senior staff and managers are already working extra hours to meet existing workloads.

How do you get this job done within the time frame and budget that you have established? How do you find someone who has the time, experience and skills to achieve your objectives? What are your options?

Determining the method of project management is critical and should be done before hiring the design or construction team.

You can run an ad in a local newspaper for a construction manager. This person can be brought on board as a temporary, full-time staff person. Under this scenario you have to be willing to accept the full liability for everything that goes right was well as for everything that goes wrong.

You can hire a designer and ask him or her to provide the program design as well as manage the building contractor. Under this scenario, the designer has two equal areas of interest: the design and its liability, and the responsibility to the owner and associated liability.

Another option is to hire a professional construction manager who has experience in managing projects of this scope and who has only one interest -- achieving your vision. Under this scenario, liability for the project is not transferred to the construction manager; however, the construction manager helps you manage the risk and associated liability.

These are but three of the ways to manage the design and construction of a major project, and all of these approaches have been successfully employed in the past.

Determining the method of management is a critical one and must be made well in advance of engaging any of the design or construction team. Experienced managers will tell you that involving the construction manager at the outset, even before establishing project budgets, allows you to get the maximum contribution from the professionals you choose to have on your team.

If a budget is established prior to engaging a construction manager, this can be the first constraint that is placed on the project team. From the start the construction manager may be placed in a position of providing damage control.

Another critical part of the formula for a successful project is establishing realistic schedules for the work and being fully informed that compressed schedules don't equate to the best value under any circumstance. The design team will be working hard, under fire, thereby increasing the chance of not achieving all of the goals of the project.

From the outset the construction manager can help you define the project goals, create an effective project strategy, develop document controls and establish the lines of communication.

What are the criteria you should consider before deciding which approach is best and getting the help that you need?

You could select a construction manager solely on the basis of experience and resources. In this case you would negotiate directly with the construction manager for his or her services.

You can request a fee proposal and management plan from several sources, including a detailed plan outlining the project team organization, schedule, strategies and fees.

A good manager will save the cost for his or her services by making the design and building process more efficient.

Finally, you could select a construction manager based on price alone. In order to protect yourself using a price-only approach, however, a "restricted" cost proposal may be requested, in which different project management sources would be prequalified according to their resources, reputation or capability of performing the work. Keep in mind that many well-qualified managers will not respond to cost proposals, so this method may be more restrictive than you may think.

As you can see, choosing a construction manager takes careful thought and diligence, not unlike selecting a member of your company's management team. A good manager will save the cost or fee for services by his or her effectiveness through the design and construction process. If nothing else, they can save you hassles in any project.

Most professional associations, institutes and societies have checklists that one can consider in making a selection. The Construction Management Association of America (CMAA) is publishing a new guide available in June on how to select a construction manager.

Finally, if you do decide to use in-house staff, make sure that the selected individual(s) meet the same qualifications as an outside professional. Also remember in going with an in-house resource, that any setbacks associated with the project should not be used as a consideration in an employee's overall performance evaluation since management of this type of project falls outside of the area of responsibility for which you hired them.

In summary, as you consider that next project, wisdom says, "first count the cost" -- that means all costs, including management.

Garry Struthers is president of Garry Struthers & Associates, a Bellevue firm that specializes in engineering, environmental science, planning, program management and remedial construction.

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