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Would like to hear from persons offering their services as a construction manager, rather than the traditional general contractor. Pros/cons, how are warranty issues handled, etc.
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I've experienced both. Constuction management gets you further into your client's back pocket. You are more their advocate an less your subs. (a very fine line.) I have clients write checks direct - this keeps your insurance premiun at bay. Now insurance Co.s are charging +% even with having certs. from subs. Warrentee issues? I haven't experienced that yet as a c.m..As a general, I look at them myself.
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Thomas,
My business associate and I have Only been doing CM for 11 years now. What Rkelly notes is accurate.
I proposed an article to FHB editors about the topic and got the go ahead but have been too busy with other stuff to write it yet. I could go on for hours.
Getting the word out is difficult. Most clients have never heard the notion of a 'contractor' who has their best interest in mind.
I sell it as SERVICE vs PRODUCT (what a contractor sells).
Pros:
provide client w/ costouts during design phase
Few checks to write
No competitive bidding
Clients trust
many nmore
CONS:
Educating client
Getting system recognized
Contractors knock idea (until I get them on-board)
Office work - keeping client informed .....
Others....
Warrantee: I spell it all out up front. I pass through all costs with no markup. I provide no warrantee other than what comes with products or from trade contractors. In event of problem I 'stand' with client to get it resolved.
Example:
Client pays for plumber's time to replace defective whirlpool. Whirlpool MFG. supplies new one according to their warrantee but no labor.
I have all clients read my SOP on warrantees before signing agreement with me and sing off that they understand.
I sometimes describe it as Cost-Plus a Flat Fee for those who understand Cost-Plus % system. Flat fee derails my incentive to pump-up the prices to pad my wallet...
If you have any specific followup question e-mail me direct. Click on my name at the top of the post.
Mike
*I'm thinking of moving more in that direction (we are woodworkers, but we seem to end up acting as generals or cm's without any pay for it). I'm in a smaller area now, but in the big city I left to come here, we were working with generals, designers, and cm's. One thing I found was that a lot of cm's (not all, I'm quite sure), were getting kickbacks from the subs; their "fee" for getting them the work. One guy I know of was probably making more on each subbed portion of the work than the sub, plus getting paid by the client. I would bet my last penny this doesn't apply to you guys, or anyone else on this forum, but thats what I've seen out there. It's a shame because I think the idea is excellent, and should be really good value to our clients.
*I did this on a mid-sized municipal water plant (3 million gallons per day.) The firm I worked for were the engineers/designers/construction managers. It saved alot of time, eliminated TONS of questions and delays and ultimately saved the village money. The filter manufacturers said the plant should cost $3 million, we upgraded nearly every system and feature of the plant and built , quite literally, a monument. for $2.1 million. Obviously this system eliminates the cost of borrowed money and multiple markups on subs. The downside for the subs is no pre-payment, payment applications for progress payments, lien releases from vendors. The upside is a schedule of payments, the GC isn't going to sit on your money, better quality materials and "better" jobs to bid on, known markups for O&P.Initially it was difficult, because the subs didn't understand the idea. They thought they were working per my direction, for example "Where do you want me to spot the excavator to dig the north footer? " And other intricacies of their tasks that I was unconcerned about. After two-three weeks all was o.k.Personally, I loved this system, and the only reason why a GC or builder would not like it is greed and loss of control. But good people are in it for the work, not the control.-Rob
*Surprised this hasn't generated more discussion.-Rob
*Rob - this may not apply to the types of projects you're all discussing, but as a designer with maybe a dozen projects delivered by CM - between $5 and $55 million - it works half the time. When it works, the cost is probably a little higher than had it been gc'ed but the value is there. When it doesn't work, it just costs more. The one observation or lesson I've learned is that those cm's that broker everything - from office and project manager and superintendent down to the guy that shovels the snow from the trailer steps - it doesn't add value (and adds work for the designers - coordination during construction.) When the cm has a lot of his own employees on the job, it works much better. Nothing particularily revolutionary in that observation or relevant to "Fine Homebuilding" - but I would guess the same thing is true.
*Odd that you thought it added more work. Maybe because my firm designed and cm'ed it was easier. In my example and a few I am probably going to get involved in. I either designed or had my hand in the design. So when I am on site you have the designer there! I didn't feel coordination was a big issue. We actually hire a GC, but in a much reduced capacity. They handle all of the odds and ends - blocking, scaffolding, weather protection, temp stairs, demo work, etc. But they don't hire subs - we do. My firm also did the surveying as well as the site plans, utility plans, etc. We inhereited this project from a very large, well respected, and unimaginative engineering firm. We sold the village on the idea and then attacked every aspect of the construction to reduce installed cost, then looked at reducing maintenance costs. As the owners representative we always have their best interests in mind when issues arise. We did go over what the village budgeted (1.7 million instead of the 3 million they should have) But after they see a building that has full HVAC and humidity control in the filter room, fully automated (their original plans called for adding an operator which we eliminated for an adder of one years salary and benefits), all stainless steel piping, gound face/split face thermo block (original plans called for morton building), epoxy flooring throughout. It really hits home when you explain life cycle costs to these people. Every change we made resulted in life cycle cost improvements.How does this relate to "Fine Home Building?" Unfortunately I think it should be crystal clear. When you build a house that costs over $200,000 you should expect a little more bang for your buck. Obviously on small or cheap houses the owner can't afford it and wouldn't get as much benefit due to the scale of the project. But I like to look at the multi-million dollar houses being built in Cresskill, NJ right now. These are HUGE houses framed with 2x4's and fg insulation. There are no cleanouts for drains, they are using the cheapest doors and windows made. Plans are not existenet and subs work on top of other for no apparent reason because they sure aren't working on a tight schedule - at least based on the amount of time the site is open. They should be run more like commercial projects. All the site plans and mechanical plans should be done ahead of time, there should be no question as to what or where by the time you are seeking bidders. I see the CM getting involved before the RFQ's even go out. Looking at every aspect of the design for cost savings or feature improvements. I guess in my experience and in my mind I have trouble seperating the design from the build. Proper construction shouldn't increase the designers work during the construction phase, it should be part of it. Ceratinly an interior designer can't always understand how something will be built - that's not their job, their job is to push the envelope. But a CM can figure out how to do it,or change it slightly to the benefit of the cutomer.Financially, it has to save money - even if the overall cost is higher you are getting more for your money since you are not paying the GC's interest, you are getting more product. If nothing else, you will not pay for doors and windows that are for a different job, or are not on site yet.Perhaps my experience has been Atypical - but the six or so commercial buildings we did went well, I don't see how large houses couldn't go the same way.-RobP.S. - I just reread this post, boy did I ramble. If you need clarification let me know.
*Rob - were I to contract for a house to be built, I'd look for a builder who would manage the construction for a fixed fee (with proper agreements for adding or deducting should the scope vary) plus time and materials. I'd also make sure as could be that the fellow or gal wanted to to a good job and at least understood my priorities and values. That's not far off from what I understand you'd like to do.As far as designers on site - no owner I've ever worked for could afford it - too many specialists required. Only a few times has there been one full time architect field reping the project - but those guys are usually not the firm's principal. Which is what I meant about relevant to fine homebuilding - my professionl experiences with CM - not the concept.One of the faults I see of including the contractor in the design decisions is the whole misguided concept of "value engineering" - or as one architect put it - "that phase of the project during which everything you value is engineered out." Many of the basics of houses don't vary that much. With work a general contractor may only build one or two of this type of building in a lifetime (usually one - on which they lost their a$$ - and run the next time they see one!) - and can't make as informed value decisions.
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This is an interesting discussion. However, I do not have a precise definition of the difference between a construction manager and general contractor. I can piece together a definition from the discussion, but are these roles more formally defined anywhere?
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Loosely - I would say that the CM is an informed person who represents the owners interests during the design, bidding and construction process. They handle subbing out all of the work and approve or recommend payments to the owner. The owner pays with their own money or a draw from the bank. The CM works for the owner.
A General Contractor works for himself, hires all the subs, arranges the payment schedules, marks up all the subs and essentially floats his own money for the project between payments. It is a borderline conflict of interests, and if all parties are 100% honest then the only benefits are extra attention towards the owners interests, a better understanding of life cycle costs, and an easier cash flow situation for the GC, though he makes no money on lending you money between draws.
-Rob
*This is another one of those times, when you can't, in all honesty wear both hats.Either you're a Project Manager or you're a General Contractor.Which is best can be argued until the cows come home.I strongly believe that both, should have the best interest of the project at heart. The house in the most important aspect. As either, it is in your best interest to ensure that 5 or 10 or 20 years later, the house that you built or managed will still be regarded fondly by the owners.A bad one, regardless of which, will cost the home owner money and time. A good contractor will do what he sayed he would do and for as much as he said that it would cost, PERIOD.Ditto for the Project Manager.If you know what you're doing it's easy, if you don't it's risky.Check out both options and use the one that makes you most comfortable.Trying to be both has caused the failure of many companies.One of my clients was a forming contractor. Had a good business for 12 years and decided that the only way to grow was to build some house on spec.Trouble is, when he built his first house, he became his former clients competitor. End of business, end of story.
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ROB
I am a framing contractor that has framed many of those HUGE homes in Cresskill. I have found those that are run by a CM were the worst jobs. For the good of the customer they would try to get the cheapest of everything ,were always to busy to stop by if problems arised or as quoted by few not getting paid enough to come by the site. Most also dont give jack -hit about quality,just slap it up.
ed
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Would like to hear from persons offering their services as a construction manager, rather than the traditional general contractor. Pros/cons, how are warranty issues handled, etc.