Construction Manager at Risk The Final Chapter

Thursday, May 5th, 2016

Construction Manager at Risk – Part 3


Parts 1 and 2 of this briefing not have triggered a lot of interest. We have had queries about the nature and content of the contractual agreement. We always advise our clients to pay special attention to definitions. For example on the New Orleans airport project, there is a definition of ‘Enabling Projects.’ This reads “means the following projects which must be completed before commencement of construction of the airport project: 1. Relocate of the airport lighting vault, and 2. Navaids relocation; Airport Surveillance Radar (ASR) facility, Remote Transmit Receiver (RTR), and Low Level Wind shear Alert System (LLWAS). The enabling projects are not part of the airport project.”

The obligations of the cm-at-risk service provider are set out and include: “Perform all required services described hereto as well as in the RFP and attachment A and provide all required labour, materials, equipment, transportation, installation, facilities and other items in strict accordance with this agreement and the following documents incorporated into the agreement by reference: the RFP, inclusive of all attachments and addends thereto, and cm-at-risk proposal. In the event and to the extent of any conflict or inconsistency between these documents, the contract documents will be interpreted in the following descending order of priority: the agreement; the RFP; and cm-at-risk proposed.”

There is provision within the agreement for “Records and Reporting” (something often omitted by clients). It includes:

  • Cm-at-risk must maintain an acceptable cost accounting system. Cm-at-risk agrees to provide the city/NOAB, the FAA and the comptroller general of the United States or any of their duly authorised representatives’ access to any books, documents, papers, and records of the contractor which are directly pertinent to the specific contract for the purpose of making audit, examination, excerpts and transcriptions. Cm-at-risk agrees to maintain all books, records and reports required under this contract for a period of not less than three years after final payment is made and all pending matters are closed. Cm-at-risk must include the requirements of this sub-section (F)(1) in any and all sub-contracts that it enters into with respect to the airport project.

This is a vital provision for open book management by the client and can be linked to another provision as the agreement, “Audit and Inspection.” This provision includes:

  • Cm-at-risk will submit to any city/NOAB audit, inspection and review and, at the city/NOAB’s request, will make available all documents relating or pertaining to this agreement maintained by or under the control of cm-at-risk, its employees, agents, assigns, successors and subcontractors, during normal business hours at cm-at-risk’s office or place of business in Louisiana. If no such location is available, cm-at-risk will make the documents available at a time and location that is convenient for the city/NOAB.

As with all agreements there is extensive detail. It is informative for the procurement specialists, motivating active reviews of current practice and identifying opportunities for innovative approaches.

Read the whole story. Part 1 and Part 2