Unless a company’s business is connected to the construction industry, it’s unlikely the company has expertise with construction. So when a company is considering a major construction project to accommodate a growing business, where do they turn? In the same way that a company might engage an outside consulting or specialty firm to help launch a new product, many companies turn to construction management (CM) firms to help them navigate the challenges of construction projects.
Construction management firms come in different sizes. Some are full-service conglomerates that provide all the services you need including the construction trades and the project management personnel to oversee the project. But most CM firms have core competencies in helping the client define and manage the overall scope of the project and rely on relationships with other firms that have the specialized competencies in the specific construction trades needed to execute the project through completion.
This article outlines how to pick the right construction management firm for a project by evaluating the CM capabilities against several important criteria. These criteria include experience, budgeting and estimating, project personnel, and relationships and reputation. These criteria can be prioritized or weighted differently for different projects, but ultimately companies that use these criteria in considering different CM firms will improve their chances of choosing the right CM partner for their construction project.
Key Criteria to Consider
Let’s look at the key criteria for evaluating construction management firms.
Experience
The first criterion we will address is experience. Experience isn’t just the number of years a firm has been in business, but rather the depth of experience the CM firm has with projects that are similar to yours. For example, CM firms that only do commercial office space are probably not worth considering if yours is a retail space, or if yours is a healthcare or medical facility space, both of which have different construction requirements. The CM firms you consider should have relevant experience in your industry and should be able to show you and speak in-depth to projects that they’ve worked on that are similar to yours. They should be able to provide you with human contacts for their prior projects who are willing to share their experience with you. While these are obviously selected by the CM firm, not having such contacts should be a concern.
Budget
The second criterion to consider is budgeting and the overall approach the construction management firm takes regarding the cost of your project. Many clients believe price is the most important factor in a construction project, and while it is very important, hiring the lowest priced CM firm will likely cost more than hiring the firm that best meets all of your criteria. A good CM firm will develop their cost estimate based on a clearly defined scope of the project. If the scope is not clear, they should ask clarifying questions and provide recommendations on how it could be made clearer. The CM firm might also be able to identify areas where potential savings can be generated through value engineering, a process by which different approaches and, or materials are identified that provide the same intended outcome but at a savings. Working with your architect they might also recommend ways to reduce the cost or timeframe for the project based on their experience. The best approach is to give the CM firm some flexibility to recommend alternate approaches to achieve the desired outcome. Good CM firms will embrace that challenge and provide a proposal that shows they are clearly investing their reputation in your project.
Project Team
Another criterion to consider is the project team that will manage your project and take responsibility to ensure your company is satisfied with the outcome of the project. Often, construction management firms will bring their senior people to initial meetings and then replace them with junior people once the contract is signed and the project begins. It is important that your contract identifies by name the specific senior project executives and team that will be responsible for your project from start to finish. It is important that the team that is overseeing the construction project for your company feels good about the construction firm’s project executive and team. Like any team, they will spend lots of time together and need to work well together. The service you receive from the CM firm should be consistent from start to finish. They should schedule regular meetings, at which they will update you on the progress of the project, budget status, timetable, and identify any issues that need to be addressed including the options and implications of those issues. They will have and regularly update the project schedule so your company knows when key milestones are being met. As such, all of these people need to be able to work together and be respectful of each other. After all, the reputation of the CM firm for your project largely rests on these relationships and they know it!
Relationships & Partnerships
Yet another important criterion to consider is the relationships and reputation of the construction management firm, in the community and with their business partners. Most CM firms rely on sub-contractors to provide specialized capabilities for a project. It is critical that a CM firm be able to demonstrate that they have strong relationships with the various professionals needed to successfully complete your project. A CM firm should be able to identify relationships with different construction trades that would be needed on your project. The firm should ideally have relationships with two or three of each of these specialized professionals that would enable them to conduct competitive bidding on your behalf. If the CM firm doesn’t have a portfolio of such partnerships, that could be a “red flag” that the firm hasn’t done much work with projects of your type, or that this CM firm doesn’t have a stellar reputation and these professionals don’t want to work with this CM firm! In general, if a CM firm has a healthy portfolio of sub-contractors that they have worked with for many years, you can be assured that the CM firm has the relationships and reputation that you want for your project.
Selecting a construction management firm is a lot like hiring a senior executive or a consultant or specialty firm to launch a new product for your company. You will be entrusting the CM firm with a sizable amount of company capital, and you expect they will produce an outcome that will help propel your business to greater success. If you use the criteria outlined above when evaluating CM firms, and compare and contrast them on each criterion, you will likely identify the right construction management firm for your project.
Scully Construction believes that our business is helping you build your business. Our construction management and general contracting capabilities and expertise will ensure your construction project is delivered on-time and on-budget so your company can focus on your core competency and what makes your business successful.
