California Authorizes Alternative Procurement Method for Public Construction Projects

by Best Best & Krieger LLP

Counties Can Now Use Construction Management At-Risk

Effective January 1, 2014, all California counties are expressly authorized to use the “construction management at risk” project delivery method (CMAR) for any building projects over $1 million. This alternative procurement process has been in use by the private sector and other public agencies for many years. The CMAR project delivery method offers both benefits and risks for the project owner, which should be carefully evaluated.

Proponents of CMAR commonly cite the following benefits for the owner: the opportunity to select the contractor who will lead the project based on factors other than price; getting a contractor’s perspective during design; and a known price that is not automatically subject to increase on account of design deficiencies. Unlike design-build, the owner utilizing CMAR retains control of the entire design process.

Risks to the owner and criticisms of CMAR include the up-front cost of preconstruction services and the need for the agency to have sufficient expertise to evaluate cost proposals and assess the final project accounting. Agency staff also have to understand that the construction manager under a CMAR agreement is not a typical “agency” construction manager who works on the owner’s behalf. Some agencies choose to retain an owner’s representative to act on the owner’s behalf during the project, which increases overall project cost.

No project delivery method is fool-proof. One important key to a successful CMAR project is a contract that clearly identifies the risks the owner is shifting to the construction manager. Another is training the owner’s staff to use the contract to enforce those responsibilities.

Public Contract Code Section 20146 (SB 328) adds counties to the ranks of local public agencies that the Legislature has expressly authorized to engage a licensed contractor who provides preconstruction services and construction administration to deliver the project for a fixed construction cost. The CMAR contract can be awarded to the “lowest responsible bidder” or based on “best value.”

On a CMAR project, the owner retains the construction manager during (or before) design. The construction manager provides a contractor’s perspective during design, assists in value engineering, and performs quality control to reduce common design problems such as coordination and constructability issues. The construction documents are divided into “trade packages” suitable for competitive bidding as separate contracts. The construction manager selects the trade contractors through procedures established by the county, and is responsible for scheduling, coordinating and completing the project for a guaranteed maximum price.

The construction manager is typically paid a fixed sum for its preconstruction services and receives a fee, calculated as a percentage of hard construction cost, for services during construction. The construction manager may also provide site services for the project, such as security and sanitation, and may, in some cases, perform portions of the work. If it does so, payment for that work may be in addition to the fee.

The overall price for construction of the project, either a lump sum or guaranteed maximum price, is usually established late in the design phase or after all trade contracts have been bid. That price should change only if the owner modifies the project, if regulatory changes increase the cost of the work, or if unexpected site conditions appear.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Best Best & Krieger LLP | Attorney Advertising

Written by:

Best Best & Krieger LLP

Best Best & Krieger LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.