Construction Management AS A Procurement Method

Construction Management AS A Procurement Method

Construction Management (CM) has been widely used in the United States and sometimes in Australia. However, it is a relatively new procurement method for Asian countries. The system is based on the arrangement where a client appoints a Construction Manager on a fee basis to manage and co-ordinate the design and construction phases of a project. 

The Construction Manager becomes a member of the professional team, contracting to manage rather than to build. The client enters into direct contracts with contractors for construction works.

This paper examines the roles of a Construction Manager. It analyses the similarities and differences of approaches in organization structure, responsibilities of the parties involved and the lines of communication when compared with the traditional procurement method. Since this system originates from the United States, the American Institute of Architects (AIA) Forms of Contract drawn up specifically for this method are examined, with a view to assessing their adaptability in Asia. A case study of a completed project in Singapore using the CM method is also included in the paper.

Construction Management as a procurement method has been widely used in the US, UK, and Australia. However, it is a relatively new procurement method in the Asian construction industry. In essence, CM is a contract to manage rather than a contract to build. It is a very versatile procurement system which provides many advantages for the client and the contractor. However, like all other procurement methods, it has some limitations which need to be carefully addressed before full benefits can be realized. 

In the Asian context, this procurement method is more likely to find application in developed countries where the default risk of individual package contractors is comparatively lower. As well-proven standard forms of contract are available, it is a reasonable expectation that Asian contractors will take the CM approach as a new direction for their growth.

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