How CMAR Contracts Manage Risk
In CMAR contracts, the construction manager provides a GMP, ensuring that the project will not exceed this cost unless there are significant scope changes. The construction manager assumes the risk of any cost overruns, which incentivises them to control project costs effectively. This type of contract is often used when the project requires a high level of oversight due to its complexity.Best Practices for Managing CMAR Contracts
The construction manager should conduct detailed cost estimation and closely monitor project expenses to ensure the project stays within the GMP. Regular communication with the Client is essential to avoid disputes over cost increases. Detailed record-keeping is important in case any changes to the scope need to be made during the project.Related Terms: Guaranteed Maximum Price (GMP) Contract