Construction Management at-Risk (CMR) | Office of the Inspector General (OIG)

About CM at-Risk

Construction Management at-Risk (CM at-Risk) (M.G.L. c. 149A) is an alternative method for public building construction projects estimated at $5 million or more. Under CM at-Risk, the awarding authority/owner selects a CM at-Risk firm before or early in the design stage through a qualifications and fee-based selection process. The CM at-Risk firm provides preconstruction services and later acts as the general contractor. Alongside the owner’s project manager (OPM) and designer, they collaborate throughout planning, design, and construction. The contract is a cost-plus fixed fee contract with a guaranteed maximum price. In most cases, the awarding authority must receive prior approval from the OIG to use the CM at-Risk method.

CM at-risk is not appropriate for every public jurisdiction or for every building project. There are several factors to consider when deciding between CM at-risk and design-bid-build:

Is your jurisdiction able and willing to assign qualified staff or contract for necessary expertise for the extensive project oversight, including financial oversight, as required by CM at-risk?
Does the project involve complex logistical challenges that could be addressed by fast-tracking and other phasing methods?
Will your jurisdiction’s stakeholders support a project that will not have a firm price until late in the timeline?

Some benefits of using CM at-risk include:

Qualifications-based CM at-risk firm selection;
Potential for fewer disputes and change orders due to CM at-risk firm’s collaboration with designer;
Potential for a more fast-tracked project;
Transparent cost-plus contract, as opposed to a fixed-price contract; and
Project oversight by in-house staff and an experienced OPM.

Some risks of using CM at-risk include:

Potential for unnecessary or inflated project costs when negotiating the GMP and throughout the project;
Lack of a firm construction price until later in the process;
Lack of risk borne by the CM at-risk firm when the GMP is negotiated late; and
Difficulty countering public misconception that the GMP increases costs to the project owner.

Exempt Agencies

The statutes exempts these agencies from the requirement to obtain prior OIG approval for CM at-Risk contracts, but they are required to submit their CM at-Risk procedures to the OIG for review and approval:

DCAMM
The Massachusetts Port Authority (Massport)
The Massachusetts Bay Transportation Authority (MBTA)
The Massachusetts Water Resources Authority (MWRA)
The Massachusetts State College Building Authority
The University of Massachusetts Building Authority

About CM at-Risk

An awarding authority must submit an application to the OIG to use CM at-Risk on building projects of $5 million or more. The OIG uses an application process to assess the qualifications and commitments of the project team as well as other factors.

Applications are composed of three pieces:

The CM at-Risk application completed in DocuSign
The Certificate of Authority, a PDF that must be signed by the awarding authority’s legal counsel; and
The Submission Certification, a PDF that must be signed by the awarding authority

Please read the steps below for details on completing this process. Submitting previous OIG applications or creating separate documents will not be accepted.

: The awarding authority must assign a person to compile the CM at-Risk application in DocuSign. This may be the Owner’s Project Manager (OPM) or another member of the project team who is familiar with the awarding authority’s plans and procedures for using CM at-Risk. For instruction purposes, this person is known as the applicant. The applicant must complete the application via DocuSign. Applicants must pay close attention to the DocuSign prompts. The application will not process until all questions are answered and required attachments are submitted.

When starting the application process, the applicant must enter their contact information twice in DocuSign. This will ensure the applicant can open and restart the application as needed. Upon completion of the DocuSign portion of the application, a copy will be sent to the applicant for download.

Please view this job aid for DocuSign directions and support.
: Upon completion of the application in DocuSign, the applicant must download the Certificate of Authority, which must be signed by the awarding authority’s legal counsel.
: The applicant must download the Submission Certification to be signed by the awarding authority. The CM at-Risk application, the signed Certificate of Authority, and the Submission Certification must be submitted to the awarding authority to authorize the completion of the application. The awarding authority must ensure that the application is accurate and completed in full.
: All completed documents, the CM at-Risk application, the Certificate of Authority, and the Submission Certification must be compiled into a single PDF document and submitted via email to the OIG at [email protected].

A copy of the application as it appears in DocuSign may be used for informational purposes only. If you have any questions about filling out the application, please email [email protected].

As a condition of the approval to use the CM at-Risk delivery method, awarding authorities are required to provide status reports to the OIG. Within 70 days of project completion, awarding authorities must provide the OIG with a final report detailing  the CM at-Risk project.

CMR FAQs

The Office of the Inspector General (OIG) provides answers to your frequently asked questions about construction management (CM) at-Risk.

: Your jurisdiction may submit a corrected application or corrected procedures to the OIG for reconsideration. Otherwise, you may use the design-bid-build procurement process required by M.G.L. c. 149, §§ 44A-44J to procure your building project.
: No. Your jurisdiction selects the CM at-risk firm before the design is completed and bidding occurs. Initially, the contract includes only fees for preconstruction and construction services. After schematic design, the owner and CM at-risk firm negotiate a Guaranteed Maximum Price (GMP) amendment, which sets the maximum cost for construction, general conditions, and fees. The GMP is based on project details available at the time and must include all relevant drawings, specifications, assumptions, and clarifications, as required by M.G.L. c. 149A.
: Depending on the scope of services specified in the CM at-risk services contract, the firm typically advises the public jurisdiction on issues such as project siting, value engineering, and constructability. The contract may also require the CM at-risk to first develop one or more project cost estimates.
: The OPM must be independent of other project participants, including the designer and contractor. M.G.L. c. 149, § 44A½ requires the OPM to serve as the owner’s agent during the planning, design, and construction stages of the project. The OPM is thus legally required to represent the owner’s interests on the project, and to monitor the CM at-risk firm’s performance on the owner’s behalf.

Although the CM at-risk process allows for greater cooperation among the parties, the CM at-risk firm and owner can have competing contractual interests. The CM at-risk firm is not obligated to consider the owner’s interests if they conflict with their own.
: Under M.G.L. c. 149A, all subcontracts estimated to cost $25,000 or more require competitive bidding. Subcontracts in the 18 filed sub-bid categories identified in M.G.L. c. 149 are called “trade contracts.” These must be procured using a formal prequalification process followed by a competitive bid process that resembles the M.G.L. c. 149 bid process. Other subcontracts are awarded through a less formal prequalification and bidding process managed by the CM at-risk firm.