The construction industry loves its terminology! And that love extends to today’s topic about another one of the main project delivery methods, “construction manager multi-prime” (CMMP). Since “construction manager multi-prime” is an absolute mouthful, we’re just going to call it “multi-prime contract” for this post, or just refer to it by its acronym, CMMP.
Read on for a closer explanation of the Multi-Prime Contracts.
Multi-Prime Contract (CMMP)
Despite the tongue-twisting name, the term shouldn’t be too intimidating. Ultimately, it’s similar to the construction management at risk method (CMAR) which you may be more familiar with.
Under a multi-prime contract, the owner has more financial control over a project. Further, the construction manager assumes no financial risk. With the CMMP delivery method, the owner chooses the contractors based on several qualifications and not just project price.
In other words, the owner has an all-access pass to the projects from the start (the bidding process) through to the end of the job.
Through the life of the project, the construction manager acts as an agent of the property owner.
Usually, property owners that use CMMP still want to remain heavily involved, but they lack the resources to manage the project themselves.
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CMMP Has Some Benefits
When CMMP is used correctly, the project is adequately staffed and the construction manager is experienced. The method allows for the project to be managed and coordinated from within. The manager of the project can allocate responsibilities to each of the contractors and subs and manage their progress – all while avoiding most financial risks.
Property owners can benefit in many ways from CMMP, too. It can offer both time and cost savings.
This isn’t all to say that this method isn’t beneficial to anyone else other than the property owner. It promotes good/healthy communications between the contractor and subcontractors with the property owner. With the opportunity to communicate directly with the property owner about the design specs of the project, contractors and subs feel their importance in the project is more prominent.
Furthermore, because subs and suppliers do not have to wait for payment to come through another party (like a general contractor), there’s a little more leeway between parties for negotiations of fees.
CMMP Also Has Some Drawbacks
This method is often used as an attempt to reduce the cost of a project by hiring the lowest cost contractors and avoiding general contractor’s fees. That’s great, but general contractors exist for a reason. Removing this hands-on coordination of work won’t be right for every project. Plus, a multi-prime contract may not really work for cutting costs if work is poorly coordinated or if the schedule runs off the rails.
Thus, if a multi-prime contract is going to be utilized, it’s a good idea to utilize a skilled, relatively hands-on construction manager on the job to keep things running smoothly. If an owner tries to take on too much of the organizational burden, all potential cost and time savings could be lost.