In this regard, Greenspan and his associates report that, "The construction manager at-risk, who also acts as the general contractor, is integrally involved in the design process, assisting with design, constructability reviews, cost estimating, and scheduling" (p. 14). In this emerging capacity, construction managers must possess a thorough knowledge of construction materials and be able to identify where cost savings can be achieved through alternative uses of different materials. For example, Greenspan et al. also note that, "This intervention maximizes the manager's opportunities to seek out and realize cost savings on the project. It also allows the manager to employ value engineering: weighing the benefits and costs of using recycled materials and factory-fabricated components such as steel framing, high-performance concrete mixes, and other new technologies" (p. 15). Value engineering was used to good effect by the construction manager for a series of construction projects completed in San Carlos, California in recent years. These projects included a remodeling of the city hall valued at $1.3 million, a community center for young people valued at $2.5 million, a new library costing $10.2 million, and three railroad grade separations completed on collaboration with a neighboring city valued at $95.5 million (Robertson, 2000). According to Garvey, city administrator for San Carlos, based on the city's experiences, the importance of using a construction manager on these projects became clear before a spade of dirt was ever dug for these projects:
The strongest piece of advice I would give is to hire a full-time construction manager and go over the plans with a fine-tooth comb before going to bid. The successful bidder on the library project came to us with a history of calling for a lot of change orders. Thanks to the details and consistency of our plans, we finished the project with all change orders emanating from the city. To assure clarity, the construction manager made more than 187 changes to the drawings before we went to bid. (Some jurisdictions call this pre-bid review 'value engineering'). (p. 2)
In addition, Greenspan and his associates also report that they have used construction managers to good effect by having them work on several projects (termed a "bundle") at once in order to achieve costs savings through savvy contracting arrangements for work that will be required for all of the projects rather than parceling them out one by one (Greenspan et al., 2007). In this regard, Greenspan and his associates note that, "A construction manager working on the downtown bundle, for example, may reduce costs by subcontracting all the electrical work for the six buildings at once. The manager may also be able to start work on discrete pieces of the various projects instead of adhering to the traditional, one-project-at-a-time approach to delivery" (2007, p. 15).
This level of multi-tasking requires individuals who are capable of recognizing when and where these alternative approaches may provide cost savings, of course, and this expertise does not just fall out of the sky but is rather the result of hard-earned experience that a formal college education in construction science cannot replace. In this regard, one professional construction manager reports that he held a series of other positions before assuming his current role: "With a company that is growing in turnover year on year, there are great opportunities to move up the management ladder. After leaving college and commencing work on site as an engineer, I have been a site manager, then a project manager, before becoming a construction manager" (Jones, 2008, p. 32). Likewise, Nicholson (1992) emphasizes that, "Design details for construction projects depends largely on skilled judgment that accounts all likely variables. Much of this knowledge is held by experienced practitioners and is unlikely available to inexperienced personnel" (p. 116).
Therefore, by "learning the ropes" of the construction management profession in this way, construction managers are able to gain a broader perspective of the overall construction management field in ways that a degree of construction science cannot replace. These are particularly important issues during economic downturns such as today, where potential cost savings represent one of the more important aspects of the construction manager's role in modern construction projects.
Even in the best of times, though, reaping the benefits of cost savings wherever possible is an important part of the construction manager's responsibilities. For instance, Koerner (1993) emphasizes that, "In any economy the most cost-effective construction is one in which the agency has direct input in the project. An ideal way to do that is to enter into the endeavor under a 'design build' arrangement, whereby a professional construction manager oversees and becomes responsible for the successful completion of the job from initial design to finishing touches" (p. 116). In fact, in some cases, a construction manager may be instrumental in helping a construction project get started in the first place. According to Betts (1993), "Construction managers deal with the contractors directly, answering questions and ensuring that their bids or negotiating documents meet the contract requirements spelled out in the specification package. The construction manager then selects the best contractor for the job based on the client's criteria and submits that choice for the client's approval. Finally, the contract is signed and construction begins" (p. 79).
Besides identifying and selecting the best contractor, subcontractors and vendors for a given construction project, cost savings can be achieved by the construction manager in other ways as well, particularly on large construction projects. For example, Koerner advises that the construction manager can also ". . . be pricing out construction as the designs are still being completed, resulting in a more accurate budget projection -- and usually a guarantee that the project will not go over a specified amount. Furthermore, construction managers keep all members of the design and construction team focused on a designated time frame, so that schedules can be met" (p. 116).
In some cases, construction managers have some strong incentive for seeking cost-saving approaches to the completion of construction projects, particularly the larger ones, because their fee might be tied in some way to these issues as well as whether the project is completed on time. As Walla (1996) points out, "Construction managers can be paid a flat fee or a percentage of the total project cost. These individuals are sometimes paid an incentive for achievements such as keeping the project cost within a specified budget or staying on a specified schedule" (p. 65). A number of factors can affect the need for changes in the construction design as the project progress; new materials may be introduced or technological innovations may appear that represent superior alternatives to those specified in the original blueprints and the construction manager must remain flexible and responsive to the need for change through the project. According to Betts (1993), "The design firm will alter the design if conditions change during construction. For example, the original design may be inadequate or the client may request a modification" (p. 80).
In order to maintain a close adherence to a tight construction budget or keep a construction project on schedule, the construction managers has some standard techniques and tools available. For example, the construction manager may be empowered to authorize changes to a construction project or to cease all work while alternatives are explored. In this regard, Walla reports that, "When a contractor does not understand a specification requirement or a plan, he issues a request for information (RFI). The RFI may initiate a request for quotation (RFQ) issued by the construction manager or the owner. The response to an RFQ is a change quotation (CQ). Several CQs may be needed to address one RFQ" (p. 66).
Based on their professional experience in the field, construction managers may elect to approve a change quotation based on a number of other factors such as the need to keep a project on schedule in order to allow other trades to complete their portion of the project in a timely fashion, or they may authorize the subcontractors or other vendors on the project to proceed with the proviso that the charges being incurred are going to be contested and further negotiations will be required after critical parts of the construction project have been completed. According to Walla, "Upon review of the CQ, the construction manager may issue a notice to proceed (NTP), a stop work order, or a notice to proceed with the price to be determined later (PDL). The NTP is an authorization to do the work for the quoted price" (p 66). It is vitally important for the construction manager to communicate the results of such authorizations or work cessation orders to the higher ups. In this regard, Piotrowski and Mcquade (1993) emphasize that, "The construction manager conducts a complete budget analysis, then supplies the agency with an updated cost report that itemizes every new budget change, along with an explanation for each" (p. 91).
The price to be determined later alternative may be in the best interests…