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Construction management contracts are legal agreements that outline the terms and conditions between a construction project owner and a construction manager. The primary purpose of these contracts is to ensure that the construction project is completed on time, within budget, and to the satisfaction of the owner.

There are several types of construction management contracts, each with its own advantages and disadvantages. Understanding the different types of construction management contracts can help you choose the right one for your project.

Here are some of the most common types of construction management contracts:

1. Agency Construction Management Contract

In an agency construction management contract, the owner hires a construction manager to act as their agent. The construction manager is responsible for managing the project on behalf of the owner and serves as an intermediary between the owner and the various contractors and subcontractors involved in the project.

Under this type of contract, the owner retains control over the construction process, and the construction manager is responsible for providing advice and recommendations to the owner. The construction manager charges a fee for their services, usually based on a percentage of the total project cost.

2. At-Risk Construction Management Contract

In an at-risk construction management contract, the construction manager assumes the risk for the project`s completion, including costs and schedule overruns. The construction manager is responsible for managing the project, hiring contractors and subcontractors, and ensuring that the project is completed on time and within budget.

Under this type of contract, the construction manager is usually compensated on a fixed-fee or cost-plus basis. The owner retains some control over the construction process but relies heavily on the construction manager`s expertise and experience.

3. Design-Build Construction Management Contract

In a design-build construction management contract, the owner hires a team that includes both a construction manager and a designer. This team is responsible for managing the entire construction process, from design through construction.

Under this type of contract, the owner has very little direct involvement in the construction process. Instead, they rely on the expertise of the design-build team to manage the project and ensure that it is completed on time and within budget.

4. Construction Management at Fee Contract

In a construction management at fee contract, the owner hires a construction manager to oversee the construction process and manage the project`s budget and schedule. The construction manager is compensated on a predetermined fee basis, regardless of the project`s outcome.

Under this type of contract, the owner retains control over the construction process, but relies heavily on the construction manager`s expertise and experience to ensure that the project is completed on time and within budget.

In conclusion, choosing the right type of construction management contract is critical to the success of any construction project. By understanding the advantages and disadvantages of each type of contract, you can make an informed decision and select the contract type that best suits your project`s needs.

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