Construction Manager at Risk (CMAR): You simply have to know this project management model for marketing in the construction industry!
- Jörg Appl
- Jan 17
- 12 min read
The Construction Manager at Risk (CMAR) method is the innovative answer to the demands of modern construction projects. It integrates the construction manager early on in the planning process and combines planning, cost control and construction under one central responsibility.
What makes it special: the construction manager assumes a financial risk by committing to complete the project within a guaranteed maximum price (GMP).
This method changes what building owners, financiers, structural engineers and architects are actually ‘allowed to want’ – and, above all, how you as a marketing manager in the construction industry should react to it. 🏗️
📌 By the way: In previous blog posts, we have already covered the methods of design-bid-build and design-build. CMAR complements these approaches with another innovative option that you should consider in your marketing strategy.
📚 Sounds good? At the end, practical case studies await you, with which you can take your skills to the next level and assert yourself in the marketing Olympus of the construction industry. 🚀
The CMAR (Construction Manager at Risk) method has become established in recent years as a modern and efficient alternative to traditional project management. It is based on the early involvement of a specialised company – the construction manager – in the project development.
This enables closer cooperation, a smoother project flow and better cost control. In Germany, the application of the CMAR method is not limited to private clients, but it is mainly used for projects with private sponsors.
Compared to the conventional sequence of design, bid and build, the CMAR method takes a fundamentally different approach:
The construction manager is involved as early as the planning phase. This means that the client works from the outset with a central partner who takes on an advisory role, supports the cost and time planning and is later responsible for the coordination of the construction work. Working together at an early stage not only improves project management, but also ensures adherence to budget and time frames. In addition, the construction manager guarantees a maximum fixed price (guaranteed maximum price, GMP), which reduces the cost risks for the client.
The construction manager contributes his expertise in the areas of cost control, time management and construction, while the planning responsibility continues to lie with a separate architectural firm. This clear division of tasks ensures a more precise risk assessment and optimised construction.
At the same time, technical offers and communication strategies must be aligned with the requirements of both the client and the CMAR at an early stage of the project. Many important decisions are made during the preliminary and detailed engineering phases, which requires intensive coordination.
To better understand the advantages of this model, it is worth taking a look at another established model: the design-build model.
Difference to the design-build model
The design-build model offers another form of process integration, with a single contractual partner taking on both the planning and the construction work. This leads to an even greater integration of processes, but also carries the risk that the client retains less control over individual aspects of the planning.
In contrast, the CMAR model keeps the planning responsibility separate and independent, and is usually carried out by external architects or engineers. The construction manager also acts as a coordinator of the construction work and minimises risks such as cost and time overruns.
Another striking difference can be seen in the contract award process. While the tendering phase is omitted in the design-build model and a single partner is contracted, the CMAR method offers the client the opportunity to actively participate in the awarding of subcontractor services. This promotes transparency and optimisation in the selection of various trades.
After distinguishing the models, the question arises as to what specific advantages the CMAR method offers in practice.
Advantages of the CMAR method
A key advantage of the CMAR method is the early integration of the construction manager into the project team. This close collaboration between the architects, engineers and the CMAR leads to improved risk assessment, reduces design errors and optimises time and cost management. At the same time, the design remains independent, giving the client more control and flexibility.
During the construction phase, the CMAR takes responsibility for adhering to the budget and schedule, which minimises risks for the client and ensures greater project security.
The advantages of the CMAR method are particularly evident when compared to a lump-sum contract, which takes a completely different approach to construction projects.
Difference to the lump-sum contract method
In contrast to the lump sum contract method, in which all risks are transferred to the contractor, the CMAR method is characterised by collaboration, transparency and joint risk sharing.
This flexible approach makes CMAR particularly suitable for complex construction projects where adaptability and strategic action are crucial. The CMAR method thus represents a more strategic alternative, as it enables dynamic collaboration between the project participants.
Nevertheless, the CMAR method also has specific requirements that need to be taken into account.
Pricing and selection criteria in the CMAR model
In the CMAR (construction manager at risk) model, selecting the contractual partner plays a central role, as the client involves a construction manager (CM) at an early stage
The CM initially acts as a consultant in the planning phase and then takes over responsibility for the construction work as a general contractor. The CM bears a significant financial risk because he is obliged not to exceed the agreed costs (guaranteed maximum price, GMP)
This integrated approach makes it possible to identify and manage risks at an early stage, while the client continues to influence the project. The most common selection criteria in the CMAR model include:
Cost forecasts and guaranteed maximum price (GMP):
A key aspect is the CM's ability to provide precise cost forecasts and to guarantee a maximum price For marketing managers, this means emphasising the reliability and efficiency of their solutions, particularly in terms of reducing costs and risks.
Qualifications and experience:
The selection of the CM is often based on their qualifications, experience with similar projects and ability to collaborate. Solution providers can impress here by presenting relevant references and successful projects.
Risk management and transparency:
Since the CM is responsible for adhering to the budget and managing potential risks, clients place a high value on transparent processes and proven approaches to risk management. Providers can distinguish themselves here with innovative solutions that contribute to optimising costs and minimising project uncertainties
The CMAR model does not focus on the lowest price, but on the CM's ability to keep the total cost of the project within the guaranteed maximum price through optimised planning and control. Suppliers should therefore pay particular attention to how their products or services contribute to adhering to this cost framework while also creating added value for the project.
In the USA, the CMAR model is widely used because it allows a high degree of flexibility and early involvement of the CM. In Germany, on the other hand, this model has been used less so far because public contracts are more strictly regulated by the Federal Procurement Act (Bundesvergabegesetz, VgV). Nevertheless, the emphasis on cost security and risk reduction could also become more important here in the future.
These differences require adapted marketing strategies. Suppliers in Germany should emphasise aspects such as cost security and risk management, while in the USA, an emphasis on partnership, flexibility and innovative strength can be promising.
Comparing marketing approaches: CMAR vs. design-build vs. design-bid-build
The main difference between the design-bid-build (DBB), design-build (DB) and construction manager at risk (CMAR) project delivery methods lies in the weighting of price, qualification, cooperation and risk assumption. These differences require specific marketing strategies:
Design-Bid-Build (DBB): Price is the deciding factor and selection is usually based on the lowest bid Marketing strategies should focus on cost-effective solutions that minimise price while ensuring efficiency and quality.
Design-Build (DB): The best value for money is crucial here. The contractor's qualifications and ability to work together play a major role. Marketers should offer integrated solutions that improve communication and collaboration between project stakeholders and enable seamless integration.
Construction Manager at Risk (CMAR): This method is characterised by the commissioning of a company that acts in an advisory and building capacity in both the planning and construction phases. The CMAR acts as a partner to the client and takes on a leading role in risk management, while also being responsible for adhering to the budget and schedules Marketing strategies should inspire confidence in the firm's expertise, highlighting the benefits of early involvement and the ability to manage risk accurately.
Marketing messages in detail:
For design-bid-build, focus on cost-effective, quick solutions that keep the price down while meeting requirements. Marketing messages should make it clear how your products or services ensure an optimal balance between price and quality.
For design-build:Emphasise integrated solutions that not only optimise price but also improve collaboration and communication within the team. Your marketing messages should highlight the added value of your solution for the entire project, for example, in terms of time savings, cost efficiency and seamless integration of all parties involved.
For construction manager at risk:Highlight how your company ensures project success as a central partner and coordinator Highlight your experience in risk management, in preparing precise cost estimates and in working effectively with clients, architects and engineers. Your marketing messages should show how your company identifies, assesses and minimises risks, creating cost certainty and resolving conflicts as early as the planning phase.
Differentiation strategies for marketing managers in the CMAR (Construction Manager at Risk) model
High-end suppliers:
Marketing managers who work for suppliers of high-end products, software or services can differentiate themselves in the CMAR model by emphasising long-term benefits and innovation:
Engineering firms: An engineering firm could highlight the added value of planning software that helps to minimise risks during the construction phase by making more precise calculations Since the CMAR model involves the site manager at an early stage, synergies between design, risk assessment and construction optimisation could be particularly emphasised. Concrete savings figures from previous projects, achieved through precise advance planning, are convincing arguments.
Construction companies: A construction company could differentiate itself by emphasising its ability to proactively mitigate risk. In the CMAR model, avoiding cost overruns is essential, which is why successful examples of risk analysis that have combined preventive measures and on-budget project implementation should be highlighted.
Supplier: A supplier of high-quality building materials could highlight the advantages of their products in terms of stability, energy efficiency and long-term cost savings. Particularly relevant in the CMAR context would be the provision of materials that avoid construction delays or rework due to high quality. Certificates, independent test results and reports of smooth collaboration in CMAR projects could build trust.
In addition, extra services such as advice on risk reduction or special training on how to use the products optimally could make all the difference. Storytelling approaches that show how high-quality solutions in high-risk projects have contributed to a successful outcome leave a lasting impression.
Cost-conscious providers
Even in the CMAR model, cost-effective providers can score points with clever strategies:
Engineering firms: An engineering firm specialising in cost-effective solutions could emphasise the advantages of standardised processes that quickly lead to reliable planning bases. Examples could include software solutions that enable low-risk decisions for smaller or standardised projects.
Construction company: A construction company could differentiate itself by emphasising fixed prices and a clear distribution of risk. Optimised processes and proactive risk analyses could be used to demonstrate savings without compromising on quality. Successful case studies in which budget limits were met could convince potential customers.
Suppliers: A supplier offering low-cost materials could focus on compliance with standards while also controlling costs. Customer ratings and practical examples of how the materials have been used in CMAR projects could build trust.
Price-conscious suppliers can create additional incentives through flexible models for material delivery, special offers or quantity discounts. Transparent communication that shows how risks can be minimised in the context of budget planning will build credibility and trust.
Conclusion
The CMAR (Construction Manager at Risk) method has established itself as a flexible and risk-minimising alternative to traditional project management. For marketing managers in the construction industry, it is crucial to understand the specifics of this method and to align their offers with the needs of the client and the specific requirements of the construction manager.
In contrast to the traditional design – bid – build method, CMAR is involved in the project at an early stage, which enables closer cooperation and improved risk assessment. Unlike the design-bid-build model, in which the lowest price is often the deciding factor, the construction manager's ability to control costs and minimise risk while ensuring quality and efficiency plays a central role in the CMAR model.
Higher-priced providers are more likely to succeed in the CMAR model
In the CMAR model, the chances for higher-priced providers increase significantly when experience, innovative ability and risk management are taken into account. Clients often select construction managers who have in-depth expertise, transparent cost structures and the ability to complete the project on time and within budget.
Data from comparable projects show that the probability of success for more expensive providers is around 30–50% when factors such as construction quality, reliability and overall cost efficiency are taken into account. These criteria are central to the CMAR model, as the client and the construction manager work closely together to identify risks at an early stage and find the best overall solutions.
By contrast, the prospects of success in the traditional model often fall to 10–20% when the focus is solely on price, which makes the CMAR model particularly attractive for providers with comprehensive expertise and high-quality services.
National and regional conditions in the CMAR model
National conditions also play an important role in the CMAR model. In Germany, regulations such as the Federal Procurement Act (VgV) continue to influence the design of contracts, with a focus on transparency and fair competition. In the US, on the other hand, the role of the construction manager is often characterised by specific requirements in terms of experience and risk management. Here, marketing strategies are needed that are strongly focused on technical expertise and a proven track record.
These differences emphasise the necessity of adapting marketing strategies to the respective regional conditions in order to meet the specific requirements and expectations of clients in different markets.
Questions that will take your marketing expertise in the construction industry to the next level!
Supplier seeks to persuade engineers in a CMAR project
Question:
A supplier of construction materials wants engineers in a CMAR project to specify its products. Which marketing strategy would be most effective?
A) Present innovative products, focusing on long-term cost savings and risk minimisation.
B) Offer a free prototype for immediate integration into the project
C) Highlighting the lowest prices on the market.
D) Providing comprehensive technical advice and specific evidence of product suitability
Correct answer: A and D
Explanation: In the CMAR model, quality, reliability and risk minimisation are crucial. Engineers value long-term efficiency and clear technical evidence. The focus on low prices (C) is less relevant in this model.
An engineering firm wants to apply for a CMAR project
Question: An engineering firm is applying to be the design service provider for a CMAR project. What should the company emphasise?
A) Fast and cost-efficient standard solutions.
B) Experience with similar projects and close collaboration with the client.
C) Use of innovative software for precise design and risk management.
D) Focus on maximising profit margins for the firm
Correct answer: B and C
Explanation: In the CMAR model, the ability to cooperate and the experience of the engineering firm count. Modern technologies for optimising planning processes and minimising risk (C) are also an advantage.
A construction company wants to convince a supplier of its products
Question: A supplier wants to persuade a contractor to use its products in a CMAR project. What should the marketing campaign focus on?
A) Flexibility in delivery and adaptation to project requirements.
B) Favourable prices compared to competitors.
C) Long-term durability and avoidance of construction delays.
D) Support through technical training and on-site advice
Correct answer: A, C and D
Explanation: Construction companies in the CMAR model value reliable supply chains, technical support and materials that avoid construction delays. Prices are less important than quality and efficiency.
US company plans to enter German CMAR projects
Question: A US company is considering participating in German CMAR projects. What should the company bear in mind when developing its marketing strategy?
A) Adapt to the Federal Procurement Act and emphasise transparency.
B) Focus on the innovative strength and flexibility valued in the US.
C) Rely on references from projects in Germany and Europe.
D) Focus on the lowest price as a competitive advantage.
Correct answer: A, B and C
Explanation: In Germany, compliance with regulatory requirements plays a key role. At the same time, innovations and references can create trust. A pure price focus (D) is less relevant in the CMAR model.
Marketing strategy for a supplier in an international CMAR project
Question: A supplier wants to address internationally operating owners and construction managers in a CMAR project. Which approaches should be pursued?
A) Present certified products and verifications that meet international standards.
B) Emphasise the ability to collaborate across national borders.
C) Offer a one-time discount for the entire project.
D) Provide support from an international network of consultants and technical specialists.
Correct answer: A, B and D
Explanation: CMAR projects across international borders require compliance with standards and strong collaboration. A global network and technical expertise are crucial. Discounting (C) alone is not convincing in the highly specialised CMAR environment.
These differences illustrate the need to adapt marketing strategies to regional circumstances in order to meet the specific requirements and expectations of clients in different markets.
I’d love to see more real-world examples of successful CMAR projects to better understand its application, especially in large-scale or public infrastructure projects. Thanks for sharing such valuable insights!