Construction Management Agreements: Key Provisions, Common Areas of Dispute, and Minimizing Performance Risks

A complex construction project will only run smoothly if all parties to the project--the owner, architect, contractor, subcontractors, materials suppliers and potentially many others--clearly understand the goals of the project and the responsibilities of each party.

The role of the owner's representative has grown in prominence and has become an essential factor in the success of many projects. Properly structuring the scope of services to be rendered by the owner's representative, careful vetting of qualifications, capabilities and experience, and crafting well-structured contracts that acknowledge the increasing performance risks of these consultants can make the difference between a successful or a challenging project.

Although construction industry associations provide standard construction forms, construction counsel should not rely on standard and boilerplate language when drafting construction management agreements. Instead, counsel should tailor the contract to the specific project, carefully negotiate key provisions and anticipate common areas of dispute.

Listen as our panel of construction practitioners experienced in negotiating construction management contracts discusses best practices for drafting and negotiating the agreements. The panel will discuss critical clauses to include in the contracts and provide strategies for avoiding common drafting pitfalls and resolving contract disputes.

1. Overview
2. Common issues
   1. Financial structuring: GMP, cost-plus, stipulated sum
   2. Preconstruction activities: budgeting, scheduling, constructability and logistics
   3. Construction phase activities: subcontract administration, payment, quality control
   4. Changes and delay
   5. Dispute resolution and termination
   6. Insurance and indemnification
3. Key provisions
   1. Scope of work
   2. Construction manager's obligations
   3. Timeframes for completion of work
   4. Compensation
   5. Timing of payments
   6. Termination
   7. Definitions
   8. Owner's remedies on default
4. Administration of the contract
   1. Protection of persons and property
   2. Insurance and bonds
   3. Uncovering and correction of work
   4. Miscellaneous provisions

The panel will review these and other key issues:

• What contract terms are most frequently included in construction management agreements?
• What factors should construction counsel take into account when tailoring a professional association standard form to a particular project?
• What are the most commonly negotiated or disputed issues during contract negotiations and what are some effective strategies for resolving them?