CM/GC Delivery Method: The Hybrid Approach Common in Public Transportation and Large Complex Projects
CM/GC (Construction Manager/General Contractor) is a delivery method that combines preconstruction services with construction execution under the same contractor. The contractor is selected during design (based on qualifications), provides preconstruction input, and then executes construction under a negotiated or competitively-established price. CM/GC is especially common in public transportation projects and other large complex work.
CM/GC is similar to CM at Risk (CMAR) in structure and intent but has specific applications particularly in federal transportation work. Understanding CM/GC helps contractors pursue appropriate work and owners select appropriate delivery. This post covers CM/GC fundamentals.
CM/GC has two phases:
CM/GC phases
- Preconstruction phase — CM provides design input, constructability review, cost estimates
- Construction phase — CM becomes GC and executes work
- Qualifications-based CM selection during design
- Construction price negotiated or competitively priced
- Off-ramp possible between phases
- Single entity through both phases
Two-phase structure provides preconstruction input while preserving ability to establish price before committing to construction. Same entity throughout provides continuity. Owner retains control over design through preconstruction phase.
Preconstruction adds value:
Preconstruction services
- Constructability reviews
- Cost estimates at design milestones
- Value engineering
- Risk analysis
- Scheduling input
- Procurement strategy
- Subcontractor and supplier planning
- Site logistics
Preconstruction services bring contractor knowledge to design. Designers may not know current material pricing, labor availability, or constructability issues. CM/GC preconstruction adds these perspectives during design rather than surfacing them as change orders during construction.
FHWA approval advanced CM/GC:
CM/GC in transportation
- FHWA approved CM/GC as federal delivery method
- State DOTs increasingly use CM/GC
- Major bridges, tunnels, highway projects
- Complex projects with high schedule or risk
- Authorities and transit agencies also use
- Legislative authority required state-by-state
Federal Highway Administration's approval of CM/GC as formal delivery method expanded state DOT adoption. Large complex transportation projects — bridges, tunnels, complex interchanges — commonly use CM/GC now. State authority varies.
Selection typically qualifications-based:
CM/GC selection
- Qualifications-based selection (QBS)
- Request for Qualifications (RFQ)
- Shortlist of qualified firms
- Request for Proposals (RFP) with technical approach
- Interviews
- Selection on qualifications and approach
- Preconstruction fee may be considered
- Construction pricing later
Selection on qualifications rather than lowest price. Criteria include experience, team qualifications, technical approach, and preconstruction fee. Construction pricing is developed collaboratively during preconstruction.
Price is established during preconstruction:
CM/GC price determination
- Negotiated price based on complete design
- Or GMP established at design completion
- Open book cost development
- Fee and markup negotiated
- Subcontractor packages competitively bid
- Independent cost estimate comparison
- Owner negotiates or accepts price
Price determination varies by contract. Some use straight negotiation; others GMP. Open-book development means owner sees underlying cost build-up. Independent cost estimates provide comparison. Final price negotiated or owner uses off-ramp.
Off-ramp protects owner:
Get AP insights in your inbox
A short monthly roundup of construction AP + accounting posts. No spam, ever.
No spam. Unsubscribe anytime.
Off-ramp mechanics
- Between preconstruction and construction
- If price exceeds owner budget
- If relationship not working
- Owner pays for preconstruction services
- Owner can rebid construction or restart
- Rare but important protection
Off-ramp preserves owner flexibility. Owner not locked into construction at any price. Preconstruction investment isn't wasted if off-ramped — design advanced, constructability addressed. Owner has runway to adjust.
Subcontractor packages typically competitively bid:
Sub bidding in CM/GC
- Major subcontractor packages competitively bid
- Open book subcontractor pricing
- Sub selection with owner involvement
- Subs brought in during preconstruction
- Buyout savings often shared
- Self-perform work may have specific treatment
Competitive sub bidding preserves price competition at tier where most work happens. Owner sees bids directly. CM/GC's self-perform work may have different treatment. Subcontractor involvement varies by contract.
CM/GC and CMAR are similar concepts with different applications. CMAR terminology common in private and building construction. CM/GC common in federal transportation. Essentially same delivery model with different terms. Contractors pursuing both markets should understand both terminologies even though functionally similar.
Risk allocation shifts through phases:
CM/GC risk allocation
- Preconstruction — CM provides services, owner retains design
- Construction — CM assumes construction risk within GMP
- Design risk typically stays with owner (designer)
- Differs from design-build where design risk moves
- Differing site conditions treatment varies
- Escalation treatment varies
Design risk separation distinguishes CM/GC from design-build. Owner holds designer relationship; CM executes design. If design contains errors, those are owner-designer issues. Design-build moves all design risk to DB entity.
CM/GC position in delivery method spectrum:
Delivery method comparison
- Design-bid-build — separate bid after design complete
- Design-build — integrated design and construction
- CM at Risk — similar to CM/GC, building construction terminology
- CM/GC — transportation terminology, similar concept
- Progressive design-build — similar two-phase but with design-build
- Each fits different project profiles
Delivery methods form spectrum. CM/GC occupies specific position — contractor engaged during design, separate designer, two-phase with off-ramp. Design-bid-build separates more. Design-build integrates more. Selection depends on project needs.
CM/GC combines preconstruction services with construction execution under same contractor. Preconstruction phase — qualifications-based selection, constructability and cost input, design collaboration. Construction phase — CM becomes GC with negotiated or GMP pricing. FHWA approval advanced CM/GC for transportation. State authority varies. Selection typically on qualifications. Price determined during preconstruction with off-ramp if needed. Subcontractor packages competitively bid. Design risk stays with owner unlike design-build. CM/GC is similar to CM at Risk with different terminology and applications. For large complex projects benefiting from preconstruction input while preserving design separation, CM/GC is effective delivery. Transportation sector adoption has been substantial; building construction uses CMAR terminology for similar concept. Understanding CM/GC expands delivery method toolkit.
Written by
Jordan Patel
Compliance & Legal
Former corporate counsel specializing in construction contracts and tax compliance. Writes about the documentation layer — COIs, W-8/W-9, certified payroll, notice-to-owner deadlines — and the legal backbone behind audit-ready AP.
View all posts