Standards of Practice Course PROFESSIONAL PRACTICE

Agenda © Construction Management Association of America. Do Not Duplicate or Reproduce.  CM Profession  Certification as a CCM  Leadership Roles of the CCM  Code of Ethics  Delivery Methods  Contractual Relationships  Fee structures  Compliance with laws & regulations

What is a Professional? © Construction Management Association of America. Do Not Duplicate or Reproduce.  Education  Specialized Training  Supervised Experience  References  Examination (& re-examination)

Profession: Providing a Service to Society  Protect public health, welfare, & safety  Cost-effective service  Judgment  Integrity  Code of Ethics Doctor…Structural Engineer…Lawyer © Construction Management Association of America. Do Not Duplicate or Reproduce.

CCM Professional © Construction Management Association of America. Do Not Duplicate or Reproduce.  Has special knowledge of the CM profession - Held to a higher standard  Represents a client - Owes the client a special duty as the owner’s “expert” representative agent - Occupies “responsible in charge” position  Acts ethically in the conduct of business - Adheres to a Code of Ethics

Certified Construction Manager © Construction Management Association of America. Do Not Duplicate or Reproduce. CCM ® – a recognized industry professional Certified by both experience and examination A CCM must meet strict certification program criteria: –Formal Education –Actual documented and verified CM Experience –Demonstrated understanding of the CM Body of Knowledge

CCM Qualifications Matrix © Construction Management Association of America. Do Not Duplicate or Reproduce. Must have 48 months responsible in charge (RIC) experience as a CM/PM (Qualification Matrix) Plus one of the following: –4-year Degree (Construction Management, Architecture, Engineering, or Construction Science) –2-year Degree & 4 yrs. Experience in General Design/Construction –8 Years Experience in General Design/Construction

CCM Qualifications Matrix © Construction Management Association of America. Do Not Duplicate or Reproduce. PHASE:Pre-designDesignProcurementConstructionPost-construction FUNCTION/ ROLE Project Management RIC Cost Management RIC Time Management RIC Quality Management RIC Contract Administration RIC Safety Management RIC RIC Experience Minimum Total of 48 months required in these Phases & Function/Roles

CCMs: Leadership © Construction Management Association of America. Do Not Duplicate or Reproduce.  Functions of a Leader  Leadership in your companies  Leadership in the CM Industry  Leadership in the construction Industry

CCMs: Ethics © Construction Management Association of America. Do Not Duplicate or Reproduce.  What are “ethics?”  Why are they important?  History of CMAA’s Code of Ethics  The future of our Code of Ethics Our Code of Ethics helps to define our primary responsibilities, which are to our clients

Code of Ethics Summary  Client Services  Representation of Qualifications  Standards of Practice  Fair Competition  Conflicts of Interest © Construction Management Association of America. Do Not Duplicate or Reproduce.  Fair Compensation  Release of  Information  Public Welfare  Professional  Development  Integrity

Code of Ethics #1 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Client Service - I will serve my clients with honesty, integrity, candor, and objectivity. I will provide my services with competence, using reasonable care, skill and diligence consistent with the interests of my client and the applicable standard of care.

Code of Ethics #2 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Representation of Qualifications - I will only accept assignments for which I am qualified by my education, training, and professional experience and technical competence, and I will assign staff to projects in accordance with their qualifications and commensurate with the services to be provided, and I will only make representations concerning my qualifications and availability which are truthful and accurate.

Code of Ethics #3 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Standards of Practice - I will furnish my services in a manner consistent with the established and accepted standards of the profession and with the laws and regulations which govern its practice.

Code of Ethics #4 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Fair Competition - I will represent my project experience accurately to my prospective clients and offer services and staff that I am capable of delivering. I will develop my professional reputation on the basis of my direct experience and service provided, and I will only engage in fair competition for assignments.

Code of Ethics #5 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Conflicts of Interest - I will endeavor to avoid conflicts of interest, and will disclose conflicts which, in my opinion, may impair my objectivity or integrity.

Code of Ethics #6 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Fair Compensation - I will negotiate fairly and openly with my clients in establishing a basis for compensation, and I will charge fees and expenses that are reasonable and commensurate with the services to be provided and the responsibilities and risks to be assumed.

Code of Ethics #7 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Release of Information - I will only make statements that are truthful, and I will keep information and records confidential when appropriate and protect the proprietary interests of my clients and professional colleagues.

Code of Ethics #8 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Public Welfare - I will not discriminate in the performance of my services on the basis of race, religion, national origin, age, disability, or sexual orientation. I will not knowingly violate any law, statute, or regulation in the performance of my professional services.

Code of Ethics #9 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Professional Development - I will continue to develop my professional knowledge and competency as a construction manager, and I will contribute to the advancement of the construction and program management practice as a profession by fostering research and education and through the encouragement of fellow practitioners.

Code of Ethics #10 © Construction Management Association of America. Do Not Duplicate or Reproduce.  Integrity of the Profession - I will avoid actions which promote my own self-interest at the expense of the profession, and I will uphold the standards of the construction management profession with honor and dignity.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce. On September 6, 2005, the CMAA Board of Directors adopted a new set of definitions for frequently used construction industry terms, designed to provide commonly understood and accepted definitions for use of the construction management, and in fact the entire construction industry, while remaining flexible to meet evolving conditions. In publishing the new industry definitions, the Board noted that “the practice of professional construction management in relation to project delivery systems and to construction management as a professional service may vary according to a number of factors,” and acknowledged that no set of definitions can accommodate all of these influences.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Construction Management - A professional management practice consisting of an array of services applied to construction projects and programs through the planning, design, construction, and post- construction phases for the purpose of achieving project objectives including the management of quality, cost, time, and scope.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Program Management - The practice of professional construction management applied to a capital improvement program of one or more projects from inception to completion. Program management provides additional benefits such as standardization, leveraged purchasing, and economies of scale.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Qualifications Based Selection - A process where qualifications such as competence, capability, relevant experience, and past performance are given primary consideration in the evaluation and selection of a service provider.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Delivery System - The process selected to execute a construction project for the purpose of assigning responsibilities and risk to the project team. Common delivery systems include: design-bid-build, design-build, multiple prime, and construction management at-risk.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Agency Construction Management - A professional service that can be applied to all delivery systems where the CM acts as the owner’s principal agent in the management of a construction project or program, where the CM is responsible to the owner for managing the planning, design, construction, and post construction phases, or portions thereof. The CM represents the interests of the owner in its dealings with other construction professionals, and with other private and public entities.

Definitions © Construction Management Association of America. Do Not Duplicate or Reproduce.  Construction Management At-Risk - A delivery system which entails a commitment by the CM for construction quality, time, and cost. The CM provides professional management assistance to the owner prior to construction and advice on constructibility, budget, and schedule considerations. During construction the construction manager holds sub-contracts for construction, and will guarantee schedule and maximum cost of construction.

Project and Program Management © Construction Management Association of America. Do Not Duplicate or Reproduce.  CMAA considers Construction Management to include both - Project Management - Program Management

Five CM Delivery Phases Project vs. Program © Construction Management Association of America. Do Not Duplicate or Reproduce. Pre-DesignDesign & Procurement ConstructionPost- Construction Program Management Project Management

Project vs. Program © Construction Management Association of America. Do Not Duplicate or Reproduce.  Project Management is the application of construction management techniques to a single project  Program Management is the application of construction management to large and complex capital improvement programs

Project vs. Program, cont. © Construction Management Association of America. Do Not Duplicate or Reproduce.  Project and Program Management both utilize integrated systems and procedures  The principal difference is the size and scope of projects, and the range of services provided

Types of Construction Delivery Methods  Design / Bid / Build (traditional)  Construction Management At-Risk  Multiple Prime Contracting  Design / Build Construction Management has proven effective regardless of the delivery method © Construction Management Association of America. Do Not Duplicate or Reproduce.

Types of Construction Delivery Methods  Fiduciary vs. Agent vs. Vendor  Competencies  Methods of Compensation  Financial Liabilities and capabilities  Full disclosure of differing legal relationships  Other? © Construction Management Association of America. Do Not Duplicate or Reproduce.

Delivery Methods / Contract Formats DO Drive Legal Relationships © Construction Management Association of America. Do Not Duplicate or Reproduce.  Agency CM - Design / Bid / Build; Single or Multiple Primes; Design/Build; or the Owners’ Rep/Consultant - Read the “A Series” CMAA Contracts for guidance - CM bound to represent interests of the owner as an agent - Providing a service, not a product - Responsibilities defined by contract - Liabilities defined by: Contract Case Law Statutes

Legal Relationships © Construction Management Association of America. Do Not Duplicate or Reproduce.  CM at Risk or GC/CM - Read the “At-Risk Series” CMAA Contracts for guidance - Agent relationships and typical pre-construction services during design or pre-GMP period - Follow-on agreement for actual construction services as a contractor, which the owner may or may not decide to accept

Legal Relationships, cont. © Construction Management Association of America. Do Not Duplicate or Reproduce.  CM at Risk or GC/CM (continued) - If owner accepts GMP, the CM must ensure the owner understands that the CM is no longer functioning as the owner’s agent, and is now functioning as a vendor/contractor - CM may provide additional CM-type services during construction, if requested by the owner during design or pre-GMP period - If the owner rejects CMs’ GMP, may terminate the CM or continue to employ the CM as an agent, and seek a third-party construction contractor

Legal Relationships, cont. © Construction Management Association of America. Do Not Duplicate or Reproduce.  All agents and professionals work for the best interests of the owner  Contracts may define a greater duty to act in the current Owner’s best interests, than others

Legal Relationships, cont. © Construction Management Association of America. Do Not Duplicate or Reproduce.  If the client chooses to take the benefit of a fixed price, the CM/Contractor takes a financial risk in the outcome of the project. The negates the previous “agency” relationship. - No longer any implied duties of loyalty and care are due to the owner.

Code of Ethics #5, repeated © Construction Management Association of America. Do Not Duplicate or Reproduce.  Conflicts of Interest - I will endeavor to avoid conflicts of interest, and will disclose conflicts which, in my opinion, may impair my objectivity or integrity.

CM Services Fee Structures © Construction Management Association of America. Do Not Duplicate or Reproduce.  Depends on the type of contract / legal relationship  Fees depend on the services the Owner is willing to pay for; not what they want or need  CMs should focus on a fee structure that best suits the client’s needs and accommodates their constraints

CM Services Fee Structures: 2 Basic Types  Fixed Price - Typically negotiated - Based on mutually agreed to scope of services - May create conflicts of interest between CM and client - Minimal billing, bookkeeping, and audit efforts © Construction Management Association of America. Do Not Duplicate or Reproduce.  Cost Reimbursement - Negotiated labor rates - NTE limits maybe set - Eliminates conflicts of interests over fees - Requires comprehensive bookkeeping

Why is the Fee Structure a Professional Practice Issue?  Professional services are to be provided cost-effectively; with integrity, and in the interest of the owner  Risks must be allocated and compensated for properly © Construction Management Association of America. Do Not Duplicate or Reproduce.

Why is the Fee Structure a Professional Practice Issue?  As an industry, we MUST have appropriate fees to be able to deliver the services required; but we must NEVER overcharge our clients for services. © Construction Management Association of America. Do Not Duplicate or Reproduce.

Enforcement of Terms and Conditions of CM Agreements  CMs should provide enforcement of their contracts – fair, firm, and fast – regardless of the delivery method employed. © Construction Management Association of America. Do Not Duplicate or Reproduce.

Enforcement of Terms and Conditions, cont.  All members of a project team should be familiar with their contract’s scope of services.  Agent and/or vendor relationships must be enforced clearly and openly. © Construction Management Association of America. Do Not Duplicate or Reproduce.

Laws We Must Deal with, EVERYDAY  Third party liability issues  Employment Practices  Environmental Regulations  Other Statutory Regulations - Emergency planning - OSHA hazard communication - Pollution Prevention - Endangered Species © Construction Management Association of America. Do Not Duplicate or Reproduce.

Laws We Must Deal with, EVERYDAY  Compliance is a professional practice issue  Compliance begins with awareness  Compliance is not just an “additional duty”  Monitoring systems must be established and documented; effective; and reliable © Construction Management Association of America. Do Not Duplicate or Reproduce.

QUESTIONS?