B (3:06)

And I'm Michael Griffin and as you mentioned, I'm with HKA now. But the bulk of my career really consisted of two parts. I spent about eight years in the public sector managing a large scale construction project in Philadelphia. And then I spent close to 40 years with Hill International, which is a premier construction management and project management firm. I actually rose before retiring from there to President of the Americas region where I managed all of our people in the United States and Latin America. And I was honored two years ago to be named a Fellow of the Construction Management association of America. And working with my good friend Sean, we'll be happy to answer your questions and give you as much insight as we can into the process and into the pitfalls.

A (3:52)

All right, great. So let's dive in. At first, I'd just ask you both, in your view, what are the primary responsibilities of a CM on the construction project? And really how important is a CM in controlling project risk? Obviously, we're with the Construction Management association of America, so we of course think that cms have a critical role. But in your view, why are they in such an important role?

B (4:18)

I can very simply say, again, focusing on the CM as an agent, which is what my practice consisted of, I would say very simply, our role is to manage, to document and to advise, to keep the owner out of trouble, to manage all of the other players in the process of a construction project, to keep them informed, especially when things go wrong. Our motto used to be no surprises, that we want the owner to be fully aware of what is happening and we want them to hear it from us. And then of course, to document everything that happens, both for the record and in the event that there are disputes down the road.

D (4:55)

Yeah, I agree with that. I would often think of the CM as an air traffic controller. There's going to be problems. But if you're prepared and if you're watching the project and it's scheduled and the documentation, you're going to adapt and you're going to manage that quickly to a resolution so the problems don't grow and become bigger. So that's really the responsibility of a cm. So there are really every aspect of construction, I feel like they're scheduling, phasing, trade coordination, field integration, cost management. These are all the areas that you want a good cm, just like you want a good traffic controller to know what planes are going to take off, what are on the Runway, what's in the air, what's coming down onto the Runway. Right. So the CM is all involved in all of those aspects of a construction project. And done correctly, they can keep everybody out of trouble, and they can get the project built on time and on budget if done incorrectly or not adapting to the changes and the problems that we're going to have. Just to run with my analogy of traffic control was going to be an issue. Now, how do we address the issue? How do we do it quickly to Mike's point, how do we document it and how do we direct people to get to a resolution? That's how vital the CM is, I think, in construction. Which also leads to risk. Right? That leads to risk. Mike talked about CM agency, so I'll just talk about it. Depends on what state you're in, how big of a risk you have. But since you and I are currently sitting in Philadelphia, Pennsylvania, I'll use Pennsylvania. I'm licensed in pa, New Jersey and New York. But in Pennsylvania, for example, there's a case called Belt. Right. And I think it's worth talking about with the difference between CM Agency and CM at risk. And even in a CM Agency situation, there can be liability for construction management, because that case holds adoption of what we call the restatement second of torts, which is to say if I make a negligent misrepresentation about a document, about scheduling, about coordination, about cost, and I'm being paid for that, and I know a third party is going to rely upon that information that I'm giving, I can be liable if I'm negligent, meaning I make a false representation that I know or should know is false. Someone else reasonably relies upon that representation that I made, and then they rely upon it to their detriment, those would be the elements. And Built right gives an ability for a contractor who doesn't have a contract with the CM than to sue the CM under that theory. And there's where the liability comes. And it's an exception for those lawyers who might be listening to this podcast. It's an accession to the economic loss doctrine, which would prevent the overlap of tort and contract law, which is usually a death knell to that type of tort claim. So these are all the considerations. So you've got a lot of responsibilities as cm. Also, as we hope to point out, a lot of risk.

B (8:07)

Summarize what was just said. Is if you don't do a good job, you can be sued by your client. You can also be sued by others who rely on you doing a good job.

C (8:19)

So just as a follow up, out of those responsibilities you mentioned, which is the most underestimated by owners,

D (8:28)

the most underestimated by the owner and maybe even by the CM is get the building or the project built, get it done. Because all things will be worse if you don't get that project built on time. But with that sort of flippant response, I'd say early risk identification is the major underestimated responsibility of the construction manager to get out in front of these issues and as quickly as possible. I had a contractor, he's not a cm, he's a prime contractor. It does mostly bridge work, building up and repair of bridges. But he was talking to me the other day and we were just having an off the record kind of discussion and he said to me, I can build anything, but I've realized over the years it's not about building it, it's about having the back office to support the building, meaning the documentation, the change orders, the RFIs, the responses. And he's absolutely correct. And that's where a CM I think is the most underestimated in my estimation. What about you, Mike?

B (9:33)

I think from the standpoint of the owner, what I would say is that the owners, probably what they misunderstand or misestimate themselves is the need to timely make decisions.

D (9:43)

Yeah.

B (9:44)

When presented with an issue, it's incumbent on the owner to make a quick decision now, not a hasty decision, but it needs the facts, it needs the alternatives. But then it needs to make a decision. It can't lay back and wait because time is money. Disputes and issues will grow. And the other thing for the owner is the importance of timely payment to all the parties, to all of its professionals, as well as to its contractors. Yeah, that really goes a long way towards making a job go smoothly.

D (10:14)

The two points that you made there, which are timely responses from payment, that to me is the difference between a problem and a dispute. And all projects are going to have problems, that's okay. But not all projects have disputes. And it really is like a chain reaction. If you've got an issue that needs rework, okay, but if you don't do the rework, what's going to happen? Is the problem going to go away? Probably not. Then what are you looking at now? You're looking at the schedule moving forward, progression being needed and the rework. So now you've got steps, stacking of trades, schedule compression. We have inefficiencies tied into that acceleration. So there's where you start to see a problem. If you followed Mike's advice and got a quick solution to an RFI and did some rework. Right. But if you don't do that now, you've got all these things stacking up and then the problem becomes a dispute. So I think we're in alignment here. I think we agree. Early identification of problems and quickly responding to them is the most undervalued responsibility of the cm. If he or she does it right, you never see the dispute, you never see the problem.

A (11:20)

Exactly. Exactly. So that actually leads into the next question and just diving into some of these problems that a CM might run into. Say, for example, contractor performance. If there are issues such as slow progress, safety problems, weak procurement, what should the CM do immediately to protect both themselves and the project?

B (11:42)

Well, I think they have to document that performance in the record. I also think they have to bring it to the attention of senior management of the contractor that they have to perform to the schedule that is part of their contract and that things aren't going to get any better if they don't.

D (12:00)

Yeah, I would agree with that. I would say go back, you need to look at your contract, know what your roles are. Right. Because there's a difference between a CM advisor and a CM at risk. Right. So if you're a CM advisor, you want to avoid giving instructions that would delve into means and methods of how the contractor is going to do something. So I would want to know, really? I probably advise. The CM called me up and said, listen, got a job that's going south. I got contractors out there that aren't performing. I would want them to look at their contract, their rights and responsibilities and what obligations they owe, and the contractors as well, and then start putting people on notice, the contractors on notice of their obligations. But to that end, I would want to know whether or not I have, as the cm, the right to demand certain actions or am I requesting or advising certain actions. And I would stay within those parameters because once you see the red blinking lights of potential claims and litigations, you don't want to get sucked into it. You want to solve the issue up front, but you don't want to get sucked into it. I would probably also call might. That's a good time to get a consultant involved to get fresh eyes on something that might have a resolution that you don't necessarily know about, but written notice, early, clear direction, understanding what your roles are. And using the right terminology, again, not taking over someone's means and methods, but with expediting remedies for non performance.

B (13:32)

And one other thing I'll add from the perspective of a contractor and if they're not performing is be aware of your schedule. So much work today is done not by the prime contractor who self performs, but so much is done almost exclusively by subcontractors. And so he has to manage those subcontractors and make sure that they're all lined up and performing so as to not get in each other's way.

D (13:55)

And this will be repeated throughout. I think this podcast, and I think we've said it a few times, but not only are you going to document what the problems are, but I would make sure that I'm documenting things multiple times a month, not just like once. And then that's it. Not just one notice letter document and document decisions and who is making those choices. Right. So again it's one thing to say give me a recovery schedule. It's another thing to say here's your two look, two weeks, go do this now you're taking over and there's an important distinction there. Right? So if I'm the CM advisor, I might say, okay, give me a recovery schedule contractor, let's look at this and make sure that you're addressing the issues that aren't being performed. Or I might, if I'm a CM at risk, I might be, here's a two week schedule. We're going to get this done. I want your commitment that these dates will be met. There's a difference, right? The latter is more affirmative. I want this done by X date date. But now I'm taking over the means and methods. So I again, I want to know what my obligations are and my rights are to impose my solutions on other people or am I advising them on a solution?

B (15:06)

And that kind of goes to the key differences between the two roles. One of advisor versus at risk. A CM at risk is really an advisor up until the point that it signs a either fixed price or guaranteed maximum price contract. At that point in time they are the contractor and they do have responsibility for the means and methods.

D (15:26)

Yeah.

B (15:27)

An agent CM on the other hand has to be very careful not to put itself in a position of starting to take over the job because then it's going to incur its own liability. Its job is really to convince the contractor, the CM at risk, to perform.

D (15:44)

So a CM advisor to me will probably look at the meeting minutes and the emails and want to see words like I'm recommending or I've observed the following as opposed to more affirmative statements of do this, do that, resequence your work. Those types of adjectives will be more affirmative and more along the lines of taking over and taking control over the progress of the job. And where there's control, there's responsibility. And responsibility means potential liability.

C (16:20)

So we talked about contractor related risks. Let's switch gears to owner related risks. Owner delays, incomplete designs and scope changes often derail projects. So what are some of the biggest owner side risks in the field and how can CMS proactively minimize them?

B (16:35)

Well, a big risk on a project can be incomplete or inaccurate design and the CM acting as an agent or as an advisor to the owner, needs to prod the designers to meet the same schedule that they're pushing other parties to meet. So hopefully the CM is involved pre construction and can act in the role as an advisor to the owner to make sure that the design work proceeds on time and they can review it and in coordination with the staff of the owner, make recommendations for changes or see things that aren't either constructible or that don't meet the owner's needs.

D (17:16)

Yeah, I absolutely agree with that. But the only other thing I'll add to that, in addition to bad design, because it's usually, that's usually the issue. Or incomplete design, because incomplete design leads to all kinds of problems too. If you're bidding work and you're getting locked into a lump sum contract as the contractor with 40% completed issues for construction drawings, there's going to be some changes and there's going to be a fight over what was in the 40% and what's not in the 40%, meaning what is a change order and what's not, because the contractor is typically buying in that situation, not only what's on the drawings, but what's reasonably inferable from those drawings. And that can lead to issues. So that's where a CM can really come in, show some immediate clarity. But it's gotta get decisions from the owner on what to do and have a realistic budget and schedule assumptions based around that. So if there's those issues and you don't come back with quick decisions, quick budgetary choices and fixing the schedule, you can run into some problems. Advice that I would give is really the difference between project production and project controls. Right. So again, I would want to see a CM take over that situation where the owner's faltering and giving information quickly enough with short interval planning. One week, two week, look Aheads to keep everybody on track, revisiting the issues, communicating and then the more the monthly cost and schedule, forecasting and updating so that the owner keeps a realistic perspective on what this is going to ultimately cost or if it's going to ultimately delay the project because that you know something, you need to know there are choices to be made. If you had a high rise going up and you decided that you wanted to, the project was being late, the owner might think it's more important for me to get. If it was an apartment building, let's just say I've had cases like this. It was an apartment building, the owner might be more concerned because of loan and grievance that it has and covenants on how many occupancy it'll have in that first year. It might be more concerned with getting people in to the building. You might decide on a 30 floor project. I want the first 15 floors. Okay, I'm going to give you the first 15 floors. Before I do one turnover, which is 30 floors, I might have to get a hoist that's outside the building that's going to run things up and down the building off because you're going to have to zipper the building. You're going to have to enclose that building. That's going to have all kinds of ramifications down the road, like a domino's. But it's still, it might be in the owner's best interest to do that. Presenting those options as a CM to an owner and letting them know where the cost is and therefore they can project into what choices they want to make. They might turn around and say, you know what, I'm okay, let's be four months late, no problem. Give me one turnover. 30 floors, I'm good. But at least you're realistic about scheduled budgeting and how those decisions are going to impact later trades. Agreed.

A (20:18)

All right, let's talk about expanding legal exposure. I'm sure you've seen that courts are increasingly view cms like architects and engineers in certain roles. So why do you think the legal system is broadening CM liability and what should CMS do to protect themselves?

D (20:35)

Yeah, I think the landscape against CMS is getting broadened because the law as just a general tenet wants to put people who are in control with the responsibility of paying for the decisions that they make. And as you can see, and as we've articulated the knowledge base and the interfacing between design and completion of construction, with the CM being there from that entire time period, the CM is involved in all of those aspects, therefore, they start to take on the biggest directives for control. And as soon as they do that, liability starts to breed in and it's just inevitable. So there's a myriad of ways that could happen, but I think it really comes from the fact that they have so much control. I don't know what you've seen out there as an expert, Mike.

B (21:29)

I guess I would turn it just a little bit different and say in a way as an agency construction manager, I'm happy to see that because it means that industry is recognizing construction management as a profession similar to architecture and engineering. And of course as a profession you have roles and responsibilities and liabilities if you don't do your job. Yeah. So from that standpoint, I see it as a good thing because the industry is being recognized in the same level of professionalism as architecture and engineering.

D (22:01)

That is true. So that's where you've got control over something. You're taking more control. So one of the tips that I always tell construction managers when I'm looking at the contractor trying to negotiate them is let's align that contract language with what you actually intend to do because sometimes it gets broadened. I had a client once who was trying to really take over a larger scope of the work on a high rise. They wanted to be the building envelope commissioning agent responsible for all of the coordination fleet curtain wall system and the stone facade and everything else, but they really weren't. They really were just providing lead certification to the outside structure. But because they had that title, the specifications had certain responsibilities that it's associated with the building envelope commissioning agent, even though they weren't. And then they found themselves on certain emails of which no one waited for them to respond to because they knew they weren't really weren't a player in the curtain wal at all. But that led to potential liability because when there were problems on those systems and your name and your title is I'm going to do this and there are specifications on what that commissioning agent will or won't do. You just saying I didn't do it excites the lawyer because oh, you failed to do it and you're going to admit you failed to do it even though no one was expecting you to do it. So to me, I think it all breeds from the control you have over the project. Let's make sure your contract terms and conditions align with what your intended role is to be. And that way we can better protect the CM from this expanding, never ending role of potential liability.

B (23:40)

You said that very well.

D (23:41)

Yes, every now and then. Great.

C (23:46)

Thanks for all the great stuff today. Unfortunately, however, as we have this great conversation, time is sliding by fast. So we're running out of time today, so we wanted to disclose with this One last question. If you had to give construction managers a short checklist to reduce legal exposure on every project, what would it include?

B (24:05)

That's a good question.

D (24:06)

I would say Ali dovetailing off of what I just ended with. Right. The previous question. Stay in your contractual role. Stay in your length. Don't escalate outside of it. Try to again, if you're a CN advisor as opposed to a CN at risk, don't use words like approved, acceptable meets code will work all of these things. Are you getting authoritative decision making on a choice right. Use observed appears recommended request pending A and E confirmation. Those types of languages. So that's number one and maybe number two. Number three would be make sure every email that you're sending out concerning any of these issues on scheduling, budget, coordination. Make sure that you recognize that they will potentially be an exhibit someday to something either to a change order request, closeout documentation, or unfortunately, litigation. But when you start to flag it in that manner, you're going to start to use the right verbiage to protect yourself and your client. So those are probably my top things to recommend to somebody.

B (25:29)

I would echo what Sean said. Stay in your lane. Your job is to manage and coordinate. Do not start to become someone who is directing. You don't direct the designer what to do. You don't direct the contractor what to do. You coordinate. You document what they do. That I think is that's the best way to preserve your situation of not being liable. When somebody says he told me to do it that way, no, it's not my job. The designer tells you how to do it. Your job is then to go do it.

A (25:56)

Great.

C (25:57)

We'll end it there with that. We thank you all for joining us today. It was a pleasure chatting and we're happy to have you back after your last webinar, which speaking of if today's conversation sparked your interest in managing risk and clarifying the CM's role, we encourage you to check out a recent webinar hosted by Today's Guests. Presented by Michael and Sean, the session takes a deeper dive into the roles and responsibilities of construction managers from both a practical and legal perspective. The program explores strategies for avoiding delays, protecting budgets, maintaining scope control, and navigating the expanding legal landscape shape facing cms. You can learn more about the free member webinar titled CM Roles and Responsibilities A Practical Legal Perspective on CM Risk, along with additional resources and educational opportunities at cmaanet.org to be sure you don't miss our next episode, please subscribe to the podcast and follow us on social media at maahq. Don't forget to leave us a review with your thoughts on today's episode and let us know what you would like to hear on an upcoming podcast. On behalf of cmaa, I'm Evan Hendershot with Carly Trout. Thank you for listening.