3 Reasons to Engage an Owner’s Construction Representative on Your Project
A massive amount of strategy, time, thought, and labor goes into every construction project, from planning to monitoring, scheduling to problem-solving, cost to closeout, and commissioning to warranty. Ideally, these activities can be managed by a team who is devoted only to that project, rather than splitting time between multiple priorities.
Fifty years ago, the construction project management team was likely to be the project’s architect. As time went on, projects became more detailed and costly, stricter safety standards were put in place and new technology became prevalent. The architect’s role was to make a project work on paper, and an overall manager was needed to manage all other aspects of the project.
The owner’s representative (aka construction manager, construction management consultant, project financial manager) role was created to take an owner’s vision and make it reality. An owner’s representative is focused on the best interest of the owner and works daily to maintain the project to the owner’s plan. Owner’s representatives manage the entire project, including the programming and phasing of complex projects, employing project controls and financial management, ensuring contracting teams execute their role with safety, quality, budget, and timing top of mind, and equipping the project with qualified and experienced construction leaders.
There are numerous benefits to teaming with an owner’s representative for construction projects. This article dives into the top three benefits and includes tips on choosing the best owner’s representative for your next project.
Reduce Owner’s Risk
All construction projects come with a certain amount of risk surrounding several key factors that lead to project delays and disappointment—cost and budget overruns, inaccurate estimates, insufficient insurance, supply chain disruptions, scheduling errors, contractor performance issues, contractual disagreements, safety hazards on the jobsite, and miscommunication between field and office teams.
Effective project management drives project success and reduces risk. The owner’s representative role is to move the project forward, assuring the owner gets what is paid for and contractors deliver what they were contracted to do—all the while allowing the owner to keep his/her focus on existing business operations.
Owner representatives apply their expertise to reduce owner and investor risk while keeping them informed and engaged. An owner’s representative is constantly evaluating progress and costs vs. plan, and keeping owners informed in real time so they can make data-driven informed decisions in a timely manner and adjust operations accordingly.
Develop a Well-structured RFP
The Request for Proposal (RFP) is a formal invitation, announcing a project and inviting construction professionals to submit details on their qualifications, outline the method they’ll use to complete the project, and list their price for the work. The RFP should offer clear directions, and state details about the project’s concept, status, funding, key milestone schedules, and planned delivery. If the RFP is vague or missing pertinent information, the project’s most qualified candidates may choose not to participate in the proposal process.
A qualified owner’s construction representative will work closely with the owner and related stakeholders to assure the RFP clearly outlines the scope of work, ownership expectations, and current state of funding. This information allows the engineers, architects, and contractors to respond with their best offers. In addition, this information arms contractors with the details they need to find the best and most qualified subcontractors for the project.
The RFP is a crucial factor in determining project risk. A poorly organized RFP can lead to inaccurate pricing and schedule estimates, staffing issues, disgruntled contractors and stakeholders, as well as costly project changes and downtime due to unclear objectives. Any one of these issues directly affect project overhead. Owner representatives are experienced in drafting well-structured RFPs. They know the questions to ask of project stakeholders to assure accurate and clear details are conveyed to potential contractors. These actions allow the owner to choose the best qualified team to successfully deliver the project.
Financial Stewardship of the Project
A successful owner’s representative should work with clients to develop formal project budgets and then review and track budgets, obligations and expenditures, mitigate project financial risks, and maintain project budgets. Owner representatives will staff the project with a financial manager, or multiple financial managers, depending upon project scope, needs and in the case of federal projects, audit agency oversight. The financial manager will engage with project teams, stakeholders, and clients to develop detailed formal project budgets and supporting schedules and utilize them to control budget line items and monitor and report on project costs.
The formal budget development takes place by researching and obtaining supporting documentation for all known and potential project costs. The project manager may utilize stakeholder and vendor contracts, bids, proposals, quotes and estimates on procurement of goods and services, negotiations, and industry and historical norms. The financial manager can be a key component in developing a project’s contingency requirements due to unknown or unforeseeable factors and project risk. Owners should expect a thorough and complete budgeting process.
The owner’s representative may augment the team with financial budget analysts who review construction invoices for progress payments and associated contractor and subcontractor invoices for compliance with contractual agreements and requirements, incorporation of contract modifications, contracting officer directives and change orders, as well as against awarded values and overall budgets.
The owner’s representative will maintain tracking and reporting on contracts and memorandums of understanding, contract modifications, change orders, contractor and inter-agency invoices, contingency, and other project costs.
Additionally, the representative will offer options for design selections, listing benefits/cost of each option and delivering recommendations on which option offers the best value. The owner will ultimately choose options and the owner’s representative will move forward with that option.
One primary benefit to having an owner’s representative in this role—vs. a general contractor—is that an owner's representative will oversee the work and assure that contractors get paid based on progress instead of estimated progress. The owner’s representative delivers peace of mind to owners and developers and serves as a good steward of the finances to make the project vision a reality.
Choosing the Ideal Owner’s Representative
The right owner’s representative can help owners and developers complete projects safely, efficiently, and profitably for all stakeholders, leading to long-term trusted relationships. Here are some qualifications to look for when choosing an owner’s representative:
- A proven track record of success in planning and executing similar projects
- A reputation for managing projects with safety, health, and environmental resources top of mind
- A clear understanding of your business, as well as your goals, timeline, and budget for the project
- A creative approach to resolving current and future project challenges, and also leveraging opportunities
- A well-rounded resume of experience in managing project financials, project and document controls, contractor teams, and quality assurance processes
Tracking project performance against plan is imperative for managing projects to planned time and budget. An owner’s representative will deliver a wealth of knowledge of the contracting community and tap into the resources needed to successfully deliver the owner’s project.
