The Complete Guide to Commercial Construction Management and Commercial Construction Project Managers

Commercial construction management (CM), also called commercial construction project management (CPM), uses business principles to make building projects more successful. These techniques address scheduling, cost, scope, quality, function, and safety.

Construction managers improve project efficiency by leveraging their expertise in both construction and project management. Commercial construction managers represent the interests of the owners and oversee the commercial construction process from start to finish. They coordinate architects, engineers, contractors, and subcontractors from pre-design to project completion.

The term commercial construction refers to the building of structures for use by private-sector businesses. This field includes a wide variety of building types, such as factories, office towers, and shopping malls. 

However, commercial construction management principles do not apply exclusively to the private sector. Many other large-scale projects also incorporate these principles, such as large residential developments, industrial construction, and public-sector construction, like schools and roads. 

The Commercial Construction Management Association of America (CMAA) has led the development of the CM discipline. Its Construction Management Body of Knowledge and Standards of Practice document best practices and ethical standards for the profession. 

Depending on the scale of your project, your CM may consist of one individual manager or a whole team.

Commercial construction project managers have numerous responsibilities — according to the Construction Management Association of America, these PMs have 120 responsibilities  spanning cost management, time management, quality management, project management planning, contract administration, safety management, and professional practice. 

The term professional practice refers to project-related duties, including evaluating the goals of the project, creating controls, and putting in place communication norms. The manager also establishes the structure of the project team and defines the roles. 

Construction project managers are responsible for keeping the project moving according to plan. The goal is to manage the project so that it finishes on schedule and within budget, while still meeting building codes, plans, and specs. 

Some of the most significant responsibilities of the commercial construction manager include the following: helping the owner and architect during the design phase; reviewing drawings; evaluating construction feasibility; estimating costs; creating work packages for the bidding process; and overseeing construction. Learn more about making budgets and schedules for construction projects in “The Comprehensive Guide to Construction Budgeting” and “Construction Project Management 101.”

Per the CMAA’s seven categories of responsibilities, the list below provides a sampling of some of those obligations:

• Project Management Planning: Creating a CM plan, setting performance criteria, compiling reference data, establishing a decision-making structure, organizing the project, defining the roles and responsibilities of team members, planning site use, selecting design professionals, and verifying insurance
• Cost Management: Estimating costs or overseeing cost estimating, developing a budget, creating a cost management structure, modeling costs, projecting cash flow needs, understanding the potential impact of external economic changes
• Time Management: Developing a schedule, reporting on progress, identifying project milestones, determining the critical path, factoring in the role of float, determining the impact of change orders on the schedule
• Quality Management: Defining the quality objectives of the owner, making sure drawings and specifications align with quality objectives, organizing the design review, identifying the construction elements that affect quality, evaluating bids for quality, inspecting quality, managing change order procedures
• Contract Administration: Understanding design phase contracts, implementing construction procurement strategies, pre-qualifying and soliciting bids, defining the submittal process, developing contract and documentation procedures, checking deliverables, resolving contract disputes, managing risk, compiling information to support owner financing of the project, preparing punch lists, managing the project closeout
• Safety Management: Assessing the contractor’s safety record, understanding site safety liability by statute and regulation, verifying insurance for safety claims, managing workers’ compensation, creating the project safety manual, documenting incidents, developing an emergency plan
• Professional Practice: Adhering to the standards and ethics of construction management, defining the commercial and legal relationship between the owner and the construction manager, identifying practice and third-party liabilities, complying with environmental regulations

The work of a commercial construction manager may overlap with that of a general contractor, but their roles and their relationship with the owner are different.

Here are some of the key differences between a commercial construction manager and a general contractor:

1. Time of Hire: The construction manager usually comes on board at project inception, before the design phase. Once the design is final, a number of general contractors bid on the job. Because the CM is involved from the outset of the project, they can increase the schedule’s efficiency by being able to overlap procurement and construction.
2. Design Input: Because CMs work during pre-construction, they can advise on project options, including design, specifications, and materials, and solve problems in order to help save money and improve the functionality of the overall building. Such activities constitute the process of value engineering. Because general contractors do not join the project until the design is complete, they cannot provide this kind of input. For this reason, CM-guided projects often generate fewer change orders and more accurate cost and time estimates.
3. Compensation Model: The commercial construction manager receives a fee, either as a flat amount, a per-hour rate, or a percentage of the project cost. The general contractor often wins the job by being the lowest bidder (the bid includes money to cover overhead and profit).
4. Relationship with Owner: The commercial construction manager represents the owner. The manager obtains the materials and services needed for the project by soliciting competitive bids on behalf of the owner, who pays the costs in addition to the CM’s fee. The CM provides the owner with complete transparency regarding these ongoing project costs. Conversely, the GC provides only the bid price (which represents all costs). Once work begins, the general contractor has an incentive to maintain or increase the profit margin by coming in under budget. They can achieve this by holding down costs and, in less frequent cases, cutting corners. Because of this incentive, the interests of the GC and owner may be at odds.
5. Team History: General contractors have staff members, including foremen, carpenters, and laborers, who work together as a team. The GC also frequently works with subcontractors. This means that the people on the job are already familiar with each other and, thus, share expectations and norms. Construction management staff members are professionals, and they manage construction work by procuring builders. As a result of this procurement process, the CM may assemble a team of laborers among whom there is no shared history. The familiarity and shared understanding among members of a GC team can offer the owner an advantage.
6. Control: By using a construction manager, the owner generally gains more control over construction, but also must be more involved in the project. With a GC, the owner gets less control over the project, but also bears less responsibility.
7. Risk and Liability: Unless the contract with the CM explicitly states that such a manager is responsible for costs beyond the budget, the owner carries the financial risk of cost overruns. GCs, on the other hand, typically must absorb increased costs, such as overtime, except when they have to issue change orders for scope changes or plan mistakes. In terms of liability, the construction manager is only responsible for a construction worker’s injury when the CM’s contract specifies an obligation to maintain safety or the CM assumes said obligation through their actions. GCs, on the contrary, must ensure worker safety and comply with safety regulations.

Despite these differences, the roles of CMs and GCs can still overlap.

When the owner and general contractor have built mutual trust (through past projects or otherwise), they may hire that GC to act as construction manager. 

Moreover, in some cases, the CM may oversee the general contractor, who, in turn, directs subcontractors. Or, the CM may contract directly with trade firms, such as electricians, placing that construction manager in the role of GC (i.e., the person who hires and supervises subcontractors, such as electricians).

Hiring a construction manager to lead a commercial construction project offers the owner several benefits, including end-to-end oversight, cost and time savings, and greater control.

Here are the most important advantages of using a commercial construction manager:

• Cost and Time Savings: As discussed above, because the commercial construction manager begins at the outset of a project, you can save in terms of your budget and your time. The CM also minimizes change orders and avoids delays. 
• Reduced Stress: The commercial construction manager’s expertise can increase the owner’s confidence that the project will be successful. The CM also deals with day-to-day oversight of the construction and any problems, which relieves the owner of these responsibilities.
• Quality: The CM’s expertise, close supervision, and opportunity for value engineering result in a high-quality structure. 
• Flexibility: A construction management firm can use a variety of scheduling and procurement approaches, which allows the CM to shorten the construction schedule and increase efficiency.  
• Control: Because the CM acts as an extension of the owner, the owner gains more project control. 

A study by the CMAA of 623 construction projects found that more buildings with a construction manager finished on or under budget than those without. And, more projects led by a CM were on or ahead of schedule. 

The value of the CM projects in the study averaged $17.8 million; those without a CM averaged $13.4 million. This discrepancy suggests that when the stakes are high, owners depend more heavily on CMs. 

Specifically, the study found that 84.9 percent of CM projects versus 81.9 percent of non-CM projects came in on or under budget. They also found that 68.8 percent of CM projects versus 65.9 percent of non-CM projects were on or ahead of schedule.

The commercial construction manager guides a project through its entire lifecycle, and manages all the steps of the construction process: development, design, pre-construction, procurement, construction, commissioning, owner occupancy, and closeout.  

(To learn more about each of these steps, see “The Stages of Construction Project Management.”) 

1. Development: This step entails finding a site, doing a feasibility study, and arranging financing.

2. Design: During this stage, architects and engineers draft plans for what the building will look like and design the substructures and systems that will make the building perform its intended function safely. 

3. Pre-Construction: In this step, the commercial construction manager shepherds the building through the zoning and permit processes. The manager coordinates final drawings and specifications, oversees detailed site preparation, prepares bid packages, and qualifies contractors and subcontractors. 

4. Procurement: In this phase, the commercial construction management firm awards contracts and obtains materials and equipment. (For details on different procurement methods and how to bid on commercial construction projects, read “Bid Like a Winner: The Master Builder’s Guide to Construction Bidding.”) Then, the newly hired contractors must make submittals regarding materials to the architect or engineer for approval. At the same time, the CM engages in detailed budgeting. 

Download the following sample commercial construction budget, which calculates costs per square foot, to help plan, track, manage, and automate your project budget.

Download Commercial Construction Budget Example — Microsoft Excel 

5. Construction: This refers to the active building phase during which the CM answers RFIs, controls costs, manages the schedule, and inspects the work. Such progress tracking is critical to keeping a project on schedule. 

Download the free commercial construction template below to create a visual timeline of actual versus planned progress. (Check out these links for more free timeline templates and free construction schedule templates.) 

Download Commercial Construction Timeline Template

Microsoft Excel | Smartsheet

6. Commissioning: This phase of the process involves verifying that all parts of the building function as intended. The CM tests systems such as heating and air conditioning to make sure they perform to specifications.

7. Owner Occupancy: As the owner moves into the building and takes possession of the keys, the CM oversees the installation and calibration of equipment and furnishings.

8. Project Closeout: The CM makes sure that the crew has completed all the work; then, the team dismantles the job site. The CM compiles a number of documents for the owner, including manuals and documentation about the building as well as contractual paperwork. The owner does a final walkthrough.

This commercial building construction process flow chart shows the phases of commercial construction.

For each of these steps, you can find helpful templates, such as a bid tabulation form and a project closeout checklist, in “Excel Construction Management Templates.”

Below, you will find all the templates you need to compile a commercial construction management plan.

Experienced commercial construction managers say certain practices are especially important for project success, including the following:

• Read the Construction Contract Carefully: The CM needs to be familiar with all parties’ rights and obligations under the contract from the start. Such information includes when a party can make claims and liens and how to handle delays and change orders.
• Expect the Unexpected: Be prepared to deal with surprise expenses, extreme weather, staff turnover, and delays. Doing this requires flexibility and multiple back-up plans.
• Keep Your Boots on the Ground: While CMs have lots of paperwork to handle in a commercial construction project, they must also be on site as much as possible to help spot brewing problems. 
• Hold a Kickoff Meeting: This meeting should include the owner and other project participants. Make sure everyone has the same understanding of the project, and encourage discussion of potential trouble spots, delays, or cost issues. Use this feedback to adjust scopes of work if necessary. By conducting this meeting, you lay the groundwork for good communication throughout the life of the project.
• Manage Schedules Meticulously: Factor in long lead times to procure customized building components. Avoid stacking trades, i.e., having multiple subcontractors work in a confined space at once, because doing this impedes work and creates inefficiencies. 
• Maintain a Safe Work Site: Watch for hazards and take measures to prevent injuries. On site, use guardrails, set up barricades around open holes, and require proper safety equipment. Safety is critical to avoiding injuries, project delays, and insurance claims.
• Hone Your Negotiating Skills: At every stage of the commercial project, the CM acts as a negotiator. Understand that in the pre-contract phase, the owner and CM usually have more leverage than the contractor and subcontractor. During construction however, that power structure reverses, giving the contractor and subcontractor more influence. Strategies such as principled negotiation (deciding on merits), mutual-interests negotiation (finding common ground), and aggressive negotiation have their places. Change orders in particular are subject to negotiation.
• Be Organized: Commercial construction requires an enormous amount of paperwork — from material orders to submittals and contracts. Without this documentation, you expose yourself to breach of contract and liability claims. Don’t waste time hunting for documents. Use software to manage administration.

If you are an owner embarking on a commercial construction project, bring in a construction manager early in order to take advantage of their expertise. Following are nine steps for a successful hiring process based on advice from the CMAA.

1. Write a Project Statement: This document details the prospective building’s size, purpose, and other characteristics. Commercial construction management firms will use this to grasp project complexity and understand the experience required.
2. Provide Your Cost and Time Goals: While these may change through your work with the CM, schedule and budget goals are important project parameters.
3. Establish Your Internal Processes: Clarify who will be the main liaison with the CM and who will have authority on decisions about spending, design, and day-to-day management.
4. Form a Selection Panel: Include members with construction knowledge and someone who will have ongoing involvement with the project. Familiarize the panel members with the project.
5. Request Submissions: Publicize a request for statements of qualifications (RFQ) from interested construction management firms. You can post this on industry association websites and in trade journals. If you are seeking particular expertise, describe it here. Be sure to request the following information:
   • Years of experiences
   • Professional credentials
   • History of similar projects
   • References
6. Screen These Submissions to Make a Short List: After reviewing the submissions, winnow the list down to those firms you want to investigate further. 
7. Solicit Proposals: Ask firms on the short list to submit proposals. This request for proposals (RFP) should outline the project in detail so the firms can address how they would approach the project and any relevant experience they have. Ask firms to provide preliminary pricing or bids in separate financial proposals, so you can evaluate technical expertise and cost independently.  
8. Evaluate the Proposals: Assess the submissions for technical merit, and rank them. Then review the financial proposals (note that these numbers are still subject to negotiation). Identify the top candidates for interviews.
9. Interview the Frontrunners and Select the Winner: Meet with the firms presenting the strongest proposals and select a winner. In the interviews, ask questions including the following:
   • What is it like to work with you?
   • What are the hallmarks of your CM process?
   • How do you differ from the competition?
   • What is your record on things that are important to us or the project such as smart building technology, environmental innovation, or distinctive design? 
   • When could you begin this project?
10. Finalize a CM Contract: Agree on scope of service and price. The contract should define deliverables and milestones for performance measurement.

To hire a skilled commercial construction manager to join your team, use a job description that highlights key responsibilities and necessary skills. Download the free job description below, which covers duties such as overseeing the construction site and managing costs. 

The following downloadable job description is designed to target an on-staff commercial CM position at a large construction, property development, or construction management firm. However, you can easily adapt the description and customize it to suit your needs.

The steps toward becoming a commercial construction manager involve both formal education and on-the-job training. 

This career track usually entails the following:

1. Education: CMs often obtain a bachelor’s degree in construction management, architecture, engineering, or a similar field. A four-year degree in construction management can be expensive, with tuition costing up to $240,000, but there are many more affordable options. In addition, there are associate-degree and certificate programs.
2. Field Experience: Starting before and during college, CMs pursue construction site work, especially hands-on building experience. Internships in commercial construction management and related roles, such as cost estimating, are also desirable. Apprenticeships offer another way to gain experience. Howard Community College in Maryland combines classwork and on-the-job training in its apprenticeship program. 
3. Work Experience: Entry-level jobs in CM are usually as assistants or in project roles such as quality assurance inspector, cost estimating, scheduling and documentation management with a CM firm or team. From there, CM specialists advance into construction manager roles, leading projects, and program executive positions.
4. License: Some U.S. states require construction managers to be licensed. For example, California CMs need to obtain either an architect, engineer, or general contractor license to work on state and local government projects. Check the requirements in your state.
5. Certification: After a certain number of years work experience, you can take a test to gain certification from various industry bodies. This signifies that you meet high standards of technical expertise and ethics.
6. Graduate Degree: This is not required, but you can enhance your resume by pursuing a master’s degree in construction management.  

Another track is the construction manager in training (CMIT) program of the CMAA. This pathway involves four progressive levels of competence and work experience. To gain the CMIT designation, you must be at least 18 years old, pass a level one exam, have a supporting letter from a supervisor, and know the basics of CM. 

Attaining each subsequent CMIT level (up to level four) requires passing an exam, completing soft skills training, and having at least six months experience per level in specific aspects of construction management, such as contract administration and time management.

In addition, CMIT participants work with mentors who help them gain experience, provide support, and facilitate networking.

The study of construction project management is a specialty field in which you learn about management, planning, and organization in order to successfully complete projects in the construction industry.

Historically, people in this field rose to construction project manager positions from trade jobs, such as carpentry or plumbing. But, construction has grown so complex, that companies now look for education and experience. 

From four-year plans to certificates to PhD programs, there are many educational possibilities in construction management.

There are many certifications that commercial construction managers can pursue. The most well known is the certified construction manager (CCM) designation from the CMAA. 

Note that many universities, colleges, and community colleges offer CM certificates for students who complete multi-week or multi-month programs, often online and self-paced. Certificates differ from certifications, which require passing an exam and meeting other industry standards.

Attaining one of the top CM certifications typically takes at least eight years of combined education or work experience. There are other certifications that demonstrate your mastery of certain aspects of construction, but they do not focus on construction management practices.

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