The first difference between the two methods deals with the relationships between the parties. ln project Management the Consultant and the contractor have no formal contract between them. They do have a third party relationship which stipulates how they are to work together
They rely on each other to perform certain duties which affect each other’s work, but their contracts are only with the Owner. Ln Construction Management, the contractor has a direct Consultant and does not have any direct agreement with the Owner. the Owner. The Contractor now has a third party relationship with the Owner and is paid by the Consultant, not directly by the Owner A second major difference arises in contractor selection. Under a Project Management agreement, the Owner can use competitive bidding or negotiate a price with a specific Contractor. This, however, is the Owner’s decision to make, the Consultant can advise, but has no direct responsibility for this decision. Under a construction Management agreement, the Consultant has greater responsibility for selecting the Contractor. the Consultant and Owner make the decision about competitive bidding or negotiating a price once the project budget has been established. The Owner may not realize the most competitive price with this process. the Owner has delegated that responsibility to the Consultant that responsibility to the Consultant under the framework of the contract Budget
The third difference falls in the matter of liability Under Project Management the Consultant has liability only for the design. The Contractor has liability for the actual work and its conformance to the Construction Documents. Under this agreement for any decision which the Owner makes without the consultants approval the Owner assumes responsibility and liability under construction management the Consultant assumes responsibility for the design and also for the work. and its conformance to the construction documents under this agreement for any decision which the owner makes without the consultants approval The owner assumes responsibility and liability Under Construction management the consultant and also for the work if an issue were to arise, the Owner only has one entity with whom to deal. The Consultant is responsible to the Owner for any part of their Contract which is not met. The Contractor is responsible to the Consultant for their work. the final liability will be shared by the consultant and the Contractor if the Contractor fails to perform the Owner direct liability under this management system is less than under Project management