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

In this article, we’ve compiled the most useful tips and step-by-step instructions for hiring a commercial construction manager. Plus, you’ll learn all about the responsibilities of the role and how proper management helps projects succeed.

What Is Commercial Construction Management?

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.

Residential vs. Commercial Construction Management

Commercial construction differs from residential building in many ways, including size, purpose, materials, regulation, systems complexity, budget, and stakeholders.

Residential construction generally refers to single-family homes and projects of four units or fewer, as well as remodels of these homes. The building of large apartment complexes and subdivisions, with dozens or even hundreds of homes, operates as commercial construction.

The distinctions between residential and commercial building are as follows:

Scale of Commercial Construction Projects

Commercial construction usually involves medium or large-scale projects, such as factories, shopping malls, and office buildings. Homes are generally small-scale construction jobs.

Residential construction seldom has a dedicated construction manager. The builder or general contractor manages the project.

Medium-scale commercial construction includes making cosmetic updates to existing structures and new buildings. It also includes the building of new strip malls, medical and dental offices, apartment complexes, and light industrial structures.

Anything larger than medium-scale commercial construction qualifies as large-scale commercial construction. Examples include the sector known as public works construction, which refers to government projects like schools, courthouses, and highways. In this sector, a government or government agency is both the owner and client. Therefore, unlike other sectors of commercial construction, public works construction is not for profit.

Commercial construction management practices are the norm for medium and large-scale projects. But, public works construction employs some different processes. Governments, for example, often have very strict competitive bidding rules for contracts.

Commercial Construction Project Manager Responsibilities

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:

Commercial Construction Management vs. General Contractors

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).

Advantages of Using a Commercial Construction Manager

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:

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.

Main Frameworks for Adding Construction Management to a Project

There are many ways to add a construction manager to your commercial project: You can hire a solo consultant, contract with a CM firm, or acquire this capacity in house.

If you choose to hire outside construction management, there are different ways to structure the relationship.

For centuries, builders and owners did not view construction management as a distinct process. But, in the 1960s, CM began taking shape as a professional service in its own right, the CMAA says.

Now that commercial construction management is a well-established discipline, property developers and large construction firms have made construction managers and CM departments integral parts of their organizations.

However, most owners do not build frequently enough to justify having a commercial construction manager or team. Owners typically hire a commercial construction management firm or an independent construction manager.

When an owner hires an independent CM, that CM generally takes one of three traditional approaches to this contractual relationship: The manager acts as a pure construction manager, a construction manager as agent (CMaA), or a construction manager at risk (CMAR).

Design-build is another popular construction project delivery method. This approach is closely related to the three aforementioned ones. In design-build, the entire project, including design and construction, falls under one contract and one team, usually either the architect or contractor. That team alone is responsible for the entire project.

This particular approach streamlines the project for the owner and limits the shifting of blame. Proponents like design-build for its efficiency and collaboration.

Design-build and CMAR are similar in that they both entail end-to-end responsibility. But, there are also some important differences between the two approaches. While the CMAR may bring a great team together, these subcontractors and other participants work for different firms, which renders them unable to integrate in the way that the single team of the design-build method can.

The two methods also have different contractual standards for performance. In CMAR, the standard of care covers the legal obligation to guarantee that the design functions as intended. Maintaining this performance standard means putting in as much effort as any other reasonable professional would. In design-build, the contractor must maintain a commitment to performance, meaning they must achieve the level of performance that they’ve specified in the contract. In other words, the design-build firm must fix any problem that arises.

In addition, once construction gets underway, CMARs are not liable for any design problem that a contractor discovers. Instead, the architect or engineer resolves any issue by responding to a change order request. Conversely, because the design-builder is both the designer and builder, they are responsible for constructing a building that functions as intended. The design-builder’s team must, therefore, work to resolve the issue so that the building performs as promised. Consequently, the design-builder does not use change orders. This responsibility (or lack thereof) highlights the essential difference between the standards of build-as-designed and build-to-perform.

Steps in a Commercial Construction Project

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.

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.

Commercial Construction Budget Template

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

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.”

Commercial Construction Management Plan Templates

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

Commercial Construction Management Plan Template

Commercial Construction Management Plan Template

This template provides the high-level structure for a commercial construction management plan.

Download Commercial Construction Management Plan Template

Construction Project Resource Management Template

Construction Project Resource Management Template

Use this template to identify resource needs and manage them appropriately.

Download Commercial Construction Resource Management Plan Template

Construction Project Timeline Template

Construction Project Timeline Template

This template will help you outline the timeline for your commercial construction project.

Download Commercial Construction Project Timeline Template

Construction Project Bid Tabulation Template

Bid Tabulation Template

This template gives you space to document each individual bid and associated cost.

Download Commercial Construction Bid Tabulation Template

Construction Project Abstract of Bids Template

Abstract of Bids Template

As you gather contractor bids, use this abstract of bids template to rank the bids against each other based on project-specific criteria.

Download Commercial Construction Abstract of Bids Template

Construction Project Subcontractor Documentation Tracker Template

Subcontractor Documentation Tracker Template

This template helps you track subcontractor work and related documents, making it easier to manage subcontracted jobs.

Download Subcontractor Documentation Tracker Template

Construction Project Daily/Weekly Inspection Report Template

Daily Weekly Inspection Report Template

Use this template to gather details of daily inspections and record details of each activity area.

Download Commercial Construction Daily/Weekly Inspection Report Template

Construction Project Contractor Progress Payment Template

Contractor Progress Payment Template

This template enables you to document payments made to contractors while the project is underway. These monthly payments reflect the percentage of completed work.

Download Commercial Construction Contractor Progress Payment Template

Construction Risk Register Template

Risk Register Template

Employ this template to assess and record risks associated with your commercial construction project.

Download Commercial Construction Risk Register Template

Construction Punch List Template

Construction Punchlist Template

This template functions as a record of outstanding work in the final stages of the project.

Download Commercial Construction Punch List Template

Construction Project Closeout Checklist Template

Use this template to check that all the major items in the commercial construction project are completed.

Download Commercial Construction Project Closeout Checklist Template

Construction Project Submittal Form Template

Construction Submittal Form Template

This template gives a standardized way to track requests from contractors to both architects and engineers, helping you verify the installation of correct products.

Download Construction Submittal Form Template

Construction Project Schedule of Submittals or Submittals Log Template

Also known as a submittal log, use this template to compile an accurate record of all submittals and responses.

Schedule of Submittals Template

Download Commercial Construction Schedule of Submittals Template

Submittal Log Template

Download Commercial Construction Submittals Log Template

Construction Request for Information Template

Construction RFI Template

This template offers a standardized way to track requests for information, which is used when there are missing details in construction documentation.

Download Commercial Construction Request for Information Template

Tips for Commercial Construction Managers

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

How to Select a Commercial Construction Management Firm for Your Project

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:
  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:
  10. Finalize a CM Contract: Agree on scope of service and price. The contract should define deliverables and milestones for performance measurement.

Commercial Construction Manager Job Description

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.

Sample Commercial Construction Manager Job Description

Use the format and content in this sample commercial construction manager job description as a starting point, and add details relevant to your needs. You can use the job description to recruit applicants.

Post the job description on employment boards. Publicize the vacancy on social media, linking to the full job description on your website. Your job description should include the following sections: