Construction Manager at Risk Delivery in Colorado

Construction Manager at Risk (CMAR) is a project delivery method used in Colorado commercial and public construction in which a construction manager assumes the contractual risk of delivering a project within a guaranteed maximum price. This page covers the definition, operational mechanics, typical use cases, and decision criteria that distinguish CMAR from other delivery structures in Colorado. Understanding CMAR's structure matters because it shifts risk allocation, procurement sequencing, and designer-contractor relationships in ways that affect permitting, scheduling, bonding, and contract law exposure across the project lifecycle.

Definition and scope

Under CMAR, the owner retains a construction manager early in the design phase — often before construction documents are complete — and the construction manager provides preconstruction services such as cost estimating, schedule analysis, and constructability review. At a defined milestone, the construction manager executes a Guaranteed Maximum Price (GMP) amendment, converting from an advisory role to a contractor role carrying full financial liability for project delivery. If costs exceed the GMP, the construction manager absorbs the overrun, not the owner.

Colorado's public sector CMAR authority is grounded in statute. C.R.S. § 24-92-103 governs procurement alternatives for state public projects and explicitly authorizes construction management/general contractor (CM/GC) arrangements, which Colorado public agencies use interchangeably with CMAR terminology. The Colorado Department of Transportation (CDOT) has used CMAR on major infrastructure procurements, operating under CDOT's own procurement rules aligned with that statute; Colorado CDOT construction projects provides additional context on those arrangements.

Scope of this page: This page addresses CMAR as practiced under Colorado law and procurement frameworks. It does not cover federal design-build or CMAR requirements governed by the Federal Acquisition Regulation (FAR), nor does it address residential construction delivery, which falls outside commercial procurement statutes. Delivery methods used exclusively in other states are not covered. Readers with projects crossing state lines should consult the applicable jurisdiction's procurement code independently.

How it works

CMAR delivery follows a structured sequence of phases with distinct contractual and regulatory touchpoints.

1. Owner solicitation and selection. The owner issues a Request for Qualifications (RFQ) or Request for Proposals (RFP) to select the construction manager on the basis of qualifications and fee, not on a lump-sum bid. For public owners in Colorado, this competitive selection is required under C.R.S. § 24-92-103.
2. Preconstruction services phase. The construction manager works alongside the design team, providing cost modeling, schedule integration, subcontractor market analysis, and phased constructability input. The construction manager's fee for preconstruction is typically a fixed amount negotiated in the initial contract.
3. GMP establishment. When design reaches sufficient completeness — typically 60–rates that vary by region construction document completion, though the threshold varies by contract — the construction manager submits a GMP proposal. The GMP includes estimated construction cost, contingency, general conditions, and the construction manager's fee.
4. GMP execution and contract conversion. Upon GMP acceptance, the owner and construction manager execute a GMP amendment. From this point, the construction manager assumes the risk of cost overruns. Subcontractor buyout proceeds through competitive bidding of trade packages, often governed by the construction manager's internal procurement policies or, on public work, by the Colorado public construction bidding rules that apply to the contracting entity.
5. Construction and permitting. The construction manager serves as the general contractor of record for permitting purposes. Building permits in Colorado are issued at the local jurisdiction level — municipalities or counties — under adopted codes. Colorado building codes and Colorado construction permits overview cover the applicable code frameworks in detail.
6. Closeout. Final inspections, punch list resolution, certificate of occupancy, and GMP reconciliation occur in sequence. Any GMP savings sharing provisions negotiated in the contract are settled at closeout.

Bonding requirements apply throughout. Colorado public CMAR projects require performance and payment bonds, consistent with the requirements described in Colorado contractors bond requirements.

Safety obligations under Colorado's occupational safety framework attach to the construction manager as the controlling employer on site. OSHA standards enforced through Colorado's state plan — administered by the Colorado Division of Labor Standards and Statistics, which operates a state OSHA program — apply to all construction manager employees and, through multi-employer worksite doctrine, to subcontractor activities. Colorado OSHA construction regulations and Colorado construction safety plans address these obligations.

Common scenarios

CMAR is used most frequently in Colorado in the following project categories:

• Public institutional construction — K-12 school districts, higher education campuses, and state agency facilities use CMAR when project complexity or phasing makes a lump-sum design-bid-build approach impractical. Colorado's larger school districts have used CMAR for bond-funded capital programs exceeding amounts that vary by jurisdiction0 million.
• Healthcare and laboratory facilities — Complex mechanical, electrical, and plumbing (MEP) systems and infection control requirements during construction make early construction manager involvement valuable.
• Transportation infrastructure — CDOT has applied CM/GC on projects including major interstate reconstructions, where phasing constraints and traffic management complexity create schedule risk that the construction manager assumes under a GMP framework.
• Phased commercial development — Private owners in the Denver metro and Colorado Front Range construction activity corridor use CMAR when early occupancy of Phase 1 is required while Phase 2 design continues.

Decision boundaries

CMAR versus Design-Bid-Build (DBB): DBB selects a general contractor by competitive low bid after design is rates that vary by region complete. The owner retains design risk until documents are finalized, and the contractor assumes cost risk only at bid. CMAR shifts cost risk earlier through GMP, allows overlapping design and construction, and incorporates the construction manager's preconstruction expertise. DBB is typically required for public projects not specifically exempted under C.R.S. § 24-92-103; CMAR requires a statutory or regulatory authorization to deviate from competitive sealed bidding.

CMAR versus Design-Build: In design-build, a single entity holds both the design and construction contract, creating single-point accountability. Colorado design-build construction covers that method's structure and authorization separately. CMAR preserves the owner's direct relationship with the designer of record, which matters for projects where the owner requires design control — particularly in publicly funded facilities subject to state review.

Licensing: The construction manager entity performing construction activities in Colorado must hold a valid contractor license in the applicable jurisdiction. Licensing requirements vary by municipality and county; Colorado construction licensing requirements describes the state-level framework and local licensing overlay.

Prevailing wage applicability: Colorado's Prevailing Wage Act (C.R.S. § 8-17-101 et seq.) applies to public construction contracts meeting the statutory threshold. CMAR contracts with public owners meeting that threshold require certified payroll and wage rate compliance; Colorado prevailing wage construction and Colorado certified payroll requirements address those obligations.

Lien and payment risk: The GMP structure does not eliminate mechanic's lien exposure. Subcontractors and suppliers retain lien rights under the Colorado construction lien law regardless of delivery method. Colorado construction lien law and Colorado prompt payment act govern payment flow obligations in CMAR subcontractor chains.

References

• C.R.S. § 24-92-103 — Colorado Construction Procurement Alternatives, Colorado General Assembly
• C.R.S. § 8-17-101 — Colorado Prevailing Wage Act, Colorado General Assembly
• Colorado Department of Transportation (CDOT) — Construction Contracting
• Colorado Division of Labor Standards and Statistics — OSHA Program
• Colorado Secretary of State — Code of Colorado Regulations
• Colorado Department of Personnel and Administration — Capital Construction