Construction Management – it is a form of contract type whereby the Construction Manager manages the project for the client, including the coordination of the design team, for a fee, but all payments flow directly from the client to the consultants and contractors, and not via the CM bank account. They key benefits are "transparency, quality, expertise and especially flexibility of design and speed of development, because you can start the construction job before the design of later packages is finalized. Construction Management (CNM) means the comprehensive service for client including control, coordination, checking and reporting of whole project team from its beginning up to the project completion. The main difference with the project management is that the project is not delivered just by one general contractor but the works are split into few trade/working packages which are tendered/executed by separate "main" contractors.
Why Construction Management?
There are two main advantages of the Construction Management. First – financial savings during the project execution (no general contractor = no coordination fee/no profit of the general contractor included within the final price) – varies in between 4-8%. The Construction Manager (CM) is often incetivised to reduce construction cost (CM share certain ratio on the project savings with client). Second – time saving due to the overlap of the procurement of the trade packages. The main disadvantage is to control such procedure – there are higher risks from the works split (right setup of interfaces in between trade packages)
Main perceived disadvantage is that the client does not know the fixed end cost until late in the project (although you can argue that never happens anyway with any procurement route, with all the claims and change orders).