Where is the cost savings in the Construction Management method of building?
In the bid & spec-general contractor method a contractor applies a “mark-up” to all labor, materials, equipment and sub-contractors. In the Construction Management method we utilize, the mark-up and any cost savings in “buying-out” the project goes directly back to the owner, thus you are building for “cost”. Quite often we find sub-contractors prefer to work directly for the owner and provide more competitive pricing rather than working “through” a general contractor. At Troy Management Group, Inc. we base our fees on the term of the project rather than a mark-up or percentage. Thus the owner will only pay a management fee and supervision fee which contractors must carry as overhead.
