Texas Construction Manager-at-Risk

The Construction Manager-at-Risk (CMAR) delivery method is one of the most widely used alternatives to traditional design-bid-build procurement in Texas public and commercial construction. This page covers how CMAR is defined under Texas law, how the contract structure operates across project phases, the scenarios where it applies, and the decision thresholds that distinguish it from comparable delivery models. Understanding CMAR is essential for owners, contractors, and public entities navigating Texas construction project delivery methods.

Definition and scope

Construction Manager-at-Risk is a project delivery method in which a construction manager (CM) is hired early in the design phase and eventually assumes financial responsibility — "at risk" — for delivering the project within a Guaranteed Maximum Price (GMP). Unlike a traditional general contractor selected solely on low bid after design completion, the CMAR firm provides preconstruction services, cost estimating, and constructability review before the GMP is established.

In Texas, authority for public entities to use CMAR is codified in the Texas Government Code, Chapter 2269 (Texas Gov't Code § 2269), which governs alternative project delivery methods for governmental entities. The Texas Facilities Commission (TFC) and the Texas Department of Transportation (TxDOT) each maintain procurement frameworks that authorize CMAR for eligible projects. Private owners are not bound by Chapter 2269 but frequently adopt its structural conventions by contract.

Scope and coverage limitations: This page addresses CMAR as practiced under Texas statutes and Texas agency procurement rules. It does not address federal construction procurement governed by the Federal Acquisition Regulation (FAR), projects funded exclusively under U.S. Department of Defense contracts, or CMAR arrangements in other states. Residential construction in Texas is not covered here; see Texas residential versus commercial construction for that boundary. Specialty trade contracting under CMAR falls under separate licensing frameworks discussed at Texas specialty trade contractor regulations.

How it works

CMAR delivery proceeds in two primary phases separated by the GMP amendment.

Phase 1 — Preconstruction Services

1. The owner selects the CMAR firm through a qualifications-based or best-value selection process, not a low-bid award. Under Texas Gov't Code § 2269.153, the governmental entity must evaluate CMAR proposals using published selection criteria that weight experience, past performance, safety record, and proposed fees.
2. The CMAR firm works alongside the architect or engineer during design development, providing cost modeling, schedule analysis, and constructability input. This phase is compensated through a preconstruction services fee defined in the initial contract.
3. The CMAR firm conducts subcontractor procurement — typically through competitive bidding of trade packages — and assembles a GMP proposal. Under § 2269.157, at least 30 percent of the work by value must be subcontracted using a competitive process open to all qualified bidders, including Texas minority- and women-owned construction firms.

Phase 2 — Construction

1. The owner and CMAR execute a GMP amendment. Cost overruns above the GMP are absorbed by the CMAR firm unless the owner authorized scope changes.
2. Construction proceeds with the CMAR serving as the prime contractor of record, holding subcontracts, managing the schedule, and maintaining site safety compliance under Texas OSHA construction safety standards.
3. Retainage is withheld from the CMAR and passed through to subcontractors in accordance with Texas Gov't Code § 2252.032 and the Texas Property Code retainage rules; see Texas construction retainage rules.
4. Closeout includes final inspection, permitting sign-off, and lien releases. Building permits are pulled under the CMAR's contractor license. Texas does not have a statewide general contractor license, but local jurisdictions — including the City of Houston and City of Austin — require contractor registration. Review Texas general contractor registration for jurisdiction-specific requirements.

Common scenarios

CMAR is most frequently deployed in the following Texas construction contexts:

• Public school construction — Texas school districts are among the largest users of CMAR. The Texas Education Code § 44.038 expressly authorizes independent school districts to use CMAR for construction projects, and districts in the Dallas-Fort Worth Metroplex have used it for projects exceeding $100 million.
• State agency capital projects — The Texas Facilities Commission routinely uses CMAR for state office buildings, lab facilities, and prison construction under TFC's published procurement guidelines.
• Healthcare and higher education — The University of Texas System and Texas A&M University System have both used CMAR extensively for campus expansion, where design and phased occupancy requirements make early contractor involvement operationally necessary.
• Transportation and infrastructure — TxDOT is authorized to use CMAR under Texas Transportation Code § 223.242 for highway and bridge projects where early constructability input reduces schedule risk.

Decision boundaries

CMAR vs. Design-Build: In Texas design-build construction, a single entity holds both design and construction responsibility. In CMAR, the architect and construction manager remain separate contracts with the owner, preserving independent design oversight. Design-build compresses the schedule more aggressively; CMAR preserves owner control over design.

CMAR vs. Competitive Sealed Bidding (CSB): Traditional low-bid procurement under Texas Gov't Code § 2269.055 awards to the lowest responsible bidder after full design. CMAR allows contractor input during design and provides a GMP rather than a fixed bid. CSB is mandatory for Texas public entities when no alternative method is formally authorized. See Texas competitive bidding construction for the statutory thresholds.

CMAR vs. Construction Manager-Agency (CMA): The CM-Agency model engages a construction manager only as an advisor to the owner — the CM never holds subcontracts and bears no financial risk. CMAR is distinguished by the GMP obligation and the at-risk contractual posture. Texas Gov't Code § 2269 defines both models and sets separate selection criteria for each.

Insurance and bonding obligations under CMAR mirror those for general contractors: performance and payment bonds are required for public contracts above $25,000 under Texas Gov't Code § 2253.021. See Texas construction bonding requirements for threshold details and bond form requirements.

References

• Texas Government Code Chapter 2269 — Contracting and Delivery Procedures for Construction Projects
• Texas Facilities Commission — Project Delivery and Procurement
• Texas Department of Transportation — Alternative Delivery Methods
• Texas Education Code § 44.038 — Alternative Methods for Contracting
• Texas Transportation Code § 223.242 — Design-Build and CMAR Authorization
• Texas Government Code § 2253 — Public Work Performance and Payment Bonds
• Texas Property Code — Retainage Provisions