For over 45 years, the Hickory name has been synonymous with exceptional craftsmanship and value, client-friendly service and on-schedule construction.
Selecting the right project delivery framework is one of the most consequential financial and operational decisions a commercial property owner, corporate executive, or institutional board will make. The chosen contract structure dictates how risk is shared, how budgets are established, how change orders are managed, and how fast the project moves from ground-breaking to final occupancy.
Across East Tennessee, commercial developments face distinct geographic and economic dynamics. Complex ridge topography, limestone bedrock, active karst geological formations, and tight labor markets in Knoxville, Blount County, Sevier County, and Chattanooga create real-world construction challenges. Navigating these regional realities requires selecting a delivery method that aligns with your risk tolerance, timeline demands, and financial goals.
Two construction delivery models dominate commercial real estate development: Construction Management at Risk (CMAR or CM at Risk) and Traditional General Contracting, officially known as Design-Bid-Build. While traditional general contracting served as the standard industry model for decades, CMAR has rapidly emerged as the preferred delivery method for complex commercial builds.
Evaluating the structural differences, cost controls, timeline impacts, and risk allocations between these two delivery methods helps East Tennessee commercial owners make an informed selection.
Traditional general contracting relies on a sequential, linear process divided into three separate phases: design, bidding, and construction. In this classic model, the owner maintains complete division between the design entity and the building entity.
Under a traditional general contracting arrangement, the commercial owner holds two independent contracts:
Because these contracts are entirely separate, no legal or contractual relationship exists between the architect and the general contractor. Both parties report directly to the owner, who acts as the sole administrative bridge between design and field execution.
The traditional model proceeds strictly in order. First, the owner retains an architect to complete 100 percent of the building design, engineering calculations, and material specifications. Once municipal authorities approve the construction documents, the owner issues the drawings to multiple general contractors for competitive lump-sum bidding.
Contractors calculate their estimates based on the drawings, solicit prices from trade subcontractors, and submit a fixed price proposal. The owner evaluates the bids, usually selecting the qualified contractor who submits the lowest price, and executes a lump-sum construction contract. Construction begins only after the bid award is complete and building permits are secured.
Construction Management at Risk is an integrated project delivery framework where the construction manager serves as an expert consultant to the owner during design and transitions into the general contractor during physical construction.
In a CMAR model, the owner contracts with two entities, but early collaboration is required:
While the contracts remain separate, the CMAR firm is brought onboard at the beginning of the project to work alongside the owner and architect throughout preconstruction.
During preconstruction, the CMAR firm provides continuous cost estimating, value engineering, site evaluation, and supply chain analysis. As architectural drawings progress from conceptual sketches to finished documents, the CMAR firm updates budget models to ensure the design remains aligned with the owner's financial parameters.
Before design plans are 100 percent complete, the CMAR firm solicits competitive bids from trade subcontractors for individual trade packages (such as earthwork, concrete, steel, mechanical, and electrical systems). The CMAR firm then presents a Guaranteed Maximum Price (GMP) to the owner. The GMP establishes a firm cost ceiling for total construction.
Once the owner approves the GMP, the CMAR firm assumes the financial risk of completing the project within that budget ceiling, transitioning into the role of general contractor for physical construction.
Choosing between CMAR and traditional general contracting requires evaluating how key operational metrics compare across both models.
Under traditional general contracting, price certainty is established at bid opening through a lump-sum contract. However, that certainty depends entirely on the accuracy and completeness of the architectural drawings. If drawings contain missing details, final project costs often increase due to necessary change orders.
Under CMAR, price certainty is established through the Guaranteed Maximum Price (GMP) during the design development phase. Because the CMAR firm helped review the plans for constructability during preconstruction, change orders caused by plan gaps or trade conflicts are virtually eliminated. Furthermore, open-book pricing allows owners to capture real financial savings if subcontractor bids come in lower than estimated.
Traditional general contracting follows a strict linear sequence. Design, municipal approvals, bid solicitation, contract award, and active construction must occur one after another. If an owner faces a firm market opening date, traditional delivery offers limited flexibility to accelerate the schedule.
CMAR enables overlapping project phases. The CMAR builder can secure early site clearing, mass grading, and utility installation permits while the architectural team finishes interior drywall, flooring, and lighting plans. Overlapping design and construction typically reduces total project duration by 15 to 25 percent.
Risk distribution is the fundamental difference between these two delivery methods.
In traditional general contracting, the owner sits in the middle between the architect and the general contractor. If a structural column conflicts with a mechanical duct in the field, the contractor requests a change order for additional labor and time, while the architect may argue the issue should have been caught during bidding. The owner bears the administrative burden and financial risk of resolving these conflicts.
In CMAR, the construction manager accepts constructability risk upon signing the GMP. Because the CMAR firm participated in design reviews, they are responsible for resolving trade coordination issues without passing additional costs to the owner. This creates a collaborative team environment focused on problem-solving rather than liability defense.
Commercial development in East Tennessee involves specific environmental and market considerations that make delivery selection particularly important.
East Tennessee topography features rolling ridge-and-valley terrain underlaid by limestone bedrock and karst geology. Sites in Knox, Blount, Loudon, and Sevier counties frequently encounter unexpected subsurface rock shelves, expansive clay soils, or underground void formations during excavation.
In a traditional general contract, encountering unexpected underground rock often leads to costly change orders and work stops while design teams adjust foundation plans.
Under a CMAR contract, the construction manager works with geotechnical engineers during early preconstruction to perform soil borings, conduct ground-penetrating radar surveys, and execute early test pitting. Understanding what to expect during the preconstruction phase of a commercial project illustrates how early site investigation reduces subsurface risk before establishing the final Guaranteed Maximum Price.
For developers planning corporate office suites, private medical facilities, or luxury hospitality assets, execution quality depends on trade coordination. High-end finishes, such as book-matched natural stone, custom architectural millwork, and sound-isolated conference spaces, require precise trade management.
Understanding what makes luxury commercial construction different from standard commercial builds highlights why bringing a builder in early through CMAR helps secure long-lead materials, verify jobsite climate controls, and review custom millwork details long before installation.
Rapid economic growth across the Knoxville metropolitan area and surrounding East Tennessee counties has created high demand for skilled craft labor. General contractors must maintain strong relationships with regional trade subcontractors to secure reliable crews and competitive pricing.
Selecting an established builder with deep regional roots in commercial construction in Knoxville, TN ensures your project benefits from trusted subcontractor networks, accurate local labor pricing, and smooth municipal permitting workflows.
Evaluating a contractor's track record across both CMAR and traditional projects is essential during selection. Reviewing the best questions to ask before hiring a commercial builder helps board members and developers evaluate safety records, superintendence experience, and financial transparency.
To see how organized project management works across real-world developments, owners can explore our portfolio of completed commercial construction projects across East Tennessee.
To help commercial owners evaluate which delivery method fits their upcoming project, consider the following decision criteria:
The primary difference is the timing of contractor involvement and risk allocation. In traditional general contracting, the builder is selected through competitive bidding after architectural designs are 100 percent complete. In CMAR, the construction manager is hired early during design to provide preconstruction guidance, constructability reviews, and cost estimating before guaranteeing the total project price through a Guaranteed Maximum Price (GMP).
Not necessarily. While traditional general contracting appears to offer a lower initial bid price, final costs often rise due to change orders caused by design gaps or field conflicts. CMAR establishes early price control through a Guaranteed Maximum Price and open-book subcontractor bidding, which helps eliminate unexpected change orders and returns unused contingency funds to the owner.
A Guaranteed Maximum Price is a contract threshold established by the CMAR firm during the design phase. It sets a ceiling on the total financial amount the owner will pay for the agreed construction scope. If actual construction costs exceed the GMP due to contractor error or plan gaps, the CMAR firm absorbs the cost difference.
Because CMAR operates under open-book accounting, any cost savings achieved during subcontractor bidding or field operations below the GMP belong to the owner. Depending on the specific contract terms, savings are either returned entirely to the owner or shared between the owner and CMAR firm as a performance incentive.
Many state, county, and municipal public entities are legally required by state procurement laws to award construction contracts to the lowest responsive, responsible bidder using completed 100 percent architectural drawings. However, statutory updates in recent years have expanded the ability of certain public authorities to utilize CMAR for complex public projects.
Yes. CMAR is effective for large or complex tenant improvement projects, such as specialized medical offices, full-service restaurants, or corporate headquarters. Early involvement allows the CMAR builder to evaluate existing mechanical, electrical, and plumbing infrastructure before signing lease work letters or finalizing layout designs.
East Tennessee sites often contain hidden limestone bedrock, expansive clay, and karst formations. Under CMAR, the builder participates in early site investigation, soil testing, and utility surveys during preconstruction. This allows the team to engineer foundation solutions and budget earthwork accurately before locking in the Guaranteed Maximum Price.
The CMAR firm manages the subcontractor bidding process. However, unlike traditional general contracting where bids are private, CMAR uses an open-book process. The owner and architect can review trade subcontractor proposals, compare scopes, and participate in selecting trade contractors for each scope package.
An owner should hire a CMAR firm early in the conceptual or schematic design phase. Bringing the CMAR builder onboard alongside the architect ensures real-time cost modeling, material lead-time tracking, and constructability input from the very beginning of the project.
In traditional general contracting, if a contractor encounters an architectural drawing error or trade conflict, they submit a change order requesting additional money and time from the owner. In CMAR, because the builder reviewed the plans for constructability during preconstruction, internal plan conflicts and omissions are absorbed by the CMAR firm within the agreed Guaranteed Maximum Price. Change orders in CMAR are generally restricted to owner-requested scope additions or unforeseen subterranean site conditions.
