RESIDENTIAL & COMMERCIAL

At The Gem State Group, we follow industry best practices by using Construction Management (CM) agreements instead of traditional General Contractor (GC) contracts. The CM model offers distinct advantages in both residential and commercial projects by giving the Owner greater control, improved cost efficiency, and more transparent communication.

Key Benefits of Construction Management

1. Aligned Goals Between Owner and Builder

In a GC lump sum contract, the general contractor profits by completing the project under budget. This often leads to cost-cutting measures that don’t benefit the Owner—and may even compromise quality.

In contrast, with a CM contract, the manager is paid a fixed fee, and all other costs are transparent and billed at cost. This means the CM has no incentive to cut corners and works collaboratively with the Owner, architect, and designers to find the best value. The CM is an advocate for the Owner throughout the project.

2. Early Involvement in the Pre-Construction Phase

With CM, the construction manager joins the project early during design and planning, offering:

• Real-time cost estimating
• Value engineering alternatives
• Advice on materials and systems
• Scheduling guidance
• Permit and procurement insights

This ensures the design remains aligned with budget and feasibility, helping avoid delays or redesigns later. The CM reviews all plans for constructability and cost-efficiency.

3. Flexibility to Change Scope

CM contracts allow the Owner to make changes more easily during both design and construction. Because the CM does not profit from change orders, all modifications are handled transparently and collaboratively.

4. Transparent, Real-Time Cost Control

Unlike GCs who bill based on estimated completion percentages, the CM bills actual incurred costs—with full documentation. The Owner pays only for verified work, not assumptions or vague estimates.

5. Flexible, Customized Bidding Process

The CM helps design a strategic bidding plan based on the project’s specific needs—such as early site work packages or pre-ordering long-lead materials. Subcontractors and suppliers are pre-qualified for quality and reliability, not just price.

6. Qualifications-Based Selection

While GCs often choose subcontractors based solely on the lowest bid, CM focuses on:

• Company and team experience
• Performance history
• Collaboration with the Owner and designers
• Ability to deliver quality and meet deadlines

Most project costs are still competitively bid, but the CM selection is based on who is best qualified, not just cheapest.

7. Fewer Change Orders

Since the CM is involved from the start, potential problems are addressed early—resulting in fewer surprises, delays, or costly revisions during construction. Inevitable changes are managed proactively to minimize budget impact.

Summary of Advantages of Construction Management

1. Faster project start and completion through phased bidding.
2. Alignment of goals between Owner, CM, and design team.
3. Enhanced protection of the Owner’s interests during construction.
4. Informed design decisions based on real-time cost and schedule feedback.
5. Early procurement of long-lead materials avoids delays.
6. Constructability reviews reduce the need for change orders.
7. Flexible redesign during construction without major delays.
8. Transparent budget monitoring throughout design and build.
9. Competitive bids from pre-qualified subcontractors.
10. Payments based on actual costs, not estimates.
11. CM works on a fixed fee—cost savings go back to the Owner.
12. Fewer change orders due to better planning and oversight.
13. Selection of the CM based on experience and quality.

Conclusion

Construction Management offers the greatest value, flexibility, and transparency for Owners. It allows for better planning, smarter spending, and more control throughout the entire project. By partnering early with a CM, Owners benefit from expert guidance at every stage—from design through construction—ensuring a smoother process and better outcomes.

In Idaho, the terms “estimate” and “bid” are often used interchangeably in everyday conversation, but in the eyes of the law and standard business practice, they carry different meanings — and different levels of commitment.

An Estimate

An estimate is exactly what it sounds like — an educated approximation of what a job might cost. It’s based on the contractor’s professional judgment, past experience, and the information available at the time. In Idaho, an estimate is not legally binding.

Because an estimate is essentially a “best guess,” the actual cost of the project may be higher or lower depending on factors such as:

• Changes in material prices and prices not yet understood or given
• Unforeseen site conditions
• Design changes requested by the client
• Labor complications or delays

Estimates are typically used early in the decision-making process, allowing a client to compare options, understand potential costs, and decide whether to move forward. While contractors should prepare estimates in good faith and be reasonably accurate, they are allowed to adjust the final price as actual costs become clear.

A Bid

A bid, on the other hand, is a formal offer to perform specific work for a set price. In Idaho, once a bid is submitted and accepted, it becomes binding — the contractor is legally obligated to complete the work for that agreed price, assuming the scope doesn’t change.

Bids are often used for competitive selection processes or in public works projects, where fairness, transparency, and cost control are crucial. A proper bid will detail:

• The exact scope of work
• The total price (or unit prices)
• The project timeline
• Payment terms

If the client accepts a bid, it effectively becomes part of the contract. Any changes to price after acceptance usually require a formal change order signed by both parties.

Why the Difference Matters

In Idaho, misunderstanding the difference between an estimate and a bid can lead to disputes. For example:

• If you thought an estimate was a fixed price, you might be surprised by additional charges.
• If you thought a bid could be adjusted like an estimate, you could be locked into a price that no longer covers your costs.

Knowing which document you’re working with protects both the customer and the contractor — helping to set realistic expectations and keep projects running smoothly.

Bottom line:

• Estimate = educated guess, not binding.
• Bid = formal offer, binding when accepted.