Project Managers are usually persons hired by an owner of a construction project to supervise and oversee as well as consult for the owner on the organization and implementation of a construction project. Unlike general contractors who, for a markup on the project, often hire the various sub contractors, assuming quite often some of the construction tasks personally, and supervising all of the construction, or architects who design the project and often supervise the work of the general contractor and other trades, a Project Manager may have no direct input for the design or work on the project but may simply act as the owner's agent in supervising the progress of the job.
Project Managers can assume more or less duties, depending on the agreement between the Project Manager and the owner. As one client put it, "My project manager is my resident expert who is not actually doing hands on work on the project but available to tell me how it is going and who is goofing off." Other Project Managers take a more controlling role in the project, approving all work, signing off on all payments, etc.
With such diverse roles, the law, both in terms of licensing and the cases, had to consider if such persons required licensing and what duties and limits on obligations would apply, if any. This article shall discuss the approach of California to the role of Project Managers.
Project Manager Overview 1
A project manager is a professional in the field of project management 2. The usually have the responsibility of the planning, execution, and closing of any project, typically relating to construction industry, architecture or software development. Many other fields in the production, design and service industries also have project managers.
1. Duties of a Project Manager in General
The concept of a Project Manager is not limited to construction and most businesses recognize the role of a person who undertakes the organization and implementation of a particular project.
Under most agreements with owners, a project manager is the person accountable for accomplishing the stated project objectives. Key project management responsibilities include creating clear and attainable project objectives, building the project requirements, and managing the triple constraints for projects, which are cost, time, and scope.
Most of the project management issues that impact a project arise from risk, which in turn arises from uncertainty. The successful project manager is one who focuses on this as their main concern. A successful project manager reduces risk significantly, often by adhering to a policy of open communication, ensuring that every significant participant has an opportunity to express opinions and concerns.
It follows from above that the project manager is one who is often responsible for making decisions both small and large, in such a way that risk is controlled and uncertainty minimized. Every decision made by the project manager should be taken in such a way that it directly benefits the project.
When recruiting and building an effective team, the project manager must consider not only the technical skills of each person, but also the critical roles and chemistry between workers.
Assuming that a Project Manager is to assume the broad powers described above, and not merely consult with an owner and advise the owner as to particular matters, it is clear that expertise is to be required. Recognizing this, there have developed various programs not only to train but to certify those who hold them out as Project Managers on construction projects.
2. Construction Project Manager Certification
In the past, construction project managers were individuals who worked in construction or supporting industries and were promoted to foreman. It was not until the late 20th century that construction and construction project management became distinct fields.
Until recently, the industry lacked any level of standardization, with individual States determining the eligibility requirements within their jurisdiction.
The Project Management Institute has made some headway into being a standardizing body with its creation of the Project Management Professional (PMP) designation.
The Constructor Certification Commission of the American Institute of Constructors holds semiannual nationwide tests. Eight American Construction Management programs require that students take these exams before they may receive their Bachelor of Science in Construction Management degree, and 15 other Universities actively encourage their students to consider the exams.
3. California Law on Construction Project Manager Licensing
While the code does not address project managers or project management, the United States Secretary of Labor has defined construction, for purposes of the Federal Prevailing Wage Law, 40 U.S.C.S. §§ 3141-3148, as: All types of work done on a particular building or work at the site thereof by laborers and mechanics employed by a construction contractor or construction subcontractor, 29 C.F.R. § 5.2(j)(1) (2004). Laborers and mechanics generally include those workers whose duties are manual or physical in nature (including those workers who use tools or who are performing the work of a trade), as distinguished from mental or managerial. 29 C.F.R. § 5.2(m) (2004). This definition seemingly would not cover work done by surveyors, lawyers, project managers, or insurance underwriters, who function before actual construction activities commence.
Whether a Project Manager needs to be licensed comes down to the nature of the work they undertake while being project manager. California has strict licensing requirements that are applicable to a “contractor” or “builder”, that is, “any person who undertakes to or offers to undertake to…or submits a bid to, or does himself [or herself] or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building… .” (Business and Professions Code §§ 7026, 7028, subd. (a).)
In Thoryck Architecture, Inc., v Trans West Housing, Inc. (2006) (THIS IS AN UNPUBLISHED CASE AND ONLY CITED HERE FOR ITS FACTUAL BACKGROUND NOT LEGAL ANALYSIS) Thoryck, the project manager, was responsible for “reviewing the project designs and construction documents, sending out plans for bid, hiring subcontractors, reviewing their work, approving their payment requests, obtaining lien releases from them prior to payment and providing a final inspection before occupancy.” The evidence in the case showed that Thoryck entered into certain contracts with subcontractors and laborer’s without Tran’s West prior approval and also made payments to the subcontractors and laborers, seeking reimbursement from Trans West thereafter. These facts show that Throyck, as project manager, did more than simply act as an architect or as Tran West’s agent in supervising the project.
Compare Dorsk v. Spivack (1951) 107 Cal. Ap.2d 206 holding that a person who supervised the construction of an apartment building as an employee of the owner was not required to be licensed as an architect or a general contractor, relying in part on the fact that the owner rather than the supervisor paid the subcontractors. Based on the nature of the work Thoryck (above) provided it was required to have a contractor’s license.
The requirements for a Project Manager to be licensed thus appear to depend upon the nature of the work the Project Manager undertakes for the project. This individual seldom participates directly in the activities that produce the end result, but rather strives to maintain the progress and productive mutual interaction of various parties in such a way that overall risk of failure is reduced. A successful project manager must be able to envision the entire project from start to finish and to have the ability to ensure that this vision is realized.3
Conclusion and Practicalities
Since the General Contractor is normally charged with the duty of supervising the project as a whole and the trades and the architect normally supervises design, the engineer and the general contractor, why is there a need for the Project Manager?
First, quite often a project will not have a general contractor with the owner seeking to occupy that position him or herself and thus save the ten percent supervision fee.
Second, often a project will not have an architect supervising day to day construction. One can simply buy the plans and specifications and seek to handle the job without the active involvement of the architect.
Lastly, many owners feel that it is wise to have someone not directly involved, monetarily or ego wise with the construction project and see the Manager as the “outside consultant” who will give objective advice.
But our office has seen enough litigation involving such Managers to know that it is as common to encounter gigantic egos in that trade as any other. Negotiating and providing for good lines of authority and responsibility is vital and, as always, an appropriate written contract is a vital part of utilizing their set of skills. They can have value but simply hiring a Manager without working through the clear details of their involvement can lead to more trouble than no Manager at all. With no licensing board involved, and with the field in some flux, it is up to the wise owner (and Manager) to clearly and fully describe what will be the duties and expectations of the Manager on the project.
1. This information is not from statute, as it is not codified, but generally recognized duties in the field of project management.
2. Project Management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives.
3. Project Management Institute: http://www.pmi.org