What is the CM at Risk Method in Japan?

CM at Risk Method

The CM at risk method in Japan is one of the methods used to place orders for construction and design work.

In Japan, the CM at Risk method is a type of CM method and is mainly used when urgent construction work needs to be carried out quickly even if the design is not yet finalized, such as in disaster reconstruction projects, or when there are many unclear factors such as large-scale renovation work that cannot be determined in detail until the actual construction work is carried out.

For this reason, the contract method in the CM at risk method is generally based on a cost-plus-fee contract.

This is because, in situations where the CM at Risk Method is used, i.e., where the design is not finalized or there are many unclear factors, forcing the contractor to enter into a subcontracting agreement increases the risks associated with subcontracting and raises the estimated cost.

In addition, when a cost-plus-fee contract is used, a GMP (maximum guaranteed price) may be set as the upper limit in the contract agreement, or an open book method may be used to ensure cost transparency.