Management contract fee structure
In the purest sense of the term, the CM doesn't hold contracts with the subs- the owner does. The CM simply "helps" the owner execute the project, and in return for lower risk of financial overruns, he gets a lower fee. His fee can be either a fixed amount per month, a percentage of the direct work costs, The Owner signs the contracts and the CM only manages and takes no risk, then the fee might be 1 or 2%, certainly no more than 3%, plus their staff costs. Another view is that their fee should be ± equal to their staff costs (with benefits) devoted to the project.