A key benefit of the managing contractor model is that it facilitates the early involvement of the contractor on a project. This makes it particularly suitable where the scope of work is too uncertain to let a contract on a more traditional fixed time/fixed price basis.

The role of the contractor is to manage the design and construction process as opposed to designing and constructing the project itself. Accordingly, the contractor subcontracts all of its design and construction obligations. This is similar to traditional delivery, as modern design and construct contractors tend to subcontract most of their obligations - the key difference is that under the managing contractor model, this is done on a fully open book basis in close consultation with the owner, who has the ultimate right to decide on which subcontractor is used.

While the managing contractor model does not impose hard obligations on the contractor in relation to time and cost, it is similar to traditional design and construct delivery in respect of obligations relating to quality. The contractor warrants fitness for purpose of the design and the completed works and remains fully responsible to the owner for the quality of the design and construction.

The traditional lump sum fixed price is replaced with a remuneration regime that consists of both reimbursable and lump sum components. The reimbursable component covers the actual costs payable to subcontractors to design and construct the works. However, unlike some other forms of relationship contracting, not all costs are reimbursable: only those costs that have been properly incurred will be reimbursable.

The lump sum fees cover the services and work performed by the contractor during both stages and include an amount for overhead and profit. They will therefore cover services such as scoping, cost planning, programming and managing and supervising the contractor's design consultants and subcontractors. The fees are generally only adjusted if there is a variation to the scope of the project or the project is delayed by the conduct of the owner.