CONSTRUCTION ADMINISTRATION (do I really need this?)

Construction Administration (or CA) services, performed by your Architect after issuing the drawings for permit and/or bidding, are often seen by clients as unnecessary expenses. After all, most clients assume that since the drawings are complete that the contractor has all he or she needs to do their work — a common misconception. I often tell my clients that seldom do things go “wrong” on the drawings (assuming a level of thoroughness in detail and embedded information). The same is not true for the work by the contractor in the field.

The Architect is the only team member with a full understanding of the intent of the drawings. If the client skimps on paying for CA services and only contacts the architect when something appears “wrong”, it’s generally too late. Ideally, the architect should be involved from preliminary planning through completion of construction. The CA portion of their service is usually only 20% of the fee, but a critical part of the process (since client has to live with whatever the contractor does during construction).

The Architect usually performs the following services under the CA phases of their contract:

  • Periodic Site Visits (based on the stage or phase of construction).
  • Documentation of Site Conditions including corrections needed to be made by the Contractor and important communications with the Owner.
  • Review of Payment Applications from the Contractor to the Owner. This includes review of the work completed, accounting for stored materials, retained payments, and coordination with construction schedule (based on levels of completion).
  • Review of Shop Drawings and Submittals. These are documents from the Contractor to the Architect that describe in detail what will actually be manufactured and/or purchased for installation on a project. This is the last chance to catch items that are not consistent with the Architect’s drawings.
  • Coordination of 3rd Party Inspections. This can include required accessibility and other inspections required by law.
  • Review of Testing Reports. These can range from concrete testing to HVAC performance and are critical for a properly constructed and performing facility.
  • Accounting for Allowances. This step ensures that payments to the Contractor properly account for any allowances included in the Drawings (and Specifications).
  • Closeout and Punchlist. This is the final walk-thru that the Architect makes on the job site with the Contractor to review the completed work prior to turnover to the Owner. This effort identifies items that are not compliant with the Drawings (and Specifications) and is generally accompanied by a Certificate of Substantial Completion which establishes important legal dates and responsibilites.

This above list is just a glimpse of the work performed by the Architect during the critical construction phase of the project. Even the most conscientious and dependable Contractors that I work with are thankful to have my presence and input during construction. They rely on me to convey my design intent and help them complete the project in a more orderly and predictable fashion. Avoiding these fees, can be disastrous for seemingly budget-conscious Owners. As the time-proven adage says: “Penny-wise, Pound-foolish”. Don’t make this mistake on your project.

— Don Leighton-Burwell, AIA © 2015 :: www.dlb-architect.com

Advertisements

CONTRACT DOCUMENTS (it’s more than just the contract)

Standard Construction Contracts (the one that you as the “Owner” will sign with the General Contractor) typically have two (2) principal components:

  • Construction Agreement between Owner & Contractor: This document looks like what we typically think of as a “contract” (multi-page, lots of legal lingo, etc) and consists of the following items (in varying degrees of detail):
    • Date of Contract and Names of Owner & GC
    • Commencement and Completion Dates (length of construction time)
    • Contract Sum & Payment Stipulations
    • Dispute Resolution
    • Enumeration of Contract Documents (see below*)
    • General Provisions or Conditions
    • Responsibilities of all Parties (Owner, GC, Architect, Subs) as well as description of work by Owners Subs (e.g. Equipment Installers). Warranty of work is included here
    • Changes in Work
    • Completion Requirements and Correction of Work
    • Indemnifications and Insurance
    • Miscellaneous Provisions
    • Termination of the Contract
    • Claims and Disputes
  • Construction Drawings & Specifications (Enumeration of Contract Documents)*: As referenced in the list above, the Drawings and Specifications produced by the Architect and Engineers are a critical part of the Construction Contract. As such, the amount of detail in these documents and the corresponding professional services provided by the Design Professionals during both Design and Construction are essential to the success of a project.

The two parts listed above (Agreement and Contract Documents / Drawings) work in tandem to ensure that the Owner is fully protected during the construction process. If either portion is lacking, it makes the Owner vulnerable in a process that they often do not fully understand or with which they have limited experience.

I always compare this scenario to the preparation of a complicated will and estate plan for your heirs. If the “boiler plate” portion of the will (or Agreement) is in place, but the specifics of your intent (the Construction Drawings & Specifications) are lacking, it is more likely that your wishes will be NOT be realized. Don’t let poor documentation keep you from having the office that you really want.

— Don Leighton-Burwell, AIA © 2015 :: www.dlb-architect.com

ALLOWANCES (should I avoid these?)

In a recent article, I made reference to “allowances”. These are items in an estimate, and less so in a bid, that put a dollar value to items that are undetermined at the time of pricing your project. My advice: AVOID allowances whenever possible.

When construction documents are abbreviated (especially in the case of estimates), there is usually a myriad of items that have not been chosen or selected when the documents are issued to the builder. Examples might be finish-related (e.g. paint colors, flooring, wallcoverings, granite, etc.) or could be bigger ticket items like plumbing and lighting fixtures. If you don’t tie these things down, the builder will likely provide an “allowance” to give some value in the contract to account for these items.

More often than not, I see the final cost of the allowance item being higher than the budget allows. You will be required to pay whatever the difference is between the desired item and the “allowed” amount in the contract. Additionally, there can be confusion as to whether the allowance includes materials only, or materials and installation (leaving less money for the materials). It is always best to make the description of any allowance item very specific in the contract language.

Of special importance: If an item is specified in your Construction Drawings, do NOT let the builder describe it in the contract (including the cost breakdown) as an “allowance”. This will allow the builder to charge you extra for an item that they should have provided a fixed price on during bidding. Buyer beware!

The ideal approach is to take the time during design to work with your architect or designer to thoroughly specify all these items included in the contract. That way the builder is compelled to provide everything in the Construction Drawings at the agreed to price and the chance of cost-overruns is greatly diminished.

— Don Leighton-Burwell, AIA © 2015 :: www.dlb-architect.com

ESTIMATES vs BIDS (or how I lost my shirt on my construction project)

If you’re on the cusp of starting that new construction project, it’s really important to understand the difference between an estimate and a bid. The two are often used interchangeably, but they are not the same thing. A lack of knowledge about the differences can be costly to you if misunderstood.

An estimate is exactly that: an educated guess based on some amount of information. The amount of information provided is critical. If the construction documents for your project are abbreviated (do not fully specify and detail all aspects of a project) and contain “allowances” for many items, then the best you can hope for is an approximation of the project cost (and can expect that final costs will be higher than initially anticipated).

A bid, by contrast, must be based on comprehensive, detailed drawings, and a narrowly defined scope of work. With these, you can successfully seek pricing from multiple, competitive bidders comparing apples-to-apples.

The example I use to explain these differences is as follows:

  • ESTIMATE: You want a new car. You ask dealers (from Ford to Mercedes) what a new car will cost. They want to know model, engine size, accessories, etc. You don’t have that information to share with them (because your specifications don’t describe the necessary items to provide accurate pricing). They will give you an estimate ($10K – $100K). You’ll be inclined to accept the $10K price because it sounds great, but it will not pay for the Mercedes that you really want.
  • BID: You want a new car. It’s a Honda Accord Coupe V6 (what you can really afford comfortably) with all the bells and whistles. You go to local dealers and look on-line. Everyone is pricing the same item. This is a competitive bid, and the highest to lowest price will not vary widely.

Don’t be fooled. A construction estimate is not a bid, as a bid requires detailed drawings/scope to have any merit. Be sure that you know what you’re asking for and what you can expect. In the end, you’ll pay a high price for that low estimate.

— Don Leighton-Burwell, AIA © 2015 :: www.dlb-architect.com