Transcript Welcome! [cmaanet.org]

CONTRACT ADMINISTRATION
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Review of Delivery Methods
Forms of Compensation
The Construction Contract
Contract Administration by project phase
Project Documentation
Q+A
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The practice of professional management,
applied to the planning, design, and
construction of projects, from inception to
completion, for the purpose of controlling
time, cost, and quality.
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A management approach that focuses
on the delivery of professional services.
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Implementation of the terms and
conditions of all the contracts
associated with a project, based upon
established systems, policies, and
procedures (laws, rules, and
regulations).
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To manage critical construction parameters
- Time
- Cost
- Quality
- Information
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To satisfy the owner’s goals and objectives
for the project
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Traditional: Design–Bid–Build
Multiple Prime
CM at Risk
Design-Build
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OWNER
GENERAL
CONTRACTOR
DESIGNER
CONSULTANTS
SUBCONTRACTORS
SUPPLIERS
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Advantages
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- Widely applicable
- Understood
- Owner retains control
- Owner “knows” the cost
prior to the start of
construction
- Others?
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Disadvantages
- Relatively slow
- Owner is liable for design
- Constructabilty issues
- Adversarial relationships
fostered
- Others?
OWNER
DESIGNER
PRIME
PRIME
PRIME
SUBS
SUBS
SUBS
CONSULTANTS
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SUPPLIERS
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Advantages
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- Increased Owner control
- Work easily fast-tracked
- Save GC markups
- Some states require it
- Others?
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Disadvantages
- Owner has risk of
controlling time and
coordination
- Multiple accountability for
performance
- Unknown “final” cost at
construction start
- Same Owner risks as
traditional approach
- Others?
OWNER
DESIGNER
CM at Risk
SUBS
SUBS
CONSULTANTS
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SUBS
SUPPLIERS
SUBS
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Advantages
- Well-suited for fast-tracking
- Contractor (and
subcontractor) input on
design alternatives
- Better cost info
- Permits “picking” of the
builder
- Others?
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Disadvantages
- Changes of CMs
accountability after GMP
is signed
- Tempted to sign GMP
“too soon”
- Variations in procurement
methods
- Others?
OWNER
DESIGNBUILDER
DESIGN
CONSULTANTS
SUBCONTRACTORS
SUPPLIERS
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Advantages
- Accountability for project
delivery
- Reduced disputes
- Can cut time / cost
- Builder can have input to
design / constructability
- Budget established
early on
- Others?
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Disadvantages
- Early definition of the
program required
- Owner’s loss of control
during design
- Potential for quality to be
compromised
- Others?
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Bid
Negotiated
Fixed Price
Reimbursable
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Different combinations are possible:
Bid
Fixed Price
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Negotiated
Reimbursable
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Advantages
- Well-known
- Competitive
- Fair and transparent
- Produces “lowest” price
- Contractor assumes risk
for completion
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Disadvantages
- No consideration of any
qualification except price
- Work must be well
specified
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Advantages
- “Best Value” selection
- Freedom to pick subs
- Easier choice of
alternatives
- Paying for design errors
reduced
- Others?
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Disadvantages
- Potential abuse
- May not be legal
- Requires expertise on the
part of the owner (or their
consultants)
- May not be legal
- Others?
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Lump Sum
GMP, Guaranteed Maximum Price
Unit Price
Cost Plus a Fixed Fee
T&M, time and materials
Fixed
Reimbursable
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When is a reimbursable contract most
appropriate / best suitable?
- Unknown quantities of work
- Risky work
- Work that is impossible to define
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What constitutes the contract documents?
- The Agreement
- Drawings
- Specifications
- Addenda (changes issued prior to the bid)
- Modifications (changes issued after the bid)
- Any documents incorporated by reference
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Use standard forms
Use customized forms
Use a combination of both
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Advantages:
- Increase the predictability of project outcomes
- Increase the consistency of pricing
- Simplify management
- These forms are regularly updated by the entities that issue
them, to keep consistent and current with industry practice
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Most commonly used forms
- AIA, American Institute of Architects (A101, A 201, etc)
- AGC, Associated General Contractors
- CMAA, Construction Management Association of America
- DBIA, Design Build Institute of America
- Owner-specific
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When making modifications, consider:
- Seek advice of legal counsel
- Assure modifications are properly coordinated with other
project documents
- Think ahead: how will modifications be received?
- Place responsibility and authority with the party best able to
perform duties and control the risks
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Intent: to provide documents that:
- Provide contractually-specified duties
- Avoid concurrent or undefined responsibilities
- Minimize conflicts between the CM, designer, and contractor(s)
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 Document A-1: agreement between the
Owner and the construction manager
 Document A-2: between the owner and
the contractor
 Document A-3: general conditions of the
contract
 Document A-4: between the owner and
the designer
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 Document CMAR-1: agreement between the
Owner and the construction manager
 Document CMAR-2: between the CM and
the contractor
 Document CMAR-3: general conditions of the
contract
 Document CMAR-4: between the owner and
the designer
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 Comparable to the CMAA Agency Series
- A101/CMa, 1992; Owner & contractor
- A201/CMa, 1992; general conditions
- B141/CMa, 1992; Owner & architect; CM as agent to the owner
- B801/CMa, 1992; Owner & CM as agent
 Comparable to the CMAA At-Risk Series
- B141, 1997
- A121/CMc, 1991
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CMAA A1-A4
- 1 or more construction
contracts
- CM is the owner’s personal
agent
- The CM handles the
contract administration
- The designer handles
the design
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AIA B141, B801
- 1 or more construction
contracts
- The designer is the owner’s
principal agent
- The designer handles the
contract administration
- The designer handles
the design
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The CM is employed prior to the designer(s)
The CM helps select the designer(s)
CM does a Construction Management Plan
The Owner approves the plan; the designer
may comment or suggest revisions
 CM is the Owner’s principal agent; the
designer is responsible for design
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 The CM and the designer agree to cooperate
 The CM and the designer can rely on each
other’s work, products, and services
 CM prepares cost estimates of the project
 Designer has sole responsibility for design
and specifications for materials & equipment
 Designer’s basic services during construction
are relatively limited
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 The designer’s additional services include site
visits to become familiar with the work, review
of progress payments, design changes
resulting from changes in the project
 The CM determines the contractor’s
compliance with the contract documents
 The CM approves the contractor’s request for
payments
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CMAA CM at Risk
- CMs extensive professional
services during design
- Self-perform work only if
low bid, owner approves,
and a separate GMP
contract is signed
- Owner may reject GMP; CM
may continue as agent
- Owner may require
additional services after
GMP is signed
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AIA B141, A121
- CMs limited professional
services during design
- CM may self-perform work
at their own discretion
without submitting bids
- No option for owner to reject
GMP & continue CMs services
- No option for owner to require
additional services after GMP
is signed
 Prior to GMP, the CM functions as the
agent of the Owner
 Upon the Owner’s acceptance of the GMP,
the CM assumes the role of the GC
- Responsible for the cost of the project
- Must bid (and be low bidder) on work to be self-performed;
must sign separate contract
- Project team concept to be maintained
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If Owner rejects the GMP, the Owner
has options:
- Terminate the project “for convenience”
- Continue with the designer and CM as agents; modify
the agreements
- Procure construction services through a re-bid (or negotiation)
of the work to third parties
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General conditions of the Agency series:
details
- Responsibilities of the Owner, CM, designer, and contractor
- Site safety
- Responsibilities / duties to subcontractors and suppliers
- Owner’s right to perform work / issue separate contracts
- Monitoring time and progress of the work
- Providing a vehicle for making changes to the contract price
and time
- General conditions do not define the scope of the work!
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General conditions of the Agency series:
details
- Inspection, testing, and rejection of non-conforming work
- Procedures for progress payments, withholding payments,
and issuing final payment
- Insurance requirements for the contractor and the owner
- Avenues for contract termination: for convenience; for default
- Defining a mechanism for dispute resolution
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Take some time to review and think about:
- CM Agency
- CM at Risk
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Part of the Contract Administration phase
Important from a CA perspective
Must support, not violate, contracts
Should have Owner’s support
Ultimate goal:
- To develop a collaborative culture; a project team that relies
on each other’s strengths, and compensates for each other’s
weaknesses
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Objectives are to control:
- Time
- Cost
- Quality
- Information
- Safety
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Pre-design
Design
Procurement
Construction
Project Close-Out
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 Develop the following:
- Construction Management Plan
- Project Procedures
- Management Information System
- Quality Management Plan
- Communications Procedures
- A master schedule, a milestone schedule
 Identify possible project delivery methods
 Manage designer selection / contract form
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Feasibility studies
Conceptual studies
Pre-design cost studies
Environmental analyses
Other items?
At this point you are establishing the foundation
for the success (or failure) of the project
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Team building / leadership development
Administration of design contract(s)
Fulfill CM contract requirements
Assist in developing contract specs
Develop contracting strategy / bid package /
contract formats
 Develop the procurement plan
 Prepare bid/award documents and schedule
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Develop bidders list
Bidders interest campaign
Bidder pre-qualification
Bid advertisement
Distribution of bid documents
Addenda
Pre-bid conference
Information to bidders
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 Bid opening and evaluation
- Procedures
- Review
- Exceptions / Conditions / Alternatives
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Notice of award
Pre-award meeting
Notice to Proceed (NTP)
Schedule and budget adjustments
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 Pre-construction conference
- Attendees
- Coordination with utilities / Owners / others
- Schedule
- Submittals
 Partnering
 Existing conditions
 Owner-furnished items
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Deliverables checklist
Permits, insurance, labor agreements, bonds
Communications
Meetings
Verify GCs procurement process
Claims mitigation / evaluation
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Review / process contract modifications
Oversee on-site safety program compliance
Administer progress payment process
Ensure as-built record drawings maintained
Fulfill reporting requirements
Ensure retention requirements are fulfilled
Other items?
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 Quality Management Plan
- QA / QC roles
- Submittal procedures
- Inspection approach
 Monitor compliance with the contract!
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Training
Testing / start-up
Commissioning
Pre-Final Inspection(s)
Punch lists
Final inspection
Acceptance
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As-built record drawings
Operation and maintenance manuals
Spare parts and warranties
Final permits / occupancy
Transfers of liability
Move-in planning / coordination
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Claims resolution
Contract closeout
Final payment (including retention)
Call-backs
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Why Document?
- Conformance to the contract
- Quality in construction
- Project control
- Responsive problem solving
- Resolution of disputes / claims avoidance
- Preparation for litigation
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Organization
Project Documentation
Tracking and follow-up
Software utilized
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 Correspondence
- Chronological master file
- By Topic: shop drawings, RFIs, etc
- By Type: letters, memos, letters of transmittal (LOTs), emails
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Meeting minutes
Telephone log / record of conversations
Project daily diary
Claims, notices of intent
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 Inspector’s daily reports
 Photos and video
 Contract documents
- Plans and specs
- Addenda
- Notice to proceed
 Submittals (shop drawings)
 Test reports, clarifications, invoices
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 Clarifications and changes
- Field clarification
- Requests for Information (RFIs)
- Requests for Changes
- Requests for Proposal
- Change Orders
 Certified payrolls
 Contractor’s progress payments
 Issues Book (see next slide)
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 Identify Issues as you go
- Field conflicts
- Requests for Information (RFIs)
- Clarification
- Change Orders
- Contractor problems
 Keep all documentation related to the
particular issue in one place
 Use notebooks with an index / numbered tabs
 Copy & file documents to the tabs as you go
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Include
- Correspondence
- Notes
- Meeting minutes
- Diary pages
- Photos
- Contract details
- Specifications
- Submittals
- Etc!
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 Project Diary
 CMs Report
 Field Books
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 Pay Quantities
 Contractor problems
 Work performed
- Who, what, when, where
 Work scheduled and not performed
 As-built schedule
- Start, stop, completion
 Teleconferences and meetings
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 Work sequence (logic): types of restraint
- Structural
- Equipment
- Sequence mandated
- Arbitrary or contractor’s
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Equipment and crew
Production
Methods of work
Job conditions
Extra work
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Field books
CMs reports
Project diary
Anything relevant!
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F-A-T
- Factual
- Accurate
- Timely
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Stick to the facts
Don’t editorialize
Let the facts speak for themselves
Try to be objective
Why is it important to be factual?
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 If your documentation is not accurate, it is
not credible
 Verify facts; don’t guess or assume
 Don’t rely on second-hand information
 Quote sources of information
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 Memory fades with time
 Record and document as you go
 Follow-up with oral agreements and directives
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 Capture images at regular intervals
 Always take from a standard location
 Record:
- Working conditions
- Progress as well as problems
 Be sure to identify:
- Date, and where the image was taken
- What is being looked at
MBP J9627.012 VDOT IVHS-060, C502, B603
- Who took the image
Description: Pier No. 2 footing formwork
View Orientation: Southeast
Date: August 21, 1998
Photo No. 1
D. Sawyer
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Complete minutes should include:
- Date, time, and location of meeting
- List of attendees
- Minutes author
- Items of discussion should be sequentially numbered
- Agreements
- Disagreements
- Problems
- Actions and decisions
- Follow-up (action item, contact person, due date)
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 Chronological file
 Copy to separate files for issues and
change orders, so all files are complete
 Control numbers
 Document logs
 Response (remember, FAT)
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 Make a written record and file
 Make a notation in the project diary
 Following a conversation, always confirm
oral directives and agreements
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 As-planned schedule
- Nail this down early, before issues arise
 CPM scheduling preferred
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Review carefully and comment
- Does the schedule comply with the contract?
- Are final and interim completion dates met?
- Are key milestones shown?
- Is the Critical Path identified?
- Are activities and actions by the Owner identified?
- For major materials / items, is there time factored for
submittal/shop drawing review?
- Are the durations reasonable?
- Is the sequence logical?
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 Actual as-built conditions, such as:
- Footing depth
- Pipe inverts
- Relocated utilities
 Agreed constructive changes
 Completion dates for structures and
sections of work
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Document log
Submittal log
Material status report
Follow-up list
Change Order log
RFI log
Issues Book
Reports
Other
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QUESTIONS?