Chapter 7

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project incentives

"carrot" approach to on-time/ ahead of time project completion contractor receives extra money for each day ahead of substantial completion that project is completed

2 purposes of preconstruction conference

1) establish rules to be followed 2) clarify lines of authority and communication

typical contract documents needed to finish job

- as-built drawings - operation and maintenance manuals - product and equipment warranties - test reports - surplus materials - permits - lien waivers

change orders

- changes in scope (easiest) - time extensions (more difficult to get approved) add or delete work from the contract

reasons for a claim

- disagreements regarding terms of the contract - defective or deficient contract docs - denied/unresolved change orders - denied time extensions resulting from delays beyond contractor's control - differing site conditions resulting in extra cost to contractor

benefits of partnering

- improved communication - speedier decision making - fewer change orders - improved quality - shorter schedules - lower costs - fewer disputes - less litigation - higher satisfaction all around

7 essential elements of partnering

1) COMMITMENT to partnering by the top management of every organization involved in the project 2) EQUITY in considering all stakeholders' interests to create shared goals and commitment by all stakeholders 3) TRUST among all parties thru personal relationships and open communication, mutual sharing of party's risks and goals 4) A PARTNERING CHARTER developed jointly by all parties that identifies specific mutual goals and objectives 5) implementation of mutual goals/ mechanism for PROBLEM SOLVING 6) continuous EVALUATION based on goals to ensure plan is proceeding 7) timely RESOLUTION OF ALL DISPUTES at the lowest level possible during the project

2 key process tools to track inquiries, decisions, and approvals

1) request for information (RFIs) 2) submittals

3 documents in official payment request

1) schedule of values - budget plan established early in project from project estimate 2) pay request continuation sheet - tracks previous payments & change orders, identifies current payments due (AIA publishes a standard) 3) application for payment - final document needed to process a payment request, summarizes actual payment amounts/ provides official approvals required before payment can be released (AIA publishes standard)

Schedule of Values

A budget template established early on in the project against which progress payments are measured. The schedule summarizes the total project cost by the various divisions of work. usually organized by CSI MasterFormat divisions an administrative submittal that must be approved by architect very early on, before construction

Retainage

A certain percentage of money owed to the contractor for work progress that is held back by the owner to encourage completion of the project. typically 10% of contract payments retainage paid to contractor once final completion is achieved

shop drawing

A supplemental drawing to the plans and specifications that details fabrication methods, materials, and models of a product or installation associated with the project. a special type of submittal PREPARED by: subcontractor or vendor to: GC for review AND architect gives final approval

Partnering

A team-building technique, calling upon the parties to the construction contract to establish a common set of project goals and objectives and develop a mutually acceptable protocol for communication and conflict resolution through a formal agreement. started with Army Corps of Engineers in 1988 Associated General Contractors of America (AGC) made it a regular technique goal: create a win-win situation

Request for Information (RFI)

A written request for clarification regarding the details presented in the plans or specifications. The requests are usually made by subcontractors through the general contractor to the architect. MADE by: subcontractors via: GC to: architect

submittals

Data, samples, details, colors, and product literature required by the terms of the contract to be presented to the architect by the contractor for approval prior to ordering and installing them. similar to RFIs, but different intent: means by which architect and owner can confirm intent of design MADE by: contractor to: architect/owner

dispute resolution options

Mediation - an impartial 3rd party facilitates negotiation between disputing parties Minitrials - an informal private process that combines aspects of both mediation and litigation, involves neutral 3rd party and an attorney representing each party Arbitration - more formal process, more costly, more time consuming, each party represented by attorney, witnesses called, evidence presented, arbitrator makes ruling, and the decision is final

Mock-up

Physical models or small samples constructed to allow the architect and owner to review the appearance and function of materials, colors, textures, and other aesthetic features before incorporating them into the actual project. may be part of submittals (ex: which brick exterior finish)

liquidated damages

an amount of money that is assessed to the contractor for failure to meet a specified contract completion date "stick" approach to on-time project completion

claim

an issue that occurs during construction and remains unresolved after the job is complete owner/architect must formally respond to claim or if rejected, a formal contract dispute arises

payment requests made...

by: contractor to: owner via: architect monthly basis project managers responsible for compiling the request architect decides if payment request is recommended or if contractor needs to make revisions

Preconstruction Conference

initial meeting to establish the rules by which the game is to be played and to clarify the lines of authority and communication in attendance: owner, architect, engineers, contractor's project manager, subcontractors, vendors, outside parties (i.e. fire marshals) primary relationships established, covers general conditions and supplemental conditions discuss site logistics, schedule issues, payment issues, change orders, etc.

Contract Administration

managing the general and supplemental conditions of the contract established by individual OR by whole team requires clear and accurate paper trail

Contract Adminstration

refers to the management of the details and info presented in the general and supplemental conditions of the contract and at the preconstruction meeting first task: create a contact list for every person associated with the project


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