Strategies for Construction Administration
By Paul Potts
Some believe that construction administration is a routine process of visiting the site to write reports that record decisions and events that have taken place; but, all working construction administrators know, that done well, CCA is not as simple as that. There are also jobsite meetings to attend, pay requests and change orders to review and sign and the final inspection and the certificate of substantial completion. Even taking these activities into account, this is a narrow view of what is required of the architect’s construction contract administrator (CCA).
To organize and make the best use of their limited time at the jobsite, the CCA must know the administrative sequence of construction events, from the prebid interview to the certificate of substantial completion and have a professional’s knowledge of the contract documents. But, these generalities must be coupled with strategies for getting the most out of each event and each document rather than relying on an open-ended game plan of responding to whatever comes up.
A strategy for guiding the client’s representative, for example, requires assessing their experience with construction and their knowledge of what to expect. It is also important to know what authority they have been given. If they are gun shy about change orders, that is something to learn early and begin working on before presenting the first change order.
As part of this strategy, arrange a casual meeting to explain your function on the project. If the ice is broken at this meeting, mention that a number of non-owner initiated change orders is not uncommon. It’s the percentage of the overall budget spent on errors and omissions related change orders that counts.
If there is a lot of tension during this conversation, it would be wise to step back and inquire of the principals in the architect’s office, who negotiated the contract with the owner, whether there was discussion during contract negotiations of change orders related to errors and omissions. It may be the case that only a higher authority is designated to sign change orders. Also, check the budget to see if there is an allowance for change orders.
If the owner’s rep becomes obstinate about signing change orders for errors and omissions, the CCA should refer this to the principal in charge of the project for further negotiations with the owner. There is no promise in taking this on at the level of the CCA.
The post bid interview is an information rich meeting with significant benefits for the architect. This is the opportunity to bring experts from the architect’s staff to meet face to face with the contractors, who are low bidders but do not yet have a contract. At this point, the architect’s professionals know more about the design than anyone and should come to the meeting with some idea of what they want to probe. They can ask questions about important elements of the design that are critical for the contractor to understand if they are to be successful. Contractors are more willing to discuss what’s in their bid now than at any other stage of the project.
The best way to organize the post bid interviews in a multiple prime contract arrangement is to have a representative from each discipline of the architect’s staff meet one-on-one with the corresponding contractor. If it is a general contractor format, it’s not inappropriate to ask the general contractor to arrange similar individual meetings. The CCA should attend to take notes, issue a report and maintain an overview of the entire process. The CCA should tactfully encourage the contractor to ask questions. The objective is to get information, not be off-putting.
It is important to note where the contractor’s bid landed in relation to other bidders. Is their bid well below the second low bidder? There may be an explanation; but it may also indicate the contractor missed something. Was it due to misleading information in the plans and specifications or a plain mistake on their part? The contractor may have intentionally omitted something from their bid expecting to claim it later after they have a contract when the owner and architect have less leverage over pricing. Getting it on record that the contractor has it in their bid will prevent them from claiming ignorance later.
The preconstruction meeting is also loaded with opportunities, but of a different sort than the post bid interview. It is attended by a room full of contractors making it less conducive to one-on-one meetings, but, there are clear benefits from meeting the contractor’s supervision for construction. They should be alerted in the notice of the meeting to come prepared to discuss constructability issues.
The CCA visiting the site only once a week is often operating in a vacuum; and, construction meetings are informative settings to get up to speed. However, they are dependent on the willingness of contractors to discuss the progress of their work. If the CCA doesn’t overplay their importance, they will learn a lot from the questions and conversation at the meeting.
The CCA should develop a style of participating at construction meetings that doesn’t set everybody on edge. It is important to pay attention, be in consultative mode and make notes of the conversation. During the meeting, the CCA wants to create an atmosphere of openness and collaboration to get as much information and as many leads about where to look around the jobsite as possible.
Don’t let the general contractor or construction manager exclude you from construction meetings by trying to have them when you’re not at the jobsite. Manage your schedule so you are there on the day of the meeting.
Disqualifying a contractor
If there is a written record justifying it, the time to disqualify a contractor is before the contract is signed. But, this precarious move must be based on solid written information of serious misperformance on other projects and must be done in concert with the construction manager. The construction manager (CM) may, and often does, oppose disqualification of a contractor because it complicates things for them. If the architect-engineer recommends disqualification to the owner without support of the CM, the owner may not go along. It is best to convince the construction manager that the contractor’s failures on other projects warrant disqualification before going to the owner. But, keep in mind, it is quite possible that the CM’s skepticism means the architect’s evidence is weak.
Legal protections for architects from defamation suits brought by contractors because of efforts to disqualify them exist in many states based on the legal principle of common interest privilege1. The architect has a duty to look out for the owner’s interests and permitting an unqualified contractor to get a contract when there is known, documented information that would disqualify them, could be construed as a failure to provide due diligence.
It is quite likely in a small market the contractor will fight disqualification, because it could be used to disqualify them from other projects. Disqualification is fraught with potential legal costs and consequences and must be done with the advice and consent of the architect’s attorney
There is nothing esoteric about building plans. Properly prepared plans and specifications are hard data about a specific project. It takes education, training and experience to read plans and specifications with confidence. To dispel the myth that the plans and specifications are only for reference, take the time to show the contractor where the answer to their question is in the documents, whether it is in the contract, general conditions, bid division description, plans or specifications. If it can’t be reasonably inferred from the documents, the contractor has no obligation to provide the materials or perform the work. It is not an interpretation the CCA is rendering, but a straight-forward reading of the content.
There is often missing or misleading information in the documents that the CCA will have to research and clarify. For example, the drawings showed a valve in the hot water circuit in every mechanical room. The symbol indicated a globe valve, but no other written description was given. The mechanical contractor suspected the valve was a control valve, but the valve was not indicated on the control valve schedule. The mechanical engineer confirmed that it was control valve costing hundreds of dollars requiring connection to the temperature control system.
Providing control valves was not the mechanical contractor’s responsibility, but installing it could still be reasonably inferred from the drawings. The controls contractor was awarded a change order for the control valves and connecting them to the controls circuit and programming them into the controls system. The mechanical contractor was given a deductive change order for the globe valve, but had to install the control valve in the piping.
In this article, I am referring to the AIA/Arcom MasterSpec specifications. They are the most comprehensive and reliable specifications in the industry and are used worldwide. They are organized based on the CSI MasterFormat, a master list of titles and numbers used to organize specifications.
To do their job effectively, the CCA must become adept at researching MasterSpec specifications starting with Section 01 – General Requirements and ending with Section 33 Utilities. The best way to do this is write specifications for a few projects. Otherwise, at least become familiar with how the MasterSpec specifications are organized.
Each Section in MasterSpec, except Section 01 and 02, has three parts, Part 1–General, Part 2–Products, and Part 3–Execution. Specifications are written to avoid saying things more than once, so each of the three parts of a Section are stand alone and each must be understood on its own merits. Part 1 General includes generalities from submittals, warranties, documents incorporated by reference, quality assurance to mockups. Part 2 Products covers all the material things that go into the project. Individual Sections will cover everything from mortar to air conditioning equipment and electrical transformers. Part 3 Execution standards of construction and will cover things like the contractor’s responsibility to examine the site before starting work, field quality control and final adjustment and cleaning, but has nothing to do with the contractor’s means and methods.
It has been my experience that contractors in the field don’t read the specifications; and many mistakes they make are based on this lack of attention. Know how to research the specifications and become aware of how documents incorporated by reference interact with the rest of the specifications and you will become respected for your knowledge.
Owner- architect agreement
The CCA should review the owner-architect agreement and the general conditions to the contract and become familiar with responsibilities assigned to the architect and others. These are complex documents, but it will be encouraging to know that there are only a few parts the CCA must know.
For example, in B132- 2009 Standard Form of Agreement Between Owner and Architect, Construction Manager as Adviser Edition the only sections the CCA needs to know firsthand are Article 2 Architect’s Responsibilities; and Article 3 Scope of Architect’s Services, Paragraphs 3.6 Construction Phase Services et al. And, it would be wise to check Article 4 Additional Services, to see if anything has been added to the architect’s duties and responsibilities. Article 5 describes the owner’s responsibilities and is good to read at least a few times. Article 8 Claims and Disputes is pretty much boiler plate language as to what recourses they have if the parties can’t agree on a settlement through fact finding or a decision by the initial decision maker. Check Article 12 for any special terms and conditions that have been added to the agreement.
General Conditions of the contract for construction
The general conditions coordinate provisions of the owner-architect agreement with the owner-contractor agreement. There are a few important provisions the CCA should know in the general conditions. Article 2 Owner, Article 3 Contractor, Article 4 Architect and Construction Manager and Article 9 Payments and Completion are basic reading required to get a grasp of the general conditions. Also, Paragraph 1.1.8 Initial Decision Maker is important to read. In more recent versions of the general conditions, the architect is the initial decision maker by default, but the owner can appoint someone else.
When resolving disputes, the CCA must have confidence in the plans and specifications. Most disputes can be resolved by a careful study of those documents. If the contractor runs into a rock quarry that was not shown on the plans or identified in a geotechnical report, it is not the contractor’s responsibility to remove it. This is a hidden condition and hidden conditions are dealt with in the AIA General Conditions. (see paragraph 3.7.4 General Conditions of the Contract for Construction).
When called on to resolve disputes between the owner and contractor, between the architect and the owner or disputes between two contractors, the CCA must try their best not to favor their own employer or the owner over the contractor. It is a simple matter, it is either there or it’s not there. The contractor in today’s bidding market cannot be expected to include something in their bid that is not fully described in the plans or listed in the specifications.
If there is an error or omission in the plans and specifications, the architect must accept responsibility for it and take it up with the owner or refer it to a principal in the firm. The documents are not warranted to be defect free and experienced owners know this.
Revisions to the AIA contract documents by attorneys for owner
Attorneys for the owner know that the AIA has taken the opportunity in authoring the most frequently used contract documents to favor their AIA membership and will alter the standard AIA contracts and general conditions to correct for this bias. AIA documents are protected PDF and copyrighted documents, any modifications to the document will be indicated to bring it to the attention of the signatory. Unfortunately, this tampering with the wording destroys the coordination of the owner-architect agreement, the general conditions and the owner-contractor agreement undermining the authoritative consistency between the documents.
To further complicate the matter, the Association of General Contractors sponsors a committee that analyzes each new version issued by the AIA and publishes an entire volume of recommendations for modifying the standard documents. The architect must try, during contract negotiations, to limit this tampering.
Schedule of values
The CCA must pay close attention to the dollar amounts assigned to each line item of the proposed schedule of values. It is not an uncommon for contractors to balloon the dollar value of work that is performed early in the project to give themselves extra working capital. Front loading, as it is called, results in over payment to the contractor at the start of the project that could backfire on the architect and owner if the contractor runs out of money before the project is finished.
Examining pay requests
The hazards of signing pay requests without putting some effort into determining that the numbers represent the contractor’s progress are many and could be costly for the architect. Overpaying a contractor that subsequently goes bankrupt can result in a claim against the architect for the difference. Or, paying for stored materials not covered by insurance can put the owner in a bind if the materials are stolen or lost in a fire.
There are ways to recognize overbilling. For example, on any commercial project – schools, hospitals, office buildings, government buildings apartment houses and even prisons and jails, the electrician is usually ahead of other contractors in overall percentage billed. It is partly because so much of their materials are large pieces of equipment like transformers and switchgear that go into place before the infrastructure is complete. The rest is conduit, wire and labor. If other contractors begin to outpace the electricians in percentages billed, it calls for scrutiny.
Whenever a contractor bills for a large piece of equipment that is on a line item of its own, it would do well to confirm it is installed or in a safe place.
Negotiating change orders
In general, the owner can expect to pay 20 to 30-percent more for work performed under a change order than at bid time. There are few defenses against this inequity, unless unit prices have been agreed to in advance. While, it is possible to verify the cost of material in the pricing of a change order, it is very difficult, even using RS Means Cost Data, to successfully challenge the contractor’s estimate for labor. The alternative, to hire a separate contractor, is almost impossible unless the work is widely separated from the main project.
Stored materials and equipment
Materials and equipment stored on the jobsite become the property of the owner once payment is made (see paragraph 9.3.3 General Conditions of the Contract for Construction). If the materials are stolen or damaged, it is the owner’s expense to replace them. It’s prudent for the CCA to make sure the owner is aware of this fact and has builder’s risk insurance covering loss or damage to property and equipment stored on the site.
Contractors often bill for equipment or material that cannot be delivered to the site because it’s too valuable or there is a lack of space. If that is the case, it must be stored at a separate location. The contractor is entitled to payment for stored materials, and the process is described in paragraph 9.3.2 General Conditions of the Contract for Construction. The contractor must furnish a certificate of insurance for the stored materials covering fire, theft and wind damage.
Observation and examination
It’s impossible to examine all aspects of a large construction site in a single day when there are job meetings to attend, pay requests to approve, change orders to negotiate, and reports to draft; but the CCA can use their wits to find some defects and deviations while on the way to do other things. For example, while checking the swimming lane sight lines from the mezzanine of a new high school pool, the CCA noticed the stainless-steel balcony railing had a small amount of rust on it. The CCA asked the construction manager to get a copy of the contractor’s delivery receipt for the stainless tubing. The specifications called for type 316 stainless steel, which is more impervious to rust in chlorinated environments than its poorer cousin, type 304. The materials invoice showed the tubing was type 304 stainless. The CCA informed the construction manager that it must be removed and replaced. The ethical question is, what would the CCA have done if the spec read type 304? Which leads us to the next paragraph.
Construction contract administrators confront many ethical dilemmas on their projects. The following paragraphs will provide some hypothetical dilemmas to illustrate the complexity of the challenges.
Example 1: (The architect did not include a basic product as a requirement.) When the CCA arrived at the site for the weekly visit, half of the shingle roof was completed. And, it was apparent the roofer was not installing ice and water shield in a climate that would call for it. A quick review of the drawings and specifications showed there was no requirement for ice and water shield. A most basic requirement, the ice and water shield, was overlooked.
Example 2: (The construction manager makes a mistaken decision and the CCA is confronted with a difficult choice.) The project was a large middle school in a neighborhood with a tradition of sports accomplishments. The fire suppression contractor, working under a performance specification that did not give details of where to run piping, ran an 8-inch water main through the gymnasium close to the ceiling.
Later it was discovered the pipe interfered with the installation of the overhead supported folding basketball backstop. The construction manager, instead of moving the pipe, decided to move the backstop framing away from wall to accommodate the piping. But, this had the effect of shortening the distance between the baskets making it too short for competition play.
We had worked successfully with the CM on several projects and hoped to do so again. They were a firm larger than ours and could easily spoil opportunities to get work in the future. What to do? If no one measured the distance, which was short by 3-feet, nothing would come of it; but if a visiting referee became suspicious and measured the distance, the school would be barred from competition play in their own gym. The truth of the matter is that most architects would pull the CCA off the project if there is a conflict with the CM.
Example 3: (The construction manager makes a poor choice in scheduling work and the owner must pay for replacement.) The construction manager scheduled shingle work completed during a break in the weather in January in Lower Michigan. The winter weather returned a few weeks later and several shingles that had not sealed down were blown off in a snow storm with high winds. Is this like the owner paying for errors and omissions?
Occupancy is the final inspection
There is no reason to get too satisfied with your work before the owner moves in to the project, because occupancy is the real final inspection. If the CCA wants to be proactive, they might send around a request for comments to the employees in the new building. Ordinary complaints that have nothing to do with the design intent can be ignored.
Here are a few examples of what the owners discovered when they occupied their new building.
Incident 1 – County jail glazing: Soon after occupancy of a new jail an inmate escaped through an exterior window measuring 6-inches by 48-inches, glazed with triple pane bullet proof glass, reinforced with Lexan polycarbonate sheets between layers of glazing. The inmate wiggled a collapsible clothes hook off the wall that was secured with two Hilti epoxy anchors in a solid grouted, reinforced masonry wall. He used the steel clothes hook to chip away the brittle bullet proof glass and scrape away the inner core of polycarbonate plastic and so on until he had made an opening large enough to pry the glazing out of the frame. He squeezed through the 6-inch opening and fled. There were two errors in the design of the exterior windows.
First, it was believed that an adult male could not squeeze through a 6-inch wide opening. Secondly, the distinction between bullet proof glass and detention glass was not understood by the designer. But it must be asked what were the guard doing while the inmate was busting out his cell.
Incident #2 Orchestra Pit New High School: When the high school auditorium was open everyone was in awe, except the orchestra conductor. The floor of the orchestra pit was 9-feet below the level of the stage. The conductor would have to stand on a 4-foot tall box to see the players on the stage.
Incident #3 Elementary School Office Windows: Shortly after occupancy the office staff complained that they could not see the bus loading area while seated in the main office. The window sills were 4-foot from the floor.
Incident #4 New Jail: Shortly after opening the first floor of the jail flooded after a downpour. The storm sewer line was too small, causing a short-lived flood in a downpour.
Construction contract administration (CCA) is a very challenging occupation, much more complicated than it appears on the surface. The design stage of the project is supported by a platoon of architects, engineers, designers, consultants and leadership from the architect’s office. The CCA enters the scene when all the professional help has gone on to other projects. The CCA is left with the responsibility to pick up the pieces of their effort and put the puzzle together again in the real world.
One single advantage for the construction administrator is that every project goes through a predictable series of administrative events that don’t vary that much from project to project. The CCA can use this repetitiveness to develop strategies that will make the most of their time at the site.
On a final note, the CCA should know the limits of their own authority, before they tangle with construction manager or other party to the contract.