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Construction Project Administration This page intentionally left blank Construction Project Administration T enth E dition Edward R. Fisk, PE Wayne D. Reynolds, PE Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editorial Director: Vernon R. Anthony Senior Acquisitions Editor: Lindsey Prudhomme Gill Editorial Assistant: Nancy Kesterson Director of Marketing: David Gesell Senior Marketing Coordinator: Alicia Wozniak Marketing Assistant: Les Roberts Production Manager: Holly Shufeldt Art Director: Jayne Conte Cover Designer: Suzanne Duda Cover photo: Shutterstock Image Permission Coordinator: Mike Lackey Full-Service Project Management: George Jacob/Integra Software Services, Ltd. Composition: Integra Software Services, Ltd. Printer/Binder: Edwards Brothers Cover Printer: Lehigh-Phoenix Color/ Hagerstown Text Font: Minion Pro Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text. Copyright © 2014, 2010, 2006 by Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax your request to 201-236-3290. Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. Library of Congress Cataloging-in-Publication Data Reynolds, Wayne D., Construction project administration / Wayne D. Reynolds, PE, Edward R. Fisk, PE.— Tenth edition.   pages cm Includes bibliographical references. ISBN-13: 978-0-13-286673-6 ISBN-10: 0-13-286673-0 1. Construction industry—Management. 2. Construction projects—Management. 3. Building—Superintendence. I. Fisk, Edward R., 1924- II. Title. TH438.F57 2014 624.068’4—dc23 2013004302 10 9 8 7 6 5 4 3 2 1 ISBN 10: 0-13-286673-0 ISBN 13: 978-0-13-286673-6 Preface New To This Edition ● Mr. Fisk’s original preface still remains applicable to this, the tenth edition: The principal objective of this book is to provide those of us who are active in the construction industry with a single source of information that will help address the responsibilities and risks that we are likely to encounter. The principles covered in this book have been gleaned from hundreds of projects worth billions of dollars over hundreds of years of construction. They are applicable to: horizontal as well as vertical construction; small and large projects; and government, commercial, industrial, and private construction. All may not be applicable to a particular project, but they remain valid principles nonetheless. The revisions in this edition were necessary because of changes in technology and industry practices as well as shifts in the way that owners choose to have projects constructed. There have been some changes made as a result of user ­feedback and chapters reorganized in order to improve the flow of the material. ● ● ● ● The material covering Preconstruction Conferences in Chapters 10 and 12 has been combined into Chapter 12 to minimize redundancy and to improve readability. Since so many projects are now being constructed using the Design–Build (DB) project delivery system, it ­became appropriate to elaborate further on how DB ­impacts the principles discussed throughout the book. With almost universal usage of computers to schedule projects, arrow diagramming has fallen into disuse and hence most of the arrow diagramming discussion was removed from Chapter 14. Leadership in Energy and Environmental Design (LEED) has become so prevalent in the construction industry that the author felt it appropriate to address its impacts on material already presented in the book. ● ● ● The National Pollutant Discharge Elimination System (NPDES) was added to Chapter 8 because those permits are required on the vast majority of construction projects and a Resident Project Representative needs to understand them. Experience Modification Rating (EMR) was also added to Chapter 8 to further emphasize the importance of safety on all construction sites. Due to the widespread use of electronic project administration on construction projects, more emphasis was placed on electronic reporting and usage of electronic devices. There have been some changes to chapter questions in order to be consistent with the revised text material. Principal contributors to this tenth edition were Mr. Scott Arias PMP, PSP, CPC, and Dr. Bryan Dyer PE, PLS, LEED AP, both professors in the Construction Management program at Eastern Kentucky University. Mr. Arias, President of ACE Consulting, Nicholasville, KY, brought his considerable scheduling expertise and worldwide construction ­ experience to this revision, and Dr. Dyer, President of Dyer and Associates, Richmond, KY, contributed extensive insights into Design– Build construction as well as LEED. I owe them both a great deal of gratitude for their significant contributions to improving the breadth and depth of this edition. I also wish to thank my wife, Karen Reynolds, for her patience and support while I worked on this revision. And last, but not least, I wish to thank my mentor, Mr. Ed Fisk, who taught me so much and gave me the opportunity to keep his vision alive in this textbook. He is sorely missed. While many people have contributed to writing this book throughout the years, I alone take responsibility for any errors found in this edition. The author is grateful to the many contributions made since this book was first published. Contributors to p ­ revious editions included: Julius (Jim) Calhoun, Esq., Asst. General Counsel for Montgomery-Watson in Pasadena, CA (ret.); v vi Preface Gary L. McFarland, PE, and Charles H. Lawrance, PE, President and Vice-President, respectively, of Lawrance, Fisk, & McFarland, Inc., of Santa Barbara, CA; Wendell Rigby, PE, former Senior Civil Engineer of the City of Thousand Oaks, CA; Albert Rodriguez, CPCU, ARM, President, Rodriguez Consulting Group, Inc., Jacksonville, FL; Robert Rubin, Esq., PE, of Postner & Rubin, A ­ ttorneys-at-Law, New York, NY; Joseph Litvin, Esq., PE, Attorney-at-Law, Dayton, OH; Arthur Schwartz, Esq., General Counsel for the National Society of Professional Engineers, Alexandria, VA; Robert Smith, Esq., PE, of Wickwire Gavin, PC of Madison, WI, General Counsel for the Engineers Joint Contract Documents Committee (EJCDC); members of the EJCDC whose contributions to the tools of the contract administrator are without equal; Donald Scarborough, President of Forward Associates, Ltd., of Novato, CA; William W. Gurry, President of Wm. Gurry & Associates, Atlanta, GA; Associated General Contractors of America; Mr. Harold Good, CPPO, formerly Director of Procurement and Contracting for the City of Palm Springs; W. Gary Craig, PE, President of ProjectEDGE; Mr. Steven E. Williams, Autodesk Inc.; Mr. Matt Gumm, Alliance Corporation; and Mr. James Dall, Dormitory Authority—New York. The author would also like to thank the reviewers of this ­edition for their helpful insights: Scott Arias and Bryan Dyer, Eastern Kentucky University; Denise Gravitt, Western Illinois University; and Matthew W. Nawn, Frederick Community College. Download Instructor Resources from the Instructor Resource Center To access supplementary materials online, instructors need to request an instructor access code. Go to www.pearsonhighered.com/irc to register for an instructor access code. Within 48 hours of registering, you will receive a confirming e-mail including an instructor access code. Once you have received your code, locate your text in the online catalog and click on the “Instructor Resources” button on the left side of the catalog product page. Select a supplement, and a login page will appear. Once you have logged in, you can access instructor material for all Prentice Hall textbooks. If you have any difficulties accessing the site or downloading a supplement, please contact Customer Service at http://247pearsoned. custhelp.com/. About The Authors Edward R. Fisk, PE, LS, was a construction consultant in Orange, California. He was a licensed civil and structural engineer, land surveyor, and licensed general contractor and held licenses in 13 states. Before becoming an independent consultant, he was president of Gleason, Peacock, & Fisk, Inc., of Brea, CA, construction consultants; vice president of Lawrence, Fisk, & McFarland, Inc., engineers, of Santa Barbara, CA; and vice president of Construction Services for Wilsey & Ham, engineers, Foster City, CA. Prior to that he served as Corporate Director of Construction Management for J.M. Montgomery Engineers (now MWH Global), and VTN Consolidated, Inc., and was an Engineer and a Field Engineer for Bechtel Corp., Power Division. He had extensive experience in both the public and private sectors. He was a Life Fellow of the American Society of Civil Engineers and former chairman of its Construction Division and was a Fellow of the National Academy of Forensic Engineers. He taught short courses statewide at the University of California, Berkeley, Institute of Transportation Studies, and at the University of Washington, Engineering Professional Programs, Seattle, for many years. He lectured nationally and internationally for the American Society of Civil Engineers until succeeded by coauthor Wayne Reynolds. Wayne D. Reynolds, PE, is a Professor and Program Coordinator in the Depart­ ment of Applied Engineering and Technology at Eastern Kentucky University. He teaches or has taught ­introduction to construction, project organization and super­vision, scheduling and cost control, contracts and bidding, quantity and cost estimating, engineering economy, statics, structures, and soils in the Construction Management program. He also lectures n ­ ationally and internationally for the American Society of Civil Engineers. He ­received his B.S. degree from the U.S. Military Academy and M.S. degree in civil engineering from the Ohio State University. Mr. Reynolds has experience in design and construction projects including transportation facilities, navigation structures, flood protection, and ­institutional buildings, and has served as Inspector, Project Engineer, Assistant Resident ­Engineer, Project Manager, Deputy District Engineer, and ­Contracting Officer. He was an Assistant Professor of Civil Engineering at the U.S. Air Force Academy and completed service in the U.S. Army Corps of Engineers as a Lieutenant Colonel. He is a member of American Society of Civil ­Engineers and the Associated Schools of Construction. vii This page intentionally left blank Contents C h a p t e r The Project Delivery System  1 Project Participants 1 Construction Administration The One-to-One Concept 1 Resident Project Representative; Resident Engineer; Resident Inspector; Resident Manager; Project Representative 14 Inspector; Field Engineer; Quality Assurance Supervisor 15 2 Contractor’s Engineering Section 3 Defining Scope of Work in a CM Contract 15 The Five-Step Process of Initiating a Project 4 Control of Quality in Construction 5 Construction Administration Task List Staff Assignments for Construction Quality Assurance/Control 8 Full-Time versus Part-Time Project Representative 10 Owner’s Responsibility Partnering Benefits 19 Potential Problems 19 The Partnering Process The CM Controversy Specifying Partnering Closing 10 Engineering Definition of Professional Construction Management 10 11 12 Design–Build Documents 12 Federal Design–Build Contracts 3 13 13 Professional Construction Manager 14 19 Contracting for Public Works Projects 20 21 Responsibility and Authority Definitions of Individual Construction Responsibilities 13 Quality Control Representative 19 C h a p t e r 12 Legal Barriers for State and Local Public Projects 13 Project Manager 18 19 Review Questions Design–Build for Public Projects 18 The Partnering Concept Professional Construction Management 10 Fast-Track Construction 16 Responsibility for Coordination of the Trades 17 Organizational Structure of a Construction Project 5 Design–Build Contracts 15 14 22 2 The Resident Project Representative and Inspectors as Members of the Construction Team 22 Lines of Authority on Construction Projects 22 Agency Relationship Actual Authority 22 22 ix x Contents Apparent Authority 22 Filing of Notices and Certificates Delegation of Authority Limited Authority Summary 23 Evaluation of Construction Materials and Methods 45 23 Requests or Information (RFI) 23 Why Have an Inspector? 23 Authority and Responsibility of the Resident Project Representative 24 Responsibility2 Authority 3 Record Drawings 45 Review Questions 46 45 C h a p t e r 25 26 Review Questions 45 Documentation: Records and Reports 47 31 C h a p t e r Resident Project Representative Office Responsibilities 32 Setting up a Field Office 3 Project Documentation as Evidence in Claims 48 Files and Records 48 Construction Filing System of a Major Engineering Firm 48 32 Familiarization with Construction Documents 33 Individual Project Records Equipping the Field Office Construction Field Office Files 54 Construction Progress Record 55 Construction Records 35 Ordering Supplies and Equipment 35 Electronic Record Keeping Establishment of Communications 35 Construction Reports Field Office Telephone Cellular Telephone 56 56 Daily Construction Reports 35 Monthly Reports 36 Two-Way Radios (Walkie-talkies) Cordless Landline Telephone PDAs 49 49 56 Construction Diary 36 36 37 56 57 Format of the Construction Diary 58 Content of the Construction Diary 60 Who Should Maintain Diaries and Daily Reports? 60 Handling Job-Related Information 37 Staffing Responsibilities Documentation of Intermittent Inspection 60 38 Staffing Level of Field Office 38 Types of Personnel Assigned to Field Office 39 Percent of Time Expended by Each Classification Toward Various Tasks 39 Special Feedback Reports Report of Field Correction 60 60 Concrete Batch Plant Daily Reports Derivation of the Field Cost Indexes (FCIs) 40 Plant Inspector’s Report to Field Inspector 63 Selection of Trailer-Type Field Offices 40 Field Investigation Report Construction Safety Miscellaneous Records Development of an Inspection Plan 43 63 Labor Standards Review Records 44 Job Conferences Construction Planning and Scheduling Contractor’s Plant and Equipment 63 Documentation of Dangerous Safety Hazard Warnings 63 41 Other Job Responsibilities 63 44 44 Leadership in Energy and Environmental Design (LEED) 44 Measurements for Progress Payments 45 68 Contractor Submittals 68 Construction Photographs 69 Public Relations Photography 69 Progress Photography 69 65 4 Contents Identification of Photographs 71 Industry Trends with BIM Adoption Photographs as a Defense Against Claims Challenges of Digital Images 71 Camera Handling Review Questions 73 C h a p t e r 73 Specifications and Drawings 74 What Is a Specification? 74 Film and Camera Storage 75 Digital Cameras for Construction 98 98 75 Conflicts between Drawings and Specifications Digital Camera Storage Media Scope-of-Work Disputes 75 Avoiding Scope-of-Work Problems 76 C h a p t e r 5 Electronic Project Administration Using Computers for Project Administration 77 Contracts 99 Instructions to Bidders General Conditions Communications 80 Meetings 80 Phonebook 79 Technical Provisions 80 Drawings 84 84 Shop Drawings and Submittals 86 86 Electronic Posting of Bidding Opportunity Advertisements 87 Contractor Advertisements CSI Subgroup/Division/Section Concept 104 CSI Three-Part Technical Section Format 106 104 State Highway Department Formats 107 88 Adaptation to City and County Civil Engineering Projects 108 89 AASHTO Standard Format for Highway Construction Specifications 108 89 Standard Electronic Ad Text 104 104 Heavy Construction Engineering Specification Format 107 Web-Enabled Project Management Applications 87 Non-DOT Standard Specifications Notification of Prebid or Preproposal Meetings 90 92 90 Specifications Formats in Use 109 Project Specifications (Project Manual) versus Special Provisions Concept 110 92 BIM and Integrated Project Delivery 109 Other Nonstandard Construction Building Information Modeling (BIM) Why Is BIM Important? 103 Transition Progress to CSI 50-Division Format 86 What Is BIM? 102 CSI 50-Division Format Requests for Information (RFI) Electronic Bid Packages 101 Original CSI 16-Division Format 84 Management Reporting 101 CSI Specifications Format—Its Meaning and Importance 103 Photos and Webcam Videos Safety 101 What Do the Specifications Mean to the Inspector? 103 83 Punch Lists Content and Component Parts of a Specification 101 Component Parts of a Specification 78 100 100 Content of the Specifications 77 Discussions Unenforceable Phrases 77 98 99 The Use of Generalities in Specifications Action Items 6 Conflicts Due to Drawings and Specifications 98 75 Review Questions 97 72 Digital Video Cameras in Construction Digital Imaging 95 Synchronization of Multiple Electronic Devices 96 72 Selection of Still Camera Equipment Selection of Film 94 Future Opportunities and Related Topics Photographic Equipment and Materials 72 Types of Equipment Used xi 93 Project Specifications (CSI Project Manual) 111 xii Contents Special Provisions or Supplemental Specifications 111 Master Specifications (Guide Specifications) 126 Inspector Training and Knowledge of Specifications 111 Special Material and Product Standards 126 Specifications and the Inspector 112 Government Standards Specification General Conditions, or Boilerplate 112 UBC Standards Building Codes, Regulations, Ordinances, and Permits 130 C h a p t e r 7 Using the Specifications in Contract Administration 114 133 Order of Precedence of the Contract Documents 133 Review Questions 117 133 117 Unforeseen Underground Conditions C h a p t e r 117 118 Types of Differing Site Conditions 118 118 Traditional Rule of Law 131 Record Drawings General Conditions Portions of Standard Specifications 117 Sharing the Risk 130 Projects Subject to Control by More than One Agency 131 Shop Drawings International Construction Contracts 115 Differing Site Conditions The International Building Code Types of Drawings Comprising the Construction Contract 131 General Conditions of the Construction Contract 114 Bidder’s Obligations 127 Access to Special Standards by Resident Project Representative and Contractor 129 113 Federal Guidelines 127 Nongovernmental Standards Allowances and Tolerances in Specifications 113 Review Questions 127 Compliance with Laws and Regulations 134 118 Use of Disclaimers of the Accuracy of Site Information 119 Materials and Equipment 119 Public versus Private Contracts 135 Limitations of Authority of a Public Agency 135 Traffic Requirements during Construction 136 The Contractor and Subcontractors 119 Shop Drawings and Samples 120 The Function of Shop Drawings 120 Approval of Shop Drawings Misuse of Shop Drawings Construction Laws and Labor Relations 134 Code Enforcement Agency Requirements 136 National Pollutant Discharge Elimination System (NPDES) 136 120 121 Disapproving or Stopping the Work 121 Work within or Adjacent to Navigable Supplementary General Conditions 122 Fair Subcontracting Laws Technical Provisions of the Specifications 123 Federal Labor Laws Water ways 138 The Hazardous Waste Problem Addenda to the Specifications 125 138 140 Labor–Management Relations Laws Provisions for Temporary Facilities Standard Specifications 137 124 124 Equal Employment Opportunity Laws Americans with Disabilities Act Wage and Hour Laws 140 140 140 140 8 Contents The National Apprenticeship Act C h a p t e r 141 Ethnic Minorities, Women, and Disadvantaged Businesses in Construction 141 Worker’s Compensation and Employer Liability Insurance 141 Labor Relations 142 Construction Unions 142 Contractor–Employee Relationships Prejob Labor Agreements Open-Shop Contracting Review Questions Meetings and Negotiations 143 Who Should Attend 157 Meeting Resources 157 Importance of Your Image 158 158 Methods and Techniques Principles of Negotiation C h a p t e r 145 OSHA and Construction Safety 146 General Responsibility for Construction Safety 146 9 Basic Negotiation Policy Negotiation Guidelines 161 Techniques of Negotiation Psychology of Negotiation Design–Build/Turnkey/CM@Risk Contracts 148 Effect of Including Contractor’s Safety Obligations in the Specifications 148 Applicability of State and Federal OSHA Provisions to a Project 150 150 Procedural Guidelines Shoring and Bracing 151 152 The Competent Person 154 Negotiating Tips Strategic Ploys 161 162 162 162 162 Setting the Pace Who Won? 163 163 Review Questions 163 C h a p t e r Risk Allocation and Liability Sharing 164 Risk Management 164 Definition of Risk 165 Scope and Applicability to Construction Contractual Allocation of Risk Exculpatory Clauses 166 167 Who Should Accept What Risks? 167 Types of Risks and Allocation of Those Risks 167 Risk Distribution 170 The Contractor’s Viewpoint Review Questions Risks Reserved to the Contractor How Are Risks Allocated? 170 171 171 11 166 Identification and Nature of Construction Risks 166 Safety Requirements in Construction Contracts 154 155 160 160 Typical Federal, State, and Utility Company Approach 147 Elements of a Safety and Health Program 148 159 The Philosophy of Team Playing Bargaining Strategy Professional Construction Management Contracts 147 158 Contractor’s Position on Change Orders and Extra Work 160 Owner Participation in the Safety Program 147 Safety Responsibility under Construction Management and Turnkey Contracts 147 158 158 The Collective Thinking Problem 144 Special Applications 157 Determine the Opponent’s Motivation 143 10 Types of Meetings in Construction 156 Seating Advantage 143 143 Construction Safety 156 Handling Yourself at a Meeting 142 Collective Bargaining in Labor Relations Administration of the Union Contract xiii Contents xiv Minimizing Risks and Mitigating Losses 172 Design–Build Risk Field Office Organization of the Owner or the Field Representative 189 172 Mission of the Field Engineer or Inspector 189 Contractor Participation in Value Engineering 172 The Planning Stage 189 Management Structures 173 Establishment of the Field Office Long-Lead Procurement 173 Field Office Responsibilities Permits and Rights-of-Way Disputes 173 Review Questions Preconstruction Conference 173 Definitions 174 Purpose C h a p t e r Preconstruction Operations Description of Approach 175 Constructability Analysis 175 Advertise and Award Phase 175 176 Issuance of Bidding Documents 177 179 Bid Bonds 179 179 Performance and Payment Bonds Time of Submittal of Bonds 180 Liability Forms of Insurance Comprehensive General (Public) Liability Insurance 180 181 Standard Builder’s Risk Insurance 194 Starting Out on the Right Foot 197 Study Plans and Specifications 197 198 Listing of Emergency Information 181 198 198 Starting a Project 198 Review Questions 200 C h a p t e r Planning for Construction 180 Property Forms of Insurance 194 Agenda for a Typical Preconstruction Conference 194 Agency Permits 179 193 194 Topics for Discussion Key Dates 177 Advertise and Award Scheduling Prequalification of Bidders 12 191 194 Time for the Conference Bonds 191 Outline of Field Office Cost Items 173 Disclosure of Information 190 202 13 Construction Schedules as Related to Building Costs 204 Scheduling Methods Bar Charts 204 206 Multiple-Peril (All-Risk) Builder’s Risk Insurance 182 S-Curve Scheduling or Velocity Diagrams 208 Submittal of Evidence of Insurance Line-of-Balance Charts 182 Network Diagrams Opening, Acceptance, and Documentation of Bids 182 Bid Shopping or Bid Peddling Bids Must Be Responsive 208 210 General Summary of Systems in Use 182 Critical Path Method 183 Acceptance and Recording of Bids Summary of Bids for Evaluation 184 187 Cost Breakdown of Lump-Sum Bids (Schedule of Values) 187 Development of a Quality Control or Assurance Program 188 Inspection and Testing Manual 188 Preparation of an Inspection and Testing Manual 188 210 210 PERT Management Control Systems 211 Learning to Use a Network Diagram 211 Specifying CPM for a Project 212 Computerized Progress Payments Lump-Sum Projects 212 Unit-Price Projects 212 Selection of PC Scheduling Software 215 Typical CPM Software Available Review Questions 217 215 212 Contents C h a p t e r CPM Scheduling For Construction 218 CPM: What It Is and What It Does 14 218 220 Job Logic 220 Logic Loops Float Time Value Engineering 220 243 Function 223 Differing Viewpoints Worth 223 223 Multiple-Critical-Path Case Precedence Formats 224 Review Questions 232 246 Value 247 247 Types of Value Engineering Recommendations Float Time in the Sample Problem 229 246 Cost 226 Value Engineering by the Architect or Engineer 248 Value Engineering by the Contractor C h a p t e r 233 15 Authority and Responsibility of All Parties 233 The General Contractor Review Questions 250 Measurement and Payment Contracts for Construction 234 Fixed-Price Contracts 251 251 Cost-Reimbursable Contracts 236 251 251 Types of Construction Contracts The Resident Project Representative; Project Representative 235 The CQC Representative 252 Guaranteed Maximum Price Contracts Temporary Facilities Provided by the Contractor 236 Construction Progress Payments Time of Inspection and Tests Approval of Payment Requests Job Philosophy 236 Basis for Payment Amounts 237 238 Administrative Activities 252 252 253 254 Schedule of Values versus Cost-Loaded CPM Schedule 255 237 Instructions to Field Personnel Evaluation of Contractor’s Payment Requests 257 238 239 Suspension or Termination of the Work 249 Field Responsibility in Value Engineering 250 C h a p t e r The Architect/Engineer as a Separate Design Organization 234 Contractor Submittals 249 Value Engineering by Design-Build Firms Construction Operations 248 Areas of Opportunity for Value Engineering 248 Reading a Computerized CPM Network Schedule 226 Schedule Reports 245 The Philosophy of Value 224 Reading a CPM Network Schedule 224 Opening a Project 16 Fundamentals of Value Engineering 245 222 Case History 243 The Role of the Resident Project Representative 244 221 222 Who Owns Float? 242 C h a p t e r Definition Activity Numbering 240 Review Questions 219 Fundamentals of CPM Activities Termination 239 Construction Services Cost Monitoring 241 Basic Procedure in Setting Up a CPM Schedule 219 Project Planning Suspension of Work by the Owner xv Submittal Requirements 239 Unit-Price Contracts 257 257 17 xvi Contents Access to the Work by Quality Assurance Personnel 286 Equipment and Materials Delivered but Not Yet Used in the Work 258 Force Account 258 Force Account as a Payment Method Force Account Payment Inspection of Materials Delivered to the Site 287 258 261 Rejection of Faulty Material Payment for Extra Work and Change Orders 261 Payment for Mobilization Costs Construction Equipment and Methods 288 263 Quality Level and Quality Assurance 291 Partial Payments to the Contractor 266 Quality Level Waiver of Lien Procedure 266 Forward Pricing of Change Orders Retainage 268 269 Testing Factory Inspection Interpreting the Contractor’s Bid 274 Mock-up 274 Example of an Unbalanced Bid 275 Detection of an Unbalanced Bid 276 277 278 Determination of Pay Quantities for Pipelines 278 Determination of Earth and Rock Pay Quantities 279 280 294 Qualified Products List 295 295 Certificate of Compliance or Conformance Warranties; Guarantees Ownership of Materials 296 296 297 297 280 Bid Items Based upon Area Measurements 280 281 C h a p t e r Changes and Extra Work  298 282 Contract Modifications 282 Changes in the Work C h a p t e r Construction Materials and Workmanship 283 18 Impact Costs 298 298 298 Oral Change Orders Change Orders 299 299 Types of Changes Materials and Methods of Construction 283 303 Directed versus Constructive Change Interpretation of the Specifications 284 Elements of a Change Order Evaluating the Need Requests for Substitutions of Materials 284 285 295 Delivery and Storage of Materials 296 Review Questions Bid Items Based upon Linear Measure Time to Consider Substitutions Proven Successful Use Handling of Materials Measurement Guidelines for Determination of Unit-Price Pay Quantities 280 Final Payment to the Contractor 294 Certified Laboratory Test Reports Resolving the Problem of an Unbalanced Bid Determination of Paving Quantities 293 293 Matching Samples on Display during Bidding 293 Interpretation of Bidding Errors 274 Review Questions 292 Experience Qualification Standard Contract Provisions for Measurement and Payment 273 Final Progress Payment 292 Installation in Accordance with the Product Manufacturer’s Instructions 292 Liquidated Damages during Construction 273 Measurement for Payment 291 Quality Assurance Provisions 270 Unbalanced Bids 291 Quality Assurance Total Cost Pricing of Change Orders 288 304 305 Considerations for Evaluation 305 Evaluation of Delays in the Work 305 303 19 Contents Change Orders for Differing Site Conditions 305 Subsurface Investigation xvii Flaws in Use of the Various Computation Methods 320 Scheduling Changes 306 Inclusion of Soil Reports in Contract Documents 306 322 Constructive Changes 323 Other Causes of Claims and Disputes 323 Evaluation of a Claim of Differing Site Conditions 306 Differing Site Conditions Other Influences on Change Order Justification 306 323 Unusually Severe Weather Conditions Starting the Change Order Process 306 Acceleration of the Work Productivity Losses 323 324 325 Initiation of Change Orders 306 Suspension of the Work: Termination Change Order Preparation 307 Failure to Agree on Change Order Pricing Cost of Delays Caused by Change Orders 309 Errors and Omissions in Plans and Specifications 326 Review Questions Conflicts in Plans and Specifications 309 Miscellaneous Problems 20 C h a p t e r Claims and Disputes 310 Protests Claims 311 312 312 Early Claims Reporting Insurance Claims 312 330 Estimates 331 Schedules 331 Contractor Must Alert Owner Administrative Procedures 328 Planning Strategy 331 332 Prelitigation Use of Records 314 Owner Must Have Opportunity to Correct Contractor’s Right to File Claims 314 315 315 Contractor Entitled to Complete Early The Litigation Process 315 Sources and Causes of Time-Related Disputes 316 332 Order of Precedence of Contract Documents 332 Obligations of the Contractor 333 Alternative Methods for Dispute Resolution 334 Compensable versus Noncompensable Delays 316 Arbitration or Litigation? Attendance at Site Visit 317 Timing Home Office Overhead 317 Inconsistent Results 335 The Eichleay Formula for Home Office Overhead 317 Cost of Arbitration Unabsorbed Home Office Overhead Discovery 318 332 Records Are Your First Line of Defense 314 Differences between the Parties Underabsorption of Overhead 330 The Use of Project Records in Litigation 332 314 314 Work Performed under Protest 329 331 Claims Administration 313 Owner-Caused Delays Evidence Costs 312 Claims and Disputes 330 Method of Presentation 311 Potential Claims 329 Burden of Proof 327 328 Resolution by Negotiation Documentation 326 328 Preparations for Claims Defense Five Principles of Contract Administration 310 Construction Problems Resolving Differences 326 318 Speedy Results? 335 335 335 335 Arbitrary Arbitrators 336 335 332 xviii Contents The Mediation Process 336 Why is a Mediator Needed? The Punch List 336 Electronic Punch List Mediation as Distinguished from Arbitration 336 Use of Mediation as a Dispute Resolution Tool 336 337 Arbitration Agreements Regulated by Law 337 Group I: Statutes Allowing Arbitration of Present and Future Disputes 338 Preliminary Notice of Potential Claim Guarantee Period Contract Time 340 340 21 Stop Notice Release Bond Post Completion Biblography 360 360 361 341 342 Computation of Liquidated Damages 345 357 Review Questions 340 Liquidated Damages for Delay Cleanup 356 Final Payment and Waiver of Liens 357 C h a p t e r Acceptance of the Work Liens and Stop Orders Lien Waivers 339 339 Project Closeout Substantial Completion versus Beneficial Occupancy or Use 353 Beneficial Use/Partial Utilization Group II: Statutes Allowing Arbitration of Present Disputes Only 339 Review Questions 347 Completion versus Substantial Completion 351 337 Authority of the Arbitrator Punch-List Obligations of the Contractor and Subcontractors 345 Preparations for Closeout 337 What is Arbitration? 345 Punch-List Obligations of the Architect/ Engineer 346 Settlement of Disputes by Arbitration 336 Business Disputes 345 343 Index 365 Forms Index 379 359 355 Construction Project Administration This page intentionally left blank chapter one The Project Delivery System T hroughout the ages, human beings have been building to meet the needs of their habitation on this earth. Then, just as now, the planning and building of each such project involved the collective efforts of many workers, all with different skills and types of specialized knowledge. At first the methods were primitive but effective. As the products of modern technology replaced the older, outdated tools of these early builders, the methods of construction and the types of skills and specialized knowledge required to complete a construction project had to change to keep pace. Now, in the twenty-first century, we are again experiencing change as the computer has revolutionized the way that projects can be administered, both on the Web and in extranet applications. Project Participants Whether the project involves a building, bridge, dam, pipeline, sewage treatment plant, water supply system, or any one of numerous other types of projects, it requires the skills and services of a project team comprised of three principal participants or only two participants if we consider the concept of a design–build contract. The owner The designer The builder The design-builder In practice, the owner usually enters into a contract with an architect/engineer or a design–build contractor to plan and design a project to satisfy the owner’s particular needs. The owner participates during the design period to set criteria for design, cost, and time limits for completion and to provide decision-making inputs to the architect/ engineer or design–build contractor. Under conventional contracts, upon completion of the planning and design process the project is ready for construction, and the advertising or selection process to obtain one or more qualified construction contractors begins. After selection of one or more qualified construction contractors, or, as in the case of public works projects, selection of the lowest qualified bidders, the owner enters into a contract directly with each prime contractor, who will then be fully responsible directly to the owner or the owner’s designated representative for building the project in accordance with the plans, specifications, and local laws. The contractor has the further responsibility for the integrity of the new structure that has been built—in effect, the contractor must guarantee the work. Although the architect/engineer may be obligated to make field visitations to the construction site during the progress of the work, such periodic visits are for the purpose of observing materials and completed work to evaluate their general compliance with plans, specifications, and design and planning concepts only. Such basic services should not be interpreted as including full-time inspection for quality control and assurance. Thus, on the typical project, there are usually only two prime contracts with the owner: one with the architect/engineer for the design and planning of the project and the other with a single construction contractor or occasionally several prime construction contractors to build the project. As is frequently the case on a modern, complex project, numerous special types of construction are involved, and the contractor who enters into an agreement with the owner to build a project finds that the work can be better accomplished by subcontracting with a specialty contractor to do a particular portion of the work. Such subcontracts are agreements between the prime or “general” contractor and the subcontractor only and involve no contractual relationship between any subcontractor and the owner. Under the owner’s contract for construction, the general contractor is fully responsible for the entire work, whether or not subcontractors have been utilized to accomplish any portion of it. The traditional contractual arrangement is illustrated in Figure 1.1. 1 2 Chapter one TRADITIONAL OWNER Architect/ Engineer Field Observation only Subcontractors • • • • • General (prime) Contractor Suppliers Fabricators Separate designer Single general contractor Numerous subcontractors Fixed price, unit price, guaranteed maximum, or cost plus a fixed fee construction contract Negotiated professional fee for design service Figure 1.1 Traditional Construction Contract Relationships. Figure 1.1 does not take into account the relationship between an owner with its own in-house engineering staff (such as many public agencies and utility companies) and the construction contractor. However, by combining the functions of owner and architect/engineer, as in the diagram, the relationships would be similar. Construction Administration “Construction administration” and “contract administration” are terms easily confused. As used in this book, the term contract administration means the management or handling of the business relations between the parties to a contract, which is popularly thought of as being limited to the administrative paperwork or electronic project management applications. In this book, the term construction administration is used to refer to the much broader responsibility of relating to all ­project-related functions between the p ­ arties to a contract—not only the traditional contract administration duties, but also the conduct of the parties, relations with the contractor, communications, business ­ systems, procedures, ­ responsibility, authority, duties of all of the parties, ­ ­ documentation requirements, construction operations, planning, scheduling, ­coordination, materials control, ­payment administration, change orders, extra work, dispute ­procedures, claim handling, negotiations, all project closeout functions including punch list inspections, final cleanup, and administrative closeout. Thus, as used in this book, contract administration, whether electronic or traditional paperwork, is just a part of construction project administration. It is not uncommon for the architect/engineer’s or ­owner’s Project Manager to function as the contract administrator, working out of the home office, who jealously guards the control of the job by reserving all meaningful project administration duties to himself or herself, while the authority of the Resident Project Representative at the project site is often limited to inspection and routine clerical duties. However, it is organizational hierarchies such as these that are the root cause of numerous construction claim losses to the owner or architect/engineer. The mark of a good manager is the ability to select and hire qualified people and then to be willing to delegate as much authority as possible to such people. As long as a manager refuses to delegate and reserves all or most of the contract administration tasks to himself or herself, the capabilities of that manager will be severely inhibited, and, furthermore, the Project Manager will be incurring considerable risk of loss to the parent organization through potential delay-claim losses. A manager’s authority is in no way diminished through delegation, but rather is strengthened. As a means of implementing such a sound relationship between a Project Manager and a Resident Project Representative, the organizational chart shown in Figure 1.2 suggests a division of responsibility between field and office management personnel. A Project Manager can efficiently handle several projects without needlessly delaying any The Project Delivery System 3 Figure 1.2 Delegation of Authority by the Project Manager during Construction Phase of a Project. one of them by delegating the authority to make decisions on matters that should be decided at the Resident Project Representative’s level. This contributes to the smooth and efficient operation of the construction activities and lessens the risk of contractor delay claims that would normally ­follow the delays caused by routing routine matters through the home office as a prerequisite to obtaining permission to act. The Resident Project Representative is under obligation to keep the Project Manager informed every step of the way. Where the Project Manager’s decision is required, the Resident Project Representative should obtain a decision by telephone, fax, or e-mail or through the use of extranet or Internet applications, prior to issuing a consent order to a contractor to proceed with some particular work or corrective action. Then, of course, proper administrative paperwork or electronic documentation must be completed to confirm the actions taken. Failure to expedite decisions often results in otherwise preventable claims that have a way of escalating into major claims the longer they take to be resolved. The most effective Project Manager, or Contracting Officer (as he or she is known on U.S. federal projects), is the person who is willing to delegate as many contract administration functions as possible to the Resident Project Representative in the on-site field office. If unwilling to ­delegate, the Project Manager’s only alternative to save the job is to relocate the Project Manager’s office to the job site and run the project from there. On matters affecting time or money, however, only the Project Manager or Contracting Officer is empowered to execute contract modifications or Change Orders. The One-to-One Concept One of the single most important philosophies in construction project administration, the one-to-one concept, is a vital administrative procedure that can eliminate much conflict, reduce exposure to claims-producing problems, and result in greater efficiency for all parties to the contract. Under this concept, the owner, architect/engineer, or Construction Manager designates a single individual, preferably located at the project site, to be the sole spokesperson representing the owner’s interests. This person should be the Resident Project Representative, sometimes simply referred to as the “Project Representative.” Under this arrangement, all orders issued to the contractor must be issued through the Resident Project Representative, and no one in either the owner’s or the architect/engineer’s or construction manager’s office should be permitted to make any commitments to or issue orders or instructions directly to the contractor or any of its subcontractors, except by communicating such orders to the Resident Project Representative for issuing to the contractor. Failure to follow this procedure may place the owner and the contractor in a difficult contractual position. Under the contract law principle of implied authority, it is generally held that the contractor may receive orders from any individual whom it has reason to believe has the authority to issue such orders on behalf of the owner (see “Apparent Authority” in Chapter 2). Thus, the project manager, department heads, vice presidents, city or county engineers, or other persons of authority might otherwise visit the site and make statements that result in the creation of constructive changes (see Chapter 19) and not only bind 4 Chapter one OWNER A/E PRINCIPAL GC PRINCIPAL A/E PM GC PM RPR SUPERINTENDENT FOREMAN Figure 1.3 One-to-One Concept in Practice. the owner, but also lay the foundation for a contractor claim. Such “diagonal” communication as shown in Figure 1.3 must be avoided at all costs. One situation where the author visited a construction site with a principal of an engineering firm was a classic example of what not to do. Upon arrival at the site, the principal went to the field office to confer with the Resident Project Representative. Then the principal toured the project site (one of his monthly site visits) with the Resident Project Representative and the contractor’s representative. Up to this point, everything was done “by the book.” However, from this point on, the principal’s actions became a classic example of what not to do. The principal listened to the contractor’s side of the difficulties experienced during the previous month, including failure to achieve certain high standards of quality and workmanship in certain areas. The principal listened, then unbelievably made commitments to the contractor by accepting such nonconforming work without ever talking it over with the Resident Project Representative. In short, he gave away the store! To complicate matters further, the principal’s actions totally stripped the Resident Project Representative of his authority and ability to deal effectively with the contractor, as after that the contractor realized that all that would be necessary to avoid unpopular decisions made in the field would be to do an end run around the Resident Project Representative and go directly to the principal to obtain concessions. Thus the principal’s workload is increased, the effectiveness of the on-site inspection forces is diminished, and the risk of claims is greatly increased. What should have been done would be for the principal to listen to the contractor’s comments about the project without offering comment at that time, then go back to the field office with the Resident Project Representative and, behind closed doors, discuss the events and issue orders to the Resident Project Representative as to the acceptability or nonacceptability of the contractor’s work. This would have placed the Resident Project Representative in a position of receiving backing from the home office, and the contractor would have realized that in the end, all orders will be received only from the Resident Project Representative. The principal is still the only person with the authority to make the final determination but is advised to issue those orders only through the Resident Project Representative to preserve the one-to-one relationship. One of the greatest difficulties, where a project is being administered by an architect or engineer on behalf of an owner, is to keep the owner from violating this vital management concept. As a part of the one-to-one concept, the contractor, too, must organize so that a single management person located at the project site is designated as the contractor’s sole agent. This is best set up as a provision of the specifications. Then, it should be arranged during the preconstruction conference that the contractor’s agent should be designated in writing, and that no substitutions are permitted under the contract without the written authority of the corporate office. The designated person should be capable of speaking officially for the contractor, although it is certainly acceptable to use an on-site superintendent or project manager as the agent of the contractor, just as the engineer or architect uses his or her Resident Project Representative. The military has a word for this. It is called “chain-of-command.” The Five-Step Process of Initiating a Project An important part of organizing a project so as to avoid later difficulties, which could include award disputes, charges of preference, loss of money due to bidder default, and later disputes over lost time and delays in the work, is the initiation of the project according to an orderly administrative procedure. This process is what the author calls the “fivestep project initiation process” (Figure 1.4). It holds that there are five vital steps that must be followed when initiating a project, especially in public works projects: United States International 1. Advertise for bids. 2. Open bids. 3. Award contract. 4. Sign agreement or “contract.” 5. Issue Notice to Proceed. Solicit tender. Open tender. Issue letter of acceptance. Execute contract agreement. Set commencement date. While it is common for many owners and architects or engineers to follow most of these steps, items 4 and 5 are, unfortunately, often combined, sometimes even with the uninformed blessing of the owner’s attorney, as well. The Project Delivery System 5 Figure 1.4 The Five-Step Process. An important point should be noted here. The procedures for the signing of the agreement often take time. If a cautious contractor chooses to wait until it actually “sees” the agreement with the owner’s signature, and if the project time is stated in the agreement as beginning as of the date of signing the agreement, there is the possibility of a valid delay claim against the owner even before the project begins. The contractor can rightfully claim that (1) it could not start until a signed contract was received, (2) the time lost in receiving the signed document was part of its construction time, and (3) it should be compensated with an extension of project time to cover the days lost while waiting for a signed agreement. Throughout the book references will be made to the five-step process and partial diagrams will retain the identification numbers in the foregoing list to identify any of the five tasks listed. Control of Quality in Construction Without definition, the term quality control in construction can have several meanings. To be sure, the actual quality of construction depends largely upon the control of the construction itself, thus involving the contractor to a great extent. What constitutes quality control and quality a­ ssurance appears to be the subject of dispute by some. For example, checking the placement of reinforcing steel in concrete ­formwork may be considered as quality control if the contractor does it and as quality assurance if the owner observes or verifies that it has been done; yet the physical act of checking this work is exactly the same in either case. Whether the subject is called quality control or quality assurance, the function performed is essentially that which has been recognized over the years as being construction inspection and testing of materials and workmanship to see that the work meets the requirements of the drawings and specifications. Inspection takes many forms, and its responsibilities vary somewhat depending upon the intended inspection objective. As an example, an inspector in the employ of the local building official is principally concerned with the safety and integrity of the structure being built and whether it meets the local building code requirements. Quality of workmanship or aesthetics is largely beyond the code inspector’s responsibility and, because his or her salary is paid by the public, quality of workmanship is, to a great extent, left to the owner to control, using the owner’s, contractor’s, or designer’s personnel. However, inspection by the owner’s representative is intended to include concern not only for the structural integrity and safety of the structure, but also for the quality of workmanship, selection of materials being used, aesthetic values, and similar matters involving compliance with the provisions of the contract plans and specifications. Organizational Structure of a Construction Project There is no single organization chart that will remotely approximate the organizational structure of the field forces of the owner, the design organization, or the contractor on all projects. Before the internal structure of any of the ­principals to a construction contract can be examined, some understanding of the several basic types of contractual relationships must be gained. Of the several types of contractual relationships frequently encountered in construction, four of the principal types are as follows: 1. Traditional architect/engineer (A/E) contract 2. Design/construction manager (D/CM) contract 3. Professional construction manager (PCM) contract 4. Design–build contract (similar to turnkey construction) Under the provisions of the traditional architect/ engineer contract illustrated in Figure 1.1, the owner usually engages the services of an architect/engineer to perform planning and design services, including preparation of plans, specifications, and estimates. Professional services of the architect/engineer during the construction are generally limited to performance of intermittent field visitations and certain contract administration functions such as review of the contractor’s payment requests, review of shop drawings, evaluation of contractor claims, interpretation of plans and specifications during construction, change order requests, and final inspection. A design/construction manager contract, illustrated in Figure 1.5, is quite similar to the traditional A/E contract with the exception that the architect/engineer’s project manager is fully responsible to the owner during both the design and planning phases as well as the entire construction phase to provide for all project needs. This includes all scheduling, cost 6 Chapter one Figure 1.5 Contractual Relationships under a Design/Construction Manager-Type Contract. control, quality control, long-lead purchasing, letting of single or multiple contracts, and coordination of the work. The design/construction manager responsibilities do not terminate until final acceptance of the completed project by the owner. These responsibilities include the examination of costsaving alternatives during both the design and construction phases of the project and the authority to require the design or construction changes necessary to accomplish the ­owner’s objectives. A professional construction management (PCM) contract is based upon a concept pioneered several years ago by the General Services Administration of the federal government, and for a time was used extensively by that agency for the construction of public buildings. Although the functions performed by the professional construction manager may be no different than those of a design firm doing construction management, the responsibilities and contractual status are significantly different. Under the professional construction management (PCM) concept, illustrated in Figure 1.6, the owner engages a construction management firm under a separate contract in addition to a conventional architect/ engineer and construction contractor contract. Thus, instead of only two contracts for a project, the owner has actually executed three. In keeping with the principles of this concept, the professional construction management firm performs no design or construction with its own forces, but acts solely in the capacity of an owner’s representative during the life of the project. In many cases, the PCM is responsible for reviewing the architect/engineer’s payment requests in addition to those of the contractor. In any case, the PCM is responsible for total project time and cost control and coordination as well as quality control and, as such, provides supervision and control over those functions of the architect/engineer and the contractor that relate to these important subject areas. The Project Delivery System 7 Figure 1.6 Contractual Relationships under a Professional Construction Manager Contract. One important distinction is that a “construction manager” under this concept is an organization, not a single individual. Thus the construction management firm may provide a staff of both field and office personnel, including a project manager, estimators, schedulers, accountants, construction coordinators, field engineers, quality control personnel, and others. A design–build contract, illustrated in Figure 1.7, sometimes called turnkey construction, is based upon the owner entering into an agreement with a single firm to produce all planning, design, and construction with its own in-house capabilities. Some organizations recognize a further distinction between design–build and turnkey construction in that while both provide both design and construction by a single organization, or a joint venture, the turnkey contractor also assembles the financing package. Such design–build firms are generally licensed as both architect/engineers and as ­general construction contractors in those states that require it and offer a complete package deal to the owner. Its principal advantages, where its use is permitted, are the elimination of contractor claims against the owner resulting from errors in the plans or specifications and the ability to begin construction on each separate phase of a project as it is completed, without waiting for overall project design completion—the “fast-track” concept. It is in the design–build industry that fast-track construction was born. There is one disadvantage in the system when public funds are involved in construction. Under the laws of many states, a construction contractor must be hired through a ­competitive bidding process where the lowest bidder gets the job. Usually, design firms and construction management organizations are selected on the basis of their individual expertise and previous experience in the type of work to be designed. Under this concept it is felt that the greatest ­savings and cost benefits to the owner will be obtained by careful planning during the design stage, and that the ­occasional cost savings that might result from competitively bidding the design responsibilities would be more than lost in the resultant higher construction cost that 8 Chapter one Figure 1.7 Design–Build Contract Relationships (Similar to Turnkey Construction). all too often follows a set of plans and specifications that had to be ­prepared in a hurry without checking. Staff Assignments for Construction Quality Assurance/Control The staff requirements for the construction management and quality assurance/control activities of a construction project vary from job to job and from one employer to another. Although there seems to be a lack of uniformity in the structuring of many owners’ or architect/engineers’ field forces during construction, the average contractor organization seems to be extremely well organized in this area. This is probably to be expected, as the contractor organization is performing its primary function at the site, whereas the owner or architect/ engineer is often on less familiar ground during the construction phase, even though the contract may call for the architect/engineer performance of some construction management functions. In an attempt to compare job assignments and titles of positions of comparable authority from one organization to the next, the numerous titles of the same job emphasize the difficulty of determining position by title alone. Figure 1.8 is a chart of the normal functional relationships under a design/ construction management contract, which will be used to illustrate the problem. An example of supervisory job titles of comparable authority is shown in the following table, which is based upon actual job titles used by some contractor and architect/ engineer offices to designate the various levels of supervisory and management personnel utilized during the construction phase of a project. The levels indicated are those used in Figure 1.8. All of these levels share in the responsibility of administering various provisions of the construction contract for their respective employers. In addition to the foregoing list of fulltime personnel on the project site, numerous tasks remain to be performed by specialty inspectors and representatives The Project Delivery System 9 Figure 1.8 Functional Relationships under a Design/Construction Manager Contract. of the various local government agencies having jurisdiction over the project. These include the following public and private specialty and code enforcement inspectors: 6. Manufacturers’ representatives (special equipment or materials) 7. OSHA safety inspectors 1. Local building department (code enforcement) 2. Soils inspectors 3. Inspectors of other agencies whose facilities are involved 4. Utility company inspectors 5. Specialty inspectors (concrete, masonry, welding, electrical, etc.) Each of the specialty and code enforcement inspectors is responsible only for its particular specialty task; thus, the overall responsibility for project administration and quality control falls on the shoulders of the Resident Project Representative of the owner or design firm or the contractor’s quality control (CQC) representative. Level Owner or Architect/Engineer Contractor Project Management Project Manager Project Engineer Project Architect Project Director Contracting Officer Construction Manager Resident Engineer Resident Architect Construction Coordinator Resident Manager Resident Project Representative Project Representative Resident Engineer Resident Inspector Inspector Quality Control Supervisor Project Manager Construction Management Functional Management General Superintendent Construction Manager Construction Manager Project Engineer Superintendent Project Engineer Superintendent Foreman CQC Representative 10 Chapter one Full-Time versus Part-Time Project Representative Not all construction projects subject to inspection by the owner or the design firm will require a full-time inspector. It is not infrequent for a single construction inspector to be assigned the responsibility of the Resident Project Representative for several projects at the same time. Usually, this is a method used to provide quality assurance inspections on smaller projects whose budgets or complexity of construction do not justify the financial burden of a full-time Resident Project Representative. The difference in responsibility is slight, as the administrative responsibilities are identical to those of the full-time Resident Project Representative on a single large project. As for the inspections performed, the inspector merely schedules field visits so as to be at each of the projects at key times during c­ onstruction. Generally, an inspector should be on call and be able to respond to a specific field problem on short notice. Thus, in this book, the responsibilities and duties of the f­ull-time Resident Project Representative should be understood to apply equally to a part-time project representative working directly out of the home office. Professional Construction Management The CM Controversy CM by now has become a byword in the construction industry. But do most people actually know what it means? Even some industry giants seem to be confused. The term construction manager is one of the most misunderstood titles of modern-day construction and defies an accurate definition that is acceptable to everyone. Definitions have ranged from applying the term to the Resident Project Representative, to the other extreme of being a third prime contract with the owner (the other two prime contracts being those of the architect/engineer and the general construction contractor). In the latter case, the construction manager is the owner’s agent and the duties of the position require supervision over some of the functions of both the design firm and the contractor. The American Society of Civil Engineers (ASCE) refers to this function as professional construction management to distinguish it from the type of construction management practiced by the design/construction management firms; others call it thirdparty CM or a CM agency contract. Both the American Institute of Architects (AIA) and the Associated General Contractors of America (AGC) simply refer to this type of contract as construction management. Each of the major professional and technical organizations seems to agree in principle on the concept that the ­construction manager should be a firm that has no direct connection with either the architect/engineer firm that designs the project or the general contracting firm that constructs it. Even when a general contractor acts as the construction manager, the AGC recommends that it enter into contract under a professional services agreement, and that the firm does not use any of its own construction forces to build the project. The principal difference between the professional services agreement proposed by the AGC and, for example, that of the AIA is that the AGC contract provides for quoting a guaranteed maximum project cost after the construction management team has developed the drawings and specifications to a point where the scope of the project is clearly defined. Under the AIA contract form, no price guarantees are made. Yet, where many organizations seem to miss the point is that CM involves participation by the Construction Manager from the very conception of the project; through the investigation and design process; selection of feasible separate bid packages; value engineering; constructability analysis; bidability analysis; preparation of input into the specifications and other front-end documents; assistance in examining bids and awarding the contract; and finally, participation in the construction phase in the form of scheduling, cost ­control, coordination, contract administration, and final ­closeout of a project. Yet many in the construction industry are still confused by the rather ill-chosen name Construction Management and still only recognize the construction-phase tasks as being construction management. This is easily understandable, as the term in itself does suggest that its duties should occur during the construction phase only. This is precisely why, a number of years ago, the American Council of Engineering Companies (ACEC) began to refer to third-party CM as the ACEC Project Management System. Strictly speaking, it is just that—a ­project management system. However, the term CM sticks to this day, so the industry needs to understand it better. Unfortunately, the problem is further complicated by the fact that even in the prestigious Engineering NewsRecord (ENR), in its annual list of top-rated CM firms, some of them are known by the author to never have done a single project that met the definition of third-party CM. The services they actually performed were better described as “services during construction.” The firms in question simply performed contract administration and inspection and believed it to be CM. Other firms in the list performed the full range of services, beginning with the conceptual phase and continuing through the design phase before finally entering the construction phase. ENR has no way of determining the difference in interpretation by the various companies, as its reporting is based upon reported CM revenues claimed by the listed companies. Engineering Definition of Professional Construction Management The Construction Management Committee of the American Society of Civil Engineers originally defined a professional construction manager as a firm or an organization The Project Delivery System specializing in the practice of construction management or practicing it on a particular project as a part of a project management team consisting of the owner, a design organization, and the construction manager (usually referred to as CM). As the construction professional on the project management team, the CM provides the following services or portions of such services, as appropriate: 1. Works with the owner and design organization from the beginning of design through completion of construction; provides leadership to construction team on all matters that relate to construction; makes recommendations on construction technology, schedules, and construction economies. 2. Proposes construction alternatives to be studied by the project management team during the planning phase and predicts the effect of these alternatives on the project cost and schedule; once the project budget, schedule, and quality requirements have been established, the CM monitors subsequent development of the project to see that those targets are not exceeded without the knowledge of the owner. 3. Advises on and coordinates procurement of material and equipment and the work of all the construction contractors; monitors and inspects for conformity to design requirements; provides current cost and progress information as the work proceeds; and performs other construction-related services as required by the owner. 4. In keeping with the nonadversary relationship of the team members, the CM does not normally perform significant design or construction work with its own forces. (In a more recent action, the ASCE Committee on Construction Management also accepts the concept of CM being performed by the firm responsible for design.) The typical functional relationships associated with a professional construction management contract are best shown in Figure 1.9, which was prepared by the General Services Administration (GSA), Public Buildings Service of the U.S. federal government. Fast-Track Construction Frequently, a construction management contract is encountered that requires the letting and administering of multiple construction contracts for the same project, with each let at different times during the life of the project. Such staggered letting of construction contracts on the same project is referred to as fast-track contracting, and its principal objective is to shorten construction time for the overall project by starting some portions of the work as soon as it has been designed (Chapter 13), even though other portions of the p ­ roject have not yet been designed. It is a risky process, depending ­heavily upon the careful selection of the various separate bid packages and the ability to schedule and control the design effort. Without this, fast-track can become the most costly method ever designed for completing a project late. Many times, such contracts also require purchase of special equipment or materials long before a contract has been let to install them. This is referred to as long-lead ­procurement, and such early Working relationship Figure 1.9 Functional Relationships under a General Services Administration Professional Construction Management Contract. 11 12 Chapter one ­urchases, along with the accompanying expediting and p scheduling, is one of the functions required to be performed by the CM team. The Resident Project Representative is a vital link in the successful operation of a construction management contract and will be called upon to assist in many of the tasks described. When utilizing the fast-track process, the services of a construction management firm are essential, as the skills and experience required to complete a fast-track project successfully are seldom possessed by the design firm. On the other hand, if a single prime (general) contractor is used to build a project, the use of a construction management firm may actually be redundant, as many of the tasks that the CM is being paid for will ordinarily be done by the general contractor. Design–Build Contracts The design–build concept, as originally conceived, was based on the concept that a single firm had the in-house staff and expertise to perform all planning, design, and construction tasks. Later, increased interest in the concept had engineers, architects, and conventional contractors seeking to compete with the original design–build firms to meet the growing interest by owners in the project delivery process. Under the current approach, instead of limiting design– build to firms with in-house capability in both areas, the field has now been opened up to permit contracts with engineers who subcontract the construction portion to a contracting firm, with construction contractors that subcontract design services to an engineer or architect, and with engineers and architects in joint venture with contractor firms. There are basically three types of design–build firms today: contractor-led, designer-led, and single firm. Contractor-led firms tend to dominate due to their experience in estimating, purchasing, cost control, and construction supervision, not to mention the contractor’s better financial backing and ability to manage risk. Design–Build Documents In recognition of these relationships, a special group of standard contract documents for design–build projects was prepared by the Engineer’s Joint Contract Documents Committee (EJCDC).1 They are available from ASCE, NSPE, AGC, or ACEC.2 The documents, and an accompanying guide on how to use them, are probably the most comprehensive set of standard documents now available to those who work with design–build projects. The special design–build documents cover a variety of situations—for example, the relationship between owner and 1 EJCDC is a multidisciplinary group made up of the American Society of Civil Engineers (ASCE), the National Society of Professional Engineers (NSPE), the American Council of Engineering Companies (ACEC), and the Associated General Contractors of America (AGC). 2 The ACEC referred to here is the American Council of Engineering Companies, not to be confused with the Association of Consulting Engineers of Canada, which shares the same acronym. design-builder, which includes both general conditions and two agreements (one for a stipulated sum contract, another for a cost-plus contract that has a provision for guaranteed maximum price). For design-builders without a professional in-house staff to perform design services, EJCDC has prepared a subagreement to be used by both design-builder and engineer. To cover the relationship between design-builders and construction subcontractors, another document covers general conditions and two subagreements (one for stipulated price, the other for cost-plus). Among the highlights of the new documents are descriptions of the selection process; scope definition; differentiation of design and construction work in several areas (such as providing for a general warranty and guarantee for construction work as well as a standard of care for design work); a dispute resolution process; responsibilities for subsurface conditions; remedies in the event an engineer is asked by design-builders to compromise an engineer’s legal and professional responsibilities; and communications among engineer, design-builder, and owner. An integral part of the new group of documents is a separate guide describing their use. The guide includes a commentary, a guide for preparing requests for proposals, a suggested proposal form, and a “how-to” guide on the preparation of supplementary conditions. Because many owners don’t have the in-house expertise to prepare proposal documents (or review design-builders’ design submittals, observe the quality of construction, and so forth), EJCDC prepared the Standard Form of Agreement between Owner and Engineer for Professional Services (E-500) to cover such services. Design–Build for Public Projects While quite popular in the private sector, some public agencies find that the process still presents legal hurdles resulting from alleged conflict between the design professional ­selection process under the Brooks law and similar local regulations and the competitive bid process traditionally used for contractor award. At the federal level, however, legislation enacted in 1997 makes it possible to award design– build contracts under specified conditions. The principal barrier to the use of the design–build ­process in the public sector lies in the difference between the procurement laws governing the selection process for architects and engineers versus that for construction contractors. Most state laws require the selection of architect/engineers on the basis of the most qualified, with the price set by negotiation. Construction contractors, on the other hand, must be selected on the basis of sealed bids, with award going to the lowest responsible bidder. As it can be seen, there is an immediate conflict when attempts are made to contract for both design and construction under the same contract. To further complicate matters, many states require bidders to list subcontractors in their bids, a near impossible task in a design–build contract, as the project has not yet been designed. The Project Delivery System Federal Design–Build Contracts3 Effective October 10, 1997, the federal government was authorized to enter into design–build contracts using a two-phase design–build selection process authorized by 10 U.S.C. 2305a and 41 U.S.C. 253m. Under those provisions, a two-phase design–build selection process may be used when a contracting officer determines that the method is appropriate based upon the following considerations: • At least three, but not more than five offers are considered. • Design work must be performed before developing price or cost proposals, and offerors will incur a considerable expense in preparing offers. Proposals must be evaluated in phase one to determine who may submit proposals for phase two. The phase one contract must be awarded using competitive negotiation. After evaluating phase one proposals, the contracting officer must select the most highly qualified offerors, and only those offerors may submit a phase two proposal. Phase two involves submittal of a cost proposal which is subject to consideration for technical evaluation factors, including design concepts, management approach, key personnel, and proposed technical solutions. It may take some time before the lawyers work out all of the wrinkles in this latest adaptation of the original two-step process, but it appears to offer considerable flexibility in combining the concept of competitive price bidding along with an equitable architect/engineer selection process that appears to be acceptable to the design community. Legal Barriers for State and Local Public Projects Due to the growing popularity of the design–build concept, the potential conflict between laws of the various states governing selection of design professionals as opposed to the competitive bidding process used in public works for award of a construction contract is being reexamined in many states. Many states are revising their statutes to permit the award of a design–build contract without violating the law. The following summary was abstracted from an American Bar Association review of design–build contracts under the various state and local procurement laws as they existed in 1996.4 State procurement laws, with respect to design–build, can be grouped into four categories. In some cases state laws are not the same for all agencies within 3 c.f. 48 CFR Ch. 1 (10-1-97 edition) Subpart 36.3—Two-Phase Design– Build Selection Procedure. 4 “Design–Build Contracts under State and Local Procurement Laws” by Kenneth M. Roberts, partner in the Construction Group at Schiff Hardin & Waite in Chicago, and Nancy C. Smith, partner at Nossaman, Guthner, Knox & Elliot in Los Angeles. American Bar Association, Public Contract Law Journal, Vol. 25, No. 4, September 1996. 13 the state, thus some states will fall into more than one of the ­following categories: 1. Laws that expressly prohibit design–build by any public agency (4 states) 2. Laws that pose obstacles to design–build by some public agencies (26 states) 3. Laws that pose no obstacles to design–build, even though design–build is not expressly permissible (22 states) 4. Laws that expressly allow design–build for all or some types of public projects (26 states) Very few state statutes expressly prohibit the use of design–build, such as by requiring that a project be split into separate design and construction phases and requiring the preparation of plans and specifications before bids are solicited. Other barriers to using the design–build method are laws that prohibit the award of a single construction contract to a general contractor by requiring multi-prime contracts, a practice widely used on public projects in the Northeast. In that instance, laws require the preparation of separate plans and specifications to allow for separate award of contracts for any number of trades. If a state agency cannot award a contract to a single general contractor for construction, it may also have trouble awarding a single contract for design and construction. Definitions of Individual Construction Responsibilities Local building codes often require intermittent and sometimes “continuous” inspection on certain critical types of construction, such as structural concrete, structural masonry, prestressed concrete, structural welding, highstrength bolting, and similar work to be performed by special inspectors. The word continuous in this context is sometimes confusing because there are cases in which “continuous” is not synonymous with “constant” without a reasonable interpretation. Work on structural masonry or concrete work that can be inspected only as it is being placed requires the constant presence of the inspector. Placement of forms for concrete or reinforcing for concrete can fairly be interpreted as requiring continuous monitoring of the work so as to miss nothing, yet would hardly be interpreted as requiring the inspector’s presence during the entire time that the steel is being placed. Generally, any special inspector coming onto the job will be under the authority of the Resident Project Representative and should be advised to follow his or her instructions. Project Manager Every participating organization on a project has its project manager. Although the person is sometimes known by different names, the duties remain the same. Whether in the direct employ of the owner, the design firm, or the contractor, the project manager (PM) is usually the person responsible for the 14 Chapter one management of all phases of the project for his or her organization. For a design firm, the project manager controls the scheduling, budgeting, cost control coordination of design and construction, letting of contracts for the owner, and is normally the sole contact with the client as a representative of the design firm. For the owner, a project manager is similarly responsible for all phases of a project and may also participate in architect/engineer selection and is the representative of the owner in connection with any business concerning the project. Where an architect/engineer firm has been engaged for design services only, the owner’s project manager will provide construction contract administration and may employ a Resident Project Representative or other on-site quality control personnel to work under his or her supervision. Wherever this is the case, the architect/ engineer may still be called upon to review shop drawings for the owner, and wherever a proposed design change is contemplated, the architect/engineer of record should always be consulted. In a contractor’s organization, “Project Manager” is also a frequently used title, although many very large firms still use the title “Superintendent” for this function. As the title implies, the contractor’s project manager is in complete charge of his or her project for the general contractor. This particular project manager or superintendent’s responsibilities include coordination of subcontractors, scheduling, cost control, labor relations, billing, purchasing, expediting, and numerous other functions related to the project. To the owner, the PM or superintendent is the general contractor. Whether referred to as project manager or as superintendent, his or her duties are the same in many contractor organizations. Professional Construction Manager The services performed by the professional construction manager cover a broad range of activities and, to some extent, overlap those traditionally performed by both the architect/engineer and the construction contractor, involving both the design and construction phases of a project. A comprehensive construction management contract may easily cover any if not all of the tasks included within the following six categories: 1. Participation in determining the bidding strategy involved in a fast-track, multiple-prime-contract project so as to avoid conflicts during the letting of the separate contracts. 2. Design phase review, including review of formal design submittals, review of contract documents, and overall constructability analysis. 3. Cost management, including estimates of construction cost and development of the project budget. 4. Scheduling for all phases of a project, generally incorporating critical path techniques. 5. Bid opening and evaluation, and assistance in contractor selection. 6. On-site, construction-phase management to provide contract administration, inspection, coordination, and field management. On-site, construction-phase management may include coordination of separate contracts, phased construction (fasttrack) contracts, monitoring of individual phases of the work, adjustment of the work to accommodate changed conditions or unanticipated interferences, determination of whether materials and workmanship are in conformance with the approved contract drawings and specifications, arrangements for the performance of necessary field and laboratory tests where required, preparation of change orders and change proposals, and review of progress payments and recommendations to the owner for payments to the contractors. The construction manager (CM) may also, in some contracts, provide certain services that would normally have been provided by a general contractor, had there been one. These might well include establishment, maintenance, and operation of temporary field construction facilities, provisions for site security, cleanup, temporary utilities, and similar General Requirements items of work. Such items of work are generally paid for under this type of contract on a reimbursable basis and are not a part of the construction manager’s professional fee for services. In certain respects, the professional construction manager’s responsibilities may overlap or even preempt those of the contractor and the architect/engineer under some contracts. Quality Control Representative Under the provisions of the construction contracts of numerous federal agencies, in particular the Corps of Engineers, Naval Facilities Engineering Command, National Aeronautics and Space Administration, and others, an inspection concept known as contractor quality control (CQC) is often implemented. Though not favored by much of the construction industry, under this system the contractor must organize and maintain an inspection system within the organization to assure that the work performed by the contractor and subcontractor forces conforms to contract requirements and to make available to the government adequate records of such inspections. Under the majority of such plans, as implemented by their respective agencies, a government representative is stationed on-site to provide quality assurance inspections. In some cases, the design firm may be engaged to provide quality assurance inspection in addition to contractor quality control. In such cases, the design firm may have a full-time Resident Project Representative and supporting staff on-site to perform this function. Resident Project Representative; Resident Engineer; Resident Inspector; Resident Manager; Project Representative These titles usually refer to an on-site full-time project representative to whom has been delegated the authority and responsibility of administering the field operations of a construction project as the representative of the owner or the design firm. The Project Delivery System On some occasions, the inspection needs of a particular project may require that the Resident Project Representative be a qualified, registered professional e­ngineer; in other cases, a highly qualified nonregistered engineer may be desired. Wherever a nonregistered engineer is permissible, it is often equally acceptable to use an experienced construction inspector for this purpose. The AIA, in its documents, describes this individual as the “full-time project representative,” whereas the EJCDC uses the term “Resident Project Representative.” In this book the term Resident Project Representative is used to stand collectively for resident engineer, resident inspector, full-time project representative, resident manager, and project representative. Inspector; Field Engineer; Quality Assurance Supervisor These titles usually refer to a staff-level, on-site representative of the owner, design firm, or contractor who has the responsibility of observing the work being performed and of reporting any variations from the plans and specifications or other contract documents. In addition, the inspector should call to the attention of the quality control supervisor or Resident Project Representative any unforeseen field conditions in time for remedial measures to be taken without ­creating delays in the work or changes in existing work to correct a problem. The inspector is the on-site eyes and ears of his or her employer, and although not empowered to make field changes that depart from the plans and specifications, the inspector should be capable of evaluating field problems and submitting competent recommendations to his or her supervisor. In that sense, the inspector is a logical part of the design process and a valid extension of it. On projects using a Resident Project Representative, the inspector will normally work under that person’s direct supervision. Except for the responsibility for construction field administration, which is one of the principal functions of the Resident Project Representative, the inspector’s job is identical in all respects to that of the Resident Project Representative. Inspection of construction is an occupation that requires a highly qualified person with a good working knowledge of construction practices, construction materials, specifications, and construction contract provisions. It is not in itself a job title, as the inspector may be a registered professional engineer or architect, a field engineer, a quality control specialist, or any of a host of other classifications. In this book the term inspector will be used to stand ­collectively for field engineer, inspector, quality control supervisor, or in some cases, the Resident Project Representative where the duties referred to apply to all field representatives on-site, whether full-time or part-time. Contractor’s Engineering Section The contractor’s engineering section is an important tool for assisting the contractor’s management forces in analyzing construction and engineering problems. Not all 15 construction companies are set up the same; however, engineering functions may be set up to operate at three levels: 1. Project level, where responsibility is usually limited to a single project 2. Area or regional level, where responsibility includes several projects 3. Main office level Interaction with the owner’s or architect/engineer’s Resident Project Representative at the above level is necessary under a one-to-one relationship or a partnering agreement. Representative tasks that may be performed by the contractor’s engineering section may include the following: 1. Estimate and prepare bid proposals 2. Plan and schedule 3. Stay alert to future work prospects 4. Maintain preconstruction liaison with joint venture partners 5. Review subcontract proposals 6. Prepare budget control estimates 7. Develop construction methods 8. Maintain contract relations 9. Lay out the work 10. Handle requisitioning, scheduling, and expediting 11. Document all work performed 12. Prepare and check payment estimates 13. Document costs and extra work 14. Document subcontract performance and payment estimates 15. Prepare reports of costs and construction activities 16. Issue progress reports: daily, weekly, monthly 17. Draft contract modifications, change orders, and claims 18. Provide assistance in contract settlements However lengthy, the list is not exhaustive and is ­subject to wide variation depending on the size and structure of the contractor’s organization. A representative organization of an engineering department of a small contractor is i­ llustrated in Figure 1.10. Defining Scope of Work in a CM Contract It is important, because of the differences in definition of the term CM, to clearly define the scope of the ­services to be performed in the CM contract with the owner. Without such definition, there are often claims and disputes between the architect/engineer as CM and the owner, due to a ­failure of the parties to achieve a meeting of the minds, as one party assumes that the term includes services that the other party never planned to provide for the basic fee agreed upon. 16 Chapter one Construction Administration Task List It is recommended that all anticipated tasks be listed and included in any CM contract executed with the owner. A checklist of some of the tasks that may be involved follows: Conceptual Phase Develop conceptual estimates Develop conceptual schedules Provide input to program risk analysis Program Planning Phase Provide constructability analysis Identify potential major construction problems Develop project resource requirements Inventory available area resources Assist in development of capital budgets Assist in development of cash flow projections Develop parametric estimates and cost budgets Update preliminary schedule Develop preliminary project control system Develop preliminary project management information system Develop project safety program Develop project labor relations program Assist in development of insurance program Administer electronic data processing (EDP) services Design Phase Oversee overall project planning Assist in development of project life-cycle costs Evaluate cost trade-offs Provide value engineering function Qualify potential bidders Procure long-lead-time items Finalize bid work packages Finalize prequalified contractor lists Finalize project schedules Finalize physical layout of construction areas Finalize project control systems and management ­information systems Assist in obtaining required permits and licenses Provide input and review of contract documents Construction Phase Develop and administer area transportation system Administer project EEO program Enforce project safety program Coordinate labor relations The Project Delivery System 17 Figure 1.10 Typical Organization of an Engineering Department of a Small-Size Contractor. Receive and evaluate bids and award prime contracts Manage and perform general conditions tasks Implement time- and cost-control systems Manage daily construction activities of the owner or architect/engineer Administer prime contracts Receive, review, and approve contractor’s requests for progress payments Administer contract changes and claims Quality assurance and inspection Interpret contract documents Closeout and Startup Phase Oversee project closeout Oversee systems validation, testing, and startup Responsibility for Coordination of the Trades Construction projects of any size usually require the efforts of several specialty contractors. Usually, of course, such work is performed under subcontract with a general contractor who is responsible for the coordination of all of the subcontractors. A large number of claims involving changes, delays, and even site conditions result from coordination problems. As a result, the courts have been asked to determine who is responsible, as well as the scope of that responsibility. Changes in the methods of construction c­ ontracting, such as design–build and multiple-prime contracts, have made the problem worse and increased the volume of litigation. 18 Chapter one Owner’s Responsibility Traditionally, the owner has had no responsibility for coordination of subcontractors. Scheduling and coordination of the trades have traditionally been the exclusive responsibility of the general contractor, and most standard construction contracts are clear on this issue. The owner’s obligation is simply to avoid any active interference with the work of the various contractors. As long as a single general contractor is used to construct a project, this will still hold true. However, if the owner awards more than one prime contract or elects to perform some of the work with its own forces, the owner inherits coordination responsibilities. On a multiple-prime project, the owner is responsible for coordinating the various trade contractors with whom it has contracted in much the same way as a general contractor must coordinate its subcontractors. Few owners are equipped to do this, which has created the need for the professional construction manager. Less apparent to owners is the fact that if they perform even a small portion of the work themselves, they have an implied obligation to coordinate the work in order to avoid economic harm to the prime contractors. Failure to meet this obligation can be expensive for the owners, as payment of delay damages will quickly offset the savings realized from performing the work with one’s own forces. On traditional projects, the project architect/engineer is not responsible for coordinating the various trades. The architect/engineer may be called upon to interpret the requirements of the contract documents to resolve scope-of-work problems but will not become involved in the actual scheduling or coordinating of the work itself. On a multiple-prime project, however, the owner’s representative (usually called the construction manager) plays a very different role. In the absence of a general contractor, the owner must rel...
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Insurance
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Institution
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Six types of General Liability Insurance are listed on page 181
Every building project carries inherent risk (Fisk et al., 2014). The company provides insurance to
protect employees in the event of an accident in which they are the sole provider for their
families.
There are six different types of liability insurance.
General (Public) Liability Insurance
This sort of insurance protects against a variety of risks. This type of insurance protects you if
you have a legal obligation to the public. Although there are different types of liability insurance,
the Broad Form Comprehensive Liability Policy is commonl...


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