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The Comprehensive Guide to Construction Contract Administration Keyword Search: Simply select the topic you wish to review and "click"
INTRODUCTION ROLE OF THE CONSTRUCTION ADMINISTRATOR This material has been prepared as a guide for the office standards and procedures for the construction administration services offered by The Mozeleski Group, Inc. The services described in the following pages shall be performed by the Construction Administration Consultant, while representing the Project Architects and/or Owner. For clarity, the manual is written specifically for the Construction Administration Consultant and hence limits project authority on the construction site to that enumerated in the Owner/Contractor and Owner/Consultant Agreements. Project Architects and Project Managers who have a larger range of responsibility and authority, are encouraged to consider the ramifications involved with on-the- spot decisions, made at the Contractor's insistence. Although the following standards represent general office policy, they are, in fact, subservient to the Owner / Architect Agreement, Owner/Contractor Agreement and General, Supplementary, and Special Conditions of each individual project. The Project Administrator should attempt to include the standards and procedures established in this manual in the Contract Documents for each project. The Administrator shall thoroughly review the complete set of documents, collectively referred to as the Contract Documents, and modify the construction administration procedures for each project accordingly. The Administrator is responsible for the comprehensive and timely administration of all project related documentation and information. The primary role of the Administrator is to represent the Owner and/or Architect in all project meetings and other field matters relating to the construction of the project. The Administrator will make periodic site visits to the project, record observations and report to the Project Administrator all observations related to status of completion, quality of workmanship and compliance with the Contract Documents. The authority and responsibility of the Administrator shall be as described in AIA Document B352. In addition to AIA B352 (Figure 1-1) the Administrator will adhere to the following company policies for Construction Administration:
The role of the Administrator is to periodically visit the job to observe the work. The person responsible for supervising the construction is, in fact, the Construction Manager or General Contractor. That entity has contracted to complete the work and legally assumes primary responsibility for the work. The Administrator is not an "inspector". His duties do not encompass the time nor the effort required to provide a comprehensive or exhaustive "inspection" of the work. The Administrator's responsibilities include the transmission of large quantities of paper work and project documentation, particularly AIA standardized documents. The Administrator is encouraged to take advantage of the time savings involved in producing computerized Master Forms for each individual AIA document for the project. Proposal Requests, Change Orders, Transmittal Letters and A.S.I.s should be prepared in advance with all consistent project information ( i.e. project name, project address, project number etc.) included and ready for specific information to be inserted. The traditional construction triangle often places the Owner, the Architect and the Contractor in adversarial relationships. The Administrator must defend the rights of the Contractor as well as those of the Owner. The Administrator is charged with the impartial administration of the Contract Documents. Since a good deal of the Administrator's time is spent reviewing, and then evaluating the Contractor's work, it is wise to remember to complement the Contractor on work well done as quickly as you point out his errors. The Administrator should take every opportunity to cultivate a "partnering" style relationship between the Architect and the Contractor. The Contractor, Owner and Architect must remember that they share a common goal which is the successful completion of the project.
PHASE 1 - SCOPE OF PRE-CONSTRUCTION SERVICES In the Bidding or Negotiations Phase the Owner and the Architect, respectively, following the Owner's approval of the Construction Documents and of the most recent Statement of Probable Construction Cost, shall provide those services designated in the Schedule of Designated Services necessary for the Architect to assist the Owner in obtaining bids or negotiated proposals and in awarding and preparing contracts for construction. In the case of phased construction, the Owner may authorize bidding and/or negotiation of portions of the Work prior to completion of the Construction Documents Phase. The following descriptions shall apply to those services assigned in the Schedule of Designated Services as the responsibility of the party indicated therein. 1.01 Project Administration services consist of the following bidding or negotiation administrative functions:
1.02 Disciplines Coordination / Document Checking services consist of bidding or negotiation activities for:
1.03 Agency Consulting/Review/Approval services during the Bidding or Negotiations Phase relating to applicable laws, statutes, regulations and codes of regulating entities relating to the Owner's interests before construction begins. 1.04 Owner-supplied Data Coordination services consisting of activities relating to bidding or negotiation including:
1.05 Bidding Materials services consisting of organizing and handling Bidding Documents for:
1.06 Addenda services consisting of preparation and distribution of Addenda as may be required during bidding or negotiation and including supplementary Drawings, Specifications, instructions and notices(s) of changes in the bidding schedule and procedure. 1.07 Bidding/Negotiations services consisting of:
1.08 Analysis of Alternates/Substitutions services consisting of consideration, analyses, comparisons, and recommendations relative to alternates or substitutions proposed by Bidders or proposers either prior or subsequent to receipt of Bids or proposals. 1.09 Special Bidding Services consisting of:
1.10 Construction Contract Agreements services consisting of:
PHASE 2 - SCOPE OF CONSTRUCTION CONTRACT ADMINISTRATION SERVICES In the Construction Contract Administration Phase the Owner and the Architect, respectively, shall provide those services designated in the Schedule of Designated Services necessary for the administration of the construction contract as set forth in the General Conditions of the Contract for Construction. Unless otherwise provided in the Schedule of Designated Services, the Administrator's duties and responsibilities during construction shall be as set forth in the Agreement between Owner and Administrator for Designated Services. The following descriptions shall apply to those services assigned in the Schedule of Designated Services as the responsibility of the party indicated therein. 2.01 Project Administration services consisting of construction contract administrative functions including:
2.02 Disciplines Coordination/Document Checking services consisting of construction contract administration activities for:
2.03 Agency Consulting/Review/Approval services
2.04 Owner-supplied Data Coordination services consisting of activities relating to construction contract administration including:
2.05 Office Construction Administration services consisting of:
2.06 Construction Field Observations services consisting of visits to the site at intervals appropriate to the stage of construction or as otherwise agreed in writing to become generally familiar with the progress and quality of the Work and to determine in general if the Work is proceeding in accordance with the Contract Documents, and preparing related reports and communications. 2.07 Project Representation services consisting of selection, employment and direction of:
2.44 Inspection Coordination services relating to independent inspection and test agencies, consisting of:
2.45 Supplemental Documents services consisting of:
2.46 Quotation Requests/Change Orders services consisting of:
2.47 Project Schedule Monitoring services consisting of monitoring the progress of the Contractor(s) relative to established schedules and making status reports to Owner. 2.48 Construction Cost Accounting services consisting of:
2.49 Project Closeout services initiated upon notice from the Contractor(s) that the Work or a designated portion thereof which is acceptable to the Owner, is sufficiently complete, in accordance with Contractor Documents, to permit occupancy or utilization for the use for which it is intended, and consisting of:
PHASE 3 -SCOPE OF POST CONSTRUCTION SERVICES In the Post construction Phase the Owner and the Architect, respectively, shall provide those services designated in the Schedule of Designated Services necessary to assist the Owner in the use and occupancy of the facility. The following descriptions shall apply to those services assigned in the Schedule of Designated Services as the responsibility of the party indicated therein. 3.01 Project Administration services consisting of post construction administrative functions including:
3.02 Disciplines Coordination/Document Checking services consisting of postconstruction activities for:
3.03 Agency Consulting/Review/Approval services relating to applicable laws, statutes, regulations and codes of regulating entities that require compliance during postconstruction use, occupancy and operation. 3.04 Owner-supplied Data Coordination services consisting of postconstruction activities during occupancy and operation relative to Owner-supplied furniture, furnishings and equipment. 3.05 Maintenance and Operational Programming services consisting of:
3.06 Start-up Assistance services consisting of:
3.07 Record Drawings services consisting of:
3.08 Warranty Review services consisting of:
PRECONSTRUCTION PRE-CONSTRUCTION MEETING AGENDA Following the acceptance of the successful bid and subsequent award of the contract for construction, the Owner, Contractor and Administrator shall schedule and attend the Pre- Construction Meeting. The purpose of the Pre- Construction Meeting is to discuss the specific requirements of the Contract Documents and how they relate to the daily operation of the construction project. The following is a sample agenda for the Pre-Construction Meeting and should be edited to conform to the specific requirements of each project. Items listed in the sample agenda are more comprehensively discussed later in this manual. AGENDA FOR PRE-CONSTRUCTION MEETING
PRE-CONSTRUCTION DOCUMENTS Following the Pre-Construction Meeting and prior to beginning construction the Administrator or Owner and/or Architect, will verify that the following documents have been properly executed between the Owner and the Contractor:
The Notice of Commencement is a legal document which is prepared by the Owner's attorney or financial lending institution and recorded with the Clerk of the County Court. A recorded copy must be posted by the Owner at the project site. Financing institutions will require the filing of a Notice of Commencement as a provision of the loan agreement. The Owner and/or Architect should obtain a photocopy of the Notice of Commencement for his project files. The purpose of the Notice of Commencement is to provide at the project site and on public record the name of the Owner, Contractor and Surety, so that those wishing to file Notice to Owner may do so to the appropriate parties. Work performed at the project site prior to the Notice of Commencement is not covered by the lien laws. Although the Notice of Commencement is the Owner's responsibility, the Owner and/or Architect should so advise the Owner of both the need and benefits of such a document. The Owner/Contractor Agreement should stipulate that the work shall not commence until the Notice of Commencement has been filed. Work to be performed under the Owner/Contractor Agreement generally commences on the date specified in a Notice to Proceed, as established in the General Conditions of the Contract for Construction. The Notice to Proceed should not be issued until the following documents (or copies thereof) have been received and reviewed by the Owner and/or Architect:
The Owner and/or Architect shall recognize that the "Date of Commencement" is the official date for the start of the construction project and is specifically identified in the Notice to Proceed. The Contractor should not necessarily be expected to commence work on the very date the Notice to Proceed is issued unless the Contractor has had adequate time to mobilize his resources and equipment to the site. The Administrator will receive and review the following schedules from the Contractor prior to processing the first Application for Payment:
4. Shop Drawing Review Schedule (Figure 1-5)
SHOP DRAWING REVIEW PROCEDURE The following procedure shall be used by the Administrator for the processing of all shop drawings and related product data for the project:
The following steps should be taken in the shop drawing review process to avoid any unnecessary work or assumption of responsibility by the Administrator:
CONSTRUCTION OWNER/CONTRACTOR MEETING The Administrator will represent the Owner and/or Architect at the Owner/Contractor meetings held on the site as provided in the Contract Documents. The project meeting should be held once per week and attended by the General Contractor, Owner and the Administrator. The Administrator will establish who will take minutes of the meeting and verify that all persons are copied with the minutes. The project meeting is a useful forum for discussions involving Owner requested changes, problems with construction and/or field observations which the Administrator feels require correction. All items which may directly impact the completion of the project should be addressed at this meeting. The Administrator will schedule field observation visits to the project as required to properly monitor the progress and quality of the work. The project scope and budget shall determine the frequency of the field observations. One beneficial arrangement for the site observation is directly prior to the project meeting. This schedule allows for the Administrator to verify that directions from the previous meeting have been followed and also to update himself with the current status of the project before the present meeting takes place. Regardless of the schedule for project observation and project meeting, the Administrator should set a regular time and date for the site observation, this will allow the Contractor to prepare questions and receive directives crucial to maintain construction progress. At each site visit the Administrator will tour the entire project and note activities in each building or area of the project. The Administrator will photograph the project at regular intervals, not to exceed one month, and also keep photographic records of all construction deficiencies from discovery through the final correction. The Administrator should not allow himself to be summoned to the project site more frequently than once per week. The Contractor will come to rely on the constant presence of the Administrator if he is allowed to do so, and will attempt to have the Administrator resolve all of the project problems for him no matter how large or small. The Administrator will prepare an Administrator's Field Report each time he completes a site visit. The Field Report will include current status of the project, work in progress, weather, time, special instructions given the Contractor and questions from the Contractor. The Field Report will be consecutively numbered and a copy will be entered into the Project Log Book and the Central File System. (See Figure 1-7 Administrator's Field Report) The Administrator will establish a schedule for site observations by the consultants, based upon the consultant's opinion regarding when they should review each stage of the construction. The consultants shall prepare a written field report each time they visit the project, the field reports will be filed in the Project Log Book and a copy sent to the Contractor and Owner. Following site visits the Administrator will return to the office and prepare Architect's Supplemental Instructions for any verbal directions given the Contractor. The Administrator will maintain a list of all construction deficiencies observed on the project in numerical order. When a defect is observed, verbally notify the Contractor and record on the list of construction defects. Unless urgent action is required do not make a formal record of the deficiencies until the second week the defect remains uncorrected. Record the date that the defect was corrected and what action was taken. PROJECT PHOTOGRAPHY The Administrator shall take photographs of the project at regular intervals, not to exceed (1) one month. The purpose for project photography is to record the quality of the work for items which are to be covered, provide documentation regarding the proper sequence of the work and to record the progress of the work. Project photography has proven to be extremely beneficial in dealing with latent defects which were not discovered prior to covering and also in improving original design concepts when re- issue of project drawings is required for another project. The project photography shall be included into the Project Log Book and displayed in chronological order. Major items which should be photographed include:
PROJECT SAFETY The Administrator, Owner and/or Architect nor any field representative are responsible for safety on the construction project. This does not mean that any major safety or life- threatening conditions are to be ignored. An unsafe condition is one that would be recognized as unsafe by the average architect or construction personnel. Situations which may be considered life-threatening, are any one in which there is immediate danger of physical harm present. In the event that an unsafe or life-threatening condition is observed by the Administrator, he shall take the following action, with ABSOLUTELY NO EXCEPTION: Unsafe Project Condition - The Administrator shall notify the Project Superintendent verbally of the unsafe conditions and leave the project immediately. The Administrator shall confirm his observation of the unsafe conditions, in writing to the Contractor's Project Manager with a copy of the notification to the Owner. Life Threatening Conditions - The Administrator shall notify the Project Superintendent verbally of the condition and leave the project immediately. The Administrator shall confirm his observation of a Life Threatening safety condition, by telegram to the Contractor's Project Manager with a copy of the notification to the Owner. The Administrator shall follow the telegram with written confirmation of the observation. In the event of a construction accident, the Administrator shall verify that the Owner and/or Architect has been notified and recommend that he notify both his liability carrier and the Owner. The Administrator shall immediately take extensive photographs of the area and shall make extensive written notes of his observations. Under no circumstances shall the Construction administrator make any statement regarding the accident to any media, or construction personnel. PROJECT LOG BOOK The Administrator will prepare and maintain a Project Log Book for the project while under construction. The Project Log Book will contain the following documentation:
The Administrator will maintain (1) one copy of all documents related to the project in the Project Log Book for his reference, a second copy of all important documentation such as A.S.I.s, Proposal Requests, Field Reports, Change Orders etc., will be filed in the Central Filing System. The Project Log Book will be divided into the required divisions and separated by indexed tabs. Each section will begin with a summary sheet as required for reference. (See Figures 1-8 thru 1-11 Change Order Log, Proposal Request Log, A.S.I. Log etc.) It is imperative that the preparation of all Proposal Requests, Change Orders, A.S.I.s and Field Reports begin at the Project Log Book so that the proper consecutive numbering may be assigned by the Administrator. The Administrator will list each new document on the appropriate summary sheet to avoid any duplication of the consecutive numbering system. Project photography may be included into the Project Log Book if this additional service has been retained. At lest (10) ten days prior to the date for each payment established in the Owner- Contractor Agreement, the Contractor shall submit to the Administrator an itemized Application for Payment draft for review. This "pencil copy" review will take place prior to the preparation of the actual Application for Payment by the Contractor. At the beginning of the project the Administrator will establish a set time to meet with the Contractor and the Owner to review the Application for Payment. This meeting may coincide with the weekly Project Meeting. The Administrator will make a complete site observation prior to the Application for Payment review. The Contractor shall break down the Schedule of Values into items or quantities of work which can quickly and easily be evaluated by the Administrator when reviewing the work in place. This breakdown is separate from the Schedule of Values and does not replace it. The sole purpose of the breakdown is to avoid disagreements between the Contractor and the Administrator as related to quantities of work completed. The Contractor shall bring to the review meeting all materials required to properly evaluate the Application for Payment, including stored material invoices, Release of Liens, etc. The Administrator, Owner and the Contractor shall review the current project status and the Application for Payment and agree on the proper amounts of compensation due the Contractor as stipulated by the Contract Documents. (See Figure 1-12) The Contractor will then proceed to prepare the certified copy of the Application for Payment in the format outlined in the Contract Documents. The Administrator shall retain his copy of the "pencil copy" and verify that the certified copy of the Application for Payment is correct as per the review meeting. If the Administrator and the Contractor cannot agree on the appropriate amount for the Application for Payment, the Contractor has the right to prepare and submit an Application for Payment which he considers correct . The Owner and/or Architect will then, following consultation with the Administrator, formally recommend to the Owner what amount he feels should be certified for payment. Following receipt of the formal Application for Payment and all supporting documentation from the Contractor, the Administrator shall:
The Contract Document describe (5) five reasons the Owner and/or Architect may recommend withholding payment from the Contractor. If these conditions exist, in whole or in part, the Administrator must advise the Owner and/or Architect of the situations and request that he make the recommendation to withhold payment. The basic premise to follow in processing the Application for Payment is that enough money remain in the Contract Sum to ensure that the project could be completed by another Contractor for the remaining funds should the original Contractor default. In the event that payments are withheld for defective work, the Administrator shall recommend that the Owner and/or Architect withhold (3) three times the value of the defective work. The normal 10% retainage is not to be considered as sufficient retainage to cover deficient work. Amounts must be withheld in addition to the normal retainage should deficient work be discovered. The normal retainage specifically covers defects which are not observed and may be discovered at a later date. The retainage ensures that adequate funds are available to make corrections to these defects. If an error is discovered in the formal Application for Payment, the entire Application for Payment must be returned to the Contractor accompanied by a letter from the Administrator explaining the reason for rejection and requesting that the Application for Payment be corrected and resubmitted. When the formal Application for Payment is correct and properly certified by the Owner and/or Architect, the Administrator will ensure that a copy of the Application for Payment is directed to the Central File System. The Construction Change Directive is not formally accepted by all Owners. Contracts utilizing the 1978 version of the General Conditions do not address the Construction Change Directive at all, however, since it is a part of the AIA General Conditions of the Contract for Construction (1987 Edition) it has been included in this manual for your informational use. In most cases, changes in the Contract Sum or Contract Time may be handled by the issuance of a Proposal Request and subsequent preparation of a Change Order. A Construction Change Directive is a written order prepared by the Architect and signed by the Owner and Architect, directing a change in the work and stating a proposed basis for adjustment, if any, to the Contract Sum or Contract Time, or both (See Figure 1-13). The Owner may, by issuance of the Construction Change Directive, without invalidating the Contract, order changes in the work within the general scope of the Contract, consisting of additions, deletions or other revisions, the Contract Sum and Contract Time being adjusted accordingly. A Construction Change Directive shall be used in the absence of total agreement on terms of a Change Order. If the Construction Change Directive provides for an adjustment to the Contract Sum, the adjustment shall be based on one of the following methods:
If none of the above methods for establishing the proper adjustment to the Contract Sum are acceptable to the Contractor, the method for adjustment of the Contract Sum shall be determined by the Owner and/or Architect on the basis of reasonable expenditures and savings of those performing the work attributable to the change, including, in the case of an increase to the Contract Sum, a reasonable allowance for overhead and profit. In such a case, the Contractor shall furnish to the Owner and/or Architect, an itemized accounting of the additional costs involved in the change, together with all substantiating documentation. Prior to the commencement of construction, a set of Contract Documents should be submitted to the construction testing agency for their review. The testing agency should provide a copy of their current rate schedule for such test work and a budget estimate for the particular project for the Owner's review and information. After the Owner's acceptance and approval, the Owner and/or Architect will authorize the testing agency to proceed, in writing, prior to any testing performed. The Administrator will review the billing with the Owner and/or Architect and transmit the bill to the Owner for payment. It shall be the Contractor's responsibility to coordinate and schedule all testing activities for the project. The testing agency shall provide test reports within 48 hours to the Architect, designated engineering consultants, Contractor, and Owner. The Administrator will act immediately, in writing, in response to any test reports which indicate that the work does not conform to the Contract Documents. Since the Contractor is responsible for the construction means and methods, it is the Contractor's responsibility to propose a method to correct construction deficiencies. It is the Owner and/or Architect's responsibility to review and act on the Contractor's proposal. ARCHITECT'S SUPPLEMENTAL INSTRUCTIONS (ASI's) The Administrator will prepare and issue an Architect's Supplemental Instruction for any additional work which is not included in the Contract Documents and will not increase the Contract Sum or extend the Contract Time. The Architect's Supplemental Instruction (See Figure 1- 14) will be consecutively numbered and recorded in the Project Log Book. The Administrator may prepare the Architect's Supplemental Instruction for the Owner and/or Architect's signature. The Administrator is encouraged to attempt to resolve small incidental items by means of the Architect' s Supplemental Instruction whenever possible. The Architect's Supplemental Instruction shall be forwarded to the Contractor for signature as an acknowledgment that the work described will not change the Contract Sum or Contract Time. When changes to the Contract Documents are needed or desired, which involve a substantial change to the Contract Sum or Contract Time, the Administrator will prepare and issue a Proposal Request using AIA Document G709. (See Figure 1- 15) The Proposal Request will be recorded in the Project Log Book and issued a consecutive number. The Proposal Request Summary Sheet will be located at the beginning of the Project Log Book section for Proposal Requests. The Administrator will issue the Proposal Request using the following procedure:
When the Owner's review of the Proposal Request is complete and approval for the Change Order obtained, the Administrator shall prepare a Change Order, as provided in the Contract Documents, utilizing AIA Document G701. (See Figure 1-17) The Change Order will be prepared in (3) three copies and forwarded to the Contractor for signature. The Contractor's signature on the Change order acknowledges that he will complete the work described in the Change Order for the stated amount in the Change Order. Additional time, if any, required for the Change Order work will be included in the Change Order. Failure by the Contractor to request additional days for the Change Order work will prohibit the Contractor from requesting additional time extensions related to the Change order work at a later date. Following the Contractor's signature of the Change Order all (3) three copies will be returned to the Administrator for the Owner and/or Architect's signature and certification. The Change Order will then be transmitted to the Owner for final signature and distribution. The Owner, Contractor and Owner and/or Architect will receive (1) one signed and certified copy of the Change Order for their records. The Change Order will then be included in the next monthly Application for Payment. The Change Order will be recorded in the Project Log Book and a copy of the Change Order included in the Log Book. A copy of the Change Order will also be directed to the Central File System. Some owner's prefer to pay for Change Orders separate from the Application for Payment. The Contractor may request assurance that the owner has adequate funds to pay for the Change Order before executing the work. Financing and lending institutions generally require that all Change Orders be processed through their office before executing the work. Contractor's Performance and Payment Bond, and Builder's Risk Insurance must be adjusted to reflect substantial changes to the Contract Sum. The Contractor is obligated to execute any Change Order authorized by the Owner even if there is a dispute regarding the actual cost of the Change Order work or it's impact on the Project Schedule. These matters can be resolved by exercising other provisions included in the Contract Documents. During the course of the construction process the Contractor may request an extension in the contract time for one of the following reasons:
The Administrator shall carefully review the contract for the definition of items which constitute a legitimate time extension. For a situation to be considered a legitimate extension in the contract time, it must be absolutely beyond the control the Contractor. Remember that the Contractor may choose to be the broker of construction services, but he is still responsible for the building schedule. It is not unreasonable to require the Contractor to resolve a scheduling problem with a subcontractor or material supplier by replacing them with another company. When time extensions are requested because of late material shipments, the contractor should be asked to furnish verification of the original date of which the material order was placed. In most cases, the Contractor or the subcontractor, did not place the order in sufficient time to ensure the delivery of the material on schedule. The most common request for time extensions is for bad weather. The Contractor must make allow for a normal amount of bad weather in his schedule. Time extensions are granted only for abnormally bad weather, defined as weather which was both detrimental to construction activities and more frequent than usually experienced during that time of year. On the last day of each month, the local newspaper generally publishes weather statistics which can be used to evaluate the weather conditions experienced dur |
