2. Today’s Presentation
• Obtaining work in the construction industry
• Project Manual
• Drawings and Specifications
• Types of Contracts
• Insurance Requirements
• Project Correspondence
• Change Orders
• Contractor Payments
• Closeout
3. Overview
• Documentation is vital !!!
• Poor documentation causes problems
– Most problems
– Second most, poor administration
• Documentation
– Who, what when, where, why and how
– Facts, facts, facts
– Specific to the type of project
4. Trade terms
• Addenda
• Bid bond
• Change Order
• Construction
Specification Institute
(CSI)
• Punch list
• Scope
• Specifications
• Shop drawings
5. Introduction
• Documentation:
– Records the progress
• Controls the time spent
– Keeps track of costs
– Need procedures in place early
• Maintain throughout the project
– Types
• Daily log
• Photographs
• Correspondence
6. What is Documentation?
• Documentation includes...
–a complete record of the project
–all contract documents
–records of circumstances
–daily reports
–meeting minutes
7. What is Documentation?
• Other items include
–Schedules
–Site visit records
–Telephone logs
–Minutes of Meetings
–Job correspondence
–Diaries
–Job logs
–Time cards
–Photos
8. Documentation Systems
– Documentation is...
• a systematic process for keeping regular,
accurate, complete and legible records of daily
activities, actual circumstances, and unusual
events on a project
9. Why Documentation Is So
Important
• Good documentation can...
–identify issues
–resolve conflicts
–settle disputes
–avoid litigation
–provide tangible proof
12. What to Document
• Everything !!!
•Murphy’s Law
–The most insignificant piece of information will
become the item that is most important if you don’t
document it
–The item you don’t document will be the one that
someone wants to see
13. What to Document
• No opinions
•No placing of blame
•No guesses
•No theories
•And absolutely do not modify notes
14. How to Document
• Documentation Tools
–Computers
–Photographs
–Video cameras
–Audio recorders
–Written reports
–Daily logs
15. Obtaining work in the Construction
Industry
• Competitive bid
• Invited bid
• Negotiation
• Design-build
• Construction Management
16. Obtaining work in the Construction
Industry
• Competitive bid
– Owner produces documents
– Contractor reviews documents
• Solicits subcontractor input
– Submits bid for completion of the work
– Owner awards to lowest, responsive bidder
17. Obtaining work in the Construction
Industry
• Invited bid
– Similar to standard process except
• Prequalification
– Experience
– Finances
– Workload
– Goal is to limit pool to similarly qualified
contractors
18. Obtaining work in the Construction
Industry
• Negotiation
– Proposal based
– Interview
• Cost
• Schedule
• Approach
• Staffing
• Experience
19. Obtaining work in the Construction
Industry
• Design-build
– One entity
• Provides
– Design
– Construction
20. Obtaining work in the Construction
Industry
• Construction Management
– CM-GC
– Third party CM
27. Contract Documents
• Drawings provide:
–Arrangement, materials, dimensions,
configuration, and other information about
the project that communicate the
engineer’s design for the project.
28. Contract Documents
• Specifications provide:
–written instructions that detail project
requirements
–information that is not easily shown on
drawings
30. Additional Key Contract
Documents
• Other key documents:
–contract
–subcontract
–general conditions
–supplemental conditions
–addenda and change orders
–purchase orders
–request for information (RFI)
31. Contract Documents
• Precedence:
–Set by the Author of the specifications
–Normally
• Special provisions
• General Provisions
• Detailed Drawings
• General Drawings
• Standard Specifications and Drawings
32. Other Documents
• Special Instructions
•Stop Work Orders
•Soil Reports
•Purchasing Lists
•Substantial Completion
•Final Completion
33. Peripheral Documents
• Shop Drawings
•Submittals
•Codes and Permits
•Agreements
•ASK QUESTIONS
–What, Why, Who, and What do I need to do ?
34. Contract Documents
• Identify and learn to recognize contract
documents
• Define a contract and understand basic legal
terms used in construction documents
• Study the relationships among various
contractual parties
35. Project Manual
• Typical manual will include:
– Invitation to bid
– Instructions to bidders
– Bid form
– Bid bond
– Performance/payment bond
– Agreement
– General conditions
– Supplementary conditions
– Specifications
– Drawings and addenda
36. Invitation to bid
• This is what you see in the DJC or on the Contractors
Plan Center website
– Gives you the information to know whether the project is one you are
interested in
• Includes
– Project Owner, A/E, Agency
– Description
– Type of bid
– Time for completion
– Bid date
– Where you can get the documents
– Requirements for prequalification / mandatory pre-bids
– Etc
37. Instructions to bidders
• Explains what you need to do
– To comply with the bid requirements i.e. be responsive
• Could include
– Resolution of discrepancies
– Substitution of products
– Bid submittal requirements
• How many copies
• Signatures
• Where to send it
• Subcontractor lists
• Etc etc
– Laws and Regulations
38. Bid Form
• Reports what your offer is
– Standardized to allow easy comparison
– Evaluated
• Balanced
• Unbalanced
• Responsive
• Unresponsive
• Totals add up
• Addenda received
39. Bid Bond
• Makes agreement that the bid will be honored for a
period of time
• Makes an agreement that the contractor will perform
the work if awarded the contract
• Percentage of bid amount
• Comes from your bonding agent
• Can be forfeited if you back away from the project
40. Performance and Payment Bond
• Guarantees that the contractor will fulfill the contract
terms
• Provides indemnity for liens
• 100% of bid amount
• Comes from your bonding agent
• If contractor defaults
– Surety (bonding company) takes over the project
• Assumes financial responsibility
• Solicits another contractor
41. Form of Agreement
• Included in project manual
– It is a contract
– Needs to be reviewed by legal counsel
42. General Conditions
• GCs define the contractual relationships
• Different types
– AIA
– EJCDC
– AGC
– Owner Provided
• Specific to the particular project
43. • The General Conditions...
–establish a common basis for relationships on a
project
–classify and clarify duties
–help to avoid disputes
–guide contractors in the execution of the project
–They are overall procedures of how the contract
provisions are to be implemented.
General Conditions
44. Using GCs to Make Decisions
• General Conditions
– remember there are different forms
–GCs are often incorporated into other forms
•Owner/Architect
•Owner /Engineer
•Contractor/Subcontractor
•Goal is to be consistent at all levels
45. Using GCs to Make Decisions
• As a Supervisor
–Determine what level of authority you have
•Basis of Authority
–Contractor
–Owner
–Design Professional
46. Using GCs to Make Decisions
•Basis of Authority
–Contractor – Perform the work in accordance with
the contract documents
–Owner – has the ultimate “Say”
–Design Professional – responsible for technical
evaluations
Remember, these levels of authority are
covered in the General Conditions
47. • Supplementary Conditions...
–provide information that is specific to a project
–immediately follows the General Conditions
–are also referred to as Special Conditions
–should be reviewed and discussed prior to starting a
project
Supplementary Conditions
48. • Information that supports and describes the
construction drawings
Specifications
49. Addenda
• Used to modify the contract before the bid date
• Issued by Owner
– Deficiencies
– Discrepancies
– Errors
– Clarification
An addendum is exactly the same as a change order
except that it occurs pre-bid
50. Drawings And Specifications
• Project Managers have to be able to read and
understand the drawings and specifications !!!
– You have to be willing and able to discuss and communicate
their content
51. Types of Drawings
• Conceptual
– Used for evaluation of project during planning phase
• Preliminary
– Used to perform reviews, submit for agency review, estimating
(budget)
• Working or Construction
– Used in the bidding process
52. Reading Drawings
• Conceptual
– Used for evaluation of project during planning phase
• Preliminary
– Used to perform reviews, submit for agency review, estimating
(budget)
• Working or Construction
– Used in the bidding process
53. Reading Drawings
• Understand the notation and nomenclature
• Get an idea of the methods being used
• Composites sometimes can help
54. Reading Drawings
• Review
– Site drawings ( C and G)
– Structural (S)
– Architectural (A)
– Mechanical (M or P)
– Electrical (E)
– Detail sheets
– Overlay and coordinate disciplines
– Erosion control
55. Specifications
• Three purposes
– Define roles
– Provide detailed technical information
– Support the drawings as part of the Project Manual
56. Specifications
• Three purposes
– Define roles
– Provide detailed technical information
– Support the drawings as part of the Project Manual
• Format
– CSI
– ODOT/APWA
– WSDOT
– FHWA
57. Technical Specification
Section Divisions - Old
•Division 1 General
•Division 2 Site work
•Division 3 Concrete
•Division 4 Masonry
•Division 5 Metals
•Division 6 Carpentry
•Division 7 Moisture Protection
•Division 8 Doors, Windows and Glass
•Division 9 Finishes
•Division 10 Specialties
•Division 11 Equipment
•Division 12 Furnishings
•Division13 Special Construction
•Division 14 Conveying Systems
•Division 15 Mechanical
•Division 16 Electrical
58. Technical Specification
Section Divisions - New
•Division 1: General Requirements
•Division 2: Existing Conditions
•Division 3: Concrete
•Division 4: Masonry
•Division 5: Metals
•Division 6: Wood, Plastics and Composites
•Division 7: Thermal and Moisture Protection
•Division 8: Openings
•Division 9: Finishes (interior finishes)
•Division 10: Specialties (for example, signs,
toilet accessories)
•Division 11: Equipment (for example, kitchen
equipment)
•Division 12: Furnishings
•Division 13: Special Construction (for example,
greenhouses)
•Division 14: Conveying Equipment (elevators,
escalators, lifts)
•Division 21: Fire Suppression
•Division 22: Plumbing
•Division 23: Heating, Ventilating and Air
Conditioning
•Division 26: Electrical
•Division 27: Communications
•Division 28: Electronic Safety and Security
•Division 31: Earthwork
•Division 32: Exterior Improvements
•Division 33: Utilities
60. Types of contracts
• Owner – GC
• GC – Subcontractor
• Written
• Oral
• One party agrees to do something for
another in return for something !!!
61. Contract Documents
• You all work with many contract
documents every day
–Most common
• the plans and specs
Definition: Contract documents are the documented
instructions provided by the Owner or Agency to the
Contractor to construct a specific project
62. Contract Basics
• Common elements of a contract include:
–mutual consent
–offer and acceptance
–exchanging something of value
–operating in good faith
–delivering and performing
–no violations of public policy
63. Contract
• Contract Law Basics
– A contract is a legally enforceable agreement
between two or more parties that creates an
obligation to do or not do particular things
– 3 parts for a contract: Offer, Acceptance, and
Consideration. For construction, they must be in
writing
– Who, What, When, Where, and How Much
– Failure to Perform Under the Contract: “Breach”
64. Contract
Contract Law Basics: Contract drafting tips
• An effective contract should always be clear, specific,
and focussed
• Sentences should be short to avoid unnecessary
complexity and ambiguity
• Make sure all party names are accurate. Include their
business titles if applicable
• A contract should be consistent in its tone, grammar,
word useage, and abbreviations
65. Contract
Contract drafting tips
– Define Important terms
– Anticipate litigation by including sections regarding
venue, choice of law, and attorney fees.
– All parties should sign the contract, including
business titles if applicable
– Pages should be numbered. Avoid the appearance
that pages could have been added after the
agreement was signed
– As with any business writing, proofread very
carefully
66. Contract
As the PM, review contract carefully …
• Name of parties
• Date
• Scope
• Schedule
• Insurance
• Bonding
• Payment terms
• Indemnifications
• Termination
• LDs
• Special conditions
• Safety
• Warranties
• C.O. procedures
67. Lump Sum Contract
• Fixed Price / Lump Sum
– Pre-determined price
– Assumes risk for some unforseen conditions
– Owner pays price regardless of profit or loss
– Change Orders
• Additional work
• Design changes
• Unforseen conditions
– Liquidated damages
– Bonus payment (some contracts)
68. Cost-Plus Contract
• Cost-Plus contract
– Actual costs plus fee to cover OH & P
– Minimizes
• Escalation
• Unforseen conditions
• Material costs
• Changes
– Reimbursables have to be defined in the contract
– Creates atmosphere to find cost-effective solutions
– Have to document EVERYTHING !!!
69. Cost-Plus Contract
• Cost-Plus contract
– Reimbursables: materials, labor, salaries related to the
project, taxes, subcontractor payments, equipment, fees,
bonds, insurance etc
– Non-reimbursables: office overhead costs, damages,
negligence etc
– LOOK AT THE VARIATIONS ON PAGE 5.9
70. Target Contract
• Variation of lump sum + cost-plus
– Agreement on target costs
– Target profit (or fee)
– Not to Exceed price
71. Unit Price
• Price per unit remains the same
• If quantities increase or decrease (>25%)
– renegotiation
74. Subcontract
• Contract between GC and subcontractor
– Prime contract conditions need to apply (make sure you
watch this)
– There is no contract with the Owner
– Careful with liens and PWR
– Manage your subs
76. Insurance Requirements
• Lots needed
– Protect employees
– Protect Owners
– Protect the public
– Protect the Company
• Normally an office function separate from
PM
– But know what is required and what is in place
77. Workers’ Compensation
• Pays employees who are hurt on the job
– State statute
– Company has to maintain coverage
• In each state in which you work
– Injuries have to be reported
78. General Liability
• Covers claims for bodily injury or property
damage
– Company offices
– Construction activities
– Liability for subcontractor
– Completed work
– Liability assumed under the contract
• Therefore read it !!!
• There may be exclusions
79. Vehicle Insurance
• Make sure you have a company policy
• What if your employee pulls his own trailer,
boat outside of work hours ?
• Coverage
– Fire
– Theft
– Collision
– Vandalism
80. Builders’ Risk
• Covers damage to the work being performed
– Losses of materials
• Fire
• Theft
• Vandalism
• Unless provided by Owner, contractor
provides at 100% contract value
81. Equipment Floater
• Covers equipment not specifically covered
on the builders’ risk policy
• PM should make sure the office knows what
rental equipment is on the site
– Make sure coverage is in place
83. Project Correspondence
• Projects can generate a lot of paper
• As PM, you are the focal point
– Sets communication channels
– Relationship channels
– Affected parties
84. The Project Team
Task Owner Design Team Contractor
Establish the
standards of
performance
Prime Responsibility Assist / Advise Assist / Advise
Appoint advisors for
the Owner
Prime Responsibility
Select the Project
Manager
Prime Responsibility
Delegate authority
by contract
Prime Responsibility Reviews Reviews
Conceive, plan, &
design
Reviews Prime Responsibility
Provide technically
qualified team
members
Reviews Prime Responsibility Prime Responsibility
Construct to plans &
specifications
Reviews Reviews Prime Responsibility
Avoid conflicts of
interest
Prime Responsibility Prime Responsibility Prime Responsibility
Comply with official
requirements
Prime Responsibility Prime Responsibility Prime Responsibility
85. Project Chart of Authority
• PM tracks communications
•Communication often through
correspondence
•Correspondence includes:
•Drafted material
•Written material
•Printed material
86. Project Correspondence
• To handle the process
– Need a good filing system
• Has to be maintained
• A good filing system has
– Easy recovery abilities
– Good tracking capabilities
88. Project Correspondence
• Guidelines for correspondence
– Must address the subject
– Reflect company policy
– Think it through
– Re-read it
– Remember
• Know your audience
• How will they react
– Be concise
– Be polite
– Facts only !!!
89. Why Good Documents Matter
Reasons Good Documents are so Important
– Jobs take a long time/Hard to remember
– Thousand of documents - contract, notes,
telephone notes, faxes, drawings, photographs,
correspondence
– Years later
– Needed for reconstruction
90. Why Good Documents Matter
Reasons Good Documents are so Important
– Helps refute allegations of:
• Causation in delay cases
• Acceleration in delay cases
• Damage and cost
• What was said at the site
91. Why Good Documents Matter
Reasons Good Documents are so Important
– May be only record available
– Party with documentation appears on top of
things
– Helps you keep track
– Can’t predict the future/Personnel changes
92. Daily Reports
• Logs and tracks issues
• Permanent record of project
• Normally by field personnel
• Must be done daily
– Check !!!
93. What You Should Record on a
Daily Report
General Issues
• Job name
• Job number
• Report number
• Day
• Date
• Contract days left (if applicable)
94. What You Should Record on a
Daily Report
General Issues Continued
• Weather, including temperature range if
relevant-especially if it had an impact on the
work
• Do not use negative nicknames for site
problems
– Glory Hole #1
• Be factual
• Location of the work
• Sign in a legible manner
95. What You Should Record on a Daily
Report Continued...
Personnel Issues
• Keep it informative, not personal
• Who was at the site
• Who left the site and when
• Whether or not they returned and when
• Who was left in charge
96. What You Should Record on a Daily
Report Continued...
Delivery Related Issues
• When were key materials delivered
• Documentation related to delivery
• Who took possession
• Conditions of material upon delivery
• Where items were stored
• How long on site before inspection by contractor
97. What You Should Record on a Daily
Report Continued...
Equipment Related Issues
• What equipment was at the site
• If contract specified equipment - was it ever used
• When did it arrive
• How long did it stay
• What equipment broke down
• How long was it down
• Who repaired it
98. What You Should Record on a Daily
Report Continued...
Equipment Related Issues
• How long before someone came to repair it
• When was it repaired
• What was the replacement equipment
• If different, how did that affect efficiency
• How any delay affected the work
• What did the contractor work on during the repair
period
• Could other work have been done
99. What You Should Record on a Daily
Report Continued...
Work Related Issues
• Quality of work issues
• Quantity of material issues
• On-site conditions
• Occurrences
• Utilities encountered
• Work interruption/shutdown
• Testing Efforts/Results
100. What You Should Record on a Daily
Report Continued...
Work Related Issues
• Any event that had an adverse affect and who caused
it
• All changes to the work
– Who authorized
– How authorized
• Importance of change orders
• Force account of work in detail
• Complaints and the results of any investigation
• Overtime inspection
• Construction Methods
101. What You Should Record on a Daily
Report Continued...
Damage to Property
• Public or Private
• When it occurred
• When it was discovered
• How it was discovered i.e. did we happen upon it ?,
did the contractor reveal it ?, did the contractor
conceal it ?
• What photographs were taken
• Contractors response to discovery, comments too
• Contact between the contractor and private citizens
102. What You Should Record on a Daily
Report Continued...
On-Site Working conditions
• Water
• Any and all efforts to dewater - timing, methods, and
consequences
• Weather
• Rock - size, number, location
• Sand, silt, clay
• Photographs very useful here
• Comments regarding failure to make pre-bid
inspection or having insufficient time to make pre-bid
inspection
103. What You Should Record on a Daily
Report Continued...
On-Site Working conditions
• Any comments regarding anticipated conditions and
how existing conditions differ
• Contacts regarding pre-bid contract interpretation
relating to soils
104. Making Daily Reports Only a
Lawyer Could Love
• You never know which fact will be
key
• Treat each day as if it held the key
to a major suit - Even before
construction begins
106. Meetings
• Meetings should be planned
• Agenda should be written
• Minutes should be taken
• Minutes should be distributed
– Obtain approval
– Correct errors
107. Project Photographs
• Good way to track
– Daily progress
– Existing conditions
– Quality of work
– Stored materials
– Methods being used
– Issues (by sending a picture !!!)
108. Schedule
Overview
• Estimate of time
• Sequence of activities
• Should be reviewed and updated regularly
• Include everything that affects your project timeline
109. Time cards
Overview
• Records labor and equipment in real time
• Helps verify extras
• Include
– Hours worked
– Area of work
– Work accomplished
– Material used
110. Shop Drawings
Overview
• Supplements the contract drawings
• More detail
– Some can be used for production/fabrication
• Include
– Drawings
– Schedules
– Lists
– Performance data
– Samples
– Vendor drawings
– submittals
111. Shop Drawings
• Submittal process
– Submit before delivering material
– Material has to be approved for use in the work
– Some projects have extensive submittal requirements
– Maintain a log !!!
112. Shop Drawings
• Submittal process
– Log in drawings when received
– Verify you have the correct data
– Verify the contract requirements for number
– Review for accuracy
– Submit to A/E
– Review when returned
• Careful
– Revise and resubmit
– No exceptions taken
113. Back Charges
• For work outside the scope of the contract
• Work performed by one party that should have been
performed by the other
• Sometimes they are arranged
• Back charges are a form of change order
– Handle accordingly
– Review documentation
114. Back Charge Examples
• Contractor loans scaffolding
• Loan of a pump
• Clean up of site
• Materials provided to another entity
115. Change Orders
• Cause work
• Cause anxiety
• Change orders
– Reflect a change in design or construction process
• Directed by Owner
• Approved by Owner
• Can be additive or deductive
• Typically are unavoidable
– Make sure you evaluate all directives
• In terms of your contract
– Not in contract ?
» Change order
116. Reasons for Change Orders
• Document errors or omissions
• Scope changes by Owner
• Adjustment to schedule
• Code changes
• Change in specified materials
117. Change Order Process
•Process should include:
• Scope
• Justification
• Cost impact
• Schedule impact
• Overall impact
• Include in progress meetings
• Keep everyone informed
118. Cost of Change Orders
• Define the work
• Determine quantities
• Obtain costs
– Material, labor, equipment, subs, suppliers
• Analyze impact on schedule
• Determine O/H
• Determine allowable markup / fee
• Determine impact on bond
119. Cost of Change Orders
DESCRIPTION/REQUEST
MATERIAL
Material $0.00
Equipment Fees $0.00
Material & Equipment Sub-Total $0.00
Material & Equipment Mark-Up 10.00% $0.00
LABOR
Laborer 0.00 Manhours @ $60.00 $0.00
Supervisor 3.00 Manhours @ $70.00 $210.00
Labor Sub-Total $210.00
Labor Mark-Up 15.00% $31.50
SUBCONTRACTORS
Subcontract- $4,885.00
Subcontractors Sub-Total $4,885.00
Subcontractor Mark-Up 10.00% $488.50
MISCELLANEOUS
Permits & Fees $0.00
Direct Job Costs $0.00
Misc. - $56.15
Miscellaneous Sub-Total $56.15
SUBTOTAL $5,671.15
General Conditions 2.41% $136.67
3.20% $181.48
TOTAL PRICE OF CHANGE ORDER REQUEST $5,989.00
This is a change order for all the over excavation (to date) that was requested to be over excavated by the Geo teck. The
quanitys to date are 118 CYof bad soils.
Fuel
Bond & Insurance
120. Change Orders & Claims
• If change order is disputed, it can become a claim
• Make sure all documentation is in order
– This is the foundation for your claim
• Remember
– Meeting minutes
– Discussion notes
– Change order procedures
– Weather conditions
– Workforce issues
– Schedule impacts
– Revised design drawings
– Photographs
121. Contractor Payments
• Payment documentation
– Request for payment
– Waivers and affadavits
– Certificate for payment
– Final payment request
ALL THIS IS DISCUSSED IN THE CONTRACT PROVISIONS
Know them !!!
122. Contractor Payments
• Request for payment
– Based on completed work, up to a specific date
– Sometimes can include materials on hand
– Schedule of values ( lump sum projects)
– Reviewed by Owner
• Waivers and affadavits
– Payments to subcontractors
– Payments to suppliers
• Certificate for Payment
– For lending institution
– Discuss
• Final Payment Request
– Release of retainage
– Final lien releases
123. Close-out
• Begins at substantial completion
• Purpose is to assure the Owner has a finished product
• Discuss
124. Close-out
• Substantial completion
• Close-out procedures
– Don’t forget the suppliers and subcontractors
– Testing
– Inspections
– Certifications
– Records
• Project Inspection
• Punchlist (Deficiency List)
• Owner Acceptance
• Certificate of Occupancy
• Record Drawings
• O&M Manuals
125. Summary Thoughts
• Accuracy
– Do not mis-state the facts
• Objectivity
– Do not be biased
• Completeness
– Fill out documents completely
• Uniformity
– Be precise, concise and well defined
• Credibility
• Timeliness
