Audio Sessions. Session 3 PRECONSTRUCTION. Construction Contract Administration Education Program
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1 Audio Sessions Session 3 PRECONSTRUCTION Education Program Certified Construction Contract Administrator (CCCA) Preparatory Course This presentation is protected by US and International copyright laws. Reproduction, distribution, display and use of this presentation without written permission of the speaker and is prohibited AIA is a Registered Provider with The American Institute of Architects Continuing Education Systems. Credit earned on completion of this program will be reported to CES Records for AIA members. Certificates of Completion for non-aia members available on request. This program is registered with the AIA/CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation. 2 1
2 Learning Objectives To introduce preconstruction submittals To explain the basic elements of construction agreements To become familiar with the purpose and content of a notice to proceed To explore the purpose of preconstruction meetings To be able to recognize the importance of record keeping and reporting To explain field offices and temporary facilities and controls To gain an insight into the role authorities with jurisdiction 3 Session Outline STUDY GUIDE: Subject Matter Area No. 3-5% PRECONSTRUCTION A. Preconstruction Submittals 1. Certificate of insurance 2. Surety bonds 3. Subcontractor lists and product lists 4. Schedules a. Construction progress schedule b. Submittal schedule c. Schedule of values B. The Construction Agreement 1. Who prepares and executes the construction agreement 2. Basic elements of the construction agreement C. Notice to Proceed 1. Purpose 2. Content D. Preconstruction Meetings 1. Purpose and participants 2. Procedural meeting 3. Site mobilization meeting Continued on following slide 4 2
3 E. Record Keeping and Reporting Session Outline STUDY GUIDE: Subject Matter Area No Project record keeping 2. A/E s documentation 3. Additional documentation F. Establishing a Field Office G. Temporary Facilities and Controls H. Authorities Having Jurisdiction PRECONSTRUCTION Continued from previous slide 5 PRECONSTRUCTION STUDY GUIDE AREA NO
4 PRECONSTRUCTION SUBMITTALS STUDY GUIDE: Submit Matter Area No. 3 - A. 1. Certificate of insurance 2. Surety bonds 3. Subcontractor lists and product lists 4. Schedules a. Construction progress schedule b. Submittal schedule c. Schedule of values 7 Preconstruction Submittals Generally, no work begins until required preconstruction submittals have been Submitted by Contractor Reviewed by A/E and Owner Process begins when Contractor receives notice to proceed
5 Certificates of Insurance Owner establishes project requirements for insurance in consultation with Legal counsel Insurance advisors Requirements for insurance specified in General conditions Supplementary conditions Before beginning work at site, Contractor and Owner exchange certificates of insurance verifying coverage Certificates of Insurance Figures 3.4 and
6 Surety Bonds Bonds provide assurance to Owner if Contractor Becomes financially incapable of making payments Cannot fulfill contract obligations Cannot complete contract Surety will assume Contractor s role Bonds are not insurance Advantages of bonding Protection of suppliers and subcontractors from nonpayment Protection of Owner against mechanic s liens Subcontractor Lists and Product Lists Standard general conditions typically Require Contractor to submit list of proposed subcontractors Some Owners may require list to be submitted with bid or proposal If Owner objects to any proposed subcontractor A/E notifies Contractor of objection Changes of subcontractors may entitle Contractor to change contract sum if there are additional costs Standard general conditions typically stipulate that Contractor will not be forced to use a subcontractor of which Contractor has an objection
7 Subcontractor Lists and Product Lists Product lists may be required As a means for A/E to verify Contractor will use only specified products or approved substitutions Valuable to Contractor in verifying that suppliers and subcontractors use products complying with specified requirements Product lists are not to be used for proposed substitutions Subcontractor Lists and Product Lists Figure
8 Construction Progress Schedule Type of schedule depends on Project delivery method Project extent Contracts Construction Progress Schedule Important aspects of schedules Contract time Milestone events and dates Start and completion dates of major activities of construction Submittal review and approval dates Coordination requirements and interrelationship of activities Related construction activities Lead time necessary to obtain products and equipment activity durations Frequency of updates Types of reports required Project cost and manpower
9 Construction Progress Schedule Types of schedule formats Bar charts - Graphic display of major activities - Form of bars overlaid on a calendar Network analysis diagram - Time analysis of network of activities - Arranged in a critical path that establishes optimum sequence and duration of operations between first and last event A/E reviews schedule to determine If schedule meets specified time requirements If sufficient time has been allowed for processing submittals Owner determines whether schedule meets requirements Construction Progress Schedule Figure
10 Construction Progress Schedule Schedule should be updated on regular basis to account for work completed and modifications Concealed and unknown conditions Delays Other circumstances that affect project Updated schedule may be a prerequisite to certifications for payment Some contracts only allow schedule changes by change order Submittal Schedule Submittal schedule may be required to be incorporated into construction progress schedule Required submittals are included in project manual Products cannot be ordered or fabricated prior to A/E approval
11 Important considerations Submittal Schedule Time frame when products are needed Time necessary to produce and deliver products to site Lead time to prepare submittal Time required for - Contractor to review submittal - A/E to review submittal Number of subcontractors affected by information contained in submittal Time necessary to correct and resubmit if original submittal is not approved Grouping or bundling of related submittals Schedule of Values Standard general conditions typically stipulate submittal before work begins or first application for payment Prepared by Contractor for use as basis of application for payment A/E reviews schedule of values Contract sum is broken down into smaller, measurable portions that A/E and Owner are able to Observe Measure Use to determine percent of completion
12 Schedule of Values Important to establish Contractor s overhead and profit listed with each item or listed separately Providing general conditions line is helpful Should be equal to Contractor s daily project overhead cost over time frame of project Establishes basis of cost for time extensions Amounts should accurately reflect value of work Front end loading is a deceptive technique which raises mobilization costs, supervision, or early work activities to improve Contractor s cash flow As construction progresses, schedule should be updated to include amounts approved by change order Schedule of Values Standard general conditions and Division 01 Specify how schedule of values is to be prepared Usually values are itemized by specification section Itemization can follow any form specified Aids in review of information required by contract documents Allows for prompt and accurate processing of later applications for payment Separation of work activities into separate labor and material categories Makes for easier review Allows for easier processing
13 Schedule of Values Figure THE CONSTRUCTION AGREEMENT STUDY GUIDE: Submit Matter Area No. 3 - B. 1. Who prepares and executes the construction agreement 2. Basic elements of the construction agreement 26 13
14 Who Prepares and Executes the Construction Agreement Anyone can prepare a construction agreement however, there should be a meeting of the minds between the parties before execution Depending on project type and requirements, any of following are possible Prepared by A/E using standardized forms Prepared by Owner using standardized forms or Owner s nonstandardized forms Prepared by Contractor using standardized forms or Owner s nonstandardized forms Owner and Contractor are only parties to a construction agreement 27 Basic Elements of the Construction Agreement Preamble Identification of parties Identification of other parties Contract documents Scope of work Date of commencement of the work Date of substantial completion of the work Project Delivery 5.5 Liquidated damages Incentives, bonuses, and penalties Contract sum Adjustment of contract sum Unit prices Payment procedures Due dates for payments Work completed Materials and equipment stored off-site Continued on following slide 28 14
15 Basic Elements of the Construction Agreement Cutoff date Payment at substantial completion Due date for final payment Progress payments and retainage Miscellaneous provisions Termination or suspension Signatures Continued from previous slide Project Delivery NOTICE TO PROCEED STUDY GUIDE: Submit Matter Area No. 3 - C. 1. Purpose 2. Content 30 15
16 Notice to Proceed Project time limit provisions can be established by Date of commencement stated in agreement Notice to proceed Notice to Proceed Typically there is a period of time after Owner-Contractor agreement is executed in which Contractor obtains certificates of insurance, surety bonds, and other required documents Once documents have been received and accepted by Owner, Owner may issue notice to proceed that Establishes date construction is authorized to begin May include number of days or date of substantial completion Directs Contractor to begin project
17 Notice to Proceed Figure PRECONSTRUCTION MEETINGS STUDY GUIDE: Submit Matter Area No. 3 - D. 1. Purpose and participants 2. Procedural meeting 3. Site mobilization meeting 34 17
18 Purpose Preconstruction Meeting Important for introducing project team Establishing ground rules for communication Explaining administrative process Participants Owner and advisors A/E and consultants Contractor and major subcontractors Types Procedural meeting Site mobilization meeting Procedural Meeting Held before construction begins Important for establishing desired attitude and direction for entire construction process
19 Procedural Meeting Purpose is to review and clarity administrative procedures Communication Submittals Testing and inspections Responsibilities and duties Schedule of values Payment process Progress schedule Modification procedures Critical issues Long lead items Requirements for quality assurance and quality control Substitutions Maintaining record documents Project meetings Sustainability requirements Maintaining construction tolerances Site Mobilization Meeting Held at project site Addresses issues about site use For sustainable projects, address allowable uses and limitations on site use If project involves remodeling, renovation, alterations, or an addition, use of facility and adjacent facilities can be significant issues If Owner will continue to use existing facilities affected by the work, consideration for access and use by public may be critical
20 Considerations Site Mobilization Meeting Access to site Environmental controls Material storage Identification of benchmarks Layout of work Use of site and existing facilities by Contractor and Owner Occupancy and use by Owner, tenants, and the public Separation of work areas Maintenance of site - Traffic control - Cleaning - Trash removal Work hours Noise control Protection of existing materials to remain in place Use of existing utilities Project phasing and sequencing 39 RECORD KEEPING AND REPORTING STUDY GUIDE: Submit Matter Area No. 3 - E. 1. Project record keeping 2. A/E s documentation 3. Additional documentation 40 20
21 Record Keeping and Reporting Documentation created by construction contract administration is effective for Communication Historical record of construction stage activity Aid in future recollection of construction activity Project Record Keeping During construction, there is an ongoing stream of information among participants Timely responses to inquires are crucial To successful completion With minimum of difficulties Use of standardized forms facilitates and expedites the documentation process
22 A/E s Documentation Field observation reports Correspondence Meeting minutes Communication reports (telephone and meeting) Submittals Test reports Payment requests and certifications Schedules Requests for interpretation, clarification, or information Proposal requests and change order requests Contract document modifications Additional Documentation Oral conversations should be documented Documentation of oral exchange of information allows participants to review what was said and to revise or object to recorder s understanding No objection to documented discussions usually means acceptance future misunderstandings and faded memories are avoided
23 ESTABLISHING A FIELD OFFICE STUDY GUIDE: Submit Matter Area No. 3 - F. 45 Establishing a Field Office Specifications usually require facility Structurally sound, weathertight structure Heated and air conditioned Electrical outlets Data communications outlets Toilet facilities Could be space in existing facility Could be lease space in adjacent facility
24 TEMPORARY FACILITIES AND CONTROLS STUDY GUIDE: Submit Matter Area No. 3 - G. 47 Includes Temporary Facilities Project office trailers Storage trailers for tools, equipment, and material Testing facilities Other storage facilities Among first items moved onto construction site Parts of existing buildings may be used for facility alteration projects
25 Includes Sanitation facilities Electrical power Water Telephone services Installation usually scheduled as soon as possible after temporary facilities are in place Temporary Utilities Includes Temporary Controls Sediment or erosion controls Pest control Controlled access Temporary controls direct or eliminate undesirable issues during project, but are removed when work is complete
26 AUTHORITIES HAVING JURISDICTION STUDY GUIDE: Submit Matter Area No. 3 - H. 51 Authorities Having Jurisdiction Federal, state, county, and city authorities Oversight of safety and welfare of public they serve Verify that code and ordinance requirements have been met Performs reviews of contract documents before issuing building permits Performs inspections at project site
27 Authorities Having Jurisdiction If authorities discover work not in conformance Work will not be approved Contractor will correct non-complying work Authorities will inspect corrected work, and if in compliance will approve If rejected work complies with contract documents, Contractor may be entitled to change order to correct defective work Contractor may be responsible for correcting work at no additional cost, if Contractor knew work to be contrary to applicable regulations and codes Review Outline STUDY GUIDE: Subject Matter Area No. 3 PRECONSTRUCTION A. Preconstruction Submittals 1. Certificate of insurance 2. Surety bonds 3. Subcontractor lists and product lists 4. Schedules a. Construction progress schedule b. Submittal schedule c. Schedule of values B. The Construction Agreement 1. Who prepares and executes the construction agreement 2. Basic elements of the construction agreement C. Notice to Proceed 1. Purpose 2. Content D. Preconstruction Meetings 1. Purpose and participants 2. Procedural meeting 3. Site mobilization meeting Continued on following slide 54 27
28 E. Record Keeping and Reporting Review Outline STUDY GUIDE: Subject Matter Area No Project record keeping 2. A/E s documentation 3. Additional documentation F. Establishing a Field Office G. Temporary Facilities and Controls H. Authorities Having Jurisdiction PRECONSTRUCTION Continued from previous slide 55 28
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