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The Construction Contract Administration Knowledge Community (CCA) has been established to help our members better understand the issues, actions and resultant impact of the decisions required in this often neglected part of Project Delivery. It is our goal to provide clear answers to issues of concern to the Institute’s membership and share case studies and best practices. We further hope to provide guidance and direction in developing guidelines for new and evolving approaches to Project Delivery as well as guidance in the continuing education of our emerging young professionals.

     

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How do we get started off right?

  • 1.  How do we get started off right?

    Posted 10-24-2012 10:02 AM
    Rand: I believe you answered your own request. Here it is again "I'd appreciate hearing other comments about how to start off on the right foot with the contractor and owner and develop a cooperative spirit of sharing the common goal of helping the owner achieve his goals." What a great way to state it....CA Teaming....I love it! ------------------------------------------- James Rains FAIA Rains Studio, PA Ramseur NC -------------------------------------------


  • 2.  RE:How do we get started off right?

    Posted 10-25-2012 10:16 AM
    Thanks James.  Well, if a National AIA Director like yourself says it's good, then I appreciate the blessing.  So be it.  And for now, let's call it:
    AIA-CA Teaming
    "The constructive approach for Architects & Contractors."

    I'll get the ball rolling by stating what I see the main principles being.  Anyone else is welcome to chime in with their own thoughts about what and how this should be accomplished, or if something should be edited.

    1.  The Architect and Contractor will cooperate to help the Client achieve his goals.

    2.  The Client will support the Architect and Contractor by paying invoices for professional services and for the construction in a timely manner, in accordance with signed agreements.

    3.  The Architect & Contractor will coordinate frequently, forecasting situations that may have created issues previously, and thoroughly review what needs to happen to make things run smoothly for this project.

    4.  When either the Architect or the Contractor or Client find defects in something each other has done or is about to do, this will be discussed with the party who initiated the problematic situation and immediately discuss the best and swiftest and most cost effective solution, without involving other parties and without broadcasting the deficiency.  Problems are to be solved in the most inconspicuous way possible and in the most direct way possible.  Each party is to be respectful of each other and realize that this is a team effort and that the Team succeeds together. No one threatens anyone else or casts disparaging remarks about anyone else's efforts.  Each party helps the others in this Team to excel.

    5.  This bears repeating: Team members respect each other.

    6.  No one will use e-mails as a method to air grievances or to broadcast blame-laying.  People will meet in person, when possible to resolve controversial issues, or through video conference calls (via Skype, etc.) or at the very least, through a phone call.  No one may vent directly at any other team member, particularly in writing.

    7.  ok: more AIA CA folks...add some more...

    -------------------------------------------
    Rand Soellner AIA
    Architect/Owner/Principal
    Home Architects
    Cashiers NC
    -------------------------------------------








  • 3.  RE:How do we get started off right?

    Posted 10-26-2012 11:21 AM
    Rand, just chiming in on AIA-CA Teaming:

    Your points listed under "The constructive approach for Architects & Contractors." are truly accurate!  And particularly point # 5 - "This bears repeating: Team members respect each other."  You are quite correct, and I will repeat it as you suggest:

    EVERYONE naturally appreciates respect, and it's simple human nature to appreciate honest compliments.  So from the Architect's approach, how can respect of a Contractor be demonstrated? If you don't care about the answer to this question, it would seem you probaly don't have much respect for contractors in general.

    Secondly, I would argue that Project Delivery Method can be and quite often is a very critical factor in actually demonstating respect, or lack thereof. Why?

    In sharp contrast to D-B-B methodology, selecting a contractor (or architect) based upon their qualifications and reputation (D-B, CM@Risk, negotiated) demonstrates respect of the GC (or Architect). The old cliche, 'actions speak louder than words'  truly applies.  A GC gets no respect by being the low-bidder; he may even wonder where he screwed up his bid to be low, and be thought a fool.  But even in a D-B-B selection, if a private-sector Owner wants 3 or 4 (selected) competitive bidders, the Architect's (and/or Owner's) choosing of GCs demonstrates respect of those GCs selected to bid. 

    Bonding?  Bonding demonstrates distrust and lack of respect of contractors.  Bonding can actually be more difficult to obtain than a loan for certain contractors.  And we all know about qualifying for a loan - the only way to qualify for a lone is to not need one!  Please pardon my cliches.  In most any other business context, it is the payer or debtor (owner) rather than the payee or creditor (GC) that must demonstrate financial capabilities.  A GC not getting paid, paid late, etc is undoubtedly far more common than the GC not paying his bills to vendors and subs.

    Retainage?  Again, retainage truly demonstrates distrust and lack of respect of the GC. 10% retainage?  Except on small projects, the GC doesn't even have a 10% mark-up for OH&P.  And don't forget, as you know, OH is a real cost!  And retainage almost always far exceeds a GC's profit.  So the GC is essentially financing the project for the Owner, probably by his line of credit through a lender.  Does this seem right?

    I know - architects feel that bonding and retainage can be necessary.  And they certainly can be, sometimes.  But that depends on the integrity of the contractors. And again, it depends upon on the method of choosing the GC (project delivery method) - was the GC simply the low-bidder?   So don't promote project delivery methods that invite less that well qualified and well respected GCs to your projects.  This approach will get you off on the right foot in your efforts of successful CA! 

    -------------------------------------------
    R. Scott Sandquist AIA
    Vice President
    Sandquist Construction
    Lincoln NE
    -------------------------------------------








  • 4.  RE:How do we get started off right?

    Posted 10-29-2012 07:34 AM
    All great points.  If I could add only one comment it would be this, "Don't make it be about the money".  All too often the players are trying to ensure there are no extra dollare expended...anywhere or for any reason.  Sometimes that is an unrealistic approach and at times drives players apart rather than bringing the "team" together.  In the spirit of cooperation and team participation there should be give and take without the project sacrificing.  It is difficult to do but I think keeping this in mind is very important. 

    -------------------------------------------
    Daniel Piper AIA
    Sr. Architect
    Davidson & Associates
    Bethesda, MD
    -------------------------------------------








  • 5.  RE:How do we get started off right?

    Posted 10-26-2012 11:28 AM
    Rand has done a good job of getting this started. We need to make certain that the goals of the client are well defined (not just the architect's interpretation), as well as the goals of the contractor and design team. Each party needs to be aware of what will make the project a success for all. Many times this may require a teaming session with project leadership from the client, contractor and design team....especially if the project is delivered in a design-bid-build method.

    -------------------------------------------
    Steven Kendrick AIA
    LPAS, Inc.
    Sacramento CA
    -------------------------------------------








  • 6.  RE:How do we get started off right?

    Posted 10-26-2012 12:24 PM

    Rand/Jim-

     Noble goals.  But, to continue Rand's list, actually enabling CA Teamwork depends on the following...

    8.  Any chance of cooperative CA Teaming is determined at the very start by the owner's choice of project delivery method.   The chosen method has to contractually align interests of the owner, designer and builder in order to allow them to function as true partners on the same team with the same contractual incentives and motivations.  Otherwise, 'partnering' is just an idealistic pretense that has to fly in the face of very real, too-often insurmountable, contractual obstacles and profit disincentives. 
     
    9. There can be no expectation of "CA teamwork" unless all the project's players are contractually on the SAME side of the SAME team.  Any delivery method where one party profits at the other's expense is NOT a team arrangement.  This may sound obvious, but in the typically contentious low-bid D-B-B and Design-Build delivery methods, an Owner is essentially paying the Contractor to be their opponent instead, resulting in contractual I-win-you-lose profit incentives to aggressively substitute, exploit loopholes, cut corners and make change order claims due to 'defective design documents', all of which slow down progress, defeat noble partnering ideals and increase costs for everyone. 
     
    10. Successful projects do not just 'happen'-they require teamwork.  And successful teamwork requires far more than just lip service:  all team members have to contractually be on the same side, with the same transparent open-book, non-conflicting motivation to achieve the same goals for the same client, start to finish.  Traditional low-bid, no-peek Design-Bid-Build and Design-Build delivery methods impose on contractors self-interest incentives that are exactly the opposite to the interests of the Owner and Architect.  The only method that can guarantee an Owner that their project will stay within a financially feasible budget and schedule-and do it in a true team effort with the Owner and their A/E-is a modified "Collaborative" version of CM at-Risk, a practical transitional step toward Integrated Project Delivery.
     

    11. In the Collaborative version of CM at-Risk, CMR, the best-qualified (and fully-bonded, if desired) CM/GC builder is selected jointly by Owner and Architect via Qualifications Based Selection, QBS, to work open-book on a competitive fixed-fee basis to keep the project on a guaranteed early-GMP and schedule.  The CMR/builder is thus contractually incentivized to work as an actual team member with-not against, for a change-the Owner's staff and the A/E from early planning through completion of construction.  My firm is now encouraging clients to use this method on every project we can.  It works.

    -------------------------------------------
    Dale Munhall AIA
    Director of Contract Administration
    Leo A. Daly
    Omaha NE
    -------------------------------------------




  • 7.  RE:How do we get started off right?

    Posted 10-29-2012 10:00 AM
    Hi Dale, I am pleased and delighted that a person and company of your stature has responded to this.  Thank you.  I think all of us can learn from the ground that you and your company are clearing.  And I very much appreciate you extending the list for the CA-Teaming approach.  While I realize that many people before us may have discussed similar issues, it may be time for a fresh look at this and I would like to thank all who are participating in this new tabulation of methods to achieve the common goal of excellent project results.

    Dale, could you possibly provide us with a bit more about your item #11?  It appears that the GC/CM (Construction Manager) has been selected based on his credentials, and the GC/CM has also submitted a fixed fee (fee = OH&P, not the actual construction cost?) as a part of his package to the Owner-Architect?  Then the project is administered like a Cost Plus project, with everyone striving to control the "'plus" to be nominal?  Okay, but how does the Owner in this scenario arrive at any sense of the total construction cost up front, to know if he/she can afford to proceed with the construction?  Do the participating GC/CMs also submit an estimated construction cost with their credentials?  If so, is there any legal commitment to such a pricing?  Or does the Owner-Architect have a joint quality surveyor provide an independent cost estimate?  If so, that's a lot of pressure on the cost estimator, and what if the estimator is wrong?  Who pays for the difference?  Just curious how that works and how to avoid an unhappy client, who, at the end of the project wants both quality and contained costs that are known, as much as possible, up front, for financial planning purposes.  Thank you sir, for considering these questions.

    -------------------------------------------
    Rand Soellner AIA
    Architect/Owner/Principal
    Home Architects
    Cashiers NC
    -------------------------------------------








  • 8.  RE:How do we get started off right?

    Posted 11-02-2012 02:04 PM
    To all --

    Sounds like the beginning of a CCA KC whitepaper. Any member can view the library and contribute a text for review.

    You might also find the case studies on the AIA Center for Integrated Practice website of interest.

    -------------------------------------------
    Kathleen Simpson
    Manager, Knowledge Communities
    The American Institute of Architects
    Washington DC
    -------------------------------------------








  • 9.  RE:How do we get started off right?

    Posted 11-08-2012 12:03 AM
    Dale, is there a formal document describing "Qualifications Based Selection" somewhere?  Sounds like it, since there's an acronym.

    -------------------------------------------
    Rebecca Schenker AIA
    Principal
    Weave Architecture LLC
    San Antonio TX
    -------------------------------------------








  • 10.  RE:How do we get started off right?

    Posted 11-09-2012 10:13 AM
    Rebecca--

    There is good information out there regarding Qualifications Based Selection (QBS).  One good website is produced jointly by AIA/Georgia and ACEC/Georgia at http://www.qbsgeorgia.org/

    QBS is, in fact, the statutory way that the Federal Government and many State agencies, are supposed to use in order to select firms who provide professional services, known as the Brooks Act.  Unfortunately, though, Contractor-led Design-Build is too often used as a way around Brooks laws, since that method shifts the selection and hiring of design firms onto the Design-Build Contractor, making A/Es merely subcontractor-vendors as part of a re-sold construction commodity, not providers of intangible professional services as the Owner's fiduciary protector.  Not what we were all educated and trained to do, and many if not most Owners, public or private, do not realize that by using Contractor-led D-B, they are no longer the Architect's client -- the General Contractor is, and that is whose interests the design subcontractor is legally, financially, ethically and contractually required to serve first and foremost--not the Owner's.

    However, Design-Build CAN be based on QBS principles, at least, even if just indirectly.  I helped negotiate the Nebraska Construction Alternatives Law, which now requires QBS-only procedures for all public Owners who choose to use D-B (no free design up-front or abusive, unpaid 'design competitions' at Architects' risk, as is all too typical in 'Competitive' D-B). 

    In addition, under the Nebraska law public Owners can also choose to use CM at-Risk (CMR), where the Architect is required to sit on the Selection Committee to help the Owner select the CM under QBS-only rules.  A big improvement.  CMR ensures professional, well-qualified builder who is compatible with and capable of collaborating with the Architect during design, where the benefits to the Owner are greatest.  And, most of all, QBS-based CMR removes the closed-book, profit-driven incentives for a Contractor to cut corners, exploit loopholes and attack 'defective' design documents during construction, all of which are legendary in traditional low-bid delivery methods.  Real, not contrived, teamwork for a change, where the design and construction TEAM is jointly dedicated to serving only the Owner's interests.

    Eventually, technology via BIM and enlightened legislative advances will drive the design and construction industry toward true Integrated Project Delivery.  But in the meantime, CM at-Risk with its 'Collaborative' provisions such as joint Owner-Architect selection of a CM under a fixed fee with a transparent, open-book GMP and team management of a realistic Contingency is our -- and our clients' -- best transitional delivery method toward less-adversarial, more-successful projects produced by REAL teamwork.  That is how we can, and should, be starting off our projects and giving our clients the benefit of  non-adversarial collaboration by a well-qualified, team of compatible professionals from start to finish.
    -------------------------------------------
    Dale Munhall AIA
    Director of Construction Phase Services
    Leo A Daly
    Omaha NE
    -------------------------------------------




  • 11.  RE:How do we get started off right?

    Posted 11-12-2012 12:47 PM
    Dale:

    Great analysis. I would suggest that a D-B firm headed by an architect might provide better service to an Owner. I listened to Russell Davidson of AIA National speak in favor of leading a D-B project at the NYS AIA conference in Saratoga this past September. He further suggested that for other forms of project delivery the architect should be offering "enhanced" construction contract administration services. He claimed that such services are already covered by traditional insurance policies.

    My humble opinion is that it almost doesn't matter what the delivery method is as long as everyone plays nicely in the sandbox, i.e. functions as a team versus as adversaries.

    -------------------------------------------
    Clifford Marvin Assoc. AIA
    Office Manager
    Conspectus, Inc
    New York NY
    -------------------------------------------








  • 12.  RE:How do we get started off right?

    Posted 11-13-2012 07:45 AM
    I couldn't agree more, Clifford.  I once was on a $3 Billion County-wide school improvement effort with major players from several states,  A Mr. Lyn Redden,(then from Heery in Atlanta, and I believe, now retired) headed the team.  His philosophy was: "No one on our team is allowed to fail.  No one gets thrown under the bus.  We will all do whatever we have to do to help and support each other so that we ALL succeed, which we all have to do, to properly support our mutual client."  Classy guy.  That's the way we should all behave. 

    -------------------------------------------
    Rand Soellner AIA
    Architect/Owner/Principal
    Home Architects
    Cashiers NC
    -------------------------------------------