Construction Contract Administration

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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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  • 1.  Certificate of Substantial Completion continuing responsibilities

    Posted 09-07-2021 01:22 PM
    Towards the end of the G704-2017 and G734-2018 documents, the following is included:

    "As of the date of Substantial Completion, the Owner shall be responsible for security, maintenance, heat, utilities, damage to the Work, and insurance, except as noted below:" On the G704 (but not the G734), there is a specific note "Owner's and Contractor's legal and insurance counsel should review insurance requirements and coverage."

    Understanding that each project and contract terms can be different, I was curious if anyone would share some sample verbiage they have seen used to define any exceptions for the continuation of responsibilities here.

    ------------------------------
    Sharon Day AIA
    Senior Associate
    GWWO Architects
    Baltimore MD
    ------------------------------


  • 2.  RE: Certificate of Substantial Completion continuing responsibilities

    Posted 09-08-2021 05:48 PM
    Substantial Completion is officially the date at which time the owner can occupy and begin using the project.  Consequently, all of the usual owner responsibilities for insurance, utilities, maintenance, etc. that go with occupancy are use become the owner's responsibility, even if they don't move in or begin use immediately. The wording "Owner's and Contractor's legal and insurance counsel should review insurance requirements and coverage" is important because the contractor's CGL insurance is not going to cover owner operations, contents, etc.  The property insurance, whether provided by the contractor or owner, also has to transition to owner occupancy and use. 

    There may be some circumstances where there is a shared responsibility for the utilities, maintenance, security, or perhaps some delay in making the transfer, which would be noted as an exception.  There could be other extenuating circumstances where these typical owner responsibilities don't transfer upon Substantial Completion and also would be noted. I don't recall in my experience that we had more than a small handful of exceptions or other issues, but you'll know them when you see them.


    ------------------------------
    Arlen Solochek, FAIA
    Owner/Principal/Founder
    Arlen Solochek FAIA, Consulting Architect
    Phoenix, AZ
    ArlenSolochek@gmail.com
    ------------------------------



  • 3.  RE: Certificate of Substantial Completion continuing responsibilities

    Posted 09-09-2021 06:56 AM
    Thanks for your input, Arlen. I did misspeak in my last sentence and meant exceptions for the "transfer" of responsibilities not continuation. I also have experienced it being rare that there are any exceptions to list, but was curious of other people's experience and verbiage used in those instances.

    ------------------------------
    Sharon Day AIA
    Senior Associate
    GWWO Architects
    Baltimore MD
    ------------------------------



  • 4.  RE: Certificate of Substantial Completion continuing responsibilities

    Posted 09-09-2021 07:03 PM
    In your mind, what are the remaining responsibilities for the AOR after substantial completion?

    We base our fees on a length of construction that ends with substantial completion (typically).  Occasionally, it takes months to get the contractor to finish everything and we are stuck extending our CA time.  In your mind, would this be an add service for this extra time?

    Thanks
    Mark

    Mark J. Paone, AIA I Principal, MJPaia, Inc.
    58 Plaza Square, Suite F  Orange, California 92866
    P  (714) 633-7667  I  F  (714) 633-8614
    Mark.Paone@MJPaia.com  I  www.mjpaia.com







  • 5.  RE: Certificate of Substantial Completion continuing responsibilities

    Posted 09-10-2021 04:23 PM
    Mark, 
    It's all dependent upon what your contract says and what you have negotiated.  The base AIA B101-2017 Owner-Architect agreement includes the following services, counts, and limitations:

    3.6.6 Project Completion
    3.6.6.1 The Architect shall:

    .1     conduct inspections to determine the date or dates of Substantial Completion and the date of final completion;

    .2     issue Certificates of Substantial Completion;

    .3     forward to the Owner, for the Owner's review and records, written warranties and related documents required by the Contract Documents and received from the Contractor; and,

    .4     issue a final Certificate for Payment based upon a final inspection indicating that, to the best of the Architect's knowledge, information, and belief, the Work complies with the requirements of the Contract Documents.

    • 3.6.6.2 The Architect's inspections shall be conducted with the Owner to check conformance of the Work with the requirements of the Contract Documents and to verify the accuracy and completeness of the list submitted by the Contractor of Work to be completed or corrected.
    • 3.6.6.3 When Substantial Completion has been achieved, the Architect shall inform the Owner about the balance of the Contract Sum remaining to be paid the Contractor, including the amount to be retained from the Contract Sum, if any, for final completion or correction of the Work.
    • 3.6.6.4 The Architect shall forward to the Owner the following information received from the Contractor: (1) consent of surety or sureties, if any, to reduction in or partial release of retainage or the making of final payment; (2) affidavits, receipts, releases and waivers of liens, or bonds indemnifying the Owner against liens; and (3) any other documentation required of the Contractor under the Contract Documents.
    • 3.6.6.5 Upon request of the Owner, and prior to the expiration of one year from the date of Substantial Completion, the Architect shall, without additional compensation, conduct a meeting with the Owner to review the facility operations and performance.
    I've seen very few of the One Year reviews, but it's in there.

    Your work also is subject to limitations for the number of inspections and reviews that you've negotiated:

    4.2.3 The Architect shall provide Construction Phase Services exceeding the limits set forth below as Additional Services. When the limits below are reached, the Architect shall notify the Owner:

    .1       «  » ( «  » ) reviews of each Shop Drawing, Product Data item, sample and similar submittals of the Contractor

    .2       «  » ( «  » ) visits to the site by the Architect during construction

    .3       «  » ( «  » ) inspections for any portion of the Work to determine whether such portion of the Work is substantially complete in accordance with the requirements of the Contract Documents

    .4       «  » ( «  » ) inspections for any portion of the Work to determine final completion.

    Last, if things really drag on, your contract also would have time limitations to complete your services under the original agreement, and which may entitle you to Additional Services or at least open discussion with the Owner:

    4.2.4 Except for services required under Section 3.6.6.5 [one year walkthrough] and those services that do not exceed the limits set forth in Section 4.2.3 [the number of inspections to determine Substantial or Final Completion], Construction Phase Services provided more than 60 days after (1) the date of Substantial Completion of the Work or (2) the initial date of Substantial Completion identified in the agreement between the Owner and Contractor, whichever is earlier, shall be compensated as Additional Services to the extent the Architect incurs additional cost in providing those Construction Phase Services.


    4.2.5
    If the services covered by this Agreement have not been completed within « » ( «  » ) months of the date of this Agreement, through no fault of the Architect, extension of the Architect's services beyond that time shall be compensated as Additional Services.

    All of these are intended to provide a reasonable and fair balance between the services originally negotiated and which the Owner expects, vs. reasonable and fair limits to the amount of effort and time certain in which the architect will provide those services.


    ------------------------------
    Arlen Solochek, FAIA
    Owner/Principal/Founder
    Arlen Solochek FAIA, Consulting Architect
    Phoenix, AZ
    ArlenSolochek@gmail.com
    ------------------------------



  • 6.  RE: Certificate of Substantial Completion continuing responsibilities

    Posted 09-10-2021 06:54 PM

    If you are providing contractual services, for example processing closeout submittals, I don't think it should be additional services, as these tasks are included in your contract, and you should have made provisions for having sufficient funds to cover this effort.   Perhaps you ought to include a limitation of time AFTER substantial completion during which the contractor must complete its closeout tasks.  Maybe 90 days?

     

    Best regards,

     

    A picture containing night sky  Description automatically generated

    Gustavo Lima, AIA

    President

    www.LimaArchitecture.com

    716-909-1709

     

     

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