Construction superintendent operations manual

Learning Effective Time Management 128Review of the Subcontract Agreement to Become Familiar with Its Contents 153 Verifying agreement with the subcontractor’s field supervisor 153 Disput

Construction Superintendent’s Operations Manual

ABOUT THE AUTHOR

Sidney M Levy is an independent construction industry consultant with more than 40 years of experience in the field He is the author of numerous books on construction

methods and operations, including Design-Build Project

Delivery, Construction Databook, and Project Management

in Construction, all available from McGraw-Hill.

Copyright © 2008, 2004 by The McGraw-Hill Companies, Inc Click here for terms of use

Construction Superintendent’s Operations Manual

Sidney M Levy

Second Edition

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Preface xiii

List of Form Letters xv

Contents of the CD xix

Chapter 2 Construction Contracts and How They Are Administered 11

Pitfalls for the superintendent to avoid when administering a cost-plus

Pitfalls to avoid when supervising a lump-sum or stipulated-sum contract 21 Addressing Material Price increases in Stipulated/Lump-Sum Contracts 23

For more information about this title, click here

The Cost-Plus-Fee Contract with a Guaranteed Maximum Price 24

Pitfalls to avoid when administering a construction manager contract 32

The contract to form the design-build team—the teaming agreement 35

Public works provisions that can affect subcontractor negotiations 37 Change Order Clauses in Government Contracts—Enrichment and Betterments 40 Looking for Those Onerous Provisions in the Contract with the Owner 41

Owner- or contractor-controlled-insurance programs—OCIP and CIP 47

Chapter 3 General Conditions of the Construction Contract 51

vi Contents

Article 12—Uncovering and Correction of Work 60

AIA Document A201CMa—General Conditions of the Contract for Construction,

Associated General Contractors’ Version of General Conditions between Owner

The general conditions of the engineers joint contract

Chapter 4 Organizing the Project—Before and During Construction 65

The new Construction Specifications Institute (CSI) MasterFormat® 73

Reviewing Allowance and Alternate Items Included in the

Abbreviations and acronyms referred to in the specifications 85

The request for information (RFI) and request for clarification (RFC) 120

Contents vii

Learning Effective Time Management 128

Review of the Subcontract Agreement to Become Familiar with Its Contents 153 Verifying agreement with the subcontractor’s field supervisor 153

Disputed Work or Interpretation of Contract Scope—RFIs and RFCs 162

Job Cleaning and Subcontract Provisions to Enforce This Task 168

Subcontractor claims for extra work where there is no owner reimbursement 187

The superintendent’s limited authority to approve T&M work 193

When the Contract Is a Cost Plus or a Cost Plus with a GMP 194

Damage to the Subcontractor’s Work or Damage to Work of Others by

Subcontractor’s request for payment for off-site storage of materials 203 The importance of recognizing second- and third-tier subcontractors 207 Chapter 7 Dealing With Difficult Issues at the Construction Site 209

viii Contents

Differing Conditions or Materially Different Conditions 211

Steps to follow when differing conditions are encountered 212 The Type I and Type II Claims as They Relate to Site Work 213

Some Ground Rules for the Difficult Issues Addressed in this Chapter 235 Chapter 8 Rehabilitation and Renovation of Older Buildings 237

Contents ix

Safety on the Job Site 259

Protection of Archeological and Paleontological Remains

OSHA’s most frequent paperwork and job site safety violations 268

OSHA Offers Assistance in Dealing with Four Dangerous Situations 270

What to do when an OSHA inspector appears at the job site 280

Chapter 10 Quality Control and Quality Assurance 289

Subcontracted work and the testing and inspection process 302

Dealing with subcontractors who diligently/reluctantly approach

x Contents

Contents xi

Chapter 11 The Legal World We Live In: Claims and Disputes 317

Appendix C Hot-Weather and Cold-Weather Concreting, Nondestructive 383 Methods for Testing Strength of Hardened Concrete, and Control of Cracking Appendix D Western Wood Products Quality, Measurement Standards, 411 and Lumber Definitions

Index 441 xii Contents

The boss brings in the work, the project manager assembles the team—but it

is the project superintendent who is going to get the project built.

The project superintendent’s role in the construction process is a critical one

He or she is the field general, directing tens or hundreds of skilled ple to ensure the timely completion of the project, provide assurance that thecontract requirements will be met, and, hopefully, allow the company to turn aprofit The project superintendent needs people skills, technical know-how, andmastery of the carrot-and-stick management approach These frontline super-visors are always willing to lend a helpful hand or a sympathetic ear, but theyare also tough when required, always mindful of the C’s required for a suc-cessful project: control over time, control over costs, control over quality

tradespeo-The Construction Superintendent’s Operations Manual, Second Edition, contains

the basic information every project superintendent needs, from interpreting andadministering the complex construction contracts of today, to methods of improv-ing organization in the field, to dealing with the intricacies of urban rehabilita-tion projects This book is jam-packed with helpful tips and reporting formsrequired for today’s fast-paced projects The CD inside the back cover includes awhole host of handy forms along with a series of form letters directed to owners,architects, and subcontractors covering most of the documentation concerns aris-ing in the field today—just type in the recipient’s name, address, and the project-specific data and send the form on its way

Today more than ever, a project superintendent’s management and technicalskills are put to the test He or she must deal with shortages of trained, experi-enced workers and learn about new materials and new construction techniquesand concepts As desktop, laptop, and, now, handheld computers become every-day management tools, and as construction companies become more sophisticated

in their collection and processing of field information, an entirely new set of skills

is required The successful superintendent must be a master of time managementand resist the tugs and pulls of the many attempts by subcontractors and mis-cellaneous visitors to the construction site to distract him or her from the primarygoals of being everywhere on the site and being aware of everything that is takingplace within the construction cycle At day’s end when most of the trades have

xiii

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left the site and quiet prevails, the superintendent’s work is not quite done He

or she is responsible for processing documents of all kinds—daily logs, drawingreviews, RFIs, updates to the schedule—planning activities for the next day, andmaking phone calls to track down tradespeople, materials, and equipment The

Construction Superintendent’s Operations Manual, Second Edition, may be of some

help in the completion of these tasks

This book has been assembled to provide insight into many of the facets ofthe construction process, offer some helpful tips for new entrants into the posi-tion of project superintendent, and, possibly, provide the experienced superin-tendent with a few more tools to add to his or her toolbox

The superintendent’s work day is long, and there are periods that test one’sphysical, mental, and emotional limits, but there is great satisfaction in know-ing that one’s efforts have not been wasted, and a project is one day closer tocompletion And, when you are riding in a car on a sunny Sunday afternoon andyou pass one of those bright, gleaming buildings you’ve recently completed, youcan point with pride and tell the family, “I built that building.”

Sidney M Levy

xiv Preface

List of Form Letters

Letter 1: When the architect/engineer issues lots of small sketches

contain-ing changes, confusion can reign—send this letter (p 72)Letter 2: Requesting an expedited review of shop drawings (Do not abuse

the privilege) (p 81)Letter 3: When the architect/engineer is overdue in returning shop drawings

(p 82)Letter 4: When previous letters to the architect/engineer still do not pro-

duce the requested shop drawings (p 83)Letter 5: Final letter to the architect/engineer when previous letters fail to

produce shop drawings (p 84)Letter 6: Notifying the architect/engineer of a delay because of the need for

a shop drawing review (p 85)Letter 7: Letter requesting a shop drawing submission schedule (p 87)Letter 8: Shop drawing submission schedule request follow-up letter (p 88)Letter 9: Requesting a close-in inspection (p 89)

Letter 10: Request for an inspection prior to backfilling (p 90)Letter 11: Requesting a schedule of work (p 91)

Letter 12: Request for a subcontractor to review baseline schedule (p 92)Letter 13: Requesting a punch list while subcontractors are still on the job

(p 114)Letter 14: Second letter requesting a punch list (p 115)Letter 15: The architect/engineer adds more items to the original punch list

on a subsequent punch list inspection (p 116)Letter 16: Owner sends the punch list to the contractor and the contractor

wants to stop this practice (p 117)Letter 17: When final payment is withheld because of “incomplete” punch

list work when the work is really covered by the warranty (p 118)

xv

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Letter 18: When a major change in work is contemplated by the architect/

owner and it will extend the contract completion date (p 122)Letter 19: Architect requests that the contractor slow down work in an area

where changes are being considered (p 123)Letter 20: Owner/architect advises of an impending change in scope (p 125)Letter 21: Proceeding with extra work on time and materials basis, repre-

sented by daily work tickets (p 128)Letter 22: Performing time and materials work when the owner’s representa-

tive or architect is not available to sign the daily work tickets (p 129)Letter 23: Proceeding with change order work when an agreement on costs

cannot be reached (p 130)Letter 24: Inquiring about the status of a recently sent proposed change

order (PCO), request for information (RFI), or request for fication (RFC) (p 131)

clari-Letter 25: When there is no response from the architect/engineer to a letter

inquiring about the status of a PCO, RFI, or RFC (p 132)Letter 26: Confirming verbal instructions received from the architect/engineer

(p 133)Letter 27: Responding to the owner’s request for partial occupancy (p 134)Letter 28: Notifying the owner of apportioned utility costs for partial occu-

pancy (p 135)Letter 29: Requesting a visit to establish the date of Substantial Completion

(p 136)Letter 30: Notifying the architect/engineer of the switch of utility costs to the

owner after Substantial Completion has been established (p 137)Letter 31: Notification of intent to file a weather-related delay claim (p 138)Letter 32: Requesting a review of a pencil copy of a requisition (p 139)Letter 33: Inquiring about the status of payment of a requisition (p 140)Letter 34: When previous requests to the architect/engineer for payment go

unanswered (p 141)Letter 35: Requesting additional sets of plans and specifications at no cost to

the contractor (p 142)Letter 36: Requesting a substitution of a specified product (p 143)Letter 37: Putting the subcontractor on notice regarding poor performance

(p 159)Letter 38: Hiring another subcontractor to supplement the poorly performing

subcontractor (p 160)Letter 39: Transmitting the punch list to a subcontractor (p 161)

xvi List of Form Letters

Letter 40: When punch list work is ongoing, but incomplete (p 162)

Letter 41: Subcontractor fails to complete punch list work as directed (p 163)Letter 42: Deducting value of punch list items from subcontractor’s account

(p 164)

Letter 43: Failure to meet start date of work per schedule (p 165)

Letter 44: When it appears that the subcontractor will be late in completing

work (p 166)

Letter 45: Rejecting defective/nonconforming work (p 169)

Letter 46: Second request to correct rejected work (p 170)

Letter 47: Engaging another subcontractor to correct defective work (p 171)Letter 48: Notification of an inspection by the architect/engineer and the

rejection of work (p 172)

Letter 49: Responding to a letter in which a subcontractor disagrees with the

reason for rejecting work (p 173)

Letter 50: Responding to a letter in which a subcontractor takes issue with

the finding(s) of the architect/engineer (p 174)

Letter 51: Transmitting an inspection report requiring rework (p 175)Letter 52: When the rework required by an inspection report has not been per-

formed by the subcontractor (p 176)

Letter 53: Letter forcing a response (p 177)

Letter 54: When a subcontractor’s interpretation of contract obligations

dif-fers from the general contractor’s (p 178)

Letter 55: When a subcontractor’s interpretation of contract obligations

dif-fers from the general contractor’s—follow-up letter with architect/engineer’s response (p 179)

Letter 56: First request to a subcontractor to clean work areas (p 180)Letter 57: Responding to a letter in which a subcontractor claims trash was

generated by another subcontractor (p 181)

Letter 58: Requesting a cost proposal for change-order work (p 182)

Letter 59: Follow-up letter requesting cost proposal submission (p 183)Letter 60: When the architect/engineer questions a subcontractor’s costs

(p 184)

Letter 61: When payment for lower-tier subcontractors is requested, but their

lien waivers are not included (p 185)

Letter 62: Advising a subcontractor of the due date to apply for payment

Letter 64: Architect doesn’t agree with a subcontractor’s requisition amount

(p 188)Letter 65: Requesting lien waiver from subcontractor (p 189)Letter 66: Responding to a subcontractor’s threat to reduce manpower unless

paid (p 190)Letter 67: Letter to architect advising of conflict in coordination process and

recommended solutions to the problem (p 224)

xviii List of Form Letters

Contents of the CD

A brief explanation of the contents of the new CSI divisions

A master checklist of typical project close-out requirements

A typical bailment agreement: for off-site storage

A typical bailment agreement: bill of sale of personal property

Accident report for a minor accident

Accident report

Blank labor rate sheet

Certified payroll form

Construction focused inspections initiative

Daily log

Example of a subcontractor interview form, this one for cast-in-placeconcrete

Example of checklist prepared for concrete inspections

Focused inspection guideline

Focused inspection relating to electrical hazards

Focused inspection relating to falls

Form to create emergency telephone number directory at the job site.Form to report witness statement relating to an accident

Format for a concrete construction safety toolbox talk

Guidelines for remediating building materials with mold growth caused byclean water

Notice to clean up

Notice to correct

OSHA’s top 26 most violated standards

Preconstruction meeting checklist

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Preproject handoff meeting form.

Project closeout checklist

Project manager and project superintendent checklist.Project manager and project superintendent review.Project start-up checklist

Quality control checklist—ConcreteQuality control checklist—Concrete Form RemovalQuality control checklist—Concrete ReinforcementQuality control checklist—Demountable PartitionsQuality control checklist—Earthwork

Quality control checklist—Finish CarpentryQuality control checklist—Flashing and SheetmetalQuality control checklist—Gypsum Drywall

Quality control checklist—Hydraulic ElevatorsQuality control checklist—Interior Glass and GlazingQuality control checklist—Landscaping

Quality control checklist—Lockers and BenchesQuality control checklist—Metal Deck

Quality control checklist—Metal Doors and FramesQuality control checklist—Miscellaneous MetalQuality control checklist—Membrane RoofingQuality control checklist—Metal StairsQuality control checklist—Metal Toilet PartitionsQuality control checklist—Painting

Quality control checklist—Pavements and WalksQuality control checklist—Rough CarpentryQuality control checklist—Resilient FlooringQuality control checklist—Roof InsulationQuality control checklist—Sealants and CaulkingQuality control checklist—Seamless Elastomeric FlooringQuality control checklist—Steel Joists

Quality control checklist—Structural SteelQuality control checklist—Toilet Room AccessoriesRequest for clarification (RFC) form

xx Contents of the CD

Request for information (RFI) form.

RFI log

Safety violation notice for a company other than the general contractor.Safety violation notice issued to an individual

Sample shop drawing submission schedule

Sample visitor log

Sample visitor sign format

Stamp to be used on time and material tickets (fill in name of generalcontractor)

Statement of compliance

Superintendent’s notice of pending backcharges

The new 2004 Construction Specifications Institute (CSI) divisions

Tracking shop drawings to/from architect

Typical subcontractor meeting minutes

Typical toolbox talk attendance sheet

Water damage—cleanup and mold prevention

Plus the 67 form letters listed previously

Contents of the CD xxi

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Construction Superintendent’s Operations Manual

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1

A Construction Industry Snapshot

The construction industry is a unique business The size of a construction pany can vary from a one-man skilled mechanic/entrepreneur to a multibilliondollar international giant operating throughout the world Locally operated familybusinesses compete with multibillion dollar contractors, but opportunities aboundfor anyone who is willing to work hard and catch a little bit of good luck

com-The construction industry is a vital part of the U.S economy As of January 2007,the annual adjusted rate of construction was $1.18 trillion and was projected

to increase to $1.21 trillion in 2007 and $1.302 trillion in 2008 Government jections point to increases in both wage and salaried jobs in the constructionindustry, where the growth rate of 11 percent through the year 2014 is expected.With 7 million wage and salaried jobs and 1.9 million self-employed and unpaidfamily member workers as of 2004—the latest information available from theU.S Department of Labor—construction is one of the nation’s largest industries,and it is an industry that pays well Bureau of Labor Statistics (BLS) figuresreveal that weekly earnings for full-time construction workers in 2006 was $642for nonunion workers, and $833 for union workers

pro-Union versus Nonunion Shops and Other

Certain other labor trends have become evident in the industry Older craftworkers have already retired or nearing retirement age and younger entrants

to the nation’s labor pool have chosen career paths other than construction.Labor shortages have had more impact than material costs on construction costincreases, as one major U.S contractor reported in mid-2007

1

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BLS projects the following labor force scenario over the next 50 years:

■ The impact of the boomer generation will continue to be felt as boomers become a larger portion of an older labor force; their exit fromthe marketplace will be the main factor in slowing the growth of the laborforce

baby-■ The stabilization of the women’s labor force participation will occur It peaked

at 60 percent in 1999 and has decreased every year thereafter, reaching59.3 percent in 2005

■ The labor force will become even more diverse as immigration and border rity issues continue to be a hot political topic

secu-A Risky Business

The building business is a high-risk, highly competitive business in which age gross profit margins, before taxes, are in the 2.4 percent range, according tostatistics compiled by the Construction Financial Management Association(CFMA) for the year 2006 The Surety Industry Organization (ISO), in a studyconducted in 2002, revealed that there was a 28.4 percent failure rate for spe-cialty contractors during that period A Dun & Bradstreet survey in this sametime frame showed that 32 percent of all contractors in business for 5 years

aver-or less will fail and 29 percent of all contractaver-ors in business faver-or 6 to 10 yearswill fail

In that D&B report, the five factors contributing to contractor failure were:

Unrealistic growth 37 percent

Performance issues 36 percent

Character/personal issues 29 percent

Accounting issues 29 percent

Management issues 29 percent

Few new technologies have been developed by contractors or equipment ufacturers, and old ways seem to die hard Although we accept computer tech-nology in the office, the field is still trowel and mortar and screw gun oriented.Construction has been compared to an outdoor factory producing a one-off prod-uct, while being exposed, and dealing with, all of the vagaries imposed by MotherNature Setting those differences aside, the construction industry has failed tokeep up with the technological advances of the indoor factory

man-Other production-oriented businesses such as the automobile industry havelong since switched from muscle power to computer-directed robots to assem-ble their product, but construction workers still butter up bricks one at a timebefore placing them side by side in a wall We still cut and fit individual wood

or metal studs every 16 or 24 inches apart in order to build interior partitionwalls

2 Chapter One

We are, however, an industry in transition As with so many businesses andinstitutions, the twenty-first century holds untold opportunities and challengesfor construction.

Developing Trends in the Construction Industry

Some changes in the construction industry are apparent, whereas others aremore subtle These changes will affect the way in which projects are designedand built, and the people who are responsible to deliver them recognize shifts

in the following areas:

■ The Organization

■ Human Resources—the Workforce

■ Project Delivery Systems

con-Changes in the subcontracting industry

Ninety-seven percent of all specialty contractors, more commonly referred to assubcontractors, attain annual revenues of less than $2.5 million; 27 percentreported yearly sales of less than $250,000, but the top 3 percent are gettingbigger, expanding by consolidation This trend began in the mid-1990s and

A Construction Industry Snapshot 3

accelerated in 1998 as a few investor groups began to purchase competitors,assuming that consolidation could bring increased profits as a result ofeconomies of scale and increased geographic exposure Emcor, the giant mechan-ical and electrical contractor, reported sales in the $2 billion range in 2005 afterbuying a series of regional firms And foreign corporations have seen the value

of entering the U.S market; Great Britain’s Keller plc has bought up old-lineU.S companies such as Hayward Baker, McKinney Drilling, and Suncoast PostTension

Human Resources—The Workforce

The U.S government is predicting a slowdown in the growth of our labor force.From 1950 to 2000, our workforce grew from 62 million to 141 million, an aver-age annual increase of 1.6 percent It is anticipated that from 2000 to 2050, theaverage annual growth rate will be only 0.6 percent The changing workforce

is characterized by an impending shortage of workers, which was first predicted

in the 1980s but has accelerated during the past two decades In today’s ketplace, a shortage of skilled craftsmen (or should we say craftspersons?) andmechanics along with experienced administrators and managers remain one ofthe major problems facing the industry Who would have thought, several yearsago, that staid construction industry companies would be offering “signingbonuses,” just like the NFL or NBA, to attract experienced and productiveemployees?

mar-One of the major challenges of this new twenty-first century will be to recruitand train new entrants to the construction industry, a task that is vital to theinterests of the United States An aging workforce, the lack of technologicaladvances, and the lure of more attractive vocations have all contributed to con-struction’s stodgy image and the difficulty in recruiting the best and the bright-est The demographics of the U.S population sounded the warning bell severaldecades ago, but the construction industry failed to recognize the signs By theyear 2010, it is estimated that the number of 55- to 64-year-old males will out-number the 18- to 24-year-old group by at least 1.5 million The number ofmales age 55 to 64 will increase from 10 million to 17 million in the next 8years This gap appears to be filled by immigrants and female workersattracted to the opportunities and the decent wage that the construction indus-try provides

Statistics developed by the Pew Hispanic Center reveal that the number ofHispanics in the construction industry grew by 556,000 in 2006, representing66.5 percent of the entire industry workforce This is a dramatic increase in justthe past 2 years, when Hispanics represented only 21.3 percent of the con-struction workforce The Pew Center studies show that 45.6 percent of that66.5 percent figure are recent arrivals to this country An English-Spanish dic-tionary of construction terminology can be seen on the desk in many field offices

these days, as superintendents struggle with directing a crew to caulk the junta

de aislamiento (isolation joint).

4 Chapter One

The growing female workforce

Female workers present yet another challenge in the construction workforce.When Occupational Safety & Health Administration (OSHA) was enacted in

1970, women made up less than 1 percent of workers in the construction trades.Female workers in the industry have grown steadily from 498,000 in 1980 to877,000 in 2000, the latest available statistics from the U.S Department ofLabor:

■ 412,000 women work as administrative support staff

■ 289,000 work in managerial capacities

■ 141,000 are employed in production crafts such as carpentry, plumbing, andpainting

■ 37,000 are laborers or helpers

(Note: rounding somewhat effects the overall number)Ergonomics, fitting jobs to the needs and abilities of workers, has not kept pacewith this influx of female workers, who complain about personal protectiveequipment that doesn’t fit properly, because it was designed and produced forthe male body Studies by the National Institute of Occupational Safety andHealth (NIOSH) revealed that 46 percent of female construction workers inter-viewed said that they could not find work shoes that fit properly, and 41 percenthad trouble finding appropriately sized work gloves Two respondents to aNIOSH questionnaire were quoted as saying: “They gave me gloves sohumungous, I couldn’t even pick things up,” and “You can be hurt That glovecould get wrapped up in a fan belt.”

Women on the job site are demanding better quality-of-life working conditions,cleaner temporary toilets, and more attention to potable water for drinking andwashing This movement has energized OSHA to declare unsanitary toilets as

“not available,” requiring either additional ones or cleanup of poorly maintainedPorta Pottis This will be better for the entire industry as it tries to “clean upits act” and attract more people

Project Delivery Systems

Fast-track and flash-track construction projects have given way to “Hypertrack,”

a system of utilizing advanced computer modeling to produce more compressed projects The design-build process has gained more credence in theprivate sector and with government agencies Adherents to the process claimthat its more efficient design and construction capability, combined with loweroverall costs, has been responsible for its increased popularity as a project deliv-ery system This concept allows an owner to contract with only one entity to pro-vide both design and construction, thereby creating a single source forresponsibility and accountability

time-A Construction Industry Snapshot 5

Changes in the design process have provided benefits to owners, architects,and contractors alike By utilizing some new software programs, the architectand engineer can generate a list of materials simultaneously with their design

of each component of construction such as structural steel, framing and drywallsystems, flooring, and ceiling materials At the end of a design day, this list ofmaterials can be transmitted to the owner’s contractor to update design costsversus budget The contractor, in turn, can transmit the list of structural steelmembers to their steel subcontractor not only for confirmation of price but also

to confirm a mill’s rolling schedule

The process known as Building Information Modeling presents a 3D dimensional) image of all design components Each member of the design teamwho receives these images can review and comment on matters such as con-structability and interference issues, which affect the placement and coordina-

(three-tion of systems—and do something about it before the design has been completed, not after the plans have been printed and distributed.

Architectural and engineering firms in the United States are subcontractingportions of their work to overseas designers who operate in different time zones.Taking advantage of Asian time zone differences, an American architect or engi-neer can punch out in New York at 5:00 P.M after e-mailing design criteria to afirm in Hong Kong or Thailand, where their day is just beginning On return totheir U.S office the next morning, they will find detailed drawings resting inthe computer awaiting printout to full-scale plans

Technology

Although lasers have more or less replaced optical leveling devices in the field anddigital computerized estimating in the office is commonplace, the constructionindustry has lagged far behind other segments of the economy in utilizingadvanced electronic technology But it is starting to catch up Wireless commu-nication is producing instantaneous verbal and document transfer as Blackberrys®

and other handheld PDAs (personal digital assistant) devices permit the projectsuperintendent to instantaneously transmit or receive vital information whenwalking the site

Several construction equipment manufacturers are entering the robotic age,producing unmanned excavators that can go about their business guided by anoperator working a joystick nearby Caterpillar has developed a system known

as Accugrade®, a sensor-independent process involving lasers and GPS thatautomatically controls bulldozer blade lift and angle, allowing the operator tograde faster and with more accuracy Complex 3D designs can be loaded intothe systems via compact flash cards

The National Institute of Standards and Technology (NIST) has been imenting with the problem of identifying and tracking materials and equip-ment on the job site, which has been a major impediment to productivity NISThas developed a prototype tracking system known as Comp-TRAK, which usesbar codes and tiny radio frequency identifying devices (RFID) Structural steel

exper-6 Chapter One

components delivered to the job site are tagged with either bar codes or RFIDs,allowing them to be instantly identified, picked up by a crane, and directed tothe exact place required Advances like this could lead to a fully automatedstructural steel erection process.

Productivity

The scarcity of experienced, skilled workers and managers has had its effect onproductivity on the construction site Some contractors are complaining thattasks previously requiring 8 hours to complete now take 12 hours because ofinadequately trained tradesmen Experienced managers are being asked toassume more responsibilities on more projects and, ultimately more things slipthrough the cracks With 85 to 95 percent of all construction dollars being con-sumed in field operations, the companies with the “leanest and meanest” oper-ations will excel However, in order for that to occur, both workers andsupervisors will have to acquire the necessary skill levels and tools to increaseproductivity while maintaining acceptable quality levels More research anddevelopment dollars will have to be spent by equipment manufacturers andconstruction trade organization to increase levels of productivity in both fieldand office operations This means that more highly trained workers and man-agers equipped with better tools and the ability and desire to extract that extraeffort from the team will be required More systems such as NIST’s Comp-TRAK will attract the attention of manufacturers and vendors, as time wastedlocating materials on site has been proven to be one of the most unproductiveactivities

Quality Control

“Do it right and do it right the first time” will take on more importance in thefuture The shortage of skilled workers and experienced supervisors makes iteven more important to increase productivity by reducing or eliminating

“rework” and callbacks to address poor quality issues Not only is price tant to owners; they also will demand a quality product If your company cannotsatisfy this demand, there are others waiting in the wings to step into your place

impor-Quality of product means complying with all of the demands of the contract

documents, including a thorough review of the plans and specifications,

sub-mission of shop drawings that have been reviewed before subsub-mission, being

responsive to all close-out documents, and reducing punch list work to “0” erance levels

tol-Safety

There were 392,400 nonfatal injuries and illnesses in the construction industry in

2004 Incident rates for nonfatal accidents fell from 6.8 per 100 full-time workers

to 6.2 per 100 full-time workers in 2004 This drop in nonfatal occupational

A Construction Industry Snapshot 7

injuries was driven largely by declines in injuries incurred by specialty tractors, whose incident rate dropped from 7.3 to 6.8 percent Although creditmust be given to all who were responsible for this decline in injuries, when com-pared to the figure for all private industry (4.5 incidents per 100 workers), wehave a long way to go.

con-The shortage of qualified tradesmen adds another dimension to the need tomaintain a safe working environment, not only to polish the industry’s imageand reduce human pain but also to retain the integrity of productive workteams A long-term absence of a skilled carpenter as a result of an on-the-jobinjury can affect costs, quality of work, and productivity for the entire crew.Many project owners, aware of job site safety from a moral and economicstandpoint, require contractors to provide them with a history of safe workingconditions as part of the bid requirements No owner wants media attentionfocusing on their new construction project if a serious accident or fatality hasjust occurred

Worker compensation insurance rates continue to remain a significant factor

in the calculation of a company’s overhead costs, thereby affecting its tive position As a result, builders are becoming more aware of the penaltiesaccruing from a poor safety record

competi-The Green Building and Sustainability

pro-Sustainability in the construction industry means creating designs thatemploy materials and operating systems that protect the environment and ournatural resources Using natural light to reduce interior lighting loads, andusing engineered wood products such as oriented strand board (OSB) andmedium density fiberboard (MDF) instead of virgin lumber, are all part of a sus-tainability program

8 Chapter One

The Project Superintendent’s Role

Managing the work process with its emphasis on maintaining schedule, trolling costs, and dealing with quality issues in today’s complex constructionprojects can be an overwhelming experience at times But that is what the con-struction industry is about, and what makes it so interesting and challenging.Management and control are the operative words today There are four basiccomponents in the construction cycle:

con-■ Construction engineering—The process of assembling materials, components,equipment, and systems, and the selection and utilization of the optimum tech-nology for this process

■ Management of the construction process—Establishing the best way toimplement the construction process to include precise scheduling and thecoordination and control of the flow of labor, materials, and equipment to thejob site

■ Human Resource management—Labor productivity and creation of a monious working environment as essential elements of a successful project.Control over human resources (the workforce) is important in these days oflabor scarcities

har-■ Financial management—Construction is a high-risk business with historicallylow profit margins Control over costs, cash flow, and adequate project fund-ing is critical to the success of any business endeavor, but even more so in thebuilding business

All of these key management functions, to some degree or other, will fall tothe project superintendent, who forms the first line of defense at the con-struction site and is one of the most visible and important members of theconstruction team

The successful project superintendent will need to manage and control the lowing seven basic elements of a successful project:

fol-1 The project is completed on time

2 The completed project meet the company’s profit goals

3 The quality levels expected are achieved

4 The project was completed with no unresolved disputes and no outstandingclaims

5 The contractor has maintained a professional relationship with the architectand engineer

6 The contractor has maintained a mutually beneficial relationship with all contractors, suppliers, and vendors

sub-7 The contractor-client relationship was a good one

A Construction Industry Snapshot 9

Although the responsibilities of the project superintendent may vary fromcompany to company, depending primarily on the size and sophistication of thecontractor and availability of support staff, one thing remains constant: theorchestration and management of the construction project This is the role thatthe project superintendent will play in this complex process called construction.

10 Chapter One

There are five basic types of construction contracts that the superintendentwill encounter, with numerous modifications such as exhibits and addendasthat customize the otherwise boilerplate provisions.

■ The lump-sum or stipulated-sum contract

■ The cost-plus-fee contract

■ The cost-plus-fee contract with a guaranteed maximum price (GMP)

■ The construction manager type of contract

■ The design-build contract

The American Institute of Architects

Contract Updates

In the latter part of 1997, the American Institute of Architects (AIA) issued itsnewly revised contracts, copyrighted 1997, which superseded the 1987 editions.Although some earlier 1987 versions may still be in use, we will address the cur-rent versions of these AIA contracts Another very important contract document

is AIA Document A201, General Conditions of the Contract for Construction,which requires its own chapter (Chap 3) to fully explore its provisions

Other, less frequently used contracts—the turnkey and joint venture contracts—will also be discussed in this chapter

A Letter of Intent is often executed as a “contract,” generally preceding theissuance of the more all-encompassing standard contract forms So let’s beginour discussion with this document

11

Copyright © 2008, 2004 by The McGraw-Hill Companies, Inc Click here for terms of use

The Letter of Intent

A Letter of Intent is generally a temporary document authorizing or initiating thecommencement of construction in a limited fashion, anticipating that a more com-plete and encompassing form of contract will be forthcoming in the near future.Limits are placed upon the scope of work to be performed, such as the dollarvalue of work to be performed, often expressed as a “not to exceed” amount,restrictions on what subcontracts or purchase orders can be awarded, and pro-visions relating to termination of the Letter of Intent In addition, the Letter ofIntent will incorporate provisions to cover settlement costs in the event that aformal contract for additional work is not awarded However, if a contract isawarded for additional work, that which was spelled out in the Letter of Intentwill be incorporated and any payments made under that document will be cred-ited to the new contract sum

There are a number of reasons for using a Letter of Intent:

■ An owner may wish to start demolition of a recently vacated office space whilenegotiating with a new tenant desirous of a quick move-in

■ Having received verbal loan approval from a lender, an owner may wish tocommence a limited amount of construction work on a new project whileawaiting full written approval

■ When a project is “fast-tracked,” an owner may wish to commit to a certain tion of work while the final budget is being prepared and, via the use of a Letter

por-of Intent, can authorize a contractor to proceed to purchase long-lead-timeitems necessary to jump-start the project, for example, reinforcing steel orstructural steel shop drawings

The Letter of Intent places limits on the scope of work to be performed and onthe dollar value of the work to be performed (often expressed as a not-to-exceedamount) and puts restrictions on what subcontracts or purchase orders can beawarded

This document is usually the precursor to the issuance of a contract withexpanded scope of work and incorporates provisions to include settlement costs

if that expanded scope of work fails to materialize

A Letter of Intent must be specific:

1 It should be specific in defining the scope of work to be performed If plansand specifications define that scope of work, these documents ought to be ref-erenced If plans and/or specifications are not available, an all-inclusive nar-rative should define the exact nature of work to be performed

2 It should include either a lump sum to complete the limited scope of work or

a “cost not to exceed” amount, including the contractor’s fee It is essential to

define what is included in cost as well as what reimbursable expenses are

included

3 It should include payment terms

12 Chapter Two

4 It should include a date when the work can commence and, in some cases,when the Letter of Intent expires.

5 If applicable, a statement may stipulate that the scope of the work and itsassociated costs will be credited to the scope/cost of work included in theexpanded construction contract

6 A termination clause should be included, setting a time limit on the work, or

an event that triggers termination, such as the issuance and acceptance

of another contract A termination “for convenience” clause is often added,allowing either owner or contractor to terminate the work upon writtennotification

7 The Letter of Intent must be signed and dated by all concerned parties

The superintendent must therefore be aware of restrictions contained in the Letter of Intent to ensure that no work beyond the scope of work contained in this document is performed.

A typical Letter of Intent might be worded as follows:

Pursuant to the issuance of a formal contract for construction, the undersigned (Owner) hereby authorizes (Contractor) to proceed with the tree removal in the areas designated on Drawing L-5, prepared by Wilton Engineers, dated July 8,

2003 All debris including tree stumps will be removed from the job site Prior to commencement of the work, all erosion control measures will be installed accord- ing to Drawing L-8, by Wilton Engineers, dated July 1, 2003 Maintenance of soil erosion measures will be required from the date of installation until this Letter of Intent is terminated on/about September 15, 2003 All the above work is to be performed

at cost plus the 15 percent contractor’s overhead and profit fee Daily work tickets will be presented by (Contractor) to (Owner’s representative) for signature to pro- vide substantiation for all costs.

Signed: Contractor Signed: Owner

Scope, tasks, and reimbursables included in letters of intent can include shopdrawing preparation and cancellation charges for any materials/equipmentordered if a further construction contract is not forthcoming Reimbursableexpenses may include in-house costs incurred by the general contractor for esti-mating, accounting, and even interim project management and superintendentsalaries The owner should be presented with a list of reimbursable costsappended to the Letter of Intent to avoid any future misunderstandings.When a formal construction contract is issued, the segregated costs associatedwith the work performed under the Letter of Intent must be applied against thecosts for the total project

It is important to accumulate and segregate all reimbursable costs as they areincurred Assigning a separate cost code to all labor, material, equipment, andsubcontract commitments will permit easy retrieval of all related costs and thepreparation of an accurate exhibit to the owner’s requisition

While operating under the terms and conditions of the Letter of Intent, the eral contractor may have to make certain commitments to subcontractors and

gen-Construction Contracts and How They Are Administered 13

vendors, and any purchase orders or subcontract agreements issued should tain the same restrictive provisions as are in the agreement between general con-tractor and owner.

con-For example, if the owner’s Letter of Intent contains provisions for the ration of reinforcing steel drawings, placing of an order for some nonstock sizes,and even partial fabrication, the same restriction(s) placed upon the general con-tractor should be transferred to the reinforcing bar contractor

prepa-This is particularly important if there is a termination clause in the Letter

of Intent A typical termination provision would be as follows:

Upon receipt of a written directive to cease the work covered under the terms of this Letter of Intent, the contractor will immediately stop all work All costs for work- in-place as of that date will cease Cancellation costs for work-in-progress will be hon- ored upon a detailed explanation for all such costs documented by purchase orders

or other commitments and related stop-work orders.

The superintendent must be familiar with the nature of costs to be included

in the agreement so that any field-related costs can be segregated, documented, and presented to the owner for payment.

The Most Prevalent Types of

Construction Contract

1 Cost of the work plus a fee

2 Stipulated or lump sum

3 Cost of the work plus a fee with a guaranteed maximum price (GMP)

Cost of the Work Plus a Fee

What could be simpler—a contract whereby the contractor invoices the ownerfor all costs related to the work plus the contractor’s fee for overhead and profit?Well, the cost-plus-fee contract requires a great deal of thought and effort to worksuccessfully

First, a definition of what constitutes cost is often a point of contention

between owner and contractor, and this needs to be clearly spelled out A plus-fee contract is, as the name implies, one in which the contractor will per-form a certain scope of work identified by contract documents or a narrativedescription The associated costs will be reimbursed by the owner inclusive of

cost-14 Chapter Two