Project Scheduling Handbook

Jonathan F. Hutchings

• Publisher: CRC Press
• Year: 2003
• ISBN:
  9781135524944
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Engineering General
• Index: Technology & Engineering

Offering real-world strategies gleaned from years of professional experience, this book contains the essential tools to prepare a well-organized, efficient, and effective working production schedule for successful construction outcomes. The only guide to address the day-to-day needs with hands-on problem resolution strategies, the author views the industry from an insider's perspective and depicts the integral role of a project scheduler in the design of lucrative schemes and layouts for contemporary residential, commercial, industrial, and civil construction ventures. It builds the necessary skills for project schedulers, one of the fastest-growing career specialties in the construction industry.

1
Construction Contract Law

CONTRACT DOCUMENTS

One of the dominant factors that emphasize the importance of construction contract environments is the highly competitive nature of the construction industry today. The contract documents are the legally binding agreements and addendum among the parties of the construction project. The major difficulty in contract environments is that, on balance, the greater percentage of project delays will be the result of some kind of error in judgment of design or deficiency in the project schedule. Whether it’s the failure to secure complete contract specifications information, mistakes in the contract documents, or inconsistencies on the part of the project management team, a large portion of delay claims will indicate an expensive mistake by someone.

The parties to a construction contract may be of either gender and may be singular or plural, such as individuals, partnerships, or corporations. However, traditionally, the American Institute of Architects uses singular, masculine pronouns as the accepted standard in text. Because this is the accepted legal industry standard, the author also uses this writing precedence but wishes to make absolutely clear to the reader that, although women traditionally have made up only a small fraction of construction management professionals, this fact has been changing in recent years. Because America is as big and diverse as it is, and this publisher is a marketing leader worldwide, some regional terminology needs to be clarified before we begin.

On the West Coast, the construction project team member that oversees production is called the Project Manager (PM). On the East Coast, the construction project team member that oversees the construction production is called the Construction Manager (CM). On the West Coast, the construction project team member that develops and oversees the project schedule is called the Project Scheduler (PS). On the East Coast, that project team member is called the Production Coordinator (PC). On the East Coast they call it wallboard, on the West Coast we call it drywall. The list goes on and on. Logically you understand, we construction management professionals do this just to confuse people starting out in the business and keep all the work to ourselves. Regardless, this book is written in West Coast terminology.

Construction contract law is a mirror of financial reality. If you want to see how the liability in contract law works, just watch where the flow of money goes. Money is the yardstick of both authority and responsibility, and in ‘‘lawyerese,’’ responsibility means liability. There are various levels within the construction project’s chain of command. Any person or organization with a financial interest in the project is called a vested party. Any contractor who works on the project has lien rights. The first, or primary, level in the chain of command consists of the vested parties in the project, and the top slot here starts with the generator of funds, usually the bank. This entity financing the project heads the pyramid. Next come the owner and the project team, consisting of the designer or architect who drew up the plans, followed by any registered engineers who were consulted on a commission basis regarding structural design analysis.

These primary parties, such as the architect or engineers, may have subcontractors or consultants who would be junior to them in authority. Next comes the project manager, who may be one of these engineers or may be a construction management professional from another field. These parties may also have subcontractors or consultants working for them. Then comes the project scheduler, followed by the site superintendent, and then field personnel. The project team assistant staff finishes out the primary chain of command in construction contract law.

The secondary level of chain of command in the project includes the workers who improved and built the project. These are lien holders, starting with the general, or prime, contractor, then followed by the subcontractors. The third level in the chain consists of the equipment and material suppliers of the subcontractors. These parties are also vested in the project by their lien rights, which provide for legal grounds of foreclosure in the event of nonpayment. In essence, the subcontractors and suppliers are extending credit to the project and hold what is legally termed ‘‘a cloud on the title,’’ which are foreclosure rights in the event of payment default, just as with a mortgage company.

By the time a construction contract has been executed, the owner has already taken full advantage of the available competition to get a low price for work that is shown and specified. The prime contractor is normally responsible for meeting ‘‘job conditions,’’ but only up to a point. That point is when a ‘‘request for information’’ (RFI) or a ‘‘request for clarification’’ (RFC) becomes ambiguous as to the degree of additional work that is beyond what was anticipated and that results in extra cost and time. The contractor had to assume the most competitive method to construct the unclear details to get the job, that is, to bid on what is shown and not price what is not shown. This practice eats up the prime contractor’s profit in no time. This classic architect– contractor separation is clearly stated in the disclaimer of AIA Document A201, The General Conditions of the Contract for Construction, which states, “The Contract Documents shall not be construed to create any contractual relationship of any kind between the architect and the contractor.”

So construction contract documents always begin with the financial bond and written contractual agreement between the owner and the project’s design professional. This contract agreement details the plans and specifications of the project’s construction. These two entities are the first two of the project’s vested parties. Two major professions are further within the design disciplines: the architect and engineer. Engineers are then further broken down into structural or civil disciplines. In the construction contract environment, architectural services usually extend beyond the phase of the building’s design and the production of plans and drawings. An equally important contractual task of the architect begins after the owner has approved the building design, cost estimates, and project schedule.

Upon approval of the plans and specifications, the architect incorporates his or her design into the package of articles termed ‘‘contract documents.’’ These documents are a collection of related drawings, plans, specifications, legal notices, and contracts contractors use to bid on a project. The drawings, plans, and specifications must be in compliance with the building code in the jurisdiction where the project is located. The architect normally also presides over the bidding, assists in selection of a bidder, and aids in establishing contracts between the owner and the contractor. The architect, in essence, becomes the agent of the owner. The final and equally critical service the architect provides is overseeing the construction of the project. This includes the interpretation of the contract documents when necessary, assisting the prime contractor in his dealings with the owner, and ensuring that all contracts are being expedited in accordance with the plans and specifications and that all contractual obligations have been satisfied by all parties to the contract.

An architect’s drawings are the main source of instruction for construction of a building and serve as the basis of the contract documents. The more specific and detailed the drawings are, the fewer the problems that develop during construction. Drawings must be complete, comprehensive, and clear so the architect, owner, and builder can have a basis for contractual understanding. Architectural drawings are of two general types: those used in discussion with the customer, and those used by people who construct the building. The first group consists of preliminary sketches (for discussion) and display drawings (for conveying the design to the public). The second group, often called ‘‘working drawings,’’ gives engineers and contractors plans to work of off on the job site.

In working drawings, schedules are lists of specifications for details that recur, or repeat themselves, in a project. Equipment schedules have no connection with a planned time sequence (which is the usual meaning of the term ‘‘project schedule’’). All windows and doors are typically listed in specification tables on drawings, with each opening numbered on the drawing and in the table. Because the specifications for framing and finishing may vary from one opening to another, it is more practical to table the data for each. Contract documents include a full set of construction drawings and plans that include various types of drawings. Normally, a set of drawings for new construction will include the following plans: site plan, plan view, cross sectionals, foundation plan, floor plan, elevations, and mechanicals.

Legally, contract documents refer to all the documents that are part of a construction contract. Generally, construction contracts can be broken down into three categories, though they are not necessarily arranged in the same order on each job. These categories are as follows:

Part I: Bidding and Contractual Documents

Notice of invitation to bid
Instructions to bidders
Proposal bid forms
Bid sheets
Contractor certificates (licensing and surety bonds)
List of subcontractors
Bid bonds
Noncollusion forms
Agreement contract
Performance bonds
Payment bonds

Part II: Conditions of the Contract

General conditions
Supplementary general conditions

Part III: Specifications and Specifications Addenda

Architect or design professional herein provides technical sections
covering the various parts of the project

Each of these items has further details, but an in-depth examination of each is beyond the scope of project scheduling responsibility and falls instead in the lap of the owner and project team. The architect or design professional is responsible for supplying technical specifications as well as the design plans. These contract specifications and their addenda are added to the contract’s general conditions to explain in detail the various responsibilities of the architect or design professional regarding the review and approval of shop drawings, as well as the parameters of design to production liabilities. Contract documents include all this information to prevent unclear or incomplete details specifications from causing delays in the project schedule.

For the purposes of project scheduling, reviewing the general conditions, specifications, and specifications addenda is a critical step to ensure contingent activity workarounds and that long-lead items do not burn up valuable float time, thereby placing the project’s completion date in jeopardy. Prime contractors also need to function within the general conditions responsibility as they subcontract to the related activities subcontractors for each contract specification, per plans and specifications.

Architect Responsibility

Upon building department approval of the plans and specifications, the architect incorporates his or her design into the package of articles that then becomes the contract documents. As stated previously, these documents are a collection of related drawings, plans, specifications, legal notices, and contracts all contractors use to bid on a project. Any deviation from the contract production schedule is cause for a construction claim for the owner, architect, or builder. These are countered by a change order in the construction contract that is generated and paid for by the owner. In reality, it’s usually the contractor versus the owner/architect team. This is why: The architect normally also presides over the bidding, assists in selection of a bidder, and establishes contracts between the owner and the contractor. The architect, in essence, becomes the agent of the owner.

The final and equally critical point to understand here is that the architect provides overseeing of the construction of the project. This includes interpreting the contract documents when necessary, assisting the owner in his dealings with the contractor, and ensuring that (1) the contractor is expediting the project schedule in accordance with the plans and specifications and (2) that all contractual obligations have been satisfied by the contractor.

Once assigned as his or her agent by the owner, the architect assumes what is called agency of representation. This means the architect speaks for the owner in decision making and has the power to authorize expenditures, or incur debt, on behalf of the owner.

Engineer Responsibility

During the construction planning process, an architect may retain consultants to supplement his or her own skills and to deliver a more complete, well-coordinated service to his or her client. The architect is trained in the integration of building systems (i.e., structural, mechanical, electrical, etc.) and has basic knowledge and design skill in each of these areas. However, on structural or geotechnical problems he or she will rely on the design capabilities of specialists in these engineering areas. In some architect offices, the engineers are placed on retainer or under contract for services. In large offices the staff usually includes one or more of these design professionals in a variety of disciplines.

The major distinction in construction law between architect and engineer runs along generalist and specialist lines. Each is a true professional, certified and licensed through examination. The engineer, however, is focused on an exhaustive study of a single technical area such as structural, civil, geotechnical and soils, or mechanical engineering. Both these design professionals have a contract authority the project scheduler should know.

Contractor Responsibility

There is usually any number of ways to complete a given project. The original bid will likely anticipate one reasonable sequence of construction that is apparently achievable, given the technical and time requirements. Assuming proper design workability of the architect’s responsibilities, the contractor is to anticipate the various components that will eventually make up the total project. Their constraints and interrelationships will be determined, and the project planning will be completed. Time tables are then developed, and the calendar is imposed to transform the plan into a project schedule. Besides the strict technical requirements of the work itself, responsibilities of contract execution by the contractor will generally fall within these following 13 categories:

1. Duty to inquire
2. Reasonable review
3. Plan and schedule the work
4. Lay out the work
5. Supervise, direct, and install the work
6. Adequate workmanship
7. Correction of patent errors
8. Coordination of all parts of the work
9. Review, submit, and coordinate shop drawings
10. Contract payments
11. Adequate insurance
12. Adherence to safety standards
13. Warranty of clear title

Owner Responsibility

Disclaimers of owner responsibilities and warranties are frequently found in many contracts. While these must be clearly understood if they do exist, they may often be overly ambitious in their attempt to shift the owner’s responsibility onto the contractor. Owner responsibility disclaimers should, therefore, be scrutinized very closely. When not barred from a specific contract, the law imposes several warranties, duties, and responsibilities on the owner, whether or not they are specifically highlighted in the contract language. They include

1. Using sound discretion in evaluating the qualifications of low bidders
2. Maintaining and preserving the bidding system integrity
3. Funding the work
4. Providing all surveys describing physical characteristics on the site
5. Securing and paying for easements and authorizations
6. Warranting the adequacy of the plans and specifications
7. Warranting the suitability of furnished materials
8. Disclosing superior knowledge
9. Offering prompt action on clarifications (RFC) and change orders
10. Providing final interpretation of the documents
11. Cooperating
12. Assuming ultimate responsibility for the design professionals

General Conditions

‘‘Boilerplate’’ is a nautical term that refers to the strong, often thick material (usually steel) that forms a pressure vessel, such as a boiler. In a construction contract, the general conditions are like boilerplates that provide containment precedence for dispute resolution among the parties of a project, by anticipating most of the areas of discussion or dispute that might arise and providing for an orderly method of resolving each case. In construction contracts, the general conditions serve to boilerplate the vested interests of the owner and lender, by providing prearranged avenues of precede...