Construction Cost Management

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Questions and Answers

An architect is reviewing contractor bids for an early education school renovation in a historic district. The owner wants an addendum stating the Historic Preservation Agency will provide up to $500,000 if the owner restores furnishings and landscaping in an adjacent park. According to AIA B101, which service is included in the architect's standard service?

  • Provide the client with costs of site furnishing and landscaping.
  • Request that contractors include furnishing and landscaping costs in their bids. (correct)
  • Provide the client a list of historic preservation criteria and standards.

An architect hires a structural engineer consultant for a new condominium project. Five days before the design document drawings are due, the owner requests a rooftop garden and patio. The structural engineer emails the architect, requesting additional time and compensation for the new roof modifications. If email is an approved form of documentation, what action should the architect take?

  • Attach the email to the owner's design document deliverables and invoice for payment.
  • Reply to the email asking the engineer to send their request to the architect in the form of a letter.
  • Forward the email request with a description to the owner for review and approval. (correct)

Under an AIA B101 agreement, an owner asks an architect to resume a laboratory project that was put on hold three years ago. The program calls for 10 laboratories at 500 square feet each. The cost per square foot three years ago was $400. Total construction inflation for the past three years is 15%. The architect's fee is 5% of construction costs. If the owner does not want the project to exceed $2,700,000, how much is the architect's new total fee?

  • $105,000
  • $100,000
  • $135,000
  • $115,000 (correct)

During construction, the construction manager submits an alternate material for approval due to supply chain delays for 6,000 square feet of exterior wall finishes. Per the contract, overhead costs for project delays are $4,000 per week. Using the data below, what are the cost savings of using the alternate material?

Original Material Alternate Material
Cost: $6/sf $13/sf
Project Delay: 14 weeks 2 weeks

<p>$6,000 (B)</p> Signup and view all the answers

An architect is preparing an initial project budget. There is a total fee of $300,000 for the entire project team. 40% of the total fee is allocated for all consultants. 8% of the net fee is allocated for the architect's non-reimbursable expenses. 7% of the net fee is allocated for the architect's contingency. What is the available budget for project labor?

<p>$153,000 (B)</p> Signup and view all the answers

An architect issues completed design development documents to prospective contractors for bidding. While interviewing contractors, the owner expresses concerns about schedule and budget changes. The owner also wants to know the cost of the project in order to apply for a community grant. What type of price should the architect advise the owner to request from the contractors?

<p>Guaranteed maximum price (B)</p> Signup and view all the answers

An architect has designed a project that the owner needs to be operational before the end of the year. As the bid package is being put together, the owner asks the architect for the most appropriate method of ensuring that the selected contractor meets the deadline. The owner is committed to not changing the design during construction. Which one of the following should the architect recommend?

<p>Provide a contract provision for liquidated damages. (B)</p> Signup and view all the answers

An owner places a project on hold after receiving completed construction documents from the architect. After six months, the owner requests that the project continue into the bidding phase. According to AIA B101, how should the architect proceed?

<p>Adjust the cost of work to reflect changes in the construction market. (C)</p> Signup and view all the answers

An architect is designing a new apartment building. The owner has a separate contract with the structural engineer. After the 100% CD set is issued to the contractor for construction, the structural engineer increases the floor beam size due to a miscalculation of the seismic load. As a result, the plumbing engineer needs to reroute the sanitary stack and the architect must redesign the bathroom layouts to accommodate a new chase. What should the architect do first?

<p>Submit an additional service request to the owner for approval prior to incorporating changes into the drawings. (B)</p> Signup and view all the answers

A contractor submits a punch list to an architect ten days before substantial completion of a gymnasium project. Days later, a subcontractor leaves a skylight open overnight, and rain floods the gymnasium floor, necessitating replacement of the flooring. The lead time for new flooring is twelve weeks. If the architect’s agreement with the owner is written to expire 30 days after substantial completion, which of the following documents must the architect prepare immediately? Check the two that apply.

<p>An invoice for additional services for owner payment. (D), A notice to the contractor for withholding final payment. (F)</p> Signup and view all the answers

During the design of a restaurant, a local Design Review Board (DRB) must approve the building elevations before the AHJ can issue a permit, which the owner wants to obtain as soon as possible. The DRB reviews the rendered elevations and rejects the branded signage shown on the restaurant as inappropriate for the neighborhood. The signage is not part of the architect's scope of design work. How should the architect proceed?

<p>Remove the signage from the permit drawings to get DRB approval and submit the signage under a separate sign permit. (A)</p> Signup and view all the answers

A renovation project is under construction. According to the general contractor's schedule, the owner's hazardous materials remediation contractor is to remove a plaster ceiling that contains asbestos. The owner's contractor does not appear, delaying other construction work. How should the general contractor respond?

<p>Make a claim for delay and/or additional cost incurred as a result. (C)</p> Signup and view all the answers

An architect is creating the workplan and schedule for a 3,200-square-foot tenant infill project. The project will have a documentation phase and a construction phase. The architect's fee is $20,000 and the project must be ready for permit in six weeks. What schedule type should be used for this project?

<p>Milestone chart (C)</p> Signup and view all the answers

A project is on schedule and just beginning in the design development phase. The architect is developing the workplan for February and March of Year 2. Which one of the following activities should the architect include in the workplan?

<p>Development of the outline specification based on the design and project requirements. (C)</p> Signup and view all the answers

An architect develops a proposed schedule prior to the beginning of design. After the schedule is developed, the following changes occur: One week is added to Owner review and approval of the DD package. Develop Construction Documents is extended by two weeks. Finalize Specifications is extended by one week. When will construction start?

<p>Week 26 (C)</p> Signup and view all the answers

An architect is working on a renovation project under an AIA B101 agreement. The architect's compensation is to be calculated as 5% of the cost of the work. The cost of the work is initially determined to be $12,800,000. At the beginning of construction, the underground foundation is uncovered and is found to require extra structural support, increasing the the total cost of work by 2%. How much should the architect bill the owner for construction administration services when this phase is 25% complete?

<p>$40,800 (A)</p> Signup and view all the answers

An architect is evaluating a construction cost estimate for a new school. Each portion of the work is to be designed at or below the construction budget. At the completion of design development, the estimate is over budget. Which of the following strategies are appropriate for bringing the project back in budget? Check the three that apply.

<p>Explore alternative exterior cladding materials. (B), Investigate how to reduce the amount of imported fill material. (C), Reduce the number of heating/cooling zones by increasing the area of each zone. (F)</p> Signup and view all the answers

An architect and a structural engineer are contracted under an AIA C401 agreement. The client revises the program, expanding the structural engineer's scope of services. The structural engineer is now preparing an additional fee request. How should the structural engineer submit the additional fee request?

<p>Submit to the architect and wait for authorization to proceed. (A)</p> Signup and view all the answers

An owner purchases a 45,000-square-foot, three-story hotel with the intention of converting it into an office building. The project will be complex and the owner's schedule is tight. The owner asks the architect for advice on project delivery. Which delivery method should the architect recommend to the client?

<p>Construction manager (A)</p> Signup and view all the answers

An architect completes the design development phase for a new apartment complex. The client approves the design pending minor changes to the three-bedroom unit. During the meeting with the architect, the client requests that a pool be added to the project scope. How should the architect reduce risks associated with this request?

<p>Send the client meeting minutes via e-mail for approval noting the discussed pool addition to the project. (C)</p> Signup and view all the answers

An architect is working on a large office building of Type V construction. A week before the 100% schematic design (SD) deliverable is due to the client, the architect conducts an internal review of the documents to confirm that the deliverable aligns with SD standards. Which of the following review items should be included in the SD quality review checklist?

<p>Review private office count and square footage needs with current architectural plan. (C)</p> Signup and view all the answers

An architect planned 1,000 hours for the design development (DD) phase of a project with an average rate of $50 per hour. The project has a planned multiplier of 3.05 and a total DD phase compensation of $152,500. At the end of DD, the architect finds that an excess of 240 labor hours were needed for DD. What is the additional project cost?

<p>$36,600 (D)</p> Signup and view all the answers

An architect is working on a large project with a construction manager (CM) as-contractor. All designers and engineers have been retained and the design is approximately 50% complete. Due to the size of the project, the CM is unable to secure a bond for the entire contracted project. Smaller construction contracts will be necessary. The owner and architect want all design and construction team members to continue in their current roles. Which delivery method should the architect recommend to the owner?

<p>CM as-advisor (D)</p> Signup and view all the answers

A university hires an architect to design a renovation and addition to a performing arts center. The university wants to use an integrated project delivery method and contract with a series of consultants who will each coordinate their scope of work with the architect. The work is to be executed in multiple phases and includes the following: Restore the original facade of the existing facility built in 1905, Convert the existing sloped concrete floor performance hall into a new flat floor performance space, Renovate existing classrooms to provide new advanced audio and video laboratories, Design a performance hall addition connected to the existing facility by an elevated walkway, Identify and address any AHJ or accessibility issues in the existing facility. Who should the architect recommend the university hire before the schematic design phase? Check the four that apply.

<p>General contractor (A), Geotechnical engineer (C), Historical preservationist (D), Construction manager (F)</p> Signup and view all the answers

During an architect's quality control review, the architect discovers the following code provisions for the minimum dimensions for all handrail extensions beyond the top riser of an egress stair: The state building code stipulates a minimum dimension that is two inches less than that required by the International Building Code. The local AHJ code stipulates a minimum dimension that is four inches greater than that required by the International Building Code. Which code requirement must the architect follow for handrail extensions in the construction documents?

<p>Local AHJ code (C)</p> Signup and view all the answers

Early in the construction document phase of a building renovation project, a mechanical engineer alerts the project manager that the architect has improperly classified the use of the space. The architect will need to revise the use of the space so that the mechanical engineer can correctly size a large portion of the HVAC system and revise the distribution duct layout. What should the architect do first to address the improper classification?

<p>Take corrective actions to modify the project work plan. (D)</p> Signup and view all the answers

An architect is working on a project under an AIA B101 agreement. During the construction phase of the project, the architect notices that brick masons are performing their work in an unsafe manner. How should the architect address this situation? Check the two that apply.

<p>Inform the general contractor of the unsafe conditions. (E), Document the situation in a field report. (F)</p> Signup and view all the answers

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Flashcards

Guaranteed Maximum Price (GMP)

A price given by a contractor early in the process before construction documents are complete, allowing the owner to have a budget for grant applications.

AIA B101 Bidding Phase Delay

If bidding doesn't start within 90 days after construction documents are submitted, adjust the budget to reflect construction market changes.

Milestone Chart

This is used for short-duration projects with relatively few tasks and fees typically under $35,000.

Assemblies Cost Estimate

An Assemblies cost estimate (also known as a systems estimate) is more precise than the order of magnitude approach. It is possible after early detailed information about project construction is defined.

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Early IPD Consultants

In integrated project delivery, these consultants should be involved from the beginning of the project in the predesign phase.

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Contract Provision: Liquidated Damages

Liquidated damages can be put into a contract, based on perceived financial loss by the contractor, if deadlines are missed.

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Project Error Protocol

After an error is determined, take corrective actions to modify the project work plan. The next step is to alert the owner of the situation, following the root cause analysis and solution.

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Code Stringency Hierarchy

Code mandated at the local level takes precedence over other codes.

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Consultant Design Error Protocol

The architect must request additional service for approval by the owner before performing the work because the additional work is due to a design error by the owner's consultant.

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Safety Concern Protocol

A memo documenting the unsafe conditions given to the contractor with a copy to the owner.

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Architect Compensation

According to B101 Article 11.6, percentage based fees for compensation is not adjusted for previous progress payments.

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AIA Document C401

AIA Document C401 is the Standard Form of Agreement Between Architect and Consultant. The engineer must submit requests to the architect and should await authorization before proceeding with any additional services.

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Complex Project Manager

For complex project, hire this type of project manager, if schedule is tight.

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Mitigate Risk with E-mail

E-mail documentation is an effective way to mitigate risk because it keeps a written record of decisions and directions, noting who generated these, along with when and where these actions were taken.

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Schematic Design Item

This item should be reviewed during an SD quality review to ensure everything matches with the current plan.

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A201 Claim Condition

The A201 agreement allows for a contractor to make a claim when a delay is caused by the owner or by the owner's consultants.

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Minimizing Owner Involvement

A construction manager is well suited when using this project delivery method.

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IPD Team Hires - Predesign

In the given scenario, a general contractor, geotechnical engineer, historical preservationist and construction manager should all be hired prior to this phase.

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Zoning Non-Conformance

If a project concept does not conform to the site's permitted use, the next course of action is to appeal for a zoning variance when you find the AHJ requires a slightly larger building setback.

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Potential Hazardous Material

The owner should engage a third-party hazardous materials testing consultant with material at risk of containing asbestos. That material should be tested and mitigated appropriately if found to be hazardous.

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CM as Advisor Delivery Method

Using this delivery method will allow all team members to continue with their current roles and responsibilities. It also allows for writing smaller construction contracts once design is complete.

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Subconsultant Team on Wetland

These should all be included on the Architect's project team for a ground-up research laboratory with road access on a wetland site.

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Construction Change Records

When there are construction modifications, construction change order, supplemental drawings and product submittals must be provided for the architect's review as part of the project closeout.

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Subconsultant Payment Time

A subconsultant will receive their payment by the time they have strategic plan and vision that they build for a new airport project is submitted during this phase.

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When New Project Requirements are Added

If added services are involved in a current project, the process begins by notifying the owner promptly of fees for additional service.

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Modifying The Project - AIA

When a client decides to proceed with the revised building program after the construction documents, prepare a new add services proposal, review updated costs with the owner and establish a revised construction start date.

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What can be done to reduce over costs?

In this certain scenario of cost cutting, the appropriate task is to specify less expensive light figures and ask the owner to directly purchase equipment in order to reduce overhead costs.

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Owner's Team Updates

This type of team should be interviewed early and receive updates at the beginning of each phase.

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Study Notes

  • Architects should request contractors to include furnishing and landscaping costs in their bids
  • This is part of assisting the owner in negotiations per AIA B101.
  • Adjustments to schedule and cost estimates must be submitted to the owner for approval, especially if email is an approved documentation form.
  • An architect's new total fee is based on the new total construction cost, not the owner's desired budget limit.
  • Total Fee = Project Square Footage * Cost per Square Foot Due to Inflation * Architects Fee

Cost Savings

  • Savings = (Original Material Cost + Original Material Delay) − (Alternate Material Cost + Alternate Material Delay)
  • Overhead costs for project delays are incorporated into these calculations.
  • To calculate Available Budget for Project Labor:
  • Calculate consultant fee
  • Determine net fee
  • Calculate non-reimbursable expenses and contingency
  • Calculate total available for labor

Integrated Project Delivery (IPD) Tasks

  • Performance specifications and sustainability goals: Criteria Design phase
  • Substantial and final completion documents: Construction phase
  • Developing constructible concepts and code compliance: Detailed Design phase
  • Design schedule and sustainability goals: Conceptualization phase
  • Finalizing BIM and specifications: Implementation Documents phase
  • Requesting Guaranteed Maximum Price (GMP) from contractors early in the process allows the owner to have a price for grant applications, even with incomplete drawings.
  • Delays in construction can run concurrently and delay the project completion date

Profit Calculations

  • Profit = Total Invoiced - Total Spent
  • Contract provisions for liquidated damages are recommended to ensure the contractor meets deadlines, motivating them based on potential financial loss from delays
  • The B101 agreement states the owner's budget should be adjusted if bidding doesn't start within 90 days of construction documents submission.
  • Architects must request additional service approval from the owner if additional work is due to errors by the owner's consultant.
  • If an agreement expires shortly after substantial completion, provide an invoice for additional services for owner payment due to extra costs and a notice to the contractor for withholding final payment, pending project closeout documents.

Design Review Board

  • To ensure that the AHJ permit proceeds to the owner, signage that has not been approved by the Local Design Review Board must be removed from the drawings
  • Subconsultants and subcontractors report to different parties based on their roles, i.e., landscape architects and structural engineers report to the Architect, etc.
  • Adding time in design review packages will delay all subsequent project completion dates
  • To ensure that ducts not routed above beams do not cause issues within the ceiling, ensure required dimensions are considered

General Contractor

  • The general contractor must make a claim for delay and/or additional cost incurred because of another contractor hired directly by the owner
  • Milestone charts are best for short-duration projects with fees typically under $35,000
  • During the Design Development phase, the outline specifications should be developed based on the design and project requirements.
  • Extra weeks for owner review of the DD package and for finalizing specifications (Finalize specifications) will not impact the week in which construction will start

Increased Costs

  • When the cost of construction increases during the design phases, previously completed services and service payment percentages, are not adjusted
  • Budget strategies to bring the project back in budget:
  • Explore alternative exterior cladding materials.
  • Investigate how to reduce the amount of imported fill material.
  • Reduce the number of heating/cooling zones by increasing the area of each zone.
  • With an AIA C401 agreement, subconsultants should submit additional fee requests to the architect and wait for authorization to proceed
  • Hiring a construction manager is best for complex projects with tight schedules

Meetings

  • Sending the client meeting minutes via e-mail for approval will help to reduce risk
  • Include items that impact the project
  • Review programming needs with the current plan, and ensure that it is appropriate for the SD quality review process.
  • Ductwork needs to be routed through the ceiling
  • Make sure to determine any impacts to the minimum ceiling elevation

Additional Project Costs

  • Additional project costs are the result of additional unplanned hours
  • When all designers and engineers have been retained and the design is approximately 50% complete, a CM as-advisor delivery method will allow the CM as-contractor and the design team to continue in their current roles with their current responsibilities

Before Schematic Design

  • Before the schematic design stage, you should hire a general contractor, a geotechnical engineer, a historical preservationist and a construction manager
  • When multiple codes conflict, the most stringent code always takes precedence
  • First, take corrective actions to modify the project work plan
  • The general contractor informs the architect about unsafe conditions

Corrective Action

  • If a project is not performing according to the Project Work Plan, that is the first step the architect should take.
  • A strong communication plan is essential for keeping project stakeholders engaged
  • To ensure that the architect's fee is adequately covered, the architects fee should be adjusted based on the increased cost of work
  • The architect will immediately document the unsafe working conditions to the contractor and inform the owner

Roles & Responsibility

  • Correct the fire separation due to consultant's uncoordinated information,
  • The project manager will need to take corrective actions to modify the project work plan.
  • Design-build projects place the owner in a position of limited involvement, this makes it a great delivery method when the owner is not interested in being highly involved
  • Essential project team for Conceptual Design: Architect, MEP engineers, Structural engineer, Geotechnical engineer

Cost Quality Checks

  • An Assemblies cost estimate is the most appropriate type of check at the end of April of Year 2.
  • Calculating the total number of hours worked and the average compensation rate and making adjustments based will determine whether the architect is remaining within budget.
  • The electrical, structural and refrigeration engineer should be contracted by the architect
  • Make sure to check with County officials to confirm schedule item 4.d

Scheduling

  • Staff Scheduling = the total amount of work by month minus the team member work available, by month
  • An add service proposal to formalize the change in scope
  • C401 documents between architect the architect/engineers
  • Project delays and impact
  • The owner asks the architect to reduce the production portion of each project phase with a client review and approval activity one week, extend the overall schedule by 6 weeks

Changes To Design

  • A construction change order, product submittals and supplementary drawings must be provided for the architect's review
  • Notify the owner of fees for additional services due to scope creep
  • Savings = Volume * (Original price - New Price)
  • Failure of performance, is subject to being paid for by a request for additional compensation
  • Be mindful of project milestones
  • When a project concept does not conform to the site's permitted use, an organization must appeal to the zoning AHJ for a zoning variance.
  • It is best to work with a third party hazardous materials tester to test for any materials

Zoning Commission's Role

  • You may need to resubmit to the zoning commission, and work with their entities
  • When a program has an item that has a 200% more square feet than needed, City Final Development Plan Submission will be delayed.
  • The HVAC structural engineers must be instructed to, locate and support a rooftop air handling unit
  • Tasks to be completed during each phase include written program from the owner, preparing a preliminary budget, development of detail drawings, and AHJ code implementation
  • Corrective measures will be needed, by the owner, architect and contractor

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