Construction Contract Documents PDF

1 At the end of this lecture material, it is expected that the students will be able to: Identify the fundamentals and references for contract documents; Describe the types of construction contracts; List and describe contents of contract documents; Identify and describe the types...

1 At the end of this lecture material, it is expected that the students will be able to: Identify the fundamentals and references for contract documents; Describe the types of construction contracts; List and describe contents of contract documents; Identify and describe the types of technical specifications; List and describe the typical contents of a general conditions of contract -GCC for Government projects; List and describe the typical contents of a general conditions of contract -GCC for private projects. 2 A letter of Intent-LOI, is a contract of restricted scope and may act as a signal to begin construction work with a limited scope of work. In the Philippines, it is oftentimes taken as a letter for a procuring entity (usually in a public or government project) that signifies the desire of a contracting firm to participate in a bidding process. Internationally and in private projects in the Philippines, LOIs are identified to usually contain six components, which are the following: 1. A stated scope of work 2. A lump-sum cost or a cost plus a fee 3. Payment terms or modes 4. A date when the work is to commence 5. A statement about contingencies if a larger related scope pushes through 6. Details (termination of current engagements) of the corresponding project continuation. There are several sources and references of construction contracts here in the Philippines. For Government initiated project it is mostly adhering to the guidelines provided by the Government Procurement Policy Board (GPPB) through the IRR of the procurement law. On the other hand the common reference for construction contracts in private industry typically comes from the following sources; Construction Industry Authority-CIAP document 102: Uniform General Conditions of Contract for Private Construction (Private Construction) Standard construction contract-American Institute of Architects -AIA Standard construction contract-Associated General Contractors of America- AGCA 3 Presently, most of construction contracts are in the following forms: 1.Lump-Sum or Stipulated Contract Fixed fee contract. Suitable if the scope and schedule of the project are sufficiently defined. Both buyer and seller are at risk. 2.Unit Price Contract Based on estimated quantities of items included in the project and their unit prices. The final price is dependent on the quantities needed to carry out the work. Suitable for projects where the different types of items, but not their numbers, can be identified in the contract documents 3.Cost Plus Contract ( Cost reimbursable contracts) The owner agrees to pay the cost of all labor and materials plus an amount for contractor overhead and profit (usually as a percentage of the labor and material cost) a. Cost + Fixed Percentage Contract b. Cost + Fixed Fee Contract c. Cost + Fixed Fee with a Guaranteed Maximum Price Contract (or GMP contract). Operating words: direct cost, indirect cost. This places a cap on the maximum cost of the work. d. Cost + Fixed Percentage/ with Bonus Contract A bonus is given if the project is finished below budget, ahead of schedule… e. Cost + Fixed Fee with Guaranteed Maximum Price and Bonus Contract The project will not exceed an agreed upper limit and a bonus is given if the project is finished below budget, ahead of schedule… f. Cost + Fixed Fee with Agreement for Sharing any Cost Saving Any cost savings are shared with the owner and the contractor 4 Continuation of the typical contract forms: 4. Incentive Contract For this type of contracts, compensation is based on contracting performance according to an agreed target – budget, schedule, and/or quality Categories of incentive contracts A. Fixed Price Incentive Contract B. Cost Reimbursement Incentive Contract -This sub-type provides for the initially negotiated fee to be adjusted later by a formula based on the relationship of total allowable costs to the total target costs. It specifies a target cost, a target fee, a minimum and maximum fees, and a fee adjustment formula. 5. Turnkey and BOT Contracts This arrangements typically liberates the owner from responsibilities in coordination during initial planning, design, construction and facilities start-up. This is a mode for complete project delivery by the contractor. Upon completions, it is noted that the key to the project is turned over to the client, leading towards the contract’s closed out or closure. Built-operate-transfer contracts are considered extension of the turnkey method. In most cases, contractors in BOT arrangements receives no payment from the Client for services but retain all or a portion of the revenues earned by a project during the concession. Other forms such as; Percentage of Construction Fee Contract or Construction-management contract. In a case in which the construction manager (CM) acts as the owner’s agent. CMs provide professional service while the contractor is a separate entity delivering the project. 5 The typical contents of a construction contract involve the items discussed below. These components are almost completely required for public projects and are sometimes implemented by private projects. 1. Introductory information. This portion contains the title page, table of contents, guides and introductions to the project at hand. 2. Bidding requirements The contract documents for a project also contains the particular forms for Bid solicitation, instruction to bidders- ITB, information to bidders, bid forms and supplementary details 3. Contracting requirements The contracting requirements are the primary contents of an individual project. It details the considerations of a project and mostly form the backbone of an eventual contract. It involves the following: Agreement, General Conditions of the Contract (GCC), Supplementary conditions of the Contract, Bonds and Certificates. 4. Specifications This will be discussed in detail in the succeeding sections, although a simple definition is provided now. Specifications-is a general term applying to all directions, provisions, and requirements pertaining to the performance of the work and payment for the work. Following a master format template, would include the anticipated divisions such as, Division 01- Gen requirements, Division 02-technical specifications, and etc. 5. Drawings Working and shop drawings in Architectural, Civil, Structural, Mechanical, Electrical, Plumbing & Sanitary are (all )anticipated to form part of a contract document. 6. Bill of Quantities These are the scope of works in measurable units such as excavation in terms of cubic meter (m3 or volume) that is required to be removed in a particular location. The typical format is a tabulation of work items (scope of works) with a corresponding columns dedicated to required quantities with an associated costing. 7. Appendices These are materials, not included in Master Format but they are useful for including copies of information, reference documents, existing conditions, photographs or example forms for use in administration during pre-construction and through the construction phase. The first three components presented here will be discussed under the (Government) Procurement lecture notes. A project manual is the bound (written) or bounded portion of the Contract Documents. 6 Specifications – is a general term applying to all directions, provisions, and requirements pertaining to the performance of the work and payment for the work. Purpose of Specifications o Specifications should describe the type and quality of every product required for the project. o The specifications should describe the requirements for fabrication, erection, application, installation and finishing o Specifications should describe the quality of workmanship Composition o Specifications should include any necessary codes and standards applicable to the project. o Specifications should also include description and procedures for alternate materials, products, or services if necessary. With the increased complexity and specialization in modern construction and the need for the Project Engineer to focus on legal requirements and administration, the use of the phrase “as directed by the Engineer” should be minimized. Work requirements must be clearly stated in the specifications. 7 Properties and organization o The specifications section should be arranged in an orderly and comprehensive format. o The organization should help the contractor, estimator, inspector, or other reviewer find information more easily. Specification Section Format o It is industry-accepted standard that provides a defined procedure for organization of the specifications section. o It provides guideline for the arrangement of information within the technical section of specifications. o Its concise orderly method reduces the chance for omissions or duplication of information. o It assists users of the document by consistently locating similar information in the same place in each section. Attributes of a well-written specifications: o Are clear, concise, and technically correct. Do not use ambiguous words that could lead to misinterpretation. o Are written using simple words in short, easy to understand sentences. o Use technically correct terms, not slang or “field” words o Avoid conflicting requirements. o Do not repeat requirements stated elsewhere in contract Well-written specifications are essential to the efficient construction of a successful project. Well-written specifications inform the Contractor of the work to be performed, the conditions and restrictions on performance of the work, the expected quality of the work, and the manner in which the work will be measured for payment. 8 Section Format has three separate parts: Part 1- GENERAL: section describes administrative, procedural and temporary requirements specific to this section of specifications. Part 2- PRODUCTS: section describes, in detail, the materials, products, equipment, systems or assemblies to be used in the project. Part 3- EXECUTION: section describes, in detail , any preparatory actions and how the products shall be incorporated into the project 9 METHODS of Specifying 1. Descriptive Specifications o exact properties of the materials and methods of installation are described in detail without using proprietary or manufacturer’s names. o commonly used for products for which no standards exist, o where using proprietary names are restricted, and o in situations where the Architect/Engineer wants to exercise tight control over the work. ADVANTAGES Specifies exactly what the design intends They are applicable to all conditions, methods or situations of a project They are applicable to all sizes and types of projects They permit free competition because they do not restrict the use of specific products or manufacturers DISADVANTAGES They require specifier to take special care in describing the design intent to achieve the desired results They take up more space because they require more verbiage, compared to other methods They may be more time consuming than other methods to create and write They are being used less often as more complete reference standards are being developed and implemented 10 METHODS of Specifying 2. Performance Specifications o required end results are specified along with the criteria by which the performance will be judged and the method by which it can be verified o contractor is free to choose materials and methods that will comply with the performance specification o are generally used to encourage the use of new and innovative techniques that may lead to more economical construction o are also used to supplement other specification methods ADVANTAGES Only the end result or design intent is specified , this gives the contractor flexibility in selecting and applying products. They permit free competition They can be applicable in all types and sizes of projects. They can delegate the technical responsibilities to the construction industry, where the Contractor instead of the Architect/Engineering firm is responsible for the results DISADVANTAGES They can be time consuming to produce and may result in long, detailed specifications They are more difficult to enforce than other methods of specifying They may be too elaborate for simple or minor projects They can delegate the technical responsibilities to the construction industry, where the Contractor instead of the Architect/Engineering firm is responsible for the results 11 METHODS of Specifying 3. Reference Standard Specifications o Under this method reference is made to an established standard defined by associations very knowledgeable about a certain part or phase of construction. o are used for “commodity” products in the marketplace, where brand names are not important ADVANTAGES Standard is usually widely known and accepted by the industry They do not limit competitions They dramatically shorten the length of specifications DISADVANTAGES There may be no appropriate standard tor reference. Standards are written for general products. Standards generally refer to the minimum requirements Standard may become obsolete They require a lot of research and care in use. They must be incorporated properly 12 METHODS of Specifying 4. Propriety Specifications o actual brand names, model numbers and other proprietary information is specified. o are primarily used for private commercial projects where the Owner knows the products they want. Two types of proprietary specifications: 1. Closed: generally prohibit substitutions, one or more products are specified. 2. Open: open specification permit substitutions, one or more products are specified, it is necessary to specify the criteria the alternate manufacturers will be judged by. ADVANTAGES They allow for close control of product selection. The drawings can be more complete and more detailed because they can be prepared based on precise information from the selected manufacturer. The specification can be shorter. They simplify the bidding by narrowing competition and eliminating product pricing as a major variable DISADVANTAGES They reduce the competition. They may specify products the Contractor is not familiar with or has had little experience with Care should be taken to assure no error is made when specifying model numbers or product designations. 13 Drawing as Communication Functions of Drawings ( Kilmer et. Al 2003) o for Idea Generation o as design and presentation media o as a Guide for Construction Purpose of technical drawings (Geisecke) o Visualization o Communication o Documentation Technical Drawing- ois the practice of creating accurate representations of objects for architectural and engineering needs. (Kubba 2009) Practitioner—drafter 1. Manual Drafting 2. Computer-aided drafting (CAD) and Computer-Aided design and drafting (CADD). CADD Presentations, Editing Flexibility , Units and Accuracy Levels, Drawing Storage and Access 14 (Review) Drawing fundamentals 1. Preliminary design— o provide a convenient and practical basis for communication between the designer and the owner in the idea formulation stage 2. Presentation drawings-purpose is to present the proposed building or facility in an attractive setting at the proposed site for promotional purposes. 3. Working drawings- also called the project and construction drawings, it include all the drawing required by the various trades to complete a project. It has the following functions: 1. they are the means for receiving building permit. 2. they are used for competitive bidding 3. they provide instruction for construction 4. they are used for material take-offs. 5. they provide a permanent record for the future use. 6. they can be used as a basis for leasing purposes. 7. after project is awarded, drawings form the basis of the contract between the contractor, subcontractor and client Letters used for blueprints: A-architectural pages, S- structural pages, P-plumbing pages, M-mechanical pages, E-electrical pages 4. Shop and Assembly drawings- are technical drawings prepared by various contractors, subcontractors and suppliers participating in the construction process to show how their product is to be made. 5. Specialized and miscellaneous drawings – numerous other type of drawings used by architects and engineers in the construction industry. o freehand sketches o Erection drawings o framing drawings 15 Drawing types and compositions: Civil/ Structural Plans Site Plan- a scale drawing of a property that shows its size and configuration including the size and location of man-made features such as buildings, driveways, and walkways on the property. Plt Map- a scale drawing of part of a city or town-ship showing some specific area, such as a subdivision made up of several individual lots. Legal descriptions: Lot and blocks , boundaries Demolition Plan- It shows the elements to be demolished and to be retained Topography Map-indicate to the builder the slope or flatness of the site. Drainage and utility plans- shows locations of the water, gas , sanitary and electric utilities that will service the building Site improvement drawings- large complex projects often require separate drawings to clarify proposed site improvements including curbing, walkways, retaining walls, paving, fences, steps, benches and flagpoles. 16 Drawing types and compositions: Structural Plans Structural drawing- oconsists of the preparation of design and construction drawings for buildings, bridges and other civil structures oinclude foundation plans, wall sections and framing details, structural steel framing and details, beam and column drawings and details, and others oNumbered beginning with an “S”, as in S-1, S-2, etc. Foundation plan- ois a plan view of a structure projected onto an imaginary horizontal plane passing through at the level of the foundation. 17 Drawing types and compositions: Structural Plans Framing Plan- owill indicate used for framing the building and may include wood or metal, studs, concrete masonry units or structural steel oinclude the basic skeletal structure of the building. Structural steel drawings- o show the overall dimensions of the structure, such as the location of columns, beams, angles and other structural shapes. Erection plans- omade by the steel fabricator are assembly drawings for the steel structure. They show how the steel parts fit together. oOther plans: structural steel shapes & connection details 18 Drawing types and compositions: Architectural Plans Architectural drawings ocontain required information on the size, material, and makeup of all main members of the structure, as well as their relative position and method of connection. onumbered sequentially with the prefix “A” for architectural. oConsist of plan views, elevations, and sections of the structure and its various parts. Plans – orepresents a view of the project from above. omost common view, oa floor plan is a 2D view of a space, such as room or building. 19 Drawing types and compositions: Architectural Plans Architectural drawings ocontain required information on the size, material, and makeup of all main members of the structure, as well as their relative position and method of connection. onumbered sequentially with the prefix “A” for architectural. oConsist of plan views, elevations, and sections of the structure and its various parts. Elevations- views that show the exterior or interior of a building, they are orthographic views. They are flat, 2D views with only the height and width indicated/obvious. Sections- used to clarify the building design and construction process. Show views of cross sections cut by vertical planes (can be staggered) 20 Drawing types and compositions: Mechanical Drawings Mechanical Plan- ospecifies the design of or the modification to the mechanical system, ductwork layout and dimensions, mechanical equipment location, damper locations, design air-delivery rates, diffuser locations, thermostat locations and supplemental cooling systems. oIdentified normally as M-1, M-2, etc. oCommonly known as HVAC drawings- heating, ventilating and air-conditioning drawings. oFire protection system are prefixed “FP” The following are typically included in a set of mechanical drawings: 1. Plans showing the size, type and layout of ducting 2. Diffusers, heat registers, return-air grilles and dampers 3. Turning vanes and ductwork insulation 4. HVAC unit types, quantities and location 5. Electrical, water or gas connections 6. Ventilation and exhaust fans 7. Symbol legend, general notes and specific key notes 8. Heating and/or cooling load summary 21 Drawing types and compositions: Electrical Drawings Electrical Systems oin a building include lighting, electrical outlets, communication lines and computer networks. oNormally numbered using prefix of “E” Power plan- is a drawing of the floor plan showing all required outlets, locating panels, receptacles, and circuitry of power-utilizing equipment and special systems. Reflected Ceiling Plan- ois a drawing of a room or space looking down at the interior ceiling. It shows ceiling treatment, ceiling grid, and the placement of all light fixtures. Typically included in a set of electrical drawings are the following items: Type and location of outlet, (duplex, dedicated, isolated ground) Size and type of conduits (data, communication, phone) Volts of switches, wiring and circuitry Lamps and model numbers of light fixtures Direct connections (junction boxes, etc.) Emergency lighting and exit signs Alarm and security systems Fire-alarm systems Sound systems, speakers, monitors and camera Special equipment (kitchen, entertainment) Special technical devices (computers, gauges, medical etc.) Special Wiring (signs, heating) 22 Drawing types and compositions: Electrical Drawings Electrical Systems oin a building include lighting, electrical outlets, communication lines and computer networks. oNormally numbered using prefix of “E” Power plan- is a drawing of the floor plan showing all required outlets, locating panels, receptacles, and circuitry of power-utilizing equipment and special systems. Reflected Ceiling Plan- ois a drawing of a room or space looking down at the interior ceiling. It shows ceiling treatment, ceiling grid, and the placement of all light fixtures. Typically included in a set of electrical drawings are the following items: Type and location of outlet, (duplex, dedicated, isolated ground) Size and type of conduits (data, communication, phone) Volts of switches, wiring and circuitry Lamps and model numbers of light fixtures Direct connections (junction boxes, etc.) Emergency lighting and exit signs Alarm and security systems Fire-alarm systems Sound systems, speakers, monitors and camera Special equipment (kitchen, entertainment) Special technical devices (computers, gauges, medical etc.) Special Wiring (signs, heating) 23 Drawing types and compositions: Plumbing drawing- oprovide all pertinent information on the design of the plumbing system for a project, including line sizes and location, fixture location, isolation valves, storage-tank capacities, hot-water heater capacities and locations, and drain locations and routing. oInvolves two major components water supply and drainage. onumbered beginning with “P”, as in P-1, P-2, etc. The following are typically included in a set of plumbing drawings: o A plan with lines and symbols representing all piping o Symbol legend, general notes and specific key notes. o Fixture schedule, specifying the manufacturer and model for each item o The sizes for all piping, cold/hot water, sanitary vent lines, etc. o Diagrams, such as water riser and sanitary stack o Information regarding the water heater 24 General Conditions of the Contract Author Sidney Levy (2010) in “Construction Process Planning and Management” defines the general conditions of a contract as followis: This document is actually like a “ rules and regulations, ” game plan statement. It defines the roles of the owner, the architect, and the contractor through construction, listing each one’s obligations and responsibilities and elaborating on certain events that take place during the process. The AIA Document is known as A201 General Conditions of the Contract for Construction; the AGC includes the general conditions in each type of contract form. (Levy, 2010 pg 90-91) This definition is consistent with the intended contents of both the Construction Industry Authority of the Philippines-CIAP 102 and Philippine Bidding Document –PBB by GPPB. After all, the stated expectations are mostly follow the references and sources provided in the introduction GPPB even has a disclaimer regarding General Conditions of Contract and it reads as: The GCC in Section IV, read in conjunction with the SCC in Section V and other documents listed therein, should be a complete document expressing all the rights and obligations of the parties. The GCC herein shall not be altered. Any changes and complementary information, which may be needed, shall be introduced only through the SCC in Section V. GCC of PBD has 51 items of important considerations, detailing guiding principles between the procuring entity and the winning bidder of a particular project. It is claimed that AIA –(American Institute of Architects) has the most prevalent form of general conditions of contract. AIA A201 (counterpart of CIAP 102) is divided into 14 parts, termed as articles. On the other hand, CIAP 102 has 11 sections, which we would be reviewing in this slide, with the intent of picking up the details important for a contractor. 25 General Conditions of the Contract-GCC under PBD A tabulation of the complete items in the PBD about GCC is presented above. Only a few key elements or defining keywords, corresponding to each item, are listed per item. The students are encouraged to read the reference document for PBD regarding the details of the GCC. Procuring entity is taken as PE in the descriptions. Calendar days are abbreviated as CD 26 General Conditions of the Contract-GCC under PBD A tabulation of the complete items in the PBD about GCC is presented above. Only a few key elements or defining keywords, corresponding to each item, are listed per item. The students are encouraged to read the reference document for PBD regarding the details of the GCC. Procuring entity is taken as PE in the descriptions. Calendar days are abbreviated as CD 27 General Conditions of the Contract-GCC under PBD A tabulation of the complete items in the PBD about GCC is presented above. Only a few key elements or defining keywords, corresponding to each item, are listed per item. The students are encouraged to read the reference document for PBD regarding the details of the GCC. Procuring entity is taken as PE in the descriptions. Calendar days are abbreviated as CD 28 General Conditions of the Contract-GCC under PBD A tabulation of the complete items in the PBD about GCC is presented above. Only a few key elements or defining keywords, corresponding to each item, are listed per item. The students are encouraged to read the reference document for PBD regarding the details of the GCC. Procuring entity is taken as PE in the descriptions. Calendar days are abbreviated as CD 29 General Conditions of the Contract-GCC under PBD A tabulation of the complete items in the PBD about GCC is presented above. Only a few key elements or defining keywords, corresponding to each item, are listed per item. The students are encouraged to read the reference document for PBD regarding the details of the GCC. Procuring entity is taken as PE in the descriptions. Calendar days are abbreviated as CD 30 General Conditions of the Contract-GCC under CIAP 102 A tabulation of the complete sections in the “Uniform General Conditions of Contract for Private Construction” GCC is presented above. Only a few key elements or defining keywords, corresponding to each section are listed per section. The students are encouraged to read the reference document CIAP 102. 31 General Conditions of the Contract-GCC under CIAP 102 A tabulation of the complete sections in the “Uniform General Conditions of Contract for Private Construction” GCC is presented above. Only a few key elements or defining keywords, corresponding to each section are listed per section. The students are encouraged to read the reference document CIAP 102. 32 General Conditions of the Contract-GCC under CIAP 102 A tabulation of the complete sections in the “Uniform General Conditions of Contract for Private Construction” GCC is presented above. Only a few key elements or defining keywords, corresponding to each section are listed per section. The students are encouraged to read the reference document CIAP 102. 33 34 CE 124: Construction Engineering and Management 1 35