Posts in "Contractors" category

Would you like to avoid common BC building project problems?

Everyone knows that complex building projects are prone to delays, disputes and deficiencies, accepting that these are an unfortunate result of the complexity inherent in the design and construction process. However not many people know that there are several approaches available to the way in which projects are delivered and that certain approaches are more prone to process issues than others.

The traditional Design-Bid-Build approach has the owner procure the services of an architect and support engineers who produce the contract documents. Once these documents are completed they are circulated to contractors for competitive bidding and a contract is awarded to the best respondent.
This method has many advantages including the fact that construction (which is the most costly portion of the process) is bid competitively with fully developed documents and therefore allows for a very clear comparison between bids. Also this approach is easy to manage as it is universally understood.
The downside of this approach is that the design process forgoes the positive input contractors can have on the project. Also it is virtually impossible to cover off all eventualities in the bid documents which often leads to multiple change orders that add cost or delay the project.

There is another very different approach that avoids most problems inherent in the Design-Bid-Build process. It is known as Design-Build. Here the one company is hired to design and build the project. In fact they can be a single company with in-house design and construction capabilities, or multiple companies who work together under one contract to the owner under the leadership of the design builder. Either way what differentiates the Design-Build process is that the owner contracts with one entity who complete all aspects of the project for them.

Advantages of Design-Build

Design-Build offers numerous advantages over the traditional Design-Bid-Build project delivery model. The advantages include:

  • Shortened Project Duration due to the fact that construction work can begin before the design and documentation process commences. Since the total project price is fixed the base building systems such as the foundations and the superstructure can be constructed while the fine details are still being finalized.
  • Only none party is responsible for the project and answers to the owner. Is is in contrast to the usual issues associated with traditional projects where designers and contractors often point fingers at each other whenever issues are not fully resolved.
  • No grounds for extras due to the fact that the overall project cost is fixed from the outset. An exception to this is when owners opt to request project changes after the initial scope is defined and agreed upon.
  • Clear and established communication between the designers and the constructors are also an important feature of Design-Build.

Types of Design-Build Arrangements

There are three main types of Design-Build arrangements. These include:

  • Contractor led Design-Build, where the contractor enters into a contract with the owner and retains the services of the Architect and other design consultants.
  • Project manager led Design-Build, where a separate project management Design-Build entity is hired to complete the project. This entity will in turn retain the services of contractors, the Architect and the design consultants.
  • Architect or consultant led Design-Build where the architect is hired to complete the full project and is retains the services of contractors.

Should you hire a Design-Builder for your project?

There are potential pitfalls associated with the Design-Build approach. These include the loss of certain controls that are present in traditional delivery models. For example, where design consultants are retained separately, their focus remains on assuring that construction complies with the design. Also the owner may lose some influence over the design as the designers will tend to work toward the global budget agreed upon in the initial contract.

Ultimately the decision to pursue the Design-Build approach usually rests on the advantages. Most large scale commercial, institutional and government projects are either Design-Build or some sort of hybrid derivative. The biggest benefit is the collaborative input of all project team members during the design process. Also including contractors in early phases where key decisions are made gains their buy-in and reduces the potential for problems during construction.

The Contract

The Canadian Construction Document Committee has developed a set of standard industry contracts which enable the Design-Build approach in Canada. They have produced contract documents specifically suited to Design-Build projects in Canada. The following information is taken directly from the CCDC website:

CCDC 14 – 2013 Design-Build Stipulated Price Contract Standard prime contract between Owner and Design-Builder where the Design-Builder performs Design Services and Construction under one agreement, for a single, pre-determined stipulated or fixed price.

CCDC 15 – 2013 Design Services Contract between Design-Builder and Consultant Standard contract between Design-Builder and Consultant to perform the design services required under a design-build contract between Owner and Design-Builder.

 

References:

The Canadian Construction Document Committee

 

Schulich School of Business, York University, Toronto, ON, I worked on this project with Hariri Pontarini Architects and it was completed in 2003.

Schulich School of Business, York University, Toronto, ON, I worked on this project with Hariri Pontarini Architects and it was completed in 2003.

How to Hire a Contractor in British Columbia – Part Three: The Formal Procurement Process

Once you have reduced your list of potential contractors down to three or four proponents you will need to ask them to submit proposals for constructing your home or building. This is a very important step in the course of your project. It is where most of your costs, the overall quality, and the schedule will be contractually fixed.

In order to call for bids you will need to provide the proponents with very clear, complete and coordinated bid documents that fully describe the scope of work. Furthermore, your bid documents will need to describe what is needed to assure compliance with requirements posed by authorities having jurisdiction over your project, including building code compliance. These
documents are comprised of two distinct categories of information: the bidding documents and the contract requirements. The bidding documents describe the rules governing the preparation, submission, receipt and acceptance of bids. While the contract requirements are the actual administrative and technical parameters the contractor will need to fulfill in the course of completing the project.
An Architect, along with the engineering/specialist consultant team, and your lawyer, will assist you in preparing these documents as part of their professional services on the project.

With your list of preferred contractors and the bid documents ready you will be able to begin the formal procurement process. Presuming you already know that all of your preferred contractors are able to successfully construct the project, the only remaining unknown will be the price of construction. As such your aim will be to choose the lowest bidder.

Legal Principles Over Competitive Bidding

The bidding process replaces negotiation between the owner and the contractor. The law of competitive bidding is unique to Canada and it confers rights and obligations to all parties where an owner receives binding offers simultaneously from multiple bidders for the same work.

In general, the bidding process proceeds through a sequence of two distinct contracts known as Contract A (the bidding contract) and Contract B (the actual construction contract). Contract A is created between the owner and each bidder that submits a compliant bid. Once the owner accepts a particular bid the bidder is obligated to enter into Contract B in accordance with the terms of their bid. In turn the owner is obligated to treat all bidders fairly and equally in line with the terms of the bid documents.

 

The Bidding Documents

The bidding documents are normally composed of several key components including:

Bid Solicitation Letter – a letter of invitation which is sent to invited bidders. It includes:

    • The name and location of the project.
    • Name of the owner.
    • Brief description of the work.
    • Time and place for receiving bids.
    • How and where to obtain the bid documents.
    • Bid security requirements.
    • Special qualification requirements.
    • Use of a bid depository if applicable.
    • Location and time of the mandatory pre-bid meeting if one is scheduled.

Instructions to Bidders – This document specifies the bidder’s and owner’s rights and obligations with respect to the bid call. It includes:

    • Owner’s legal name and address.
    • Telephone numbers, fax numbers, and emails of the person authorized to receive enquiries.
    • Time and place for receiving bids.
    • How and where the bid documents will be received.
    • Procedures for how bidder’s proposed product substitutions may or may not be considered during the bid period.
    • Instructions for method, form and completeness of bid submissions.
    • Instructions for methods of modifying bids prior to bid closing time.
    • Number of days the bid is to be irrevocable and open for acceptance by the owner. Usually 30 days.
    • Disclosure of criteria and preferences that will be applied in selecting the successful bidder.
    • The means by which bid documents may be modified through addenda.
    • Confirmation of the owners intent to respond to common bidding irregularities such as receiving late bids, missing signatures etc.
    • Any special rights the owner reserves such as the privilege not to accept any bid under special circumstances or to negotiate with the lowest bidder in the event of changes to the project (for instance financing problems that come up during the bidding process).
    • Type and amount of required bid security.
    • Requirements for pre-bid meeting attendance.
    • Requirements for use of a bid depository.
    • Any mandatory qualification requirements.
    • Instructions relating to submissions of alternative, unit or itemized prices.
    • Basis for determining the lowest bidder when alternative prices are requested.
    • Any unusual process requirements.

Information Made Available to Bidders

All pertinent site conditions need to be revealed to the bidders. These include:

    • Site geotechnical reports.
    • Surveys.
    • Information on existing buildings or structures.
    • Environmental assessments, permits and approvals.
    • Toxic and hazardous materials locations and data.
    • Easements and other site restrictions.

Bid Form and Bid Form Supplements

The bid form is project specific and includes information such as:

    • Name and location of the project.
    • Bidder’s company name.
    • Bidder’s address and contact information.
    • Owner’s name and address.
    • Bidders declarations such as price, agreement to perform the work and schedule.
    • Supplements such as the list of subcontractors, alternate prices and substitutions.

 

Contract Requirements

The Agreement

The Canadian construction industry employs a series of standard agreement documents for most methods of construction delivery. These documents are well established and have been developed over many years in consultation with the Canadian Construction Association, Construction Specifications Canada, the Royal Architectural Institute of Canada, and the Association of Consulting Engineering Companies – Canada. They are developed to be fair in representing the interests and obligations of all involved parties as well as adherence with legislative requirements. The standard documents include:

CCDC 2 – 2008 Stipulated Price Contract Standard prime contract between Owner and prime Contractor to perform the required work for a single, pre-determined fixed price or lump sum, regardless of the Contractor’s actual costs.

CCDC 3 – 1998 Cost Plus Contract Standard prime contract between Owner and prime Contractor to perform the required work on an actual-cost basis, plus a percentage or fixed fee which is applied to actual costs.

CCDC 4 – 2011 Unit Price Contract Standard prime contract between Owner and prime Contractor to perform the required work for a pre-determined, fixed amount for each specified unit of work performed. The total price is determined by multiplying the unit price by the actual, measured quantity of work performed for each specified unit.

CCDC 5A – 2010  Construction Management Contract For Services Standard contract between Owner and Construction Manager for which the Work is to be performed by Trade Contractors.  The Construction Manager acts as a limited agent of the Owner providing advisory services and administering and overseeing the contracts between the Owner and Trade Contractors.

CCDC 5B – 2010  Construction Management Contract For Services and Construction Standard contract between Owner and Construction Manager to provide advisory services during the pre-construction phase and perform the required Work during the construction phase.  At the outset, the Work is performed on an actual-cost basis, plus a percentage or fixed fee which is applied to actual costs.  The parties may agree to exercise the following options: Guaranteed Maximum Price (GMP), GMP Plus Percentage Cost Savings, and conversion into a Stipulated Price Contract.

CCDC 14 -2013 Design-Build Stipulated Price Contract Standard prime contract between Owner and Design-Builder where the Design-Builder performs Design Services and Construction under one agreement, for a single, pre-determined stipulated or fixed price.

CCDC 17 – 2010  Stipulated Price Contract for Trade Contractors on Construction Management Projects Standard contract form between Owner and Trade Contractor to perform the Work for a single, pre-determined fixed price, regardless of the Trade Contractor’s actual costs.  It is specifically for use where the project is performed under the CCDC 5A Construction Management method of contracting.

Supplementary Conditions

Any additions, deletions, or other modifications to a CCDC form should be clearly identified.

General Requirements

Division 1 of the project specifications manual. This will include:

    • Summary of the work.
    • Restrictions that will affect construction operations.
    • Scheduling and phasing requirements.
    • Payment procedures and cash allowances.
    • Administrative requirements.
    • Temporary facilities and controls.
    • Broadly applicable quality requirements.
    • Broadly applicable product and execution requirements.
    • Other issues that affect the overall work.

Technical Specifications

Written specifications describing the technical requirements of the project. These describe detailed quality and performance requirements for products and for the execution of various parts of the work

Drawings and Schedules

Drawings are a graphic depiction of the scope of work, including locations and size of all components. Schedules are a useful method of depicting quantities and typologies of building components such as doors, windows, finishes, paint colours etc.

Addenda

Modifications made to the bid documents after they were issued for bidding.

 

Calling for Bids

There are two general methods of calling for bids. The Open Bid Call and the Invitational Bid Call. Open Bid Calls are publicly advertised and open to all proponents. Invitational Bid Calls are open to preselected bidders.

Bidder Inquiries and Issuing of Addenda

It is essential that all bidders base their bids on identical information and that this information is made available to them at the same time. As such responses to bidder enquiries must be distributed through formal addenda which supplements or compliments the bid documents.

Receiving Bids

All bids should be received in a single location specified in the bid documents. They should be received by the person designated to do so in the bid documents and should be time stamped upon receipt. Late bids should always be considered non-compliant, while bid modifications or withdrawals should be allowed (unless specifically disallowed in the bid documents) prior to closing time.

Contract Award

Prior to contract award all bids should be evaluated for compliance with the requirements indicated in the bid documents. According to the law of competitive bidding non-compliant bids should be rejected.
All compliant bids must be evaluated fairly according to the criteria in the bid documents and no undisclosed preferences are to be applied. The contract should be awarded to the bidder with the most suitable bid, most often the lowest price.

 

Past Tips:

Part One: Are you Covered?

Part Two: Qualities to Look For
References: Information in this article is referenced from the following sources.

Listing of CCDC Documents

CCDC 23 – 2005 A Guide to Calling Bids and Awarding Contracts

 

University of British Columbia, Vancouver, BC, Renovations to the Wesbrook Building Laboratories. I worked on this project with ABBARCH Architecture and it was completed in 2012.

University of British Columbia, Vancouver, BC, Renovations to the Wesbrook Building Laboratories. I worked on this project with ABBARCH Architecture and it was completed in 2012.

 

How to Hire a Contractor in British Columbia – Part Two: Qualities to Look For

There are several issues owners need to consider before beginning the formal construction contract procurement process. Some of these will be reviewed with your Architect early on in the design process. They may include the form of project delivery, the type of construction contract as well as the method of awarding the contract. These critical elements affect the design process itself, as well as the scope of Architectural services, and therefore need to be settled upon before the architectural fee is established.

We will discuss the procurement process in part three of this series. In this article we will focus on general contractor traits to look out for. The process of identifying contractors who exhibit most, if not all, of these traits will let you establish a short-list of pre-selected potential bidders. The advantage of doing this is that most likely the only remaining determining factor will be the price, greatly simplifying your final winning bid selection.

Traits and qualifications to look out for:

Excellent References – It is important to work with your Architect to identify contractors who are capable to successfully complete your project. You may also seek recommendations from within your own network. Once you have a list of contractors contact all of them and ask for referrals and then contact previous clients to discuss their experiences in private. Some of the questions you may ask may be:

  • How did the contractor handle problems?
  • Did they keep the team informed?
  • Was the contractor a good team player and did they get along with the other team members?
  • Was the project completed on budget and on schedule?
  • Did their work meet your quality expectations?
  • Did they respond to warranty issues?
  • Was it a pleasant working relationship?

Efficiency and Time Management Skills – This is a very important category to consider in your selection. The general contractor will be your main construction project manager. They will be responsible for the daily construction process oversight, including managing of the trades and suppliers, information flow to all team members as well as scheduling, coordination, and site safety assurance. Essentially they are responsible for the “How” on the project, while your Architect and Engineers are responsible for the “What”.

Given all this is is imperative that your contractor is very organized. look out for well established procedures and a systematic approach to daily operations.

Good Communication Skills – While clear and efficient project information flow is essential during all project phases, it is especially critical during construction. With a continuous flow of time sensitive questions, answers, requests and approvals that constantly flow between team members, it is important for your contractor to have a proven track record of effective communication through well established procedures and systems.

How are their other Construction Projects run? Is is a good idea to visit a few of your likely proponents’ construction sites to see them in action. It will also be a good idea to bring your Architect along as they will be very accustomed to the construction environment and will be able to spot possible trouble areas.

Doing your homework will go a long way in assuring that you are inviting the right general contractors to join your project team. This trait identification process will allow you to quickly spot general contractors who fit within your chosen project drivers. Once you become familiar with how various local contractors operate you will be in a position to easily pre-select the right ones for your project.

 

Coming up:

Part Three: The Formal Procurement Process

2009 LDS Calgary 11

LDS Temple in Calgary, Alberta. I worked on this project with ABBARCH Architecture over a four year period. It was completed in 2012.

How to Hire a Contractor in British Columbia – Part One: Are you Covered?

Hiring a contractor to construct your project is a great milestone. At this stage all documentation, such as drawings, specifications, and other contract conditions are complete and ready to be bid on.

However, before bidding there are several issues that need to be considered. In this part of my “How to Hire a Contractor in British Columbia” series we will discuss the legislation around WorksafeBC insurance coverage.

WorksafeBC insurance coverage protects both workers and the employers who pay the premiums. It is a no-fault system which means that insured parties are indemnified for losses no matter who is at fault. In most cases employers (or project owners) are required to carry this coverage by law.

Under its coverage employers are protected from lawsuits while workers are eligible for benefits if they suffer a work related injury. Conversely, if the owner does not carry registered coverage they will likely face WorksafeBC coming after them for the costs of all benefits if a worker suffers an injury while working on their project. A very serious repercussion that has been known to lead to home owners losing their houses.

Usually, project owners will retain the services of a contracting company. In such cases this company will be responsible for securing the required WorksafeBC insurance coverage. Here the owner is obliged to make certain that coverage exists by obtaining the contractor’s WorksafeBC number as well as copies of the WorksafeBC clearance letter for each premium period. Contractors usually submit clearance letters with their monthly progress payment claims but this needs to be called for in the project contract documents.

In situations where the contractor fails to provide coverage the onus falls on the owner to fulfill these requirements.

On small residential projects, where the owner employs individuals or independent businesses directly to perform work on their homes, they are responsible to provide coverage. Please check the exact requirements with WorksafeBC.

 

Coming up:

Part Two: Qualities to Look For

 

References:

WorksafeBC About Insurance: http://www.worksafebc.com/insurance/about_insurance/default.asp

WorksafeBC Do you need coverage page: http://www.worksafebc.com/insurance/need_coverage/

WorksafeBC Homeowners and Renters: http://www.worksafebc.com/insurance/need_coverage/homeowners/default.asp

 

3e

Private school project in Maple Ridge BC that I worked on in 2007 with Atelier Pacific Architecture and ABBARCH Architecture