Wednesday, June 17, 2020

Understanding Change Orders for Ambiguous and Difficult to Control Projects


It is known that the scope of work for concrete spalling repair and similar unit cost projects can be ambiguous and difficult to control costs and time but decisions associated with such projects must be guided by the contract and construction documents because all project teams have different skills, abilities and management styles.

Also, during such project inceptions it is not uncommon for the contractor and professional team to become completely aware of the owner's budget constraints and objectives as envisaged by the owner.

Therefore, giving timely notice of work that warrants change directives or change orders for such projects is vitally important to avoiding perceived blatant disregard for the owner’s interests and budgeting objectives

Anticipating Problems

 1.     It has been said that the seeds for project failure are sown when projects are initially estimated, approved and continued delay in acknowledging true costs until projects reach a point of no return resulting in real project cost overruns or a perceived project failure.

 2.       When work is completed without giving the required timely notifications the question of how to address the situation arises and places the professional team in the difficult position of simultaneously managing the project and maintaining the relationship with the owner. Additionally, it is sometimes the owner’s common instinct to want to approve the Change order Proposal before considering that that the contract violation (no timely notification) deprived the owner the right of exploring alternative solutions or rejecting the deviations upon discovering the conditions and before they were disturbed.

Herein lies the conundrum for the professional team’s management on behalf of the contract documents:

a.      Owner can approve the Change Order Proposal and increase the budget, proceed with the work and maintain the schedule and relationship

b.     Owner can Reject the Change Order Proposal and preserve the budget, possibly stop the work, and haggle over the proposal; and

c.      Owner and Contractor risks escalating the matter to litigation or mediation and jeopardize the owner/contractor relationship and project success.

Here are definitions taken from the publication “ConstructionManagement Made Easy” and questions to be answered before making Change Order Proposal decisions:

Change Order Proposal 

A change order proposal is the written document before it has been approved and effected by the Contractor and Owner. A change order proposal can be issued by either the contractor or the owner. The change order proposal becomes a change order only after it has been approved and effected by the Contractor and Owner.

Questions (of common causes) before approving a Change Order Proposal:

1.     What was the Original Contract Amount?

2.     How many Change Orders have been approved to date for this project and total cost of same?

3.     What is this Change Order Proposal amount?

4.     What provision(s) of the contract documents justifies this Change Order Proposal?

5.     Who initiated this Change Order Proposal? Project Team (Architect, Engineer, Project Manager), Contractor or Owner?

6.     What are the consequences for Rejecting this Change Order Proposal?

7.     Did deficient drawings and/or specifications lead to this Change Order Proposal?  If so, the design teams errors and omissions insurance policy(s) may cover these costs.

8.     Did a Building department inspection initiate this Change Order Proposal? If so, the contractor may have a legitimate claim if supported by the Contract Documents.

9.     Did the owner or project team discover obstacles or possible efficiencies that requires deviation from the original plan or construction documents that initiated this Change Order Proposal? If so, what are they?

10.  Is this Change Order Proposal due to a claim for unforeseen conditions? If so, is there an unforeseen provision in the contract documents?

11.  Has this Proposed Change Order work been started or completed?  If so, who authorized the work and when?

12.  Did the owner demand the changes in the work such as additional or deductive features or options? If so, a fair price for the work items and fees must be added or deductive for the materials and labor plus any percentages stipulated in the contract documents.

13.  Was the project's work incorrectly estimated? If so, this Change Order Proposal should be negotiated or rejected.

14.  Did extreme weather conditions cause delays or require additional work to complete the work or add time to the contract? If so, when?

 

Change order proposal options

1.     Approve the Change Order Proposal that becomes a Change Order

2.     Reject Change Order Proposal

3.     Negotiate the Change Order Proposal

Change Order 

A written document between the owner and the contractor signed by the owner and the contractor authorizing a change in the work or an adjustment in the contract sum or the contract time. A change order may be signed by the architect or engineer, provided they have written authority from the owner for such procedure and that a copy of such written authority is furnished to the contractor upon request. The contract sum and the contract time may be changed only by change order. A change order may be in the form of additional compensation or time; or less compensation or time known as a Deduction (from the contract) the amount deducted from the contract sum by change order.

 Change Orders can be divided into three categories

1.     Addition to the work agreed in the contract

2.     Omission or deduction to work agreed in the contract

3.     Substitution, alteration, or deviation to work agreed in the contract.

 

Common provisions relating to notice for concealed or unknown conditions

1.      Contractor is REQUIRED to provide detailed weekly quality control reports to verify work performed. Such reports should include substantiating information to validate the Change Order Proposal 

2.      Knowledge of project conditions: Were the conditions known or should they have been known? 

3.      Contractor has Ten (10) calendar days to notify consultant of any change in conditions that warrants a change directive or change order.  “FAILURE TO PROVIDE SUCH NOTICE WILL VOID ANY CONTRACTOR RIGHTS TO ADDITIONAL TIME OR MONEY TO ADDRESS THE CHANGED CONDITIONS.”

4.      Concealed or unknown physical conditions encountered may adjust the contract sum or time if MUTUALLY agreed between the Owner and Contractor: “PROVIDED THE CONTRACTOR PROVIDES NOTICE TO THE OWNER OR CONSULTANT PROMPTLY AND BEFORE THE CONDITIONS ARE DISTURBED”.  Then NO adjustment in the contract sum shall be permitted.

Managing the Conundrum

1.     If the contractor fails to give timely notice for completing work that warrants a change directive or change order and said provision has not been waived it must be construed that the notice was necessary and would be followed by the contractor.  Thus the Change Order Proposal must be REJECTED or, if the board feels obliged, NEGOTIATED. 

2.     REJECTED means the contractor completed work without giving timely notice as required in the contract documents. But it may be in the best interest of the project to negotiate reasonable compensation to the contractor for the documented acceptable additional work completed. And the owner may feel obliged to NEGOTIATE the Change Order Proposal requested but should not feel obligated to do so unless the Proposal can be legitimized with supporting documents and reports approved by the respective project consultant(s):

3.     NEGOTIATING options and suggestions may include, but not limited to: 

a.      Requesting a detailed letter from the contractor explaining why the owner or project consultant was not notified promptly before disturbing the conditions and completing the claimed change order proposal work.

b.     Possible negotiations may include paying the Contractors actual cost for the work without overhead and profit; a percentage of the actual cost; a percentage of the unit costs completed; or a fixed settlement amount.

In summary, don’t be guided by instinct.  Be guided by the contract documents when making decisions on you next project. 

 


Wednesday, January 30, 2019

Building the greatest non-wall structure between the United States and Mexico (Continued from March 19, 2017)






One way of earning respect and loyalty is to admit ones mistakes or errors.

In our OPINION the promise to build a wall along the southern border with Mexico was simply a poor and unfortunate choice of words by then candidate Trump.  Here is a DRAFT of what he could say now:

During my campaign when running for President of the United States I made two key note promises that I cannot keep now and I apologize for that.

I promised that, if elected, I would build a great wall along the southern border between the United States and Mexico.  My use of the word “WALL” sounded great and it was received very well by my supporters.  However, in retrospect I regret using the word “Wall” when I meant “Security Plan”.

 However, now that my administration has had over two years of access to relevant government and private reports, including national security agency briefings, associated with border security and humanitarian issues, I now understand that Wall was definitely the wrong word to use because: 

1.     A wall requires ongoing maintenance such as graffiti and debris removal;

2.     Some areas along the southern border have such rugged terrain and water areas making it impractical and cost prohibitive to build a wall on; 

3.     Walls can be scaled and tunneled under.  In fact, I now understand that many very elaborate tunnels have been discovered at various fence locations along the Southern border;

4.     Environment impact studies would, most likely, be required in some areas;

5.     We would  have to initiate imminent domain land takings from property owners along the Southern border;

6.     For observation purposes additional see thru barriers are much more desirable and practical than a solid wall; 

7.     Walls can become an attractive nuisance for both adults and children causing false alarms;

8.     We can do wonders with state of the art technology such as cameras, drones and sensors;

9.     Our Country’s border security people are second to none.  They just need more people;

10. I was not aware that hundreds of miles of fencing had already been constructed at strategic locations along the border; and

11. With the proper border security legislation we can address the humanitarian issues that drives asylum seekers to the Southern border at their point of origin.

I also promised that Mexico would pay for the wall.  I honestly don’t know why I said that because I was actually thinking border security and not a wall per sey.

During my campaign when making these promises I basically put my political objectives and needs ahead of what our actual national security needs were and are by not clarifying my use of the word WALL. I am truly sorry for that.  

But let’s move forward now with a plan to achieve great border security, without a WALL, that will also address and solve humanitarian and asylum seeker issues.

Let’s use the word WALL to mean GREAT BORDER SECURITY……….Thank you!

The above, of course, is a fictional statement.  But anything is possible.

Comments and/or editing suggestions are encouraged and welcome!


Sunday, March 19, 2017

Building the greatest non-wall structure between the United States and Mexico (Continued from the March 13, 2017 posting)

Following this initial post on March 13, 2017 on March 14, 2017 we received an e-mail from Kevin Quealy, a reporter from the New York Times because our company was among the 647 listed in the “Interested Vendor List” of the Design-Build structure for the design and build of a prototype wall structure in the vicinity of the United States border and Mexico.

His e-mail asked if we were willing to share a “sketch or design advice of any kind to the customs and border protection” because he thought “readers will be interested to see how different companies envisioned this structure, particularly since aesthetics will factor into the final decision.”

As a courtesy we telephoned Mr. Quealy mentioning that we had no sketches but we had posted some design advice on our web site’s blog at http://constructionplace.blogspot.in/

Here are the visions of the two Options we posted on our web site Blog on March 13, 2017:

Option 1

Envision the following:

A concrete wall (30 foot high x approximately 2 foot thick with equally spaced buttress supports topped with spike like components traversing a variety of terrains, ranging from major urban areas to uninhabitable deserts;

Optionally, tower like structures or poles for cameras and other surveillance equipment are on or adjacent to the wall and spaced at strategic distances and locations;

An occasional drone is hovering overhead;

The wall is covered with graffiti, rust stains from metal fasteners or wall mounted components, light fixtures and/or exposed reinforcing steel;

Cracks and spalling concrete caused from earth quake tremors and common stress are observed;

Debris and garbage from wind and humanity is seen at the base of either side of the wall;

Occasional homeless shelters are observed next to the wall;

As needed draining systems are placed to prevent erosion and flooding; and
Sensor devices for detecting/locating tunneling activities because as the wall footings/foundations get deeper the tunnels are deeper thus making them more difficult to discover.

This option includes a mix of a continuous wall structure with limited or no visibility and technology while serving as a barrier

Graphic artist Sketches of this option are welcome for our next or future blog posting(s).  

Option 2

Envision the following:

A variety of strategically located open fence like systems/structures or boundary lines (the border line) traversing a variety of terrains, ranging from major urban areas to uninhabitable deserts;

Tower like structures or poles for cameras and other surveillance equipment are placed along the border line at strategic locations and distances;


An occasional drone is hovering overhead;

High tech equipped mobile homes with DHS (Department of Homeland Security) logos are flying American flags can be seen at strategic locations and distances along the border; and

If and when deemed appropriate both American and Mexican security officers will be seen periodically sharing the Motor homes for surveillance and patrolling activities in their respective areas.

This option includes a joint task force mobile security system with a mix of open vision fencing systems, mobile vehicles, and technology while promoting a good neighbor relationship.

Graphic artist Sketches of this option are welcome for our next or future blog posting(s).  

Ironically, on March 16, 2017 Wall Street Journal stories by Dan Frisch; and Dan Frisch and Laura Meckler respectively titled “Ranchers have their own Ideas on Border Wall” and “Wall Debates Shrinking Problem” expressed ideas mostly comprising “a mix of structures and technology”.  

The stories included thoughts from ranchers along the United States and Mexico border such as “I don’t care what they build.  They’ll climb over it or they’ll go under it” and “No matter what they build on the border, it isn’t going to stop the traffic”.

And weeks ago we read in a local newspaper about another contractor on the “Interested Vendor list” who believes the Design-Build Border Wall structure will not solve the expressed Illegal Immigration and drug trafficking problem(s) from Mexico but he will still bid on the project because he wants the work.  

We would like the work also but as Construction Managers with General Building Contractor licenses in California and Hawaii we feel obligated to tell our clients (1) when we believe their proposed project will have little or no impact on solving their problem; and (2) when we can offer other project scope options for consideration.

Therefore, we think readers would be more interested in seeing design advice that will solve the expressed problem including designs that are aesthetically pleasing.

Here is our definition of Design found in the publication “Construction Management Make Easy” See Glossary

DESIGN
A graphical representation consisting of plan views, interior and exterior elevations, sections, and other drawings and details to depict the goal or purpose for a building or other structure.

In other words, we design structures to depict a goal or purpose usually based on a promise that we have made to ourselves or others to solve a particular problem with a specific intent.

But sometimes we come up with more than one option to solve that particular problem. In such case it is prudent to choose the least expensive solution (Design) that satisfactorily produces the intent of the promise.

Comments, thoughts and/or other Options Welcome!

Clink on the below link to read about great border walls:


Monday, March 13, 2017

Building the greatest non-wall structure between the United States and Mexico


Problem:  Illegal immigration from Mexico into the United States via Illegal border crossings

Solution: Implement a great security system that discourages/prevents illegal border crossings and encourages legal immigration.

Option 1 – The Department of Homeland Security, Customs and Border Protection (CBP) is currently soliciting for the Design and Build of several prototype wall structures in the vicinity of the United States border with Mexico. The total length of this continental border structure would be approximately 3,201 kilometers or 1,989 miles long if completely built and traverse a variety of terrains, ranging from major urban areas to uninhabitable deserts.  As of January 26, 2017 the estimated cost to build this proposed wall is $15 to $20 Billion Dollars without the benefit of a design and construction documents.

Advantages: None that we can think of at the moment

Disadvantages: Limited visibility, high maintenance, unknown environmental and construction issues; and a perception of confinement and separation.

Option 2 – Build a joint task force mobile security system along the entire United States and Mexico Border using mobile homes, current fence deliberations by the United States Senate, and high tech surveillance equipment.  This option will divide our two countries with a secure open visible boundary line that traverses over a variety of terrains, ranging from major urban areas to uninhabitable deserts.  This option is currently estimated at $2 Billion dollars (see the Senate's estimate in item 2 below) plus our estimated costs for mobile homes at $100 million and high tech surveillance systems/equipment and training as determined by the Department of Homeland Security.

Advantages: Optimal visibility, low maintenance, minimal environmental and construction issues while creating the perception of building good will and better friendships; and a security system that would be fair and beneficial to all concerned.

Disadvantages: None that we can think of at the moment

How it works:

1. Mobile home stations - Use mobile homes placed every 1 to 2 miles or as determined by the Department of Homeland Security. Mobile homes will be self-sufficient with water, propane, electrical generators, mobile devices, and surveillance equipment allowing the mobile homes to easily relocate at any time and without notice along their assigned boarder territory. 

Each mobile home will have the Department of Homeland Security seal applied to the home’s exterior. If and when deemed appropriate each mobile home will fly both American and Mexico flags. And it may be possible to have the mobile homes donated by American and/or Mexican companies in exchange for sponsoring privileges like logo placement on the mobile homes and/or other promotional benefits.  Some mobile home locations may be more permanent and as such may require concrete pads being constructed with more permanent utility connections.



2. Complete the current Border fence deliberations by the Senate (from Google Search)


The fence would have high tech sensors for detecting breaches and/or tunneling activities connected to their respective mobile home stations.

3. Homeland security personnel – One Homeland Security Officer from the United States will occupy each mobile home.  Optionally, if appropriate, one officer from Mexico will join and occupy a mobile home with the United States officer. Officer(s) will patrol their respective area using 3 wheel and 4 wheel drive vehicles.  And conduct border surveillance using surveillance systems/equipment in their mobile home stations and/or vehicles.

4.  Border Management and chain of command - The respective State/County Sharif’s Departments would oversee the border, mobile home stations, and personnel in their respective states (from west to east, are California, Arizona, New Mexico, and Texas).The Sharif’s offices would coordinate with the Department of Homeland Security.

Here is a brief design for gathering study for the aforementioned options:


Conclusion - Don’t build something that will deteriorate and/or be torn town over time or that inhibits a good neighbor relationship. Build something that will symbolize American ideals and mutually withstand meaningful humane political aspirations.  The message – “America is a Country of secure openly visible borders and it’s easier to come to America legally.”

How is this for a possible solution to solving the illegal immigration problem from Mexico that can be mutually beneficial and save the United States tax payers lots of money?



Friday, April 15, 2016

Improving the Construction Industry Through a More Positive and Healthier Life Style



We are always looking for ways of improving the Construction Industry because there are lots of team members.  Well here are two simple and fast ways of doing just that.

Good manners, positive attitudes, and staying healthy can help achieve and maintain outstanding project productivity and promote good working relationships with all team members.

Building a More Positive Life Style

Too often we either miscommunicate or offend others with words we use or wrong unintentional body language, gestures, expressions, and most of time it’s simply negative and poor behavior which leads to bad manners.

These behavioral failures tend to be especially true when extending complements, offering constructive criticism, and just every day life’s events. 

Try this simple 3 step game, the object being to accumulate lots of points by the end of each day. 

HERE IS HOW TO PLAY THE GAME:

              Step 1 - Using the “Sample Positive and Negative Behaviors” table below create and           memorize your own list;

              Step 2 – Using the honor system start each new day with zero “0” points; and

              Step 3 - Let your actions be your guide by awarding yourself plus points for every good         deed, action or positive behavior performed. And deducting minus points for every negative or self- serving action performed.

Sample Positive and Negative Behaviors

Positive and Good Behavior = Plus Points
Negative and Poor Behavior = Minus Points
Acting with good manners (+1)
Not acting with good manners (-1)
Greeting others with a smile (+1)
Not greeting others with a smile (-1)
Positive and future talking (+2)
Negative and past talking (-2)
Doing something special for a friend or family member (+5)
Being self-centered (-2)
Being on time (+2)
Being late (-2)
Hold a door open for someone (+1)
Don’t hold a door open for someone (-1)
Saying Good Morning, Afternoon, Evening to others (+1)
Not Saying Good Morning, Afternoon, Evening to others (-1)
Saying thank you (+1)
Not saying thank you (-1)
Giving or offering a senior citizen a seat on the bus (+2)
Not giving or offering a senior citizen a seat on the bus (-2)
Saving your litter for a garbage can (+2)
Littering (-2)

SCORING

Subtract any Minus Points from Plus Points.  For example:   +10 – 2= +8 points for the day

Have fun and try for lots of + Plus Points each day.

Building a More Healthier Life Style

Try avoiding the following for a couple of weeks to lose weight, inches and get healthier and happier which leads to improved self-esteem, a more positive attitude and happier and life style. Most important, eat three meals every day.

No Caffeinated Drinks
No Eating in Bed
No Frozen Foods
No Junk Foods
No snacks between meals
No sparkling sugar added drinks
No unnatural salt
No white flour
No white rice
No white sugar



If you can't avoid all of these try avoiding a few.

If you have more suggestions on improving the Construction Industry please tell us!