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Construction Contracting

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Presentation on theme: "Construction Contracting"— Presentation transcript:

1 Construction Contracting
2013 Providers Conference Presented By Todd Macalady Assistant Professor UAF AK TTAP

2 The Next Step Construction Project Development
Phases of a construction project Preliminary planning and feasibility studies Preliminary engineering and design Final Design Completion Procurement Construction Closeout

3 Construction Bid Proposals
Contains the cost estimate Includes all of the bid forms Required to bid competitively if government projects Private owners could require bidders to prequalify before bidding on a project

4 Instructions to Bidders
Provides procedures to follow in order to bid on a project Provides detailed instructions on the requirements for the bid documents, bid submission, project information, and information on how to prepare the bid documents

5 The Bid Submission Process
Owner issues bid documents (usually done by the owner’s representative) Contractors prepare their bid documents The bids are submitted at the location indicated in the bid instructions Public or private bid openings Contractors have to sign noncollusion statement that they did not work with other contractors during the bid process

6 Bid Advertisements Include Information on:
The project Who is building it The A/E The date of issue A description of the work The basis of the bids The time of completion Bid opening information Where to locate the bid documents Prequalification requirements Statement on the right to reject any and all bids References to any government laws and regulations that pertain to the project

7 Bid Shopping Occurs when the prime contractor asks the subcontractors to lower their bids after a contract has been awarded or uses different subcontractors than the ones that submitted bids Results in additional profit to the prime contractor Illegal Could be prevented by requiring the prime contractor to provide a list of the subcontractors with the bid

8 Proposal Evaluation Evaluation and selection of contractor
Bids are either responsive or non-responsive Issue Intent to Award Prepare contract documents

9 Contracts Set Forth The Terms And Conditions Of Agreements
Protect Parties To A Contract Protect Parties When There Is A Default Help Parties To Determine Who Is In Breach Of Contract

10 The Need to understand Contracts
The Legal Terminology The Basics Of Contact Law Whether A Contract Addresses The Requirements Of The Engineering And Construction Project Whether The Contract Favors An Engineer Or The Constructor To The Detriment Of The Owner

11 The Main Components of Construction Contracts
General conditions Supplementary conditions Specifications Contract drawings (plans) Critical path method schedules

12 Components of Engineering Contracts
Articles in contracts include: Services to be provided Owner’s responsibilities Schedule for rendering services Invoices and payment information General considerations

13 Components of Engineering Contracts
Articles in engineering contracts include: Definitions Exhibits and special provisions Engineer’s services Additional services Construction cost limit Dispute resolution Allocation of risks

14 The American Institute Of Architects (AIA)
Commercially Available Construction and Engineering Contracts Are Available Through The American Institute Of Architects (AIA) The Joint Engineering Contract Documents Committee (EJCDC) The Associated General Contractors (AGC) Other Professional And Trade Organizations Owner Developed Contracts

15 Difficulties in Contracts Arise Due to Interpretation which is Caused by:
Vague Terms Unclear Contract Clauses Lack Of Familiarity With Contracts

16 Contract Administration
Act Of Determining Whether The Contractor Is Meeting The Construction Contract Requirements Determining Whether The Contract Is Being Built According To The Contract, Plans, And Specifications

17 Changes to Contracts Definition of Changes Owner requested changes
Inadequate design Material unavailability Budget changes Natural disasters

18 Five Types of Potential Alterations to Construction Contracts
Changes Extras Deletions Modifications Waivers

19 Change Orders Document in writing the terms agreed to by both the Owner and the contractor for altering the scope of work Provide written instructions for contractors and they are signed by owners, the A/E, and the contractor For projects with bonds they are signed by the surety



22 Types of Items that Require Change Orders:
Change orders are also used to correct construction documents if there are errors, omissions, or discrepancies Types of Items that Require Change Orders: Additions or deletions of work Unforeseen site conditions Changes in market conditions

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