Paper Contracting - The How-To of Construction Management Contracting Book
Looking for a better way to make a living in construction? Construction consultants are doing that right now. They don't have the headaches common on nearly every project – risk of loss, code compliance, warranty claims, liens, and – always – the need for more capital.
If working as a consulting contractor appeals to you – and if you aren't exactly sure how to do it – consider Paper Contracting. The co-author, William D. Mitchell, has completed over 100 projects as a construction consultant – everything from home remodels under $100 thousand to government projects worth over $100 million.
Looking for a better way to make a living in construction?
Construction consultants are doing that right now. They don't have the headaches common on nearly every project – risk of loss, code compliance, warranty claims, liens, and – always – the need for more capital.
Consulting contractors work with the designer, get owner approval of the plans, guarantee a maximum price, select trade contractors, make sure work is done right -- and then collect a little extra for finishing under budget. It can be a good business. But it's not a general contracting business. It's a consulting contractor business: no employees, no inventory, no payables, no warranty, no investment, no liens, no risk.
Is anyone really doing this?
It's the way most federal, state and municipal jobs are done today, including many of the largest projects, e.g. the Corps of Engineers. Many commercial and residential jobs are run by consulting contractors – sometimes called paper contractors. Some of the most experienced, most successful, most respected construction professionals in the industry fit the definition of paper contractor. And for good reason.
A consulting contractor is the owner's representative – answers only to the owner. The consultant's job is to protect the owner against high costs, delay, shoddy work and risk of loss. No one else on the site shares that agenda.
Finding work as a construction consultant
It's not hard. In fact, why not suggest consulting every time you bid a job. The pitch goes something like this:
I can save you some money on this job. I'll act as your consultant at a price my competition can't touch. There's zero profit for me in this job. Just pay me for my time. I'll give your job the same attention I give to every project I take on, but with no markup. You can't beat that deal. Say the word and I'll write up a contract we both can live with.
If working as a consulting contractor appeals to you – and if you aren't exactly sure how to do it – consider Paper Contracting. The co-author, William D. Mitchell, has completed over 100 projects as a construction consultant – everything from home remodels under $100 thousand to government projects worth over $100 million.
Covers consulting when the fee is either (1) a fixed amount, (2) a percent of the job cost, or (3) a guaranteed maximum price (consulting contractor "at risk"). Includes a free Web link to sample consulting contracts legal for residential and commercial work in each of the 50 states.
For more information, or to see video from the author, click here
| Weight | 1.680000 |
|---|---|
| ISBN | 978-1-572182-70-7 |
| Page Count | 272 |
| Author | William D. Mitchell & Gary Moselle |
| Publisher | Craftsman Book Company |
| Dimensions | 8-1/2 x 11 |
- Paper Contracting 5
Why Owners Choose Construction Managers................................................... 8
Construction Management Summarized.............................................. 9
Opportunities for CM Contractors.........11
What’s Different about CM Contracting?............................................ 12
Overhead & Profit.................................... 16
The CM Contractor’s Fee.........................17 - A Case Study 23
The Facts.................................................... 24
Lessons for CM Contractors....................31 - Managing Pre-Construction Services 37
A Contractor’s Perspective......................37
Adding Value During the Design Phase........................................................ 38
Finding Prospects..................................... 40
The Initial Contact: What’s Required?...41
The Second Meeting: Make an Offer......47
The Third Meeting: Get a Commitment................................. 48
A Formula for Success............................. 50
Q & A on CM Contracts.......................... 55
Your Design & Engineering Team...........57
The Design Process...................................61
How Architects Work.............................. 62
Your Contract for Pre-Construction Services.................................................... 64 - Review the Plans and Specs 67
Plan Checking........................................... 68
The Six Cs of Plan Review...................... 70
Cost Estimates...........................................77
Pulling the Permit.................................... 79
The First Schedule.................................... 82 - Preparing Bid Packages & Evaluating Bids 87
Public vs. Private Contracts.................... 88
The Bid Package....................................... 89
Getting the Word Out.............................. 90
The Invitation to Bid................................ 95
The Pre-Bid Conference............................97
Awarding the Contract.......................... 100
Invitation to Bid Form........................... 103 - Reviewing the Trade Contracts 111
Essentials in Every Construction Contract..................................................112
Optional Contract Terms.......................114
Contract Bias............................................116
Comply with State Law........................ 118
Your Own Contract................................ 120
Ordering Materials and Services..........121 - Observing Day-to-Day Construction 125
Direct, Oversee, Monitor and Advise............................................... 126
Bonds and Insurance.........................127
Staying on Schedule..........................131
Contractor Claims for Delay........... 140
LEED Green Projects........................ 144
Jobsite Safety..................................... 145
Defective Work...................................147
Quality Assurance............................ 148
Hazardous Materials........................ 149
Cleanup.............................................. 149 - Keeping the Owner Informed 153
Heading Off Problems...................... 154
Information Channels...................... 156
Submittals, Samples, Shop Drawings.......................................... 159
Significance of Approval................. 162
Retaining Construction Records..... 163
Your Job Log...................................... 165
Contacts for Everyone......................167
Record Documents........................... 168 - Evaluating Payment Requests 171
The Request for Payment................ 172
The Schedule of Values.................... 175
Final Payment....................................177
Release of Retainage......................... 179
Interest on Past Due Balances..........181
Pay or Reject?.................................... 182
Rejections........................................... 183
Liens & Waivers.................................187
Keeping Track of Payments............. 189
Face Time with Owner..................... 192 - Communicating with Contractors and Suppliers 195
Limits of Authority............................197
Manufacturer’s Instructions........... 198
Interpreting the Contract................. 199
Interpreting the Plans & Specs........201
Correcting Design Defects............... 205
Job Conferences..................................207
Suspension of the Job....................... 209
Termination for Cause.......................211 - Assisting with Change Orders 213
Mutual Agreement vs. Force Account............................................ 215
Negotiating Price Changes.............. 216
Processing Change Orders...............221
Value Engineering............................. 224 - Protecting Against Construction Claims 227
Allocating Risk of Loss..................... 228
Primary Source of Claims: Surprises.......................................... 232
Site Walk............................................ 233
Errors in the Plans............................ 235
Notice of Discrepancy...................... 236
Differing Site Conditions................. 236
Resolving Contractor Claims.......... 239
Mediation, Arbitration & Litigation...........................................241 - Directing Project Closeout 247
Beneficial Occupancy........................247
Inspection for Substantial Completion...................................... 249
Substantial Completion Punch List........................................ 254
Final Completion.............................. 256
Callbacks.............................................257
Express and Implied Warranties.... 258
Warranty Exclusions.........................261
Responsibility for Warranty Claims............................................... 262
Index.............................................................. 265
- Risk of loss
- Disputes with subs and suppliers
- Negative cash flow
- Slow pay
- Warranty claims
- Code compliance
- Oppressive regulation
- Failed inspections
What is a construction manager?
A construction manager earns a fee as a consultant, helping the owner:
- Get the right plans and specs
- Keep the owner informed of progress
- Prepare bid packages and contracts
- Evaluate payment requests
- Evaluate the bids
- Assist with change orders
- Observe day-to-day construction
- Protect the owner from claims
Most of a construction manager’s task will come as second nature to experienced traditional contractors. What won’t come easy is the construction management contract itself. CM contracts are very different from traditional prime contracts – and have to be drawn very carefully to avoid misunderstandings with property owners and problems with state authorities. That’s why this book offers access to downloadable CM contracts that comply with unique laws in all 50 states and the District of Columbia.
The Authors
WILLIAM D. MITCHELL is a successful construction manager, having completed dozens of residential, commercial and institutional projects from under $100,000 to over $100,000,000.
GARY MOSELLE, J.D. U.C. Berkeley, is a member of the California bar, specializing in state-specific construction contracts, including CM contracts for residential and commercial projects.