Why Honesty is critical to a successful construction project

In the construction industry you have a lot of stakeholders and partners to work with.  This makes teamwork really important.  In order to foster a good team environment, trust is priceless.  Trust is built over many weeks and months of good will and cooperation, but trust can be broken in a single moment of weakness. 

Our human condition is inherently defensive.  It's common to behave evasively or defensively when we make mistakes, but in order to retain trust, we have to avoid reverting to this basic instinct. 

Although the repercussions of a mistake could be difficult to bear, the impact of obfuscating or deflecting responsibility has far greater implications.  Here are a few reasons why being forthright is the best policy.

Promotes problem solving
All projects encounter problems, the ability to promptly and effectively solve problems is critical to success.  When the team communicates honestly and completely with each other, problems can be mitigated.  Often when problems are revealed early, the impact of mistakes can be minimal.  Conversely, when problems are ignored or hidden, the issues becomes more difficult to overcome.  Communicate your mistakes promptly.  You may be pleasantly surprised when your team rallies behind you to mitigate your mistake so they have no impact at all.

Avoid conflicts
Nothing raises ire and frustration on a job site more than failing to own and acknowledge mistakes.  Conflicts on the job result when one person appears to make more work for others.  Revealing a mistake and owning the resolution of the mistakes is an effective way to avoid conflicts.  When others see you've been honest about your mistake, they are likely to respect you.  This helps them trust you and also promotes honesty from others.

Promotes good will and cooperation
When mistakes happen and you take responsibility for it, others appreciate you more.  Most can empathize with someone who makes mistakes because they know that one day it could be them.  When you own your mistakes, others are likely to help with its resolution.  The act of recognizing your error and then working to correct it shows you are honorable and trustworthy.  People naturally gravitate towards trustworthy individuals and makes them want to work with you.

Enhances quality results
The combination of good will and trustworthiness resulting from your honesty simply leads to higher overall results.  When people enjoy coming to work their work products is better.  An honest and cooperative work environment produces good results consistently. 

Regardless of whether the news is good or bad, being able to rely on accurate honest information is paramount.  Maintain your integrity throughout every project (even when things go bad).  Team members and colleagues will stick by your side when they know you can be trusted.  No one is expected to be infallible but honesty throughout breeds a positive and nurturing work environment that can overcome most problems effectively and with minimal impact.

I have communicated the benefits of honesty in the context of a construction team, but I think these benefits hold for all aspects of your life.

What do you think?  Are there times when you shouldn't be honest?  Were there times in your life where you were honest and wished you hadn't?

Building Rules and Regulations for your home construction project.

I've just published my first Article for the year.  The topic I'm addressing this quarter is rules and regulations for a construction project.  I hope you find this helpful.  Here is an excerpt from the article check out my website to read the full text.


There are multiple level of clean-up required during a construction project. Each phase of construction should have clear rules about what you expect.

While construction is ongoing establish expectations to keep the floor free and clear of tools, screws, nails, or other tripping hazards.  Construction debris will be piled neatly until it is ready to be removed from the premises.  Appurtenances that are suspended above the work area will be safed and secured at all times.  Exposed wiring and plumbing lines to remain will be deactivated and safely secured in place.

Rules for daily end-of-day cleanup are also important.  The area of work will be broom swept daily.  No construction debris will be allowed to remain in the area of work overnight.  Tools will be collected and stored in a secure tool chest or carried off the job site daily.  Construction materials will be stored neatly in designated areas.  All electrical equipment will be unplugged from it's power source and stored in a secure designated location.


Check back next week when I return with my weekly blog.

Should you hire an engineer directly or through an architect

Just about every project requires the services of both an architect and an engineer.  In some rare exceptions you might be able to do a project with an architect and not need an engineer.  Such projects are generally simple alterations that don't impact any building systems, but If you are building a new house or adding a substantial addition to an existing house, it is likely that an engineer will be required.

Once the decision to hire an engineer has been made, you will need to consider how to contract the engineer.  Some might suggest the engineer should be hired directly by the owner, while others recommend contracting the Engineer as a sub-consultant of the Architect.  There are pros and cons to both options.

Acknowledging my bias as an architect, I hold a pretty strong view that the architect should always be the lead designer and the engineer should be subcontracted to the architect.  It is true that you will pay some amount of mark-up to the architect in order for them to subcontract the engineer, but for most projects the risk vs reward evaluation does not support hiring the engineer directly.

To fully appreciate this statement it is important to know that the coordination of the building systems is an essential part of the architect's responsibility. 

It may surprise some that architects are responsible for coordination of building systems, but the only licensed professional in the design team that is educated in all of the major systems of a building is the architect.  Engineers are specifically trained in their respective disciplines and tend to know their part very well, but they are generally not familiar with the other systems of the building.  It's critical that you have one central figure responsible for coordination of the design to avoid a large amount of costly coordination during construction.

If your architect does not have a contractual relationship with the engineer and the engineer does not have to answer directly to the architect, the architects authority over the engineer will be limited.  This may put the burden of coordination on to the owner and the owner could take on a needless risk and expense. 

We also need to recognize that the mark-up added to the engineer's fee will be minimal.  Also, most architects are generally willing to negotiate the markup, so if you are concerned about how much you are paying you can discuss this upfront.  Generally a 10% to 15% fee is common.  The lower the value of the engineer's fee the higher you should expect the percentage mark-up paid to the architect.

You may pay a bit more allowing the architect to hold the engineer's contract, but empowering your architect to coordinate the various parts of the project will pay dividends well into the construction phase of work.  What do you think?  Is it worth the additional mark-up for design phase coordination or would you prefer a lower design fee?

For more tips on how to manage your project, check out my articles on www.luisgile.com.

How to ask a Builder for a quote

Asking a Builder to quote a project sounds like a simple task.  Most people put very little thought into requesting a quote, but taking this too casually could be a terrible mistake.

Your first formal communication with an Architect or a General Contractor is when you ask for a quote for your project.

If you don't take the time to communicate how you want the pricing to be presented, you could receive quotations that are difficult to compare.  In the construction industry, there is no standard way to present a quote, so while one bidder may provide you with a detailed quote, another may simply quote you one all-in number.  If you are not clear about how you want the quote to be presented, you may not be able to compare one quote to another.  This will make it difficult to discern which bidder addressed your scope completely and which one will be hitting you with change orders during the work. 

Another common oversight is soliciting a quote without a complete scope.  There are several ways that an Owner can (and should) influence scope.  When soliciting a quote from an Architect, there are several preliminary studies and preliminary design work that you should commission before you solicit a quote for construction documents.  When requesting a quote from an Builder, be mindful that the Architect's drawings alone will not fully address every aspect of your project scope.  If you fail to address all of the elements of the scope, assumptions will be made and you may not be pleased with the results.

Give yourself sufficient time to prepare.  Don't skip any of the typical phases of work.  Spend the time up front to understand your project scope before you make expensive commitments.  The cost of making a change can be as much as six times more expensive during construction phase than it is during design phase.

If you follow these basic steps;  you will be more confident when you solicit your quotes, bidders will know you are serious, you will have bids that can be readily compared, and you will have all you need to make an educated award decision.

What information did you request in your solicitation? Were you able to compare bids? Was your scope clear and complete, or did you deal with several change orders?  Tell me your best or worst experience.

What's new for 2016

Happy New Year everybody!

Yes, I know I'm a little late, but better late than never.

Im going to start 2016 in a slightly different way.

If you were with me from the start (launched my website in March 2015) you will note that the content and design of my site has evolved quite a bit.

From the start, I wanted my site to be a place where you could find articles full of in depth content to help you manage your projects more effectively.

I feel pretty good about the current state of the content and the design of the website so I want to shift my focus to shorter more frequent blog entries. 

My hope is that this shift will allow for more of a quick read along with more interactions between you and I.

I will still be producing articles (like the ones I published in 2015) but there will be fewer of them. 

I would love your feedback on this approach. 

Do you prefer long articles with lots of content or blogs that offer a quick snapshot on a single topic?

How an Owner can influence Scope definition

How an Owner can influence Scope definition
By Luis Gile
November 2015

One of the most important factors in the success of a construction project is having a quality Scope of Work.  Scope of Work is the definition of what you expect your service providers to do for you.  A service provider could be an Architect or a Contractor.  You should have a Scope of Work for every phase of your project and for every service provider.

Owners have a great deal of influence over the Scope of Work.  The steps an Owner takes (and even the steps an Owner skips) could have profound influence over the quality of the Scope of Work and ultimately the quality of the final product.

In this article I will outline some of the ways in which an Owner can influence the quality of the Scope of Work.

Number One:  Invest in Preliminary Studies:
There are a number of preliminary studies that an Owner should undertake before beginning design.  The first and most important one is a Programming and Feasibility study.  Most of the time this is done as part of the schematic phase of work.  Assuming that this will be done and that it will be done correctly could be a costly mistake. 

This type of study has two parts.  The first is the project programming.  This establishes the basic parameters of what you want to build (for example, 2 bedrooms, one bath, and a garage).  The second part of this study is the code and zoning review.  A code and zoning review establishes the limitations of your project, this is absolutely necessary to establish the feasibility of your project.  It is a good practice to have this study done as a distinct phase of work.  I recommend that you pay a small fee for this study and share it with all of the Architects you wish to consider so that you can establish a common starting point for all. 

There are a number of additional specialty reports and studies that you might also need.  Geo-technical Reports, Site Surveys, and building conditions reports might be needed depending on your project.  If you attempt to proceed without the proper preliminary studies, it is possible that you may have to pay for additional services later on or face steep penalties for violations.

Number Two:  Invest on Schematic Designs:
Schematic Design (also called conceptual design) is a phase of work under which a Designer will work with the Owner to design what they want.  This is the phase where you can change your mind as frequently as you would like without incurring huge costs. 

A lot of people rush right into construction documents because they think they know what they want and think it will save them money.  Unfortunately, most people do not realize that the cost of making changes later in the process can be more than 10 times the cost of making the same change during schematic design.  If you invest a little more time and money up front to refine your design the next phases of work will run much more smoothly.

Number Three: Establish your contract terms:
There are a number of options for establishing the contract terms for a construction project.  Most of the time Contractors will use a third party template from the American Institute of Architects or from Consensus Docs (produced by the Associated General Contractors of America). 

I recommend that you consult with a Construction Attorney before you accept any form of agreement.  You should note that just because these are considered "templates" does not mean that they cannot be modified or that these terms are right for you.  An Attorney skilled in construction will be the best person to advise you on which terms to accept.  Regardless of which template you use and how your attorney decides to modify them, make sure that you establish these terms up front.  Do not wait until you are ready to award the work to decide on which template to use and don't try to interpret these contracts on your own.

Number Four:  Define the General Conditions:
The General Conditions of Construction are terms that establish the services that the Contractor will be required to perform.  General Conditions are often overlooked or added in as an after-thought, but these are the most important part of the Construction Documents. 

Your Architect's drawings will tell the General Contractor what to build, the General Conditions tell the contractor how you want the project managed.  You should review the General Conditions well before you solicit pricing.  Make sure that you establish clear expectations with respect to meetings, reporting, scheduling, and cleaning.  Ultimately, the Owner has the responsibility for making sure that the General Conditions are aligned with their expectations.  You should not expect your General Contractor to perform these services the way you want them unless you communicated them clearly up front.

Number Five: Establish Close-Out Procedures:
Closeout Procedures refer to the final steps that the General Contractor or possibly even your Architect will have to perform in order to receive final payment.  Close out procedures are often part of the General Conditions, but I have called these out specifically because these are very important. 

You need to be very careful here.  If you release final payment before all of your closeout procedures have been completed you may find yourself missing critical documents.  One of the most overlooked items is the lien waiver.  Lien waivers are documents that prove you paid the contractor and that the contract acknowledges receipt of the payment.  Your close-out procedures should require a lien waiver for the full value of the work (including change orders).    Without this document if a contractor places a mechanic's lien on your property, it will be more difficult to lift the lien.  This will make it impossible for you to sell or refinance your property.  Other documents that you might need are warranty's for labor and equipment, release of surety if you had a bond, or inspection approvals from the local authority.

These are just some of the things that an Owner can do to make sure that their scope of work is as good as it can be.  Consult with a professional if you are unsure of anything and keep in mind that no scope of work will ever be perfect.  These are the challenges of construction and this is why you need to be vigilant and careful through every step of the process to make sure that you make as few mistakes as possible.

What steps have you taken to influence your scope of work?  Have you overlooked any of these and had a tough time? Email me with your experiences.

The top 5 mistakes that homeowners make when they bid out their construction projects

The top 5 mistakes that homeowners make when they bid out their construction projects
By Luis Gile

When people think about a home improvement project, they either think about the design or the construction.  They rarely consider that the bidding phase might be the most important phase of work.  In fact, most people don't even think of the bid as a unique phase of work.  They think that you just call someone on the phone, hand them the drawings, and get a price.

A homeowner can adversely affect their project in more ways during the bid phase than during any other phase of work.  Here are the top 5 mistakes that I see homeowners making when they solicit a construction bid.

Number One:  Failing to solicit enough bids. A small pool of bidders hampers your ability to negotiate.  I like to make sure that the pool of bidders is large enough that even if some contractors opt out, I still have at least three viable bids.  The phrase "viable" means that you should be able to exclude any outliers (bids that are significantly higher or lower than the majority of quotes) and still have three options.  My goal is always to have a minimum of 4 bids.  In order to meet that goal you have to start with at least 6 to 8 viable contractors.  Any less and you will be likely to end up with less than 3 bids.

Number Two:  Having a poorly defined scope of work. Proper scope definition is probably the most important consideration when soliciting quotes.  This is true for both design and for construction.  Poor scope definition is the number one reason for change orders and for delays in the work.  You might be thinking that scope definition is the responsibility of the Architect.  This is true to a certain extent, but Owner's have much more influence over scope definition than they think.  I will be posting a separate blog to address "How an Owner can Influence Scope Definition"

Number Three:  Failing to request information about the bidder's qualifications. When soliciting bids, most people focus their attention on the cost.  Rarely are the qualifications of the bidder considered.  Failing to ask the right qualifying questions or failing to confirm that the contractor is qualified (i.e. licensed and insured) to do the work is a recipe for a failed project.  The contractor that offers the lowest price is not always the best contractor and the difference between a good contractor and a bad contractor is huge.

Number four:   Not having a formal bidding process.  Another major mistake I see homeowners make is not having a formal structure for soliciting a contractors price.  Having a formal structure for soliciting a price means that you start the bid at the same time and end at the same time.  It also means you control the communication between yourself and the bidders to make sure that all of the bidders have the same information at the same time.  This is important because if any one of the bidders has more time or different information that bidder may either have an advantage or a disadvantage over the others.  If this happens, then you will be unable to compare the bids evenly.

Number Five:  Failing to request pricing in a specific format.When you request a construction quote, you have to think ahead to how you will compare the bids.   Consider that you will be receiving three, four, maybe five bids from separate contractors.  Each of them will have their own way of developing their price and each of them will want to give you their price in their format.  In order for you to be able to compare the bids, you will have to review and interpret each bid in a common format.  This can often be difficult because some contractors will give you more detail than others and you might not have enough information to compare all the numbers.  This could lead to awarding the work to someone who has missed or underbid major portions of the scope.

So there you have it, these are the top 5 mistakes I see homeowners making when they solicit pricing from a contractor.  Be careful not to make these mistakes and you will end up with more viable options and you will be better able to identify the best contractor for your project.

Tell me your bid stories.  Did you have enough viable bidders?  Were you able to compare the bids?  How did you make your award decision?

About my blog 
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.
You can find out more about me on www.luisgile.com.

Should I hire a project manager for my home remodel?

Should I hire a project manager for my home remodel?

By Luis Gile

A construction project is one of the most difficult and costly challenges anyone can undertake.  With so many choices to make and so many people to manage, the entire process can be very overwhelming.   

Hiring a Project Manager (PM) can alleviate some of that stress.  It's best to engage the PM very early on (even before you have a design).  The PM can be by the Owner's side acting exclusively on the Owner's behalf through every phase of work.  The PM's role is to bring order to the project and to provide expert advise on technical, contractual, and financial matters of the project.

Your project may include several other professional service providers including Architects, Contractors, and maybe even Lawyers and Accountants, but each of them have boundaries of responsibility.  A skilled PM can address each step of the process and fill the service gaps that exist between each of the other professionals.  

In this article, I point out some of the advantages of hiring a Project Manager.  There may be other benefits as well and your PM may have certain strengths and weaknesses, but the advantages of having a PM on your project will certainly benefit the project in the long run.

Number One:  Organize your thoughts 

Before you are ready to start your project, you may need someone with whom to discuss your ideas.  During early stages of project conception, you'll have lots of thoughts and ideas.  A PM can help you narrow down your choices and hone in on the best ideas.  The PM can also help document your thoughts so they can be presented in clear industry specific terms to others.  This documentation is critical to getting off to a good start on your project.

Number Two:   Identify a good Designer

When selecting a designer for your project, it's not enough to search the word "Architect" in your web browser or look in the Yellow Pages under "designer".  You need to have industry knowledge to sort through the hundreds of firms and sole proprietors to narrow down the pool of choices.  Then knowing what questions to ask and how to interpret the responses is a critical skill for qualifying a firm.  A Project Manager can help with all of that.  Your PM can then also help negotiate your design contract to ensure you are getting the best value.

Number Three:  Turn your design into Construction Documents 

Most of the time the amount of documentation and information that you get from design drawing isn't sufficient to move on to construction.  Those pretty pictures and 3D renderings need to be converted to Construction Documents.  Construction Documents communicate to the General Contractor your design intent and allow you to solicit construction pricing.  It may be necessary to have a separate agreement for your design drawings to become construction documents.  You may even need a different Company to execute the Construction Documents.  If your designer isn't able to supply you with Construction Documents or your agreement did not include Construction Documents,  you may be left holding a beautiful set of renderings, but not be any closer to building your dream.  A PM will anticipate these issues and help you to decide the best option for converting your design documents into construction documents.

Number Four:  Objective Professional Advise

During the design process you will have hundreds of decisions to make.  Many of these decisions will have long-term impact on your project.  Some decisions will impact price, other decisions will impact functionality. In either case, having an experienced professional (other than your designer) by your side to consult with on key decision will give you the confidence to move forward.  Whether you want to act boldly or you want to mitigate risk, the objective professional advise of a PM will keep you on the right track.  

Number Five:  Know when a Change Order is legitimate  

Whether you are in the design phase or the construction phase, you may have to consider requests for additional fees.   Design changes and unknown conditions of the site are the most common events that trigger requests for additional fees from Architects and General Contractors.  A PM can help you discern when a  request for additional fees is legitimate and when it is not.  The PM can also negotiate on your behalf to ensure that what you pay on Change Orders is reasonable. 

Number Six:  Choosing the right Contractor 

Choosing the right contractor requires objective consideration of both qualifications and price.  For obvious reasons, Owner's always want to rationalize an award to a low price bidder.  Price-based decisions are generally not favorable.  Owner's need an experienced professional who will implement a rigorous objective system to help them make award decisions.  An experienced Project Manager will know how to implement such a system and will help guide the Owner in structuring an evaluation process.

Number Seven:  Define a Project Execution plan 

There are a number of ways that a project can be executed.  These are often referred to as delivery models.  Each delivery model has certain nuances and considerations that can have long term implications on your project.  An experienced Project Manager will listen to your specific goals and will recommend a plan that suits you.  The Execution plan you choose may impact the Architect and General Contractor you choose.  The Execution plan will even impact which contract and pricing models you use.  This is a critical step that is often overlooked and should not be taken on without professional advice.   

Number Eight:  Choose the correct pricing option 

Most Owner's probably don't know that there are multiple pricing options to choose from.  Depending on your circumstances a fixed price (or lump sum price) may not be the best choice.  A full assessment of your scope of work together with an honest discussion about your ability to make decisions should precede any decisions about pricing options. 

Number Nine:  Construction Management 

Even after you have hired the General Contractor, there is still a great deal of project management to be done.  There will also be invoices to review, schedules to manage, consultants to coordinate with, and contracts to manage.  All of these require experience and know how.  Without a PM, these duties will rest on the Owner and without a background in construction, these tasks may seem overwhelming.  

Number Ten:  Final payment and Project Closeout 

At the end of every construction project there is a list of critical tasks that the GC should perform before he receives his final payment.  If you release final payment before everything on the list has been satisfied, it's unlikely to happen.  Your PM can confirm that everything has been completed before he releases (or advises you to release) the final payment.

These are just a few of the reasons why an Owner should not undertake a project without a Project Manager.  Project Managers have the experience and the know how to help navigate the complex issues that existing in every construction project.  From technical issues to contract issues, you need to have an independent professional working for you to advise you every step of the way.  A PM contracted directly to you as your agent will represent your best interests through every phase of work and will bring the oversight needed to make your project a success.

About my blog
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.
You can find out more about me on www.luisgile.com.