PROFESSIONAL AND BUSINESS REQUIREMENTS OF ARCHITECTS AND ENGINEERS BASIC INFORMATION AND TUTORIALS

This article is important for both the service provider and the client.

Management of the building process is best performed by the individuals educated and trained in the profession, that is, architects and engineers. While the laws of various states and foreign countries differ, they are consistent relative to the registration requirements for practicing architecture.

No individual may legally indicate to the public that he or she is entitled to practice as an architect without a professional certificate of registration as an architect registered in the locale in which the project is to be constructed.

This individual is the registered architect. In addition to the requirements for individual practice of architecture, most states and countries require a certificate of registration for a single practitioner and a certificate of authorization for an entity such as a corporation or partnership to conduct business in that locale.

An architect is a person who is qualified by education, training, experience, and examination and who is registered under the laws of the locale to practice architecture there. The practice of architecture within the meaning and intent of the law includes:

Offering or furnishing of professional services such as environmental analysis, feasibility studies, programming, planning, and aesthetic and structural design Preparation of construction documents, consisting of drawings and specifications, and other documents required in the construction process

Administration of construction contracts and project representation in connection with the construction of building projects or addition to, alteration of, or restoration of buildings or parts of building

All documents intended for use in construction are required to be prepared and administered in accordance with the standards of reasonable skill and diligence of the profession. Care must be taken to reflect the requirements of country and state statutes and county and municipal building ordinances.

Inasmuch as architects are licensed for the protection of the public health, safety, and welfare, documents prepared by architects must be of such quality and scope and be so administered as to conform to professional standards.

Nothing contained in the law is intended to prevent drafters, students, project representatives, and other employees of those lawfully practicing as registered architects from acting under the instruction, control, or supervision of their employers, or to prevent employment of project representatives from acting under the immediate personal supervision of the registered architect who prepared the construction documents.

SPECIALTY CONTRACTORS IN CIVIL ENGINEERING PROJECTS BASIC INFORMATION AND TUTORIALS

A specialty contractor or subcontractor is a separate contractor hired by the prime contractor to perform certain portions of the work. The amount of work that the prime contractor will subcontract varies from project to project.

Some federal and state regulations limit the proportion of a project that may be subcontracted, but this is rarely the case in private work. There are advantages and disadvantages to using specialty contractors.

Trades such as plumbing, electrical, and heating and air-conditioning have a tradition of being performed by specialty contractors, due to their specialized nature and licensing requirements. However, specialty contractors can now be found who are capable of performing every aspect of the construction project.

Contractors today can construct entire projects without having any direct-hire craft personnel. The use of specialty contractors has gained popularity as a means to reduce risk and overhead; however, the contractor gives up a substantial amount of control when subcontracting the entire project.

If specialty contractors are to be used, the contractor must be certain to notify them early in the bidding period so that they have time to prepare a complete, accurate proposal. If rushed, the specialty contractor tends to bid high just for protection against what might have been missed.

The use of specialty contractors can be economical, but estimates still must be done for each portion of work. Even if the estimator intends to subcontract the work, an estimate of the work should be prepared. It is possible that the estimator will not receive proposals for a project before the bid date and will have to use an estimated cost of the work in totaling the proposal.

All subcontractors’ proposals are compared with the estimator’s price; it is important that a subcontractor’s price is neither too high nor too low. If either situation exists, the estimator should call the subcontractor and discuss the proposal with him.

The specialty contractor’s proposal is often phoned, faxed, or e-mailed into the general contractor’s office at the last minute because of the subcontractor’s fear that the contractor will tell other subcontractors the proposal price and encourage lower bids. This practice is commonly referred to as bid peddling or bid shopping and is highly unethical and should be discouraged.

To prevent bid shopping, specialty contractors submit their final price only minutes before the bids close, which leads to confusion and makes it difficult for the estimator to analyze all bids carefully. This confusion is compounded by specialty contractors who submit unsolicited bids. These bids come from specialty contractors who were not contacted or invited to submit a bid, but who find out which contractors are bidding the project and submit a bid.

Since these companies are not prequalified, there is an element of risk associated with accepting one of these bids. On the other hand, not using low bids from unsolicited subcontractors places the contractor at a price disadvantage.

In checking subcontractor proposals, note especially what is included and what is left out. Each subsequent proposal may add or delete items. Often the proposals set up certain conditions, such as use of water, heat, or hoisting facilities. The estimator must compare each proposal and select the one that is the most economical.

All costs must be included somewhere. If the subcontractor does not include an item in the proposal, it must be considered elsewhere. A tricky task for the prime contractor is the comparison of the individual subcontractor’s price quotes.

Throughout the estimating process, the prime contractor should be communicating with the specific subcontractors concerning the fact that they will submit a price quote and what scope of work is to be included within that quote. However, subcontractors will include items that they were not asked to bid and will exclude items that they were asked to bid.

A “bid tabulation” or “bid tab” is used to equalize the scope between subcontractors so that the most advantageous subcontractor’s bid can be included in the prime contractor’s bid.

SUB CONTRACTING DISPUTE RESOLUTION IN CIVIL ENGINEERING PROJECTS

The problems between main and sub-contractors were one of the areas to benefit most from Part II of the UK Government’s Housing Grants, Construction and Regeneration Act 1996 (see Section 1.6). The introduction of adjudication under that act to deal with disputes has at least allowed sub-contractors to press their claims to an earlier conclusion, and to challenge any withholding of payment by the contractor.

The Act requires payment terms to be stated and regular payments made. It prohibits ‘pay when paid’ clauses, and requires the contractor to issue a detailed ‘withholding notice’ if he seeks to hold back payment. These measures have eased the cash flow problems of sub-contractors.

Also most standard forms of sub-contract now contain provision for payment of interest on delayed payments, but this may not be very effective because a sub-contractor may not claim interest for fear the contractor might not as a consequence give him any further work.

The Civil Engineering Contractors Association (CECA) has issued a Form of Sub-contract ‘for use in conjunction with the ICE conditions of contract.’ Contractors are, of course, not obliged to use this form and many use one of their own devising or modify the standard form.

The provisions of the CECA sub-contract illustrate the many matters which such a sub-contract has to cover and the difficulty of trying to provide rights to the sub-contractor without putting the main contractor at risk under his contract.

Provisions of the CECA sub-contract, apart from defining the work, timing and duration of the sub-contractor’s input, require the sub-contract to set out the division of risks as between contractor and sub-contractor.

It defines procedures and methods of valuing variations made by the engineer and confirmed by the contractor, or made by the contractor; and sets out procedures for notification and payment for ‘unforeseen conditions’ or other claim matters. It also stipulates requirements for insurances and so on.

Many of the provisions are similar in terms to the ICE conditions applying to the contractor, and are thus passed on to the sub-contractor in respect of his work. The subcontractor is ‘deemed to have full knowledge of the provisions of the main contract’ and the contractor must give him a copy of it (without the prices) if the sub-contractor requests it.

Of particular importance is Clause 3 of the CECA sub-contract which requires the sub-contractor to carry out his work so as to avoid causing a breach of the main contract by the contractor. He has to indemnify the contractor ‘against all claims, demands, proceedings, damages, costs and expenses made against or incurred by the contractor by reason of any breach by the subcontractor of the sub-contract.’

But a sub-contractor undertaking a small value contract may find it impossible to accept this clause. If he fails to complete his work on time and this could possibly cause a delay to the whole project, he might be liable to pay many thousands of pounds to the contractor – far in excess of the value of his sub-contract.

A further problem for the engineer is that, if a dispute arises between the contractor and his sub-contractor as to who is responsible for some defective work, the defect can remain uncorrected until the dispute is resolved. If a defect is found after the sub-contractor has left site and he is believed or known to be responsible for it, the contractor may not be able to get the sub-contractor back to site to remedy the defect, or to pay for its repair.

To guard against this, the contractor may therefore hold back full payment to the sub-contractor for many months until a certificate of completion for the whole works is issued. This will cause another dispute between contractor and sub-contractor.

The development of sub-contracting in civil engineering has therefore brought both advantages and disadvantages. However, problems rarely arise if the contractor can use sub-contractors he has worked with before whose work has proved satisfactory and he treats them fairly.

SUB CONTRACTING ON CIVIL CIVIL ENGINEERING PROJECTS BASIC INFORMATION

What Is Sub Contracting?

Many civil engineering contractors now use sub-contractors to do much of their work. Most conditions of contract permit a contractor to sub-let work of a specialist nature; but the ICE conditions of contract have gone further and permit the contractor to sub-contract any part of the work (but not the whole of the work), subject only to notifying the engineer of the work sub-contracted and the name of the sub-contractor appointed to undertake it.

The contractor does not have to notify any labour-only sub-contracts he uses. The engineer can object, with reasons, to the appointment of a sub-contractor, but otherwise has no rights in connection with such sub-contracts, except that he can require removal of a sub-contractor who proves incompetent or negligent, or does not conform to safety requirements.

Under FIDIC conditions for overseas work, sub-contracting requires the engineer’s prior sanction. In building work there has long been a trend to pass the majority of work to sub-contractors who specialize in various trades, and the same has now occurred in civil engineering where many operations are ‘packaged up’ and sub-let.

Thus sub-contracts may be let for excavation, formwork, reinforcement supplied and erected, and concreting. The advantage to the contractor is that this reduces the staff he needs on site and his capital outlay on plant and equipment. He can use sub-contractors with proven experience and does not have to take on a range of temporary labour whose quality may be variable.

The contractor retains responsibility for the quality and correctness of work and, of course, has to plan and co-ordinate the sub-contract inputs, and often supply any necessary materials.

But if much of the work is sub-contracted, the contractor’s or agent’s main input to a project may be that of dealing with the sub-contracts and controlling their financial outcome, so these matters may take priority over dealing with any engineering problems which arise.

The contractor may therefore tend to leave a sub-contractor to solve any problems he encounters, on the basis that these are his risks under his sub-contract and it is up to him to deal with them. But the sub-contractor may think otherwise, so a dispute arises as each considers the other responsible for any extra cost or delays caused.

Frequent disputes have also arisen in recent years when any default or presumed default by a sub contractor has resulted in the contractor withholding payment to him. Late payment by contractors to sub-contractors is another widespread source of complaint by sub-contractors, but remedies are difficult to devise.

The sub-contracts are private contracts whose terms are unknown to the engineer and the employer, so they cannot interfere in any such dispute. The engineer has only power to protect nominated sub contractors, i.e. subcontractors he directs the contractor to use.

CONSTRUCTION CONTRACT BASIC DEFINITION AND TUTORIALS

Construction projects are done under a variety of contract arrangements for each of the parties involved. They range from a single contract for a single element of the project to a single contract for the whole project, including the financing, design, construction, and operation of the facility. Typical contract types include lump sum, unit price, cost plus, and construction management.

These contract systems can be used with either the competitive bidding process or with negotiated processes. A contract system becoming more popular with owners is design-build, in which all of the responsibilities can be placed with one party for the owner to deal with.

Each type of contract impacts the roles and responsibilities of each of the parties on a project. It also impacts the management functions to be carried out by the contractor on the project, especially the cost engineering function.

A major development in business relationships in the construction industry is partnering. Partnering is an approach to conducting business that confronts the economic and technological challenges in industry in the 21st century.

This new approach focuses on making long-term commitments with mutual goals for all parties involved to achieve mutual success. It requires changing traditional relationships to a shared culture without regard to normal organizational boundaries.

Participants seek to avoid the adversarial problems typical for many business ventures. Most of all, a relationship must be based upon trust. Although partnering in its pure form relates to a long-term business relationship for multiple projects, many single project partnering relationships have been developed, primarily for public owner projects.

Partnering is an excellent vehicle to attain improved quality on construction projects and to avoid serious conflicts. Partnering is not to be construed as a legal partnership with the associated joint liability. Great care should be taken to make this point clear to all parties involved in a partnering relationship.

Partnering is not a quick fix or panacea to be applied to all relationships. It requires total commitment, proper conditions, and the right chemistry between organizations for it to thrive and prosper.

The relationship is based upon trust, dedication to common goals, and an understanding of each other’s individual expectations and values. The partnering concept is intended to accentuate the strength of each partner and will be unable to overcome fundamental company weaknesses; in fact, weaknesses may be
magnified.

Expected benefits include improved efficiency and cost effectiveness, increased opportunity for innovation, and the continuous improvement of quality products and services. It can be used by either large or small businesses, and it can be used for either large or small projects.

Relationships can develop among all participants in construction: owner-contractor, owner-supplier, contractor-supplier, contractor-contractor. (Contractor refers to either a design firm or a construction company.)

TYPES OF CONSTRUCTION COMPANY FOR CIVIL ENGINEERING PROJECTS BASICS AND TUTORIALS

CONSTRUCTION COMPANY TYPES FOR CIVIL ENGINEERING PROJECTS 
What Are The Types Of Civil Engineering Project Construction Companies?


The principles of construction project management, as outlined in this article, apply equally to those engaged in subcontracting and those engaged in general contracting.

Small Renovation Contractors. These companies generally work on jobs requiring small amounts of capital and the type of work that does not require much estimating or a large construction organization. They usually perform home alterations or small commercial and office work.

Many small renovation contractors have their offices in their homes and perform the ‘‘paper work’’ at night or on weekends after working with the tools of their trade during the day. The ability to grow from this type of contractor to a general contractor depends mainly on the training and business ability of the individual.

Generally, if one is intelligent enough to be a good small renovation contractor, that person may be expected to eventually move into the field of larger work.

General Contractors. These companies often are experts in either new buildings or alteration work. Many building contractors subcontract a major portion of their work, while alteration contractors generally perform many of the trades with their own forces.

Some general contractors specialize in public works. Others deal mainly with private and commercial work. Although a crossing of the lines by many general contractors is common, it is often in one or another of these fields that many general contractors find their niche.

Owner-Builder. The company that acts as an owner-builder is not a contractor in the strict sense of the word. Such a company builds buildings only for its own ownership, either to sell on completion, or to rent and operate. Examples of this type of company include giants in the industry, and many of them are listed on the various stock exchanges.

Many owner-builders, on occasion, act in the capacity of general contractor or as construction manager (see below) as a sideline to their main business of building for their own account.

Real Estate Developer. This is a type of owner-builder who, in addition to building for personal ownership, may also build to sell before or after completion of the project. One- and two-family home builders are included in this category.

Professional Construction Manager. A professional construction manager may be defined as a company, an individual, or a group of individuals who perform the functions required in building a project as the agent of an owner, but do so as if the job was being performed with the owner’s own employees.

The construction management organization usually supplies all the personnel required. Such personnel include construction superintendents, expediters, project managers, and accounting personnel.

The manager sublets the various portions of the construction work in the name of the owner and does all the necessary office administration, field supervision, requisitioning, paying of subcontractors, payroll reports, and other work on the owner’s behalf, for a fee.

Generally, construction management is performed without any risk of capital to the construction manager. All the financial obligations are contracted in the name of the owner by the construction manager.

Program Manager. A general contractor or construction manager may expand services by undertaking program management.

Such services will include: demolition of existing buildings on the site; devising and providing financial analyses of new buildings or a program to replace what was there, or for the acquisition of a new site; hiring an architect and other design professionals on behalf of the owner and supervising their services; performing preconstruction services during the planning stage; advertising for and receiving bids from contractors for the new work; consulting on financing and methods of payment for the work; supervising the contractor; obtaining tenants, whether commercial, residential, or industrial for the completed project; helping to administer and manage the complete project.

Obviously, the comprehensive services outlined above will require that the general contractor or construction manager augment his staff with trained architects, accountants, real estate professionals, and management and leasing experts.

Package (Turnkey) Builders. Such companies take on a contract for both design and construction of a building. Often these services, in addition, include acquisition of land and financing of the project. Firms that engage in package building usually are able to show prospective clients prototypes of similar buildings completed by them for previous owners.

From an inspection of the prototype and discussion of possible variations or features to be included, an approximate idea is gained by the prospective owner of the cost and function of the proposed building.

Package builders often employ their own staff of architects and engineers, as well as construction personnel. Some package builders subcontract the design portion to independent architects or engineers.

It is important to note that, when a package builder undertakes design as part of the order for a design-construction contract, the builder must possess the necessary professional license for engineering or architecture, which is required in most states for those performing that function.

Sponsor-Builder. In the field of government-aided or subsidized building, particularly in the field of housing, a sponsor-builder may be given the responsibility for planning design, construction, rental, management, and maintenance. A sponsor guides a project through the government processing and design stages.

The sponsor employs attorneys to deal with the various government agencies, financial institutions, and real estate consultants, to provide the know-how in land acquisition and appraisal. On signing the contract for construction of the building, the sponsor assumes the builder’s role, and in this sense functions very much as an owner builder would in building for its own account.

TYPES OF CIVIL ENGINEERING CONSTRUCTION INSURANCE BASIC AND TUTORIALS

CIVIL ENGINEERING CONSTRUCTION INSURANCE TYPES BASIC INFORMATION
What Are The Types Of Civil Engineering Construction Insurance?


Commercial General Liability Insurance
This type of insurance provides coverage for claims by third parties against the CM/GC and all additional named insured parties. A pedestrian who has an accident while passing by a construction site would be covered under this type of insurance policy.


Builders Risk Insurance
This type of insurance provides coverage against the insured’s loss to the property during the construction process. A break in a water service in the building during the construction process, which damages electrical, mechanical, elevator, and plumbing systems would be covered under this type of insurance policy.

It is a primary coverage rather than against a claim from a third party. One needs to define the policy period for which it is in effect, which could be when the project is completed or a date thereafter.

Errors and Omissions Insurance
This is the professional liability insurance for the CM/GC and design professionals. CM/GCs cannot easily obtain architectural or engineering services Errors and Omission (E&O) coverage. The CM/GC must be careful with this type of insurance, especially if involved with a design-build project.


Environmental Liability Insurance 
This is a specialized insurance policy to cover pollution and hazardous material damages such as asbestos, mold, lead paint, medical waste, fuel oil, etc. The coverage under the commercial general liability (CGL) policy is very limited, and a separate policy with broader environmental coverage is often obtained to deal with these matters.

It is recommended that the owner directly hold the contract for environmental work and provide the insurance policy for the appropriate coverage, with the CM/GC as the additional named insured.


Workers’ Compensation Insurance
Workers’ Compensation (WC) coverage is a state mandatory insurance to provide coverage for the CN/GC’s workers if they are injured while performing their work. It provides for lost wages, medical coverage, and loss of partial or full ability to work because of an accident on the job.


Automobile Coverage
This provides coverage for all automobiles and trucks used in connection with the construction of the project, as well as transporting personnel and material to and from the project site. The insurance company will require the names and drivers license information for all drivers operating vehicles covered under the policy.

If a driver’s report from the Department of Motor Vehicles is not good, that person may be excluded from coverage under the policy, and thus should not drive company vehicles.

SIZE AND REVENUE OF CIVIL ENGINEERING CONTRACTORS BASIC AND TUTORIALS

SIZE AND REVENUE OF CIVIL ENGINEERING CONTRACTORS BASIC INFORMATION
What Is The Size And Revenue Of Civil Engineering Contractors?


The construction industry is composed of about 710,000 businesses, mostly small companies, 91 percent of which have fewer than 20 employees. While the largest U.S.-based contractor had revenues of $22 billion in 2007, the overwhelming majority of builders had an annual volume of less than $10 million.

To provide a snapshot of the construction industry, it can be categorized as one in which building contractors range in size from a small family-owned business operating in a narrow geographic area to giant multinational firms.Finding the right one for your project is sometimes a confusing task but can be made somewhat easier by understanding how the industry works.

This is a business of high risk and relatively low profi t margins. The Construction Financial Management Association (CFMA) of Princeton, New Jersey, is a nonprofit organization serving the construction financial community; every year it surveys the 7,000 members in chapters across the country to obtain financial data and the major concerns of the industry.

The members include residential, nonresidential, industrial highway, and specialty contractors. The 2007 financial survey presented the following national overview as reported by the respondents:

■ The year’s hot topic was fi eld personnel recruitment and the ability to retain qualified workers, a concern that will continue for the immediate future. (This can impact owners, who may see a decrease in quality levels of workers.)

■ Construction jobs are good jobs, with the seasonally adjusted hourly rate of $21.08 per hour as of September 2007, a rate that reflects a 4.5 percent increase over the previous year for the same period. (Owners may find that labor increases in the construction industry exceed the overall inflation figures reported in the media.)

■ Material costs are a major problem. From December 2003 to September 2007, construction material producer prices indices increased 30 percent, more than double the 13 percent rise in the Consumer Price Index (CPI). Steel, cement, diesel fuel, and other petroleum-based products were at the top of the price
increase column.

The construction slowdown in 2008 in the United States has had a dampening effect on price increases of some materials, while worldwide demand has increased the prices of others. The projected building cost index for 2009, as reported by McGraw-Hill in December of 2008, refl ected a decrease of 0.5 percent, as opposed to an increase of 5.5 percent for the year 2007 – 2008.

■ In 2006, shipments of construction materials exceeded $500 billion, approximately 11 percent of the total shipments by U.S. manufacturers, and shipments of construction machinery topped $36 billion, 11 percent of all U.S. machinery manufacturers.

Due to the value of the dollar in relation to other world currencies, heavy equipment manufacturers like Caterpillar saw export sales rise during that period.

■ The typical construction establishment is a small company with an average employment of fewer than nine individuals.

■ Internal Revenue Service fi gures for 2004 show that the 700,000 corporations in construction had a net income of $47 billion, or 3.7 percent of total receipts of $1.3 trillion, considerably below the all-industry average margin of 4.9 percent.

■ Construction is a high-turnover industry. The Small Business Administration (SBA) showed that in 2004, 77,000 companies closed shop.

CFMA reviews the member responses and prepares a Best-in-Class composite for nonresidential and industrial building contractors.