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Design And Build Contractors

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Developments in procurement are reshaping the traditional contractual relationships that exist within construction. In this environment, the challenge for consultants is to develop working practices consistent with the scope and nature of the obligations (and therefore liabilities) they face - particularly when operating for contractor clients.



There is a common perception that consultants thrive best when briefed and retained by an informed end-user whose prime objective is to see a quality project delivered at a reasonable cost. Working for a contractor who has accepted a brief to deliver an end product at a particular cost, by a particular time is a different prospect. In the former relationship, quality and value for money are in most cases paramount whereas for the contractor client, profit is the prime factor.

Professional Indemnity claims are notoriously long tail and it is therefore difficult to draw finite conclusions from the data currently available. What we do know is that there are firms who notify more claims when appointed under design & build contracts than when they are appointed under traditional contract forms. Equally, however, there are consultants who focus on design & build and have an exceptionally good claims experience.

These recent developments pose some far-reaching questions for engineers: Is liability under design & build relationships really that different? What are the major issues facing consultants as a result of procurement changes - particularly contractor client relationships? Do today's contracts represent consultants' areas of influence and the actual performance of the project?

Our experience suggests that there is a distinct change in the nature of risk posed under design and build contracts.

The questions that consultants need to ask themselves in this key area are simple:

a) Do I have absolute control over a particular aspect?

b) Do I have any influence over it?; or,

c) Is it achievable as a result of the exercise of 'reasonable skill and care'?

An increasingly common source of claims involves contractors seeking to recover costs when a project's finances overrun. In these instances the extent of services and contractual obligations that the consultant has assumed have a significant influence on how claims are defended and resolved. It is therefore more important than ever for consultants to carefully consider the contractual risks arising from contractor appointments - and to document their responsibilities carefully.

With the scale and contractual complexity of many projects increasing, informed advice on the basis of the risks faced and the extent of cover required to fund those risks, is increasingly a critical element in any consultant's robust business plan. In turn, this enhanced understanding is leading to a more appropriate allocation and funding of risk.

Add to the mix 'the spectre of novation', where firms can be caught between the differing interests of client and contractor and it is easy to conclude that the risks faced by today's consultants are not for the faint-hearted. However, with a combination of good internal management, controlled innovation and the right risk and insurance advice, it is possible to establish and maintain a positive position.

Our clear message is that consultants should increase their knowledge and understanding of the risks associated with differing procurement routes. The current combination of buoyancy in the construction sector and "soft" insurance market conditions should not lessen the need for effective risk management.
Design And Build Contractors
You've heard the horror stories and possibly lived through your own. The home remodel that was supposed to take six months, ends up taking a year or more. And the budget? Well, that was pretty much shot by the third month. The architect and the contractor (when you can find either one of them) are pointing fingers at each other. Subcontractors forget what day they're supposed to show up. And the materials? Wasn't the flooring supposed to be bamboo, not pine?

This is the world of remodeling. A process that's guaranteed to make your every moment, either asleep or awake, a perpetual nightmare. For many people this can be like entering their own Twilight Zone. A hellish place of missed deadlines, cost overruns, and headaches that start at the pupils and sear through the brain. This is not a good place to be. And now, you don't have to be in it.

Why? Because design/build firms around the country have taken the remodeling process and turned it on its head. What was a gruesome task has been transformed, through proper planning and administration, into a pleasant experience that saves time and money.

This is the world of design/build. An approach to remodeling that goes all the way back to the Egyptians, an approach that unifies and integrates every element of the remodeling process, from initial design to final completion. All under one roof, all in the hands of one company, and all with 100% accountability. If it worked for the pharaohs, you better believe it will work for you.

The beauty of design/build is in the simplicity of its structure. For comparison here is the way most remodeling jobs are currently handled.

Most remodeling projects start with plans drawn by an architect. Once a design has client approval the plans go out to bid to several general contractors. When the bids return, more often than not the client is surprised to learn that the architect's initial estimate for the design is off by 50% or more. At this point the client's architect must revise the design and resubmit the revised design to the general contractors so that they can revise their bids. This process may go several rounds, several thousands of dollars and often creates tension between all involved. This is a situation that lends itself to playing the blame game. If at the end of this excruciating process one of the general contractors is selected the process moves on to the next step. The contractor gives the client his contract and timetable. And voila, it begins! T's crossed, I's dotted, one nice straight line from beginning to end. The client assumes he'll be enjoying that new addition, kitchen, whatever in a few months. The money is budgeted and the client can hardly wait. But in this case 'wait' may be the operative word.

Shortly into the job, the electrician tells the general contractor that he's run into problems, because the plans weren't drawn right ("problems" is a word the client is going to hear a lot). The contractor contacts the client who then has to track down the architect. Construction, of course, stops. Playing phone tag with the architect, who by now has moved on to other jobs, comes next. When the architect is finally reached he nose is put out of joint by the mere suggestion that his plans are anything less than perfect. Good lord, what's the world coming to! And now the imbroglio heats up in earnest.

The electrician gets into it with the architect, the contractor wrings his hands in despair, and the client stands helplessly by. Finally, of course, agreement is reached on how to proceed, usually with no one assuming any responsibility for the error much less the delay.

But that's far from the end of the story, because by now the general contractor's subs have all gone off in different directions while the job was stalled. New work schedules, new supply delivery schedules, and just about new everything have to be re-figured. And it goes on, and on, and on. What doesn't keep going on is the money budgeted for the remodel. It may be pretty much gone, period.

This scenario may be repeated may times before the job is finally finished ' late, over budget, and with probably a dozen compromises along the way. in summation, "the horror, the horror". Now the typical design/build scenario: The client comes to the design/build firm with their ideas and concepts. The in-house design team, which will normally include a project coordinator, possibly an architect and a designer, take the client's ideas and comes up with the design that matches the client's wants and desires. It's that simple, and the design process costs ? as much as going to an architect.

But it gets even simpler. The in-house design team passes the blueprints on to the estimator who gets the best possible prices from suppliers and comes up with the total cost, and a construction timetable. Usually this is then presented to the client as a fixed price contract. And because the design/build firm is the general contractor on the remodel, everything is checked and double checked to make absolutely certain that everything will run smoothly and efficiently. They designed it ' now it is time to build it!

Since the process is under one roof with one primary source for accountability, the likelihood of squabbles, missed deadlines and cost overruns is much less likely.

If you are contemplating a remodel the first step is to talk to a local design/build firm. Prospective clients should ask to see pictures of jobs that the design/build firm has done, and get testimonials from clients who have had jobs completed.

It doesn't make any difference if you are planning a kitchen remodel, bathroom remodel or a new garage. ft. addition. The design/build approach will ultimately save that client money, time and aggravation (probably a lot of aggravation). And, of course, the remodel has a much better chance of being the way you want it - on-time and on-budget.

Copyright (c) 2008 Gary Belk
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About Author
Both Paul Berg & Gary Belk are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Paul Berg has sinced written about articles on various topics from Insurance for Business, Insurance. Paul Berg is the owner of griffithsandarmour.com. Griffiths & Armour are one of the UK's leading firms of independent. Paul Berg's top article generates over 880 views. to your Favourites.

Gary Belk has sinced written about articles on various topics from Insurance for Business, Arizona Property and Fitness. Gary Belk has been actively designing, building or renovation residential property in the Caribbean, California, Hawaii, Texas and Maryland for more than 20 years. He is also owner of Winans Construction a residential design/build firm founded in 1978.. Gary Belk's top article generates over 1600 views. to your Favourites.
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