UNDERSTANDING CONTRACT DOCUMENTS

							                                                               legalSOLUTIONS

  UNDERSTANDING CONTRACT
  DOCUMENTS
  By Thomas J. Kucera




  T
           oday’s design and construction contracts are loaded         documents or specific project goals. Since each project brings
           with legal speak that can be difficult to navigate.          its own unique challenges, a specific contract and bid needs to
           Poorly written contract documents lead to differing         be crafted for each job.
           interpretations and can cause disputes. Many of
  these disputes lead to claims and costly litigation. However,        THE ALL-IMPORTANT SCHEDULE
  by clearly outlining project goals and providing the most            A properly developed Critical Path Method (CPM) schedule
  specific documents possible, contractors can greatly reduce           is an essential part of any successful project. Therefore,
  the number of change orders on a project, and eliminate              specific standards and requirements for CPM scheduling need
  disputes and claims. The key to success is taking the time to        to be included in the contract documents. Too often, these
  ensure that the right language is included in the contract from      details are absent from the contractor’s schedule because the
  project onset and that the contract specifications agree with         contractor lacks scheduling expertise or does not take the time
  the contract drawings.                                               to properly develop the schedule. (For more on how to create
                                                                       a proper schedule, see “Scheduling for Success” on page 28.)
  COMMON PITFALLS                                                      The result is a schedule that does not operate properly and
  A poorly written contract can set the tone for a bad business        misleads the contractor and the owner.
  relationship and an inadequately executed project. For                  A schedule is a tool—no different than a power drill. A
  example, one key item that is often excluded from a contract         proper schedule should include setting specific intermediate
  document is a requirement for a daily report from the                goals for the completion of project elements. Internal
  contractor. These daily reports are critical for ensuring            milestones provide checkpoints to see if target goals are being
  adherence to the schedule and keeping management abreast             reached.
  of any important developments. As such, the reports should
  indicate what work is being performed and by how many
  crew members, as well as which subcontractors are and what
  equipment is at the site.
                                                                                     A POORLY WRITTEN
    Another common issue with contract documents is the                              CONTRACT CAN SET
  tendency for owners and architects to use the same contract
  repeatedly without checking to see if it applies to a particular                 THE TONE FOR A BAD
  project. This is especially true for public entities. For example,
  in a recent project the brick and mortar in the plans did not
                                                                            BUSINESS RELATIONSHIP AND
  match the drawings—something that could have been avoided                           AN INADEQUATELY
  with careful attention to the contract. This point also applies to
  contractors who don’t adjust their bids based on the contract                    EXECUTED PROJECT.”


                               Thomas J. Kucera, PE, is vice president of H.R. Gray, a unique management and consulting firm that
ABOUTthe                       offers public-entities programs and construction management services. For more information, please call
AUTHOR                         614.487.1335, e-mail tkucera@hrgray.com or visit www.hrgray.com.


52 | OCTOBER2007                                                                                                moderncontractorsolutions.com
           MAKING THE CONTRACTOR AWARE OF THE GOALS OF THE
        PROJECT IS KEY TO CONTRACT SUCCESS AND INCREASES THE
  CONTRACTOR'S ABILITY TO PARTICIPATE AS A MEMBER OF THE TEAM.”

  Building on the importance of detailing all schedule            creative solution to alleviate the problem. A constructability
milestones, a constructability review should be performed         review would have identified this scenario early in the
as part of the design process. Such reviews ensure that the       construction process.
drawings and specifications are geared toward the current
project. Constructability reviews significantly reduce change      COMMON GOALS
orders and can help alleviate the possibility for claims. This    Making the contractor aware of the goals of the project is
simple check is often overlooked because of lack of time and      key to contract success and increases the contractor’s ability
budgetary constraints. Too often, a claim situation occurs when   to participate as a member of the team. Contractors are
a contractor is unaware of an item and does not include it in     motivated by profits to perform each project in a quick,
the bid. For example, one contractor had to cancel a concrete     effective way. If there are numerous change orders, it can
pour because he was not informed of load limits on the main       greatly disrupt a project and increase the chances of a claim.
access road to the site. The ready-mix trucks were repeatedly     Documentation of project goals ensures that everyone is
stopped by the police and ticketed. This greatly affected the     working toward the same goal. Creating thorough contract
schedule and required the concrete contractor to develop a        documents ensures the greatest chance for project success.




moderncontractorsolutions.com                                                                                         OCTOBER2007 | 53