Volume 3 - Number 3

  May 2008

Arthur O'Leary, FAIA, MRIAI

Allowances In Construction Contracts
Avoiding Misunderstandings and Disputes
   The establishment of cash allowances in construction contracts is a convenient method of allocating construction funds to portions of the work that cannot be specified with sufficient particularity for competitive bidding at the time of contracting. This includes primarily items that have not yet been selected pending the availability of new models or the arrival of updated catalogs. In some cases the owner has not as yet established definite criteria for certain equipment or furnishings, but this should not preclude proceeding with general construction. It also includes items of superficial or decorative nature that will be selected at a later time when colors, textures, furniture, and interior designs are more definitely established.
   The types of purchases most frequently encountered as cash allowances are those such as finish hardware, lighting fixtures, special equipment, graphics, building signage, floor coverings, window treatment, and wall coverings. It is a flexible way of including in the contract items that are not yet designed, chosen, or specified. Allowances are practical for work of indefinite scope or where the quality, configuration, and other specific characteristics have not as yet been determined.  Read More

Construction Nightmares: Jobs from Hell and How to Avoid Them 
   Arthur F. O'Leary, FAIA, MRIAI, a 40-year construction project veteran, relates actual jobs gone bad from the world of construction, dealing with plans, extras, delays, interference, scheduling, change orders, defective construction, inadequate supervision, incompetent contractors and just about every other problem that could happen on a construction job.
   After you find out what went wrong and how it went wrong, you get a clear legal analysis explaining the tools and procedures to use to untangle the mess. For example, you'll see how to use mechanic's liens to your advantage, the proper way to use a bonding company, insurance coverage checks, contract preparation and negotiation strategies and much more.
   Packed with real-life case examples describing nightmares like these:
• The mysterious retaining wall collapse. 
• Earthquake damage or liable defect? 
• The case of the fraudulent shop drawings. 
• The contractor who hired his high school buddy. 
• The corrupt inspector and the crooked estimator. Read More

Construction Cost Trends 

Construction Cost Trends for 2008

DCD Sq. Ft. Cost Guides 

Just Released! The DCD Building Sq. Ft. Cost Guide
The DCD Sq. Ft. Cost Guide For Medical Buildings
The DCD Educational Square Foot Cost Guide
The DCD LEED® Square Foot Cost Guide

    DCD Subscribers: The archives of Design Cost Data are available online at DCD.COM in the DCD Archives™. The DCD Archives contains over 1,100 completed projects, and their actual cost to build, to assist you in developing preliminary cost estimates, building type research, cost modeling and more. The DCD Archives includes cost escalators through 2010 and regional modifiers in an easy-to-use cost modeling database.
    Access the DCD Archives with your DCD Subscriber Number that is located on your DCD Magazine mailing label next to your last name. To become a subscriber of DCD, you can subscribe online at DCD.COM or call us at 800-533-5680.

Architecture Billings Index Remains Weak
Business levels still declining, while institutional sector remains lone bright spot
    After sinking to its lowest level ever in March, indicating a rapid slowdown in billings at U.S. architecture firms, the Architecture Billings Index (ABI) rose slightly in April. As a leading economic indicator of construction activity, the ABI shows an approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the April ABI rating was 45.5, up from the historic low mark of 39.7 in March (any score above 50 indicates an increase in billings). The inquiries for new projects score was 53.9. Read More

Modular Building: The Time and Cost Efficient Approach to Construction   

  When evaluating building options, two of the most important considerations are cost and time. Many designers and builders are attracted to the accelerated construction method, as it not only yields a faster time to occupancy but also offers significant flexibility and financial benefits over the life of the building. Methods using modular components decrease the design and construction timeline by 30 to 50 percent, with fewer change orders, earlier occupancy and improved cash flow.
   While accelerated construction techniques are not exactly new (according to Architectural Record, they have been used since the 1960s), modular building has become an increasingly popular method, with tremendous strides in construction technology and design innovation since the 1990s. Recent data from the Modular Building Institute (MBI) indicates the commercial modular industry is a $5 billion business annually, with a revenue growth rate of about 6 to 9 percent per year.   Read More

How to Hire a How to Hire a Project Management Firm
By Scott A. Swiderski, PE

    It seems that almost every firm is now offering project management; however, the interpretation of project management and the services it entails greatly varies. By selecting the proper project management firm, you can help manage risks and control costs at every stage of the project from pre-construction planning and complete construction oversight to post-construction services. 
What is Their Role? 
   Undertaking a construction project is a complex and challenging endeavor. Project management firms can help level the playing field between the owner and the contractor, as well as ensure that everyone is informed and understands their role, expectations and schedule for completing the project on time. 
   The role of a project management firm is especially important in the public sector as many public agencies, especially smaller communities, undertake substantial construction projects only once during the course of their career. However, the construction firms that they will be working with construct many similar projects in the course of one year. This leads to a gap in knowledge and experience. By integrating a project management firm into the project, you can balance the experience level between the owner and the construction firm. 
   Yet another reason a firm that specializes in project management is necessary is because project management services are often included with the architectural and engineering services as an afterthought or merely as a requirement. Unfortunately, by the time construction begins, the design team may very well see their profit margin for the project shrinking. To accommodate the shrinking budget, it is common practice to send the rookie or team member who bills the lowest to monitor the project and provide the promised project management services. This person may have had little involvement on the project before this and may not feel comfortable asserting the owner’s interest to the contractor. Further, this representative may lack the necessary experience to truly be a creative problem-solver. This approach results in construction observation rather than project management because the construction process is just being monitored rather than explored for methods to control the cost and schedule. Read More

TradeWinds 

• Custom-Curved Decking Panels Offer Strength, Aesthetics, Construction Economy
• Good News Buried In Construction Spending Report, Agc Says
• Architecture Billings Index Drops to its Lowest Level Ever
• Arch’s Glass Entrances Now Available Nationally with C.R. Laurence Hardware
• Atlas Keeps Roofs “Cool” With ACFoam CrossVent Polyiso Insulation
• 'Red-Hot' Steel, Fuel Prices Send Construction Costs Soaring, AGC Says
• SARGENT 421 Cam Action Door Closer’s 
• Petersen Introduces Corrugated And Ribbed Profiles;Expands Line Of Exposed Fastener Panels
• Architecture Billings Index Points to Major Downturn in Commercial Construction
• Fox Blocks Announces Building Code Approval For Miami-Dade County
• CONSTRUCT2008 Exhibit Space Commitment Robust

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