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OWNERS GUIDE TO CONSTRUCTION

The Reynolds Group “Owners Guide To Construction“

The Reynolds Group “Owners Guide To Construction“ Copyright © Perry A. Reynolds 2011 [email protected]

CONTENTS

INTRODUCTIONMETHODS OF CONTRACTING YOUR PROJECT

EVALUATING THE BUILDING SITESELECTING AN ARCHITECT OR DESIGNERBIDDING THE CONSTRUCTION PROJECT

SELECTING A CONTRACTORTHE CONSTRUCTION CONTRACTTHE CONSTRUCTION SCHEDULE

CONCLUSION

IntroductionConstruction has evolved into a complex network of highly skilled professionals including contractors, sub

contractors, architects, designers, and a wide variety of other entities that have introduced a new era of construction. Long gone are the simple handshakes and contracts scribbled on napkins. Once known as Blueprints because of the method of copying, hand drawn plans of pen and ink are now replaced by extremely accurate computerized drafting and design programs. Today's dedicated construction professional has invested considerable time and finances in the education of themselves and their employee’s in the ever changing codes, building trends, governmental regulations and submittal requirements. They are also familiar with the computer hardware, software and specialized equipment and construction support services that insure they can provide the necessary information, documentation and services that today's construction consumer demands. The recent downturn in the economy has resulted in many construction professionals standing on the edge of financial insolvency. Because of the current job market the construction industry has witnessed an influx of smaller contractors and sub contractors that lack the finances and technical expertise required to successfully perform to satisfactory standards. These General Guidelines are designed to bring attention to key elements of the construction process. The information contained is not locally specific to any geographical area therefore local building codes and other aspects that are area specific have not been included.

Building or remodeling a home is a large financial and emotional undertaking whether you are building a new home or renovating an existing home. Everyone has heard horror stories of homeowners being misled or taken advantage of by unethical, under capitalized or inexperienced contractors. The process is complicated even when you hire a reputable contractor. There can be delays, cost overruns and and in the worst of situations litigation or arbitration. After years of working with homeowners, architects, contractors and material suppliers, The Reynolds Group understands that it is best to prevent future problems then to allow them to develop resulting in costly litigation, a delayed construction project and cost overruns. Problems can be avoided by thoroughly investigating potential contractors, the careful drafting and review of written contracts and using sound oversight procedures during the construction process. We recommend that any homeowner undertaking the challenge of building or renovating their home carefully research each aspect of this challenge.

Methods Of Contracting Your ProjectThe overall focus of this “Owners Guide to Construction” primarily concentrates on the typical Owner /

Contractor relationship. For your reference we have also included a few options available in today's construction industry. Deciding on how the you plan to accomplish your goals is primarily a matter of your understanding of the complete building process. Below are a few examples other then the standard Owner / Contractor relationship.

The Owner / Builder - If you have considerable knowledge of the building process you may wish to act as your own contractor assuming the responsibilities of Owner/Builder. Many think that by building their home themselves they save considerable money and in some cases this is true. In many cases it is not. Primarily the amount saved would be that of the “Contractor’s Profit and Overhead”. Contractors usually have a group of sub contractors and material suppliers that they give repeat work to therefore usually get better pricing as well as prompt service. It is rare for a homeowner to get true “Contractor Pricing” from any sub contractor or material supplier. As an Owner / Builder you must seek out reputable sub contractors and solicit bids, execute sub contract agreements, provide the scheduling of material deliveries and sub contractors by trade category, obtain permits, provide waste removal, temporary services such as rest room facilities and a variety of other responsibilities that are provided by a Contractor.

Project Management - Hiring a Project Manager or Owners Representative can be another alternative to taking on the building process yourself. In this method of construction the owner hires a reputable and knowledgeable company or individual to oversee the technical details that most owners are not well versed in. This includes assisting the owner with the review of plans and specifications, filing for various permits, solicitation of bids, negotiations for materials, scheduling of temporary services, sub contractors and material deliveries, inspecting work performed for acceptable standards, authorizing payment for completed work, and other aspects that require a firm understanding of the building process.

Design / Build - The Design / Build process usually involves a Contractor with in house design capabilities or can be a Contractor that works closely with an Architect or Designer in a joint effort to offer the convenience of both the Planning Stage and the Construction Stage. This can streamline the process for those that desire the option of dealing with a single entity to complete their entire construction process.



Evaluating The Building SiteWhether for new construction or renovation there are important facts to take into consideration when planning

your project that are specific to your building site. For instance, if your building site is steep or difficult to access you should anticipate additional costs. These may include additional costs for foundations, scaffolding and staging, retaining walls, material handling, equipment rentals such as cranes and other costs not usually associated with level and easily accessible building sites. If you have a waterfront building site you may incur costs such as EPA permits, sea walls and bulk heading, foundation height requirements, ect.

Other considerations, regardless of the type of building site includes: Set Back requirements (how far away from your property line, roads and right of ways do you need to be), homeowner association restrictions, development restrictions, and other aspects of the property that must be taken into consideration when properly planning your construction project. In many cases, especially in subdivisions, you will find height restrictions and area restrictions that dictate how many square feet must be built or cannot exceed, or percentage of the property where the structure and all walks and drives cannot exceed a certain number of square feet or total of lot area. In some cases your developer or homeowner association may require that your plans be presented to a board or committee for approval as well as charge a fee for the review and approval of your planned project. Your real estate agent, developer, local building department or homeowner association will usually be able to provide you with this information.

Selecting An Architect Or DesignerA homeowner should use several considerations when selecting an architect or designer to properly prepare the

plans and specifications for their construction project. Whether you select an architect or designer is based upon your own personal preference. A designer is almost always less expensive than an architect. An Architect has spent considerable time and effort to obtain their licenses as well as are required to pass rigorous examinations to be able to practice their profession. Research the Qualifications and Experience of Your Architect or Designer. and obtain references .

Sign a Written Contract before the Architect or Designer begins work. This should include a description of services to be provided to the client, a description of any basis of compensation applicable to the contract and method of payment,, a description of the procedure that the architect or designer and client will use to accommodate additional services and a description of the procedure to be used by either party to terminate the contract.

The contract should provide a detailed Scope of Work. The design process is generally divided into four phases, the preliminary design phase, design development phase, construction drawings phase and construction administration phase if the owner desires the Architect or Designer to oversee or participate in certain functions of the construction project. If you retain an architect or designer to perform construction administration make sure you have a written contract setting forth the scope of construction administrative services and how the architect or designer will charge for those services. Construction administrative services can be charged based upon a percentage of the overall cost of construction, a fixed fee or on an hourly basis.

When interviewing and receiving bids from architects and designers make sure that the Architect or Designer provides you with the total cost to complete all phases that will result in Complete Construction Drawings and Specifications. Construction drawings and specifications are needed to obtain building permits and it is the construction drawings and specifications that are used to obtain bids from contractors. Inadequate plans and specifications result in additional construction costs. The contract should also specify the cost for any required redraws, shop drawings, and other such revisions or clarifications required by building officials, plans examiners, or other parties. It is also a good idea to ask that any three dimensional renderings of the project be priced separately. These renderings are usually only good for the homeowners reference, giving a visual interpretation of a completed project. They are of little or no value to the building professional who relies on two dimensional plans, elevations and details to adequately deliver the information that they need to provide a detailed estimate and construct the project.

The contract should include an estimated cost for actual construction to ensure that the plans prepared by the architect or designer can be built within the homeowners budget. It is not uncommon for the homeowner to get caught up in designing the home and request numerous changes and upgrades that the homeowner cannot afford. It is important to clearly communicate and put in writing that the architect or designer will be preparing plans and specifications that can be built within a specified budget. The contract should also include an attorney fee provision that provides that if either party files a lawsuit to enforce the terms of the contract, the prevailing party is entitled to recover reasonable attorneys fees and costs.



Bidding the Construction ProjectTo obtain the best price, the homeowner should obtain at least three (3) bids from qualified contractors or sub

contractors (if they plan act as Owner/Builder). Contractors submit a bid based upon a review of the construction drawings and specifications. It is recommended that the homeowner, or owners agent, also prepare a separate document,, Instructions to Bidders, outlining any special requirements the contractor must follow when submitting its bid. The Instructions to Bidders should address the required format that a contractor must use when submitting its response to the bid. If all contractors use the sane format it makes it much easier to compare bids. For example, unless your construction plans and specifications are extremely detailed, contractors cannot give set prices for items such as appliances, lighting and plumbing fixtures, flooring, door styles, cabinets, ect. Instead of giving a fixed price for these items the contractor includes an amount of money assigned to a specific category which is referred to as an allowance. If the actual amount spent for that item, for example cabinets, is less than the allowance, the homeowner receives the difference. If the actual amount spent for that item is more than the allowance, the homeowner must pay the extra amount plus the agreed upon contractor profit and overhead.

When comparing contracts or bids, it is important to look beyond the total contract amount and compare allowance items. If one bid is considerably lower than the other it may be because the allowance items are unreasonably low. In reality the actual amount paid by the homeowner will be substantially more because the homeowner is responsible to pay costs that exceed the allowance amount. Categories which are not allowance items are fixed price. This means that if the contractor spends less than the fixed price amount, he keeps the difference. However, if the actual cost is more that the fixed price amount, the contractor is responsible to pay the overage. If the homeowner has determined that he wants specific finish items like types of appliances, lighting fixtures, cabinets these should be specified in the Construction Drawings and Specifications or can be included in the Instructions to Bidders and the contractor can submit a fixed price bid for these items. It is also good to remember that owner furnished items are the responsibility of the owner to furnish and to make available when needed as well as the owner assumes full warrantee responsibility.

A homeowner should request that all contractors bids include a Schedule of Values. A schedule of values is a breakdown of the total construction contract amount broken into categories such as grading, foundation, framing, rough plumbing, rough electrical, drywall, roof, finish plumbing, finish electrical, appliances, contractor profit and overhead, etc. The schedule of values should be part of the bid submittal to allow the homeowner to compare contractors bids. Additional information about the importance of a schedule of values is discussed later. As part of the bid process, a homeowner should also require that a contractor or sub contractor submit proof of insurance.

Selecting a ContractorA homeowner should only hire a Licensed General Contractor. A contractors license status may be verified by

the Contractors State License Board. The homeowner should thoroughly investigate potential contractors, preferably before the bid process. This includes verifying the contractors license status, obtaining and contacting references and determining if the contractor has been involved in past or present litigation. It is also advisable to view the contractors prior projects. It is best to select your contractor after you have reviewed numerous bids and performed your investigation. A decision made after a review of the bids and an investigation of contractors is an informed decision. It is much more difficult to negotiate price or deal with background issues if the homeowner and contractor already have a written contract. Always keep in mind that the lowest price is not always the best alternative and that just because you may know a contractor personally does not mean that they would be the best to select in your decision making process. This is especially true in the event that problems arise during the construction process that could substantially increase costs, delay construction time or in the worst case scenario require litigation or arbitration.

The Construction ContractThe overall purpose of all contracts is to protect the interest of all parties involved therefore use careful

consideration when deciding on which is right for your specific project. Two common contract outlines used are the AIA (American Institute of Architects) and the AGC (Associated General Contractors of America) contracts. The following are examples of the most common types of construction contracts used today with a brief description of each.



Lump Sum or Fixed PriceThis type of contract involves a total fixed priced for all construction related activities. Lump sum contracts can

include incentives or benefits for early completion, or can also have penalties, called liquidated damages, for a late completion. Lump Sum contracts are almost always preferred when a clear scope and a defined schedule has been reviewed and agreed upon.Cost Plus Contracts

This type of contract involves payment of the actual costs, purchases or other expenses generated directly from the construction activity. Cost plus contracts must contain specific information about certain pre-negotiated amount (some percentage of the material and labor cost) covering contractor’s overhead and profit. Costs must be detailed and should be classified as direct or indirect costs. There are multiple variations for Cost plus contracts and the most common are Cost Plus Fixed Percentage, Cost Plus Fixed Fee, Cost Plus with Guaranteed Maximum Price and Cost Plus with Guaranteed Maximum Price and Bonus. In the cost plus contract there is usually a provision which allows the owner and/or owners accountant to review the contractors books related to the project for a specific period of time during and after completion of the project.Time and Material

Time and material contracts are usually preferred if the project scope is not clear, or has not been defined. The owner and the contractor must establish an agreed hourly or daily rate, including additional expenses that could arise in the construction process. The costs must be classified as: direct, indirect, markup, and overhead. Sometimes the owner might want to establish a cap or specific project duration to the contractor that must be met in order to have the owner’s risk minimized. As with cost plus contracts this type of contract usually includes a provision which allows the owner and/or owners accountant to review the contractors books related to the project for a specific period of time during and after completion of the project.

Always sign a written contract prior to any work commencing. A contract governs the relationship between homeowner and contractor and how the contractor will charge the homeowner for work performed. A homeowner is in a better negotiating position if the contract terms are decided before work commences. After work commences it becomes much more difficult to negotiate price, define the scope of work and terminate an uncooperative or irresponsible contractor. The written construction contract also include several key provisions. Most states set forth specific requirements for items that must be included in a construction contract. This is the obligation of a contractor. For the homeowners protection, the following items should be included in addition to obvious information such as the contractors name, address and license number and should be attached to the contract and made an exhibit.

A Detailed Scope Of WorkThe detailed scope of work should indicate what is and what is not included in the contract price. The contract

should reference the construction drawings and specifications as well as any revisions to the plans prior to executing the contract. It should list not only the name of architect or designer and the date of plans but also each page number and revision date to insure that everyone involved is referencing the same information. It should include any and all allowances and the amount of such allowances.

A Construction ScheduleInformation about the importance of the Construction Schedule is included in detail in the section below titled The Construction Schedule.

A Schedule Of Values Detailed information about the importance of the Schedule of Values is included in the section below.

Finance Control MeasuresA finance control is a procedure to make sure that before a contractor is paid for progress payments that the

work billed for has been completed and that the contractor uses the money it receives for the project to pay the subcontractors and material suppliers for that project. The homeowner can manage the finance control or thehomeowner may hire a company that specializes in finance control. Many banks and lenders require its borrowers to use a finance control with a pre-established finance control procedure. However, insurance companies do not often require a finance control procedure or the use of a finance control company. Insurance companies will issue a check to its insured. It is the insured/homeowner who is responsible for making payments to the contractor and ensuring that the contractor properly applies funds and performs the work for which it bills. It is not uncommon



for contractors to front load their monthly pay requests (that is to bill for work not completed) or in some instances fail to pay subcontractors and material suppliers.

Contractors usually submit regular bills. These are called progress payment requests. Like the name suggests, the contractor bills for the progress it has made to date on the construction project. The issue is how can a homeowner verify the contractors progress. This can be very difficult, especially for anyone that is not familiar with the construction process. If a contractor submits a progress payment request indicating that the project is 25% complete, how can a homeowner know if this is correct? The best tool to track contractor billing is a schedule of values. This schedule of values is a breakdown of the total construction contract amount. It is broken down into categories such as, grading, foundation, framing,, roofing, rough plumbing, rough electrical, drywall, finish electrical, finish carpentry, cabinetry, flooring, and all other aspects relevant to the project including the contractors profit and overhead. The schedule of values is prepared by the contractor and it should be submitted at the time the contractor bids the project.

The schedule of values should also be made part of the construction contact. When the contractor submits its progress payment request the request should be accompanied by a revised schedule of values. Each schedule of values should indicate the total amount billed to each category and the percentage of completion plus the amount billed for that monthly progress billing request and revised percentage of completion. It is easier to determine if framing is 25% complete than it is to determine if the entire project is 16% complete. Using a finance control procedure is the best method to ensure that a contractor is paying project subcontractors and material suppliers. A good fund control procedure requires that a contractor obtain signed lien releases from subcontractors and material suppliers as a condition of receiving progress payments. If a contractor does not pay its subcontractors and material suppliers the unpaid subcontractors and material suppliers may record mechanics liens against the homeowners property. The homeowner is legally responsible to pay the subcontractors and material suppliers even if the homeowner previously paid the contractor for the services or materials which are the subject of the mechanics lien.

It unwise to pay a contractor for work not performed with the exception in some cases of a modest deposit. The written construction contract and finance control agreement many times require that a percentage of all progress payments are withheld as a retention. The retention is then paid to the contractor upon final completion of the phase being billed or the completed project. The retention is a safeguard for the homeowner. If there is a problem with the project the homeowner may use the withheld retention funds to fix any problems or complete unfinished work. A Fixed Price To Complete Construction (unless using one of the optional contracts listed above)

The Time To Complete Construction (as indicated by the construction schedule included as an exhibit) . The time to complete construction should include both a start date and a total number of days to complete the

project. During the initial phases of construction such as the grading, foundations and framing stages weather may play a role in extending the construction time. A well prepared and experienced contractor keeps daily reports that include labor, delivery, weather and other job related information and thus can substantiate any causes of delay that are weather related. After these initial phases there usually is not excuse for weather with the exception of catastrophic events such as flooding, massive snow storms and similar unnatural events. This is especially important when a contract contains Liquidated Damages which is usually a condition included in commercial or municipal construction contracts but on occasion are included in residential contracts.

A Procedure For Change Orders There should always be a provision requiring that all changes to the scope of work, cost of construction and

time to complete must be in writing signed by the homeowner and contractor. The change order procedure should clearly define any contractor profit percentage above the actual additional cost associated with such changes and should be substantiated with adequate documentation of the costs. Even the smallest changes must be documented in the form of a change order. The change order will contain the date of the original contract; date of the change order; original contract amount, amount of previous change orders, amount of current change order and total contract amount after change. Most importantly, change orders give specifics about exactly what will be done with the change. The change order will need to be signed by both the owner and the contractor.

The most common causes for change orders are: Owner Requested Changes - For example adding additional or upgrading windows, changing a staircase design, increases in ceiling height,higher ceiling, better-grade appliances, etc. When the owner requests changes during the



construction process it is the owners responsibility to a change order request claiming the economic and time costs associated with the proposed modifications.Drawing Errors and/or Omissions - Quit possibly the most claimed situation for change orders is inadequate details, misrepresentation or simply avoidance to prepare a complete set of detailed drawings can lead to serious change order requests. Sometimes leaving out details and misrepresenting the exact environment in which the construction will be held at, can also lead to change order claims.Design Changes - Several factors can lead to start a construction project without a complete scope of the project and start the construction without final drawings. This type of situation is common on design-build projects, where the ongoing process of design can induce to work stoppage or produce economic impact in the project.Specifications - Sometime the drawing asks for one product but the specifications call for another. The Specifications should always take precedence over the Drawings and a knowledgeable contractor should bring this to attention during the estimating stage. This situation is common on construction projects where the drawings are prepared by one entity and the specifications by another or are prepared by a designer lacking adequate attention to detail who prepares both the Final Construction Drawings and the Specifications. Unforeseen Conditions - This can include issues such as soil problems or other subterranean features that may require replacing with additional materials or even the boring or blasting of rock.Substitutions - A contractor may request to substitute material, when he cannot get the specified materials or there is a shortage in supplies. In this situation a credit will be due if the material cost is less, or sometimes the contractor will have to absorb the costs’ difference between materials and/or products.

The best method of avoiding unnecessary change orders is to make all selections and decisions regarding exactly what you want in the finished product then develop a concise and clear scope of work so that the Final Construction Drawings, Specifications, Instructions to Bidders, Proposals, and contract provide for all the necessary documentation.

RetentionRetention, also called Retainage, is a percentage ( usually 5 - 10 % ) of all payments to the contractor that is to

be withheld until the project is complete. In most construction contracts, the contractor will request payment on a regular basis at pre-described intervals for labor and materials supplied during that time period or phase of construction. However, the contractor will receive payment for only 90 percent or 95 percent of those labor and materials supplied. The remaining 5 -10 percent will not be paid monthly but will be retained until that particular phase or the entire project is completed. The owner will typically require retention from the project general contractor. The general contractor usually then requires similar retention in all subcontracts. Construction material suppliers typically refuse retention by their contractor customers and will insist on payment in full within 30 days of invoice.

The owners and the general contractors may feel that retention is necessary to insure prompt completion of the project. Retention will motivate subcontractors and tradespersons to return to the project to complete small unprofitable punch-list items. Retention provides the owner and contractor with money to correct defective work if a subcontractor abandons the project and provides funds to pay the mechanics lien claims of unpaid suppliers. When retainage is held to the end of the entire construction project it should be placed in interest bearing escrow account for the benefit of the contractor and all subcontractors. Many states have prompt pay laws which require general contractors and subcontractors to promptly pass on payments they have received from the owner. In addition some lending institutions require the use of retainage which is including in the loan agreement.An Attorneys Fee Provision

An attorneys fee provision provides that if any party files a lawsuit to enforce the terms of the construction contract that the prevailing party is awarded reasonable attorneys fees and costs. Costs refer to filing fees, fees for serving the summons, complaint, and other court papers, fees to pay a court reporter to transcribe depositions (pretrial interviews of witnesses) and in-court testimony, and, if a jury is involved, to pay the daily stipend of jurors. Often costs to photocopy court papers and exhibits are also included. Typically, court costs are paid by the parties to the dispute. But, with the inclusion of an attorney fees clause, the losing party is held responsible for both parties' court costs.

Just because you include an attorneys' fees provision in your contract, you shouldn't assume that the clause will be enforced if a lawsuit arises and one side tries to get their legal costs reimbursed by the other. Courts are allowed to judge contracts for fairness and to change their terms if they decide that doing so is the more fair solution. If a judge decides that it would be unfair to enforce a requirement that one side pay the other's attorneys' fees or finds that one of the parties was forced into signing the agreement, the judge could cancel the requirement or change the



amount of fees to be paid. But if a judge decides that an attorneys' fees provision is reasonable and that it was negotiated by two parties with equal bargaining power, then the judge will likely enforce it. In some contracts there is an Arbitration Clause. An arbitration clause states that disputes arising under the contract must be settled through arbitration rather than through court litigation.

A Procedure For Submitting Pay RequestsA clearly defined procedure for submitting pay requests and making payments under the construction contract.A Termination Of Contract Clause

A Termination of Contract Clause ensures that either or both parties have the right to terminate the contract under certain circumstances. Generally, termination clauses describe breach of contract events that justify the right to terminate the contract (for example, nonpayment of subcontractors). Termination clauses also describe the methods of giving notice of exercise of the termination right and whether the breaching party must be given an opportunity to cure the breach before the other party can terminate the contract.

An Insurance ProvisionThe Homeowner should be listed as “Additional Insured” on the Contractors Insurance Policies. The contract

should require that the homeowner be added as an additional named insured on contractors commercial general liability and workers compensation policies (if applicable). As stated earlier, at the bid phase the homeowner should request that all contractors produce proof of insurance. Once the contractor is selected and the contract is signed it is not enough that a contractor represents that the homeowner has been added as an additional named insured. The homeowner should request that contractor provide the homeowner with written verification, usually in the form of an Accord Form, listing homeowner as an additional named insured.

An additional insured endorsement does not necessarily cover damage in all circumstances. It might be limited in scope, based on the insurance company providing the policy. Some cover the additional insured only while the project is active, not after the project has completed. Coverage after a project is completed is known as "Completed Operations Coverage or Products and Completed Operations coverage. If there is no completed operations coverage, then the additional insured is not covered for construction defects after the job is complete.

The homeowner should always have an attorney experienced in construction law review the written construction contact prior to signing.

The Construction ScheduleThe construction schedule serves several purposes. For the contractor it is a vital document which, along with

the construction estimate, determines whether a profit is made or a loss will occur. For the owner it also is an important document. It lets them know when funds must be distributed, when they need to have the owner furnished items available to insure they do not cause delay in the construction process and when they can anticipate moving into their new home or addition. Many lending institutions require that contracts include construction schedules in addition to schedules of values and other documents when reviewing a loan application. The construction loan is almost always more expensive then a permanent mortgage therefore every day saved in the construction process translates into less money the owner has to pay. If the owner has moving companies, utilities to transfer, changes of address’s to contend with, deliveries of new furnishings or other goods, a day late may mean costly rescheduling or temporary lodging and travel expense. There are many methods in the construction industry to represent and create construction schedules including

Bar Charts - Bar Charts are the most simple and easiest way to produce a scheduling format in the construction industry. It is widely used due to its simplicity and multiple adaptations to numerous events. A bar chart is formed with a list of activities, specifying the start date, duration of the activity and completion date of each activity, and then plotted into a the project time scale. The detailed level of the bar chart will depend on your project complexity and the intended use of the schedule. A variation of the bar chart schedule, is the linked bar chart. Using a linked bar chart, the activities and subsequent items are linked with arrows and lines, specifying the sequence and order of preceding activities. The previous activities are linked one to another to demonstrate that one activity must be completed before the other activity can start. Bar charts are useful and commonly used to detect the amount of resources needed for one particular project. Adding the resources vertically will produce what is called the resource aggregation. The purpose of this aggregation is to estimate the work production and establishing estimates for man-hour and equipment needed.



Critical Path Method - This process is more elaborated and detailed than the Bar Chart. It usually includes a sizable list of activities and each activity is then linked to previous and subsequent activities, specifying that each activity has at least another one that must be completed prior to starting the preceding one. With the Critical Path Method, calendar days are established and activities are assigned with an early date, first date that an activity can start; late start, specifying the last possible date that this activity must be started to avoid delays in the overall construction process; early finish, the earlier date that the proposed activity will be completed; and the late finish, that is the last date the activity must be completed without affecting the start of the next one, and subsequently affecting the entire construction schedule. The steps in producing a network are Listing of activities, Producing a network showing the logical relationship between activities, Assessing the duration of each activity, Producing a Schedule, and determining the start and finish times of each activity and the available float assessing the required resources.

Line of Balance - This process is a planning technique for repetitive work. The essential procedure for this scheduling technique is to allocate the resources needed for each step or operation, so the following activities are not delayed and the result can be obtained. This process is usually applied in the construction or manufacturing of cabinetry and other aspects of construction where the same systems of assembly and the same types of products are used.

Q Scheduling - Q. Scheduling is Quantitative Scheduling, in the context that quantities to be executed at different locations of the construction project form the elements of the schedule. Also Q. Scheduling is Queue Scheduling in the context that trades pass through the different segments of the project in a queue sequence. No interference between two activities is allowed at the same location. It is derived basically from the Line of balance technique with some modifications to allow for the non repetitive models that are characteristic of the majority of construction projects. The Q Scheduling is a new technique, gaining popularity among contracting firms. It is the only scheduling technique that reveals a relation between the sequence of doing a job and the cost to be incurred. The Q schedule is similar to the Line of Balance with some modifications, to allow for a varying volume of repetitive activities at different segments or locations of the construction project, thus the model produced is closer to reality.

ConclusionEvery State permits a person, or company, who furnishes labor or materials for a construction project to claim

a lien against the improved property. While some states differ in their definition of improvements and some states limit lien claims to buildings or structures, most permit the filing of a document with the local court that puts parties interested in the property on notice that the party asserting the lien has a claim. States differ widely in the method and time within which a party may act on their lien. Also varying widely are the requirements of written notices between property owners, contractors, subcontractors and laborers, and in some cases lending institutions. As a general rule, these statutes serve to prevent unpleasant surprises by compelling parties who wish to assert their legal rights to put all parties who might be interested in the property on notice of a claim or the possibility of a claim. This by no means constitutes a complete discussion of construction lien law and should not be interpreted as such. Parties seeking to know more about construction laws in their State should always consult their State statutes directly.

During the design and construction phases problems can arise. Some of these problems may be resolved informally between the homeowner and the architect or designer or the homeowner and the contractor. Informal resolution is more likely if the homeowner has entered into a detailed written contract that governs the relationship between the parties, if problems are caught early and the parties openly discuss issues and problems. For situations in which informal resolution is not possible it is very important for the homeowner to get competent legal advise as soon as possible. Problems that are ignored or put off can result in increased design or construction costs, abandonment of the project by the contractor, a depletion of the homeowners funds and delay in construction. It is also important that the homeowner document all communications with the architect/designer or contractor in writing. This has become much easier with the widespread use of e-mail. All communication should be saved for future reference.

About The Reynolds GroupThe Reynolds Group was formed by Perry A. Reynolds in 1995 as a design, estimating and project expedition firm providing services to the residential and retail construction industries. Perry began as a craftsperson in a cabinet shop at an early age and soon began excelling in everything from cabinet making to design and management and soon was recruited to work as a construction manager and estimator for a local building contractor in Williamsburg Virginia. After holding a high profile upper management position with one of the nations leading general contractors Perry began drawing plans for several national retailers. Today The Reynolds Group performs Design, Estimating, and Construction Support Services nation wide. Perry also owns and operates Lake Lure Woodcrafters, an interior wood work company specializing in high end residential and retail interiors.



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