Roles & Responsibilities in Construction Management

Ben Shuman, PESenior Environmental EngineerUSDA, Rural Utilities Service

(202) 720-1784ben.shuman@wdc.usda.gov

First Let’s Talk AboutRoles & Responsibilities

Partners• Owner• Funding Agencies• Consulting Engineer• Construction Contractor

Owner• What are the owner’s responsibilities?

– Need to be fully informed– Make final decisions on planning– Hire the engineer and contractor– Pay on time!– Resolve disputes

Consulting Engineer

• Responsibilities before award:– PER (which defines scope)– Preliminary Design– Plans and specifications– Coordinates and assists in bidding/award

Engineer’s Role (continued)• After award:

– Owner’s representative– Provide Resident Project Representation– Evaluate shop drawings– Visit site and observe construction– Reject defective work, evaluate change orders,

and pay estimates– Determine final quantities for unit prices

Visits to Site by Engineer

• Visit site as needed to observe as an experienced/qualified design professional;

• Review progress and quality of work for benefit of owner;

• Determine in general if work is proceeding per contract documents

Engineer’s Role (continued 2)

• Evaluate substitutes and “or equals”• Make clarifications and provide initial

decisions on disagreements• Determine substantial completion• Write punch list• Recommend Final Payment to the Owner

Limitations on Engineer’s Authority (and RPR)

• Will not supervise, direct, control, have authority over or be responsible for:– means, methods, techniques, sequences,

procedures of construction;– safety precautions or programs;

• Acts or omissions of contractor, subs, or suppliers;

Limitations on Engineer’s Authority (continued)

• Review of pay requests, documentation, operating instructions, schedules, guarantees, bonds, inspections, tests, approvals is:– only to determine generally that content

complies.

Brief explanation of RD

RD Undersecretary

RUS RHS RBS 47 State Offices

RD Undersecretary

State Director

State Office

Area Offices

Rural Development

• Program Director• State Engineer• State Environmental Coordinator• Area Director• Area Specialist

Specialist• Provide information about the program• Main Point Of Contact• Performs some review of PER

– completeness – financial info

• Construction management• Loan servicing

State Engineer

• 1/3 of job is engineering (the easy part)• 2/3 is people (the hard part)

Here’s the short story...

• Reduce risk to the Agency and taxpayer• Provide an opinion to the Management

In Prioritized Order...

• PER• Engineering Agreement• Review plans and specifications• Execute construction contracts• Construction management

Contractor

• Build it per plans and specs– On time– Within budget– Absolute obligation to perform and complete

the work in accordance with contract documents

Contractor’s Responsibilities

• Supervise, inspect, and direct the work• Responsible for site, materials, equipment,

and schedule• Responsible for all subs and suppliers• Responsible for site safety• Maintains record documents at site

What are the typical steps in a project?

From Cradle to Grave• Need for Project• Working with a Technical Assistance Provider• Selecting an engineer• Application• Design• Bidding and award• Construction • Operations (loan servicing)

Selecting an Engineering Firm

• Owner develops Statement of Work (SOW)• Request For Qualifications (RFQ) process• Owner makes an informed decision

Statement of Work

• What is a SOW• How to develop a good SOW

Request for Qualifications

• What is an RFQ and its purpose• How to select the best engineering firm

Deliverables • What are the Engineering deliverables?

– PER– 60% design– 100% design– Construction services– warranty inspection

• What are the due dates for the deliverables?

Bid & Award of Contract

• RD’s requirements– Open and free competition– Use of standard contracts unless approved

otherwise– No conflict of interest

• Competitive bidding– Low bid vs “Best Value”

Construction Management

Construction Management

• Why do we even do it?– Protect the interest of the owner– Protect the interest of the taxpayer

Components• Pre-construction Conference• Monthly construction meetings (Partial Payments)• Change orders• Engineer Invoices• Prefinal Inspection

– Punch List• Final inspections• Warranty Inspection

Pre-construction Meeting• Led by consulting engineer• All parties involved attend• RD has an outline of items to discuss• Clearly describe expectations for project –

timelines, payments, change orders, etc.• Written record of meeting signed by all

Monthly Construction Mtgs• Led by consulting engineer• RD Specialist sometimes State Engineer or

Construction Analyst also• Updated progress schedule from contractor

if needed• Payment requests• The dreaded change order

Change Orders• Sometimes generated by contractor• Recommended by consulting engineer

– May involve additional design work• RD

– Confirms availability of funds– Scans for eligible purpose– Approval

Pay Requests– Quantities of work completed (unit prices)

• Or based on schedule of values (lump sum)– Materials stored on or near site– RD forms signed by Engineer & Owner– RD Specialist confirms eligibility & funds– Compare % complete with % time complete

Roles of the Inspector• The inspector only does two things

– Observe & report• Know the contract• Document in a daily log record book

– Take photos• Safety

Safety• Know the safety plan• Inspector should let appropriate people know

immediately of safety concerns or violations

What Inspector Should Not Do• Do not direct the contractor • Do not act as engineer• Do not act as owner• Know what authority you have (almost none)

Costs of Inspection • $50 - $100 per hour ($8K-$18K per month)• 4-7% of estimated construction cost• If contractor goes beyond allowed time,

liquidated damages should pay for additional inspection costs

• Budget enough money up front – should not use contingency funds

Common Problems• Inspector not on site• Inspector directs contractor• Inspector makes deals

Inspections – Prefinal and Final• Coordinate with Substantial Completion

– Start of warranty period• Critical players

– Owner/operator– Consulting Engineer/Resident Inspector– Contractor– Funding agencies

• Final inspection confirms punch list completed– Triggers final payment

Warranty Inspection• 11 months after substantial completion• RD State Engineer should attend• Good idea to talk to operator• Any concerns should be addressed in

writing to contractor• As-builts, O&M manuals

Liquidated Damages

• Not a penalty• Should be enforced uniformly• Amounts established in advance

– Interest– Engineering/Inspection– Administrative costs– Other costs

Contractor Default

• Follow contract terms & notice requirements• Check state laws that may apply• Allow surety reasonable time to respond• Notify state licensing agency and Treasury

Department if surety is unresponsive

Servicing andOperation & Maintenance

• Run your system like a business• “Sustainable” systems

“Take-Aways”• Know your roles & responsibilities• If you’re more than one year past start of

project and you haven’t gone to bid, it’s time to act

• Owner is responsible for the project• Contractor is responsible for meeting terms

of contract

Questions?

Ben Shuman, PESenior Environmental Engineer

Rural Utilities Service202-720-1784

ben.shuman@wdc.usda.gov