The Building Business

Dr. Sadi AssafProfessor Construction Engineering and Management

King Fahd University of Petroleum and Minerals

Department of Construction Engineering and Management

The Architect or Engineer

A. Selection When the project financing is solved, selecting an

engineer or architect is the next step.

He must design something the owner wants, design some thing that is safe to use and safe for the general public.

The architect or engineer should not place his seal on plans prepared by another, or perform some other illegal practice.

Both architects and engineers write specifications in the same manner.

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B. Statement of Work When an owner employs an architect or an engineer, he

usually prepares a statement of work.

The architect or engineer, after studying the requirements, quotes a price to the owner for his services. If the fee is satisfactory, a contract between the owner and the architect or engineer is entered into. This is called “The Agreement between the Owner and the Architect or Engineer.”

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C. The Agreement If the statement of work is oral, the architect or engineer

would be well advised to place it in writing when the agreement is made.

While all phases of the work should be stated in the agreement, two requirements often lead to a misunderstanding. the accuracy required in the estimate of the cost of the project. the degree of quality assurance provided by the architect or

engineer.

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D. Fees

• Architects or engineers are usually paid in one of three ways: lump sum of money for performing all the work required in the

statement of work

percentage of the cost of the final product

the cost of producing the plans and specifications plus a fixed fee or percentage of their costs as profit.

The Architectural or Engineering Offices

1. Departments A large architectural or engineering office is made up of

various departments, each responsible for a specific phase of the work.

2. Client Relations The most essential person in an architectural or

engineering firm is the client relations man. He is the salesman for the office. He brings in the clients. They must have a broad knowledge of construction and costs, and they must be able to associate with people who control money.

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3. The Designers The designers must have artistic talent. They must be able

to sketch and make renderings of their ideas and present them to the client for approval.

4. The Civil Engineers Civil engineers are people who determine the location of

the project on the site, and design the roadways, bridges, and parking lots. They are also responsible for storm water drainage and the sewage disposal plant.

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5. Architectural Draftsmen When the designers get their sketches approved, the work

is turned over to the architectural draftsman, who takes the sketches and from them produces the working drawings.

6. Structural Engineers When the draftsman’s work is under way, the structural

engineers start their work. They work out strengths and deflections, foundation sizes, the size of beams, thickness of floor slabs, etc. It is their job to make the building structurally sound against wind, gravity, and other forces.

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7. The Mechanical Engineers When the structural work is under way, the mechanical

engineers start work. It is their job to design a heating system, a cooling system, a water supply system, and a sanitary system as required.

8. The Electrical Engineers The electrical engineers must supply drawings showing

power lines, motors, transformers, and similar equipment. Electrical engineers transform electrical power into light energy or physical energy in an economical way.

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9. The Landscape Architects The landscape architects locate trees, shrubs, bushes, and

flower beds on the property to present an artistic setting.

10.The Specification Writers When the plans of the various departments are near

completion, the specification writers start work. Their first job is to check and coordinate the plans from the various departments. Then they write their specifications and prepare the work for bidding.

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There are five things specification writers must do to fulfill their job.1) They must coordinate the civil, architectural, structural,

mechanical, electrical, and landscape drawings.

2) They must check the drawings to make sure there has been no omission or lack of information necessary to make a complete project.

3) They must select the proper materials and methods of installation to assure that the owners will receive a quality product with the utmost economy.

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4) They must balance cost with the owners’ budget so that the owners obtain full value for their money.

5) They must write specifications clearly and concisely to describe the requirements in a manner to avoid delays, disputes, or costly claims, and must provide a document that will give a basis upon which a legal contract can be executed.

Only a few engineers have the ability to make good specification writers. Some lack the knowledge of contractual relations. Many lack the ability to write intelligently, spell correctly, or even express themselves well.

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11.The Contract Administrator When the plans and specifications are complete and are

approved by the owners, the contract administrator’s first duty is to have the proper professional seal or seals affixed to a complete set of plans and specifications.

When the building permit is granted, the project administrator should obtain proposals from satisfactory contractors who are willing to bid on the project.

Some architectural or engineering firms require the general con tractor to obtain the building permit.

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12.The Engineers’ Estimators Some large architectural and engineering firms employ

one or more full-time estimators to keep the cost of a project within a cost the owners can afford. Estimators keep abreast of the latest material and labor costs.

When a client has imposed a definite cost limitation, and where an architect or engineer knows or should have known that his client has limited funds, he is subject to severe penalties if, through his neglect, he submits an erroneous cost estimate.

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13.The Clerks of Work Architects or engineers also employ a clerk of the works.

This person is a trained construction engineer employed by the architect or engineer to enforce the terms of the contract.

He represents the architect or engineer at the job site.

The Contractor

The contractor is the person or the company that the owner employs to perform specific work.

When an architect or engineer designs a project, he usually invites various contractors to submit bids or prices for performing the specified work.

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B. Subcontractors Contractors can depend upon subcontractors or they can

do the work with their own forces. The choice often depends upon the area. It stands to reason that in a large city, specialists can do work more cheaply than contractors who may do a type of work occasionally.

Subcontractors usually work in cities and work for several contractors. In small towns with only one or two general contractors, subcontractors are brought in from the city.

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C. The Estimator The architect has a picture on paper, but it is only a

picture until the contractor trans forms that picture into a solid, three-dimensional structure. The estimator is the one who translates that picture into cold, hard dollars. It is the first step in the transformation of a dream into a solid object.

When the estimator’s bids are high, the time spent estimating is lost. If the estimator figures too low, the firm will lose money. A bad mistake can put a firm out of business.

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D. Estimating by the Contractor The preparing of a cost estimate is a detailed procedure,

and the methods may vary in different offices. The first operation after the contractor receives the plans and specifications is to analyze the project and determine the work that will be done by the contractor’s own forces and the work that will be awarded to subcontractors.

For the contractor to be a low bidder, it is necessary to receive low bids from the subcontractors.

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2) Estimating by the Sub-Contractor When a subcontractor receives a card from a contractor,

he must examine the project documents in order to establish the costs. The documents may be examined at the office of the architect or engineer, at the office of one of the general contractors bidding on the project, at a plan room, or on microfilm in the subcontractor’s office.

Plan rooms are offices established in many cities for the purpose of giving estimators a central place to work while figuring their costs on jobs in the area.

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3) Estimating by the Material Suppliers Some material suppliers will make a take-off of quantities

and bid to the subcontractors at a lump-sum price for the material required.

The subcontractor is then responsible for the proper quantities.

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E. Bidding Subcontractors obtain the price of materials they are

required to buy, add material they are furnishing, add their field labor costs, add their shop labor including set up and loading trucks, add cartage, add travel time if required, and add fees for bonds and permits. They add up their costs and enter a percentage for overhead and profit. To this they add any taxes. This gives them their bid price.

It is important to realize that each contractor and subcontractor has a slightly different form and various short cuts for figuring prices.

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E. Bidding contd.. Shortly before the bids are due, subcontractors give their

prices to the various general contractors they wish to quote.

It should be realized that general contractors do not know until they receive the bids from their subcontractors, often an hour or less before bids are due, whom they will employ as their subcontractors.

Opening the Proposals

The proposals from the contractor are received by the public agency, read aloud, and become public record. On private work, the bids are received by the architect or engineer.

They are recorded and evaluated by the contract administrator and submitted to the owner.

The contractor to be awarded the contract is selected in a conference between the owner and the architect or engineer.

To the owner and architect or engineer the opening of bids signifies the completion of one phase of the work.

Bid Peddling

It is in the period between the time the general contractor is selected and the time the contract is signed that bid peddling takes place.

“Bid Peddling” mean that the general contractor calls subcontractors other than low bidders for each trade; the low figure may or may not be revealed, but all subcontractors are asked to reduce their price.

Often subcontractors who find their bids are not low will offer to reduce their price without being asked.

Bid peddling is an old problem and has received considerable publicity in the trade and professional papers.

Signing the Contract

When the contractor is selected, a contract is drawn up. A contract is usually physically written by the architect or engineer; the owner is asked to have an attorney approve the same.

A building contract is between the owner and the contractor. The architect or engineer is simply a representative of the owner or the owner’s agent, to act in his behalf, but is not one of the contracting parties

Starting the Construction

A. Notice to Proceed After the contract is signed, the contractor is given a

notice to proceed with the work.

B. The Superintendent One of the first is for the general contractor to hire or

appoint a general superintendent. It is the superintendent’s job to see that the subcontractors get on the job, do their work satisfactorily, get off the job, and let the next subcontractor start work.

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C. The Clerk of Works This person is a trained construction engineer employed

by the architect or engineer to enforce the terms of the contract.

He represents the architect or engineer at the job site, and interprets the plans and specifications, gives assistance in solving the many problems that arise during construction, approves or rejects materials delivered to the job site, approves or disapproves the workmanship, and approves monthly payments to the contractor.

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D. The Owner’s Representative Sometimes the owners place their own representative at

the job site, with the job of representing the owner in any dispute, checking upon the clerk of the works, and making sure defective materials or workmanship are not accepted.

E. Subcontractors At the same time as the superintendent and the clerk of the

works are being assigned, the contractor’s purchasing agent is busy awarding contracts to subcontractors.

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F. Shop Drawings “Shop drawings” are drawings prepared by the contractor,

the subcontractor, or his material supplier to supplement the design drawing made by the architect or engineer.

After the contract has been awarded, shop drawings, if required by the particular subcontractor, are made to conform with the de sign drawings prepared by the architect or engineer.

The architect may approve or disapprove the shop drawings or may approve them with corrections.

Construction

The clerk of the works inspects the work of each of the subcontractors during the progress of the work. If he finds material at the job site that does not conform to the specifications, orders must be given to have it removed, and if subcontractors are found to be performing work in a manner other than that specified, it is ordered corrected.

As there is no contract between the owner and the subcontractor, the clerk of the works has no direct authority over the subcontractor. In theory, the clerk of the works should report any deviation from the specifications to the general contractor for correction.

Completing Construction

After the completion of the project the superintendent notifies the architect or engineer that all is ready for a final inspection. The owner’s representative, selected personnel from the architect’s or engineer’s office including the clerk of the works, and selected personnel from the general contractor’s office, including the superintendent, make a complete inspection of the facility. Any correction is listed. This list is called a “punch list.”

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When the items on the punch list are resolved, another meeting is scheduled at which the keys, bonds, and pertinent papers are delivered by the contractor to the owner, and in turn the owner gives the contractor, through the architect or engineer, a certificate of completion. Final payment is due within a specific number of days after the date of acceptance of the building.

Defective Materials or Workmanship

As a rule the specifications require the contractor to replace materials or workmanship that prove to be defective within a period of one (1) year.

Normally, when defects are found, the owner calls the architect or engineer, who calls the contractor. The contractor calls the proper subcontractor or makes the repair with his own forces.

Some bonds and warranties extend beyond the one-year period. The procedure of obtaining the repair or adjustment remains the same.

The Flow of Building Business

Start OwnerArchitect

EngineerContractor Sub -

Contractor

Invest Capital

Hire A/E

Design

Contract

Specifications

Owner Representative

Clerk of the works

Bid

Construct

Sub Contract

Superintendent

Bid

Construct

Finish