PRE-CONSTRUCTION RISK ANALYSIS
In construction, as with most important issues, prevention is more easily attainable than a cure. As with most preventable events, early detection is most effective. Therefore, our pre-development risk mitigation services feature an emphasis on pre-construction activities.
We examine a wide array of specific aspects of the planning, design and specifications, contractor pricing, and scheduling including supporting sub-contractor documentation. Moreover, at CAG we not only scrutinize the responsibilities of each faction – e.g., architects, engineers, contractors, and consultants, but we also reconcile the documentary relationship between them. The resulting risk reduction can help avoid costly delays, expenses, misunderstandings, and stress.
Among The Activities We Monitor:
RFP Analysis
A Request For Qualifications (RFQ) or a Request For Proposals (RFP) is a major factor in determining the direction and success of the project. Specificity and internal integrity are paramount. CAG will systematically
- review project plans and specifications
- develop a matrix tool for decisions
- provide an effective coordinated and comprehensive communication tool for:
- soliciting qualification, professional fees, and contractor pricing
- scheduling, decision points during design stages, etc.
- construct a matrix that will allow the recipient of the RFQ/RFP to evaluate, prioritize and select the best options from responding parties
Contracts
Success of a project can be traced to one word – communications. Contracts must leave nothing to chance, detailing variables, duties and obligations including remedies. Contracts take various forms including customized word processing documents, standard form agreements from the American Institute of Architects (AIA) or the Associated General Contractors (AGC) as well as ConsensusDOCS developed by a consortium of owners, contractors and trade groups. Whatever form it takes, CAG will collaborate with your legal counsel to craft the appropriate terms for the intended project in order to develop clarity and substantially limit disagreements, mediation, and /or litigation.
Drawings & Specifications
Design Documents or Construction Design Documents traditionally embrace three distinct design stages -- Schematic Design, Design Development, and finally Construction Documents or working drawings. Discrepancies can often be revealed in details, elevations, site and floor plans along with the materials specified as these documents progress through a series of designs and contractor pricing scenarios. Among the areas to be examined for discrepancies and inconsistencies uncovered are:
- detail for the intended design
- coordination between plans, elevations, and details
- consistency between project plans, specifications, and details
- validity of preliminary budget as documents progress through a succession of designs
Project Budgeting
Construction costs typically account for about 65% of project budgeting or total project cost. Moreover, construction issues can also significantly influence the remaining 35% -- non-construction costs. To minimize risk for the total project, professional risk management advice from CAG will encompass construction costs as well as all non construction aspects, including:
- acquisition costs
- financing
- A/E design fees
- brokerage commission
- lease up contingency
- construction costs
- legal fees
- tenant fitup costs
- site improvements
- marketing
- administrative costs
- permits
- property management equipment
- project fees
- contingencies
- etc.
Construction Pricing Scenarios
The most effective time to control initial target construction cost is in the very early stages of the Schematic Design. A team approach comprised of the A/E team, project manager, client, and a Construction Manager will employ a series of brain storming sessions to define the vision and goals of the project and share value engineering ideas to achieve construction budget objectives. This process typically utilizes the Construction Management project delivery approach. As the various design stages progress, it employs an “open book” process -- sharing pricing, scheduling, value engineering suggestions and scope of work. Traditionally, a Construction Manager is retained on a negotiated basis encompassing experience, qualification, fees and general conditions costs.
Contract Negotiations
Successful negotiations depend on clear and concise communication between the negotiating parties with both committed to one of the more essential element of communications – listening. Everyone wins through a mutually beneficial arrangement where both parties achieve their respective objectives. The contract arrangement itself should be considered a critical communication tool to launch a cooperative effort. A series of comprehensive discussions during the contract negotiations bring about an understanding of the obligations of the project team members to execute their respective responsibilities and achieve the project expectations of the client.
