Commercial Architecture June 2019 - 47

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Unanticipated or unknown
circumstances can make the project
manager's job of planning, organizing,
and directing resources to remain
on time and on budget-while also
achieving an adequate profit-
extremely difficult.

PROJECT

| project management

architect agreed to develop design and construction doc-

should be understood so that changes or deficiencies can

uments for the shell of the entire project and the portion

be identified and addressed as they occur.

of the interior the owner could initially afford.
The architect's contract defined the fee basis for addi-

WHEN A PROBLEM ARISES

tional services for the remaining interior fit-out as a per-

Architectural firm leaders, engaged in the proj-

centage of the construction cost as the owner was able to

ect should be fully aware of contract language, in-

increase the funding. This strategy became an efficient

cluding the scope of services, specific/unique client

way for the architect to request and receive authorization

requirements, and any other relevant issues of each proj-

for the added scope without having to create extensive

ect before it begins. In addition, project managers should

data justifying hourly labor costs. The lesson learned on

be encouraged to share the business issues and criteria

this project is that creative contracting can streamline the

contained within the contract with the entire design

process for an architect to attain valid additional services

team. There should never be guesswork pertaining to the

for owner-generated scope increases.

project's scope, schedule, deliverables, and budget. Transparency is not a luxury. It is a necessity for efficiently and

BEST PRACTICES

cost-effectively identifying and managing changes in a

It's extremely important to proactively address potential

timely, orderly, and cost-effective manner.

scope-creep issues during the negotiation and execution

For instance, well-defined change-management proto-

of the design contract. This includes firmly establish-

cols consisting of the following steps should be integral

ing an understanding of the project's intent and condi-

to every negotiation:

tions-location, budget, schedule, functional/technical

* Identify. Further the ability to recognize change condi-

program, sustainable-design goals, project-delivery meth-

tions as they occur.

od, and other relevant initial information. These factors

* Notify. Follow the chain of communication to notify

tion of the additional services was paid, but the design

form the basis of the professional-services agreement and

the project manager and communicate promptly to the

team

subsequent changes to these project conditions can justi-

client.

took

financial

loss

the

additional

labor costs.

fy change in services and additional fees.
In addition, to ensure contractual obligations are met

* Authorize. Receive authorization. (It is the client's
right in any contract to authorize additional services

LESSON LEARNED

by all parties, client expectations are satisfied, and a rea-

before they are performed.)

A more positive outcome involved a new elementary

sonable profit is returned, it is imperative for contracts to:

* Document. Memorialize the situation, recommenda-

school project with a construction manager (CM) who

* Clearly define the scope of services and deliverables

tions, and any authorization or other client decision in

was responsible for cost estimating. The CM bid the

provided for the defined fees, including consultants, with-

the project file.

project to 15 trades. Thirteen bids came in on budget,

in the architect's responsibility.

while the other two were significantly over budget (pre-

alike. The overriding truth is that change and challenges

cast concrete wall panels and electrical). With CM deliv-

* Distinguish supplemental and additional services from
basic services, and specify the fee basis for known/possi-

ery, the architect and owner were entitled to rely on the

ble services that the owner can add during the project.

prises from financial catastrophes is the ability to readily

CM's estimates, which indicated on budget for all trades.

* Include project and design schedule definitions to pro-

confront and overcome changes and issues as they occur.

Therefore, the architect was due additional services for

vide an overall context for the provision of services.

Every project is defined by its own criteria. No two are
are inevitable. What separates successful, profitable enter-

Almost any situation can be remedied if the proper

the redesign required to reduce the cost for precast and

* Insist on a separate fee to create, validate, or confirm

processes are in place. The ability to assess and address

electrical.

the owner's program.

change is essential for not only effectively controlling

Working collaboratively with the owner and CM,

* Specify the right to rely on reports provided by the

scope creep, but also delivering projects on time, within

the updated construction documents realized $1.8M in

owner's consultants, such as geotechnical reports and cost

budget, and to everyone's satisfaction. CA

savings from the prior bid, bringing the project back on

estimates.

Andrew Mendelson, FAIA, senior vice president, chief

budget. What's more, the architect was paid fully for its
additional services. The lesson learned is that when a

ROLES AND RESPONSIBILITIES

risk management officer, Berkley Design Professional, a

third party is responsible for cost estimating, the archi-

Every party involved in a project has specific roles and

Berkley Co., has nearly four decades of experience as a

tect's contract should acknowledge the ability to rely on

responsibilities, and those roles should be negotiated and

licensed architect and firm principal. Since 2013, Mendel-

that estimate in order to justify any additional redesign

carefully documented before professional services ever

son has directed Berkley Design Professional's efforts to

services not related to errors and/or omissions by the ar-

begin. Successful outcomes result from team efforts. For

provide design professionals with leading-edge, risk, and

chitect.

owners, this traditionally means providing site surveys,

practice-management resources, tools, and training. Con-

geotechnical, and environmental reports, and identify-

tact him at amendelson@berkleydp.com.

DIAGNOSING YOUR CLIENT

ing a representative authorized to make timely decisions

A new hospital project shows the importance of knowing

and process pay requests or change orders. In addition,

your client, fully understanding its funding, and contract-

a construction manager or general contractor may be

ing accordingly. The owner (hospital) had limited funds

retained to provide cost estimating and other strategic

for the initial phase of this large new-construction proj-

pre-construction services.

ect but was confident that funding would be increased

Bottom line, the roles, responsibilities and expecta-

over time to enable completion of the entire project. The

tions of all participants in the project-delivery process

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JUNE 2019

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Commercial Architecture June 2019

Table of Contents for the Digital Edition of Commercial Architecture June 2019