The Comprehensive Guide to Construction Contract

Administration
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Application for Payment Notice of Commencement Proposal Request

Architect Supplemental Schedules for
Notice to Proceed
Instruction Construction
Payment and Performance
Change Order Substantial Completion
Bond
Construction Administration PreConstruction Meeting Testing
Construction Change Directive Project Close-out Time Extension
Final Application for Payment Project Site Observation Warranty Inspection

       

INTRODUCTION

ROLE OF THE CONSTRUCTION ADMINISTRATOR

This material has been prepared as a guide for the office standards and procedures for the construction
administration services offered by The Mozeleski Group, Inc. The services described in the following
pages shall be performed by the Construction Administration Consultant, while representing the Project
Architects and/or Owner. For clarity, the manual is written specifically for the Construction Administration
Consultant and hence limits project authority on the construction site to that enumerated in the
Owner/Contractor and Owner/Consultant Agreements. Project Architects and Project Managers who have
a larger range of responsibility and authority, are encouraged to consider the ramifications involved with
on-the- spot decisions, made at the Contractor's insistence.

Although the following standards represent general office policy, they are, in fact, subservient to the
Owner / Architect Agreement, Owner/Contractor Agreement and General, Supplementary, and Special
Conditions of each individual project. The Project Administrator should attempt to include the standards
and procedures established in this manual in the Contract Documents for each project. The Administrator
shall thoroughly review the complete set of documents, collectively referred to as the Contract
Documents, and modify the construction administration procedures for each project accordingly.

The Administrator is responsible for the comprehensive and timely administration of all project related
documentation and information. The primary role of the Administrator is to represent the Owner and/or
Architect in all project meetings and other field matters relating to the construction of the project. The
Administrator will make periodic site visits to the project, record observations and report to the Project
Administrator all observations related to status of completion, quality of workmanship and compliance with
the Contract Documents.

The authority and responsibility of the Administrator shall be as described in AIA Document B352. In
addition to AIA B352 (Figure 1-1) the Administrator will adhere to the following company policies for
Construction Administration:

1. The Administrator does not have the authority to authorize any deviations from the Contract
Documents.

2. The Administrator does not have the authority to stop any on the work on the project.

3. The Administrator does not conduct any tests.

4. The Administrator is not obligated to solve construction problems on the spot. Despite the Contractor's
alleged urgency, the Administrator will defer any decisions until he may return to the office for consultation
and review with the Owner and/or Architect or appropriate engineer.

5. The basic role of the Administrator is to observe the work and advise the Owner and/or Architect and
the Owner of the progress and quality of the work and conformance with the Contract Documents.

6. The Administrator shall wear a hard hat at the job site at all times. Hard hats are often provided by the
Contractor but will be furnished by The Mozeleski Group, Inc. if not available.

7. Neither the Administrator nor the Owner and/or Architect are responsible for construction means and/or
methods.

8. Neither the Administrator nor the Owner and/or Architect are responsible for construction safety.

9. The Owner and/or Architect will be invited to make a monthly review of the project, preferably at the
time the Application for Payment is reviewed.

10. Neither the Administrator nor the Owner and/or Architect will "supervise" any portion of the
construction.

The role of the Administrator is to periodically visit the job to observe the work. The person responsible for
supervising the construction is, in fact, the Construction Manager or General Contractor. That entity has
contracted to complete the work and legally assumes primary responsibility for the work. The
Administrator is not an "inspector". His duties do not encompass the time nor the effort required to provide
a comprehensive or exhaustive "inspection" of the work.

The Administrator's responsibilities include the transmission of large quantities of paper work and project
documentation, particularly AIA standardized documents. The Administrator is encouraged to take
advantage of the time savings involved in producing computerized Master Forms for each individual AIA
document for the project. Proposal Requests, Change Orders, Transmittal Letters and A.S.I.s should be
prepared in advance with all consistent project information ( i.e. project name, project address, project
number etc.) included and ready for specific information to be inserted.

The traditional construction triangle often places the Owner, the Architect and the Contractor in
adversarial relationships. The Administrator must defend the rights of the Contractor as well as those of
the Owner. The Administrator is charged with the impartial administration of the Contract Documents.
Since a good deal of the Administrator's time is spent reviewing, and then evaluating the Contractor's
work, it is wise to remember to complement the Contractor on work well done as quickly as you point out
his errors.

The Administrator should take every opportunity to cultivate a "partnering" style relationship between the
Architect and the Contractor. The Contractor, Owner and Architect must remember that they share a
common goal which is the successful completion of the project.

PHASE 1 - SCOPE OF PRE-CONSTRUCTION SERVICES

In the Bidding or Negotiations Phase the Owner and the Architect, respectively, following the Owner's
approval of the Construction Documents and of the most recent Statement of Probable Construction Cost,
shall provide those services designated in the Schedule of Designated Services necessary for the
Architect to assist the Owner in obtaining bids or negotiated proposals and in awarding and preparing
contracts for construction.

In the case of phased construction, the Owner may authorize bidding and/or negotiation of portions of the
Work prior to completion of the Construction Documents Phase. The following descriptions shall apply to
those services assigned in the Schedule of Designated Services as the responsibility of the party
indicated therein.

1.01 Project Administration services consist of the following bidding or negotiation administrative
functions:

Construction
Research
Conferences
Communications
Travel time
Progress reports
Direction of the work of in-house architectural personnel
1.02 Disciplines Coordination / Document Checking services consist of bidding or negotiation activities
for:

Coordination between the architectural work and work of engineering and other involved disciplines for
the Project.
Review and checking of documents prepared for the Project.
1.03 Agency Consulting/Review/Approval services during the Bidding or Negotiations Phase relating to
applicable laws, statutes, regulations and codes of regulating entities relating to the Owner's interests
before construction begins.

1.04 Owner-supplied Data Coordination services consisting of activities relating to bidding or negotiation
including:

Review and coordination of data furnished for the Project as a responsibility of the Owner
Assistance in establishing criteria
Assistance in obtaining data
1.05 Bidding Materials services consisting of organizing and handling Bidding Documents for:

Coordination
Reproduction
Completeness review
Distribution
Distribution records
Retrieval
Receipt and return of document deposits
Review, repair and reassembling of returned materials.
1.06 Addenda services consisting of preparation and distribution of Addenda as may be required during
bidding or negotiation and including supplementary Drawings, Specifications, instructions and notices(s)
of changes in the bidding schedule and procedure.

1.07 Bidding/Negotiations services consisting of:

Assistance to Owner in establishing list of Bidders or proposers

Prequalification of Bidders or proposers
Participation in pre-bid conferences
Responses to questions from Bidders or proposers and clarifications or interpretations of Bidding
Documents
Attendance at bid opening(s)
Documentation and distribution of bidding results
1.08 Analysis of Alternates/Substitutions services consisting of consideration, analyses, comparisons, and
recommendations relative to alternates or substitutions proposed by Bidders or proposers either prior or
subsequent to receipt of Bids or proposals.

1.09 Special Bidding Services consisting of:

Attendance at bid openings, participation in negotiations, and documentation of decisions for multiple
contracts or phased construction
Technical evaluation of proposals for building systems
Participation in detailed evaluation procedures for building systems proposals.
1.39 Bid Evaluation services consisting of:
Validation of Bids or proposals
Participating in reviews of Bids or proposals
Evaluation of Bids or proposals
Recommendation on award of Contract(s)
Participating in negotiations prior to or following decisions on award of the Contract(s) for Construction.
1.10 Construction Contract Agreements services consisting of:

Notification of Contract award(s)

Assistance in preparation of construction contract Agreement forms for approval by Owner
Preparation and distribution of sets of Contract Documents for execution by parties to the Contract(s)
Receipt, distribution and processing, for Owner's approval, of required certificates of insurance, bonds
and similar documents
Preparation and distribution to Contract(s), on behalf of the Owner, of notice(s) to proceed with the
work.
PHASE 2 - SCOPE OF CONSTRUCTION CONTRACT ADMINISTRATION SERVICES

In the Construction Contract Administration Phase the Owner and the Architect, respectively, shall
provide those services designated in the Schedule of Designated Services necessary for the
administration of the construction contract as set forth in the General Conditions of the Contract for
Construction. Unless otherwise provided in the Schedule of Designated Services, the Administrator's
duties and responsibilities during construction shall be as set forth in the Agreement between Owner and
Administrator for Designated Services. The following descriptions shall apply to those services assigned
in the Schedule of Designated Services as the responsibility of the party indicated therein.

2.01 Project Administration services consisting of construction contract administrative functions including:

Consultation
Research
Conferences
Communications
Travel time
Progress reports
Coordination of out-of-normal-sequence construction operations
Coordination of multiple-prime construction contracts
Coordination of work by the Owner's forces
Direction of the work of in-house personnel.
2.02 Disciplines Coordination/Document Checking services consisting of construction contract
administration activities for:

Coordination between the architectural work and the work of engineering and other involved disciplines
for the Project
Review and checking of documents prepared for the Project.
2.03 Agency Consulting/Review/Approval services

During the Construction Contract Administration Phase relating to applicable laws, statutes, regulations
and codes of regulating entities relating to the Owner's interests during construction of the Project.
2.04 Owner-supplied Data Coordination services consisting of activities relating to construction contract
administration including:

Review and coordination of data furnished for the Project as a responsibility of the Owner
Assistance in establishing criteria
Assistance in obtaining data
Coordination of delivery and installation for Owner-supplied equipment
Coordination of delivery and installation of Owner-supplied furniture and furnishings.
2.05 Office Construction Administration services consisting of:

Processing of submittals, including receipt, review of, and appropriate action on Shop Drawings,
Product Data, Samples and other submittals required by the Contract Documents
Distribution of submittals to Owner, Contractor and/or Architect's field representative as required
Maintenance of master file of submittals
Related communications.
2.06 Construction Field Observations services consisting of visits to the site at intervals appropriate to the
stage of construction or as otherwise agreed in writing to become generally familiar with the progress and
quality of the Work and to determine in general if the Work is proceeding in accordance with the Contract
Documents, and preparing related reports and communications.

2.07 Project Representation services consisting of selection, employment and direction of:

Full-time Project Representative(s)

Part-time Project Representative(s).
2.44 Inspection Coordination services relating to independent inspection and test agencies, consisting of:

Administration and coordination of field testing required by the Contract Documents

Recommending scope, standards, procedures and frequency of testing and inspections
Arranging for testing and inspection on Owner's behalf
Notifying inspection and testing agencies of status Work requiring testing and inspection
Evaluating compliance by testing and inspection agencies with required scope, standards, procedures,
and frequency
Review of reports on inspections and tests and notifications to Owner and Contractor(s) of observed
deficiencies in the Work.
2.45 Supplemental Documents services consisting of:

Preparation, reproduction and distribution of supplemental Drawings, Specifications and interpretations

in response to requests for clarification by Contractor(s) or the Owner and as required by construction
exigencies
Forwarding Owner's instructions and providing guidance to the Contractor(s) on the Owner's behalf
relative to changed requirements and schedule revisions.
2.46 Quotation Requests/Change Orders services consisting of:

Preparation, reproduction and distribution of Drawings and Specifications to describe Work to be

added, deleted, or modified
Review of proposals from Contractor(s) for reasonableness of quantities and costs of labor and
materials
Review and recommendations relative to changes in time for Substantial Completion
Negotiations with Contractor(s) on Owner's behalf relative to costs of Work proposed to be added,
deleted, or modified
Assisting in the preparation of appropriate modifications of the Contract(s) for Construction
Coordination of communications, approvals, notifications, and record- keeping relative to changes in t
he Work.
2.47 Project Schedule Monitoring services consisting of monitoring the progress of the Contractor(s)
relative to established schedules and making status reports to Owner.

2.48 Construction Cost Accounting services consisting of:

Maintenance of records of payments on account of the Contract Sum and all changes thereto
Evaluation of Applications for Payment and certification thereof
Review and evaluation of expense data submitted by the Contractor(s) for Work performed under cost-
plus-fee arrangements.
2.49 Project Closeout services initiated upon notice from the Contractor(s) that the Work or a designated
portion thereof which is acceptable to the Owner, is sufficiently complete, in accordance with Contractor
Documents, to permit occupancy or utilization for the use for which it is intended, and consisting of:

A detailed inspection with the Owner's representative for conformity of the Work to the Contract
Documents to verify the list submitted by the Contractor(s) of items to be completed or corrected
Determination of the amounts to be withheld until final completion
Securing and receipt of consent of surety or sureties, if any, to reduction in or partial release of
 retainage or the making of final payment(s)
Issuance of Certificate(s) of Substantial Completion
Inspection(s) upon notice by the Contractor(s) that the Work is ready for final inspection and
acceptance
Notification to Owner and Contractor(s) of deficiencies found in follow-up inspection(s), if any
Final inspection with the Owner's representative to verify final completion of the Work
Receipt and transmittal of warranties, affidavits, receipts, releases and waivers of lien or bonds
indemnifying the Owner against liens
Securing and receipt of consent of surety or sureties, if any, to the making of final payment(s)
Issuance of final Certificate(s) for Payment.

PHASE 3 -SCOPE OF POST CONSTRUCTION SERVICES

In the Post construction Phase the Owner and the Architect, respectively, shall provide those services
designated in the Schedule of Designated Services necessary to assist the Owner in the use and
occupancy of the facility. The following descriptions shall apply to those services assigned in the
Schedule of Designated Services as the responsibility of the party indicated therein.

3.01 Project Administration services consisting of post construction administrative functions including:

Consultation
Research
Conferences
Communications
Travel time
Progress reports
Direction of the work of in-house personnel.
3.02 Disciplines Coordination/Document Checking services consisting of postconstruction activities for:

Coordination between the architectural work and the work of engineering and other involved disciplines
for the Project
Review and checking of documents prepared for use or occupancy of the Project.
3.03 Agency Consulting/Review/Approval services relating to applicable laws, statutes, regulations and
codes of regulating entities that require compliance during postconstruction use, occupancy and
operation.

3.04 Owner-supplied Data Coordination services consisting of postconstruction activities during

occupancy and operation relative to Owner-supplied furniture, furnishings and equipment.

3.05 Maintenance and Operational Programming services consisting of:

Assistance in the establishment by the Owner of in-house or contract program(s) of operation and
maintenance of the physical plant and equipment
Arranging for and coordinating instructions on operations and maintenance on equipment in
conjunction with manufacturers' representatives
Assistance in the preparation of operations and maintenance manual(s) for the Owner's use.
3.06 Start-up Assistance services consisting of:

On-site observation, troubleshooting and assistance in the operation of building systems during initial
occupancy
 Assistance in the training of the Owner's operation and maintenance personnel in proper operations,
schedules, and procedures
Administration and coordination of remedial work by the Contractor(s) after final completion.
3.07 Record Drawings services consisting of:

Making arrangements for obtaining from Contractor(s) and other parties information certified by them
on all changes made during construction from the initial Contract Documents and on the location of
concealed systems as installed during construction
Review of general accuracy of information submitted and certified to by the Contractor(s)
Preparation of record drawings, based on information furnished by the Contractor(s), including
significant changes in the Work made during construction
Transmittal of record drawings and general data, appropriately identified, to the Owner and others as
directed.
3.08 Warranty Review services consisting of:

Consultation and recommendation to the Owner during the duration of warranties in connection with
inadequate performance of materials, systems, and equipment under warranty
Inspection(s) prior to expiration of the warranty period(s) to ascertain adequacy of performance of
materials, systems, and equipment
Documenting defects or deficiencies and assisting the Owner in preparing instruction to the
Contractor(s) for correction of noted defects.

PRECONSTRUCTION

PRE-CONSTRUCTION MEETING AGENDA

Following the acceptance of the successful bid and subsequent award of the contract for construction, the
Owner, Contractor and Administrator shall schedule and attend the Pre- Construction Meeting. The
purpose of the Pre- Construction Meeting is to discuss the specific requirements of the Contract
Documents and how they relate to the daily operation of the construction project.

The following is a sample agenda for the Pre-Construction Meeting and should be edited to conform to
the specific requirements of each project. Items listed in the sample agenda are more comprehensively
discussed later in this manual.

AGENDA FOR PRE-CONSTRUCTION MEETING

1. INTRODUCTIONS

a. Owner, Architect, Engineers, Contractor, Contract Administrator.

2. COMMUNICATIONS

a. All communications between the Owner and the Contractor shall be in writing to the Owner and/or
Architect, routed through the Administrator.

b. All "Requests for Information" (RFI's) shall be in written form to the Owner and/or Architect routed
through the Administrator. All responses from the Owner and/or Architect will be in writing addressed to
the Contractor's Project Manager.
c. All RFI's shall be consecutively numbered and include specification reference number.

3. BOND, INSURANCE & NOTICE TO PROCEED

a. Submit for review, Performance and Payment Bonds.

b. Submit required insurance certificates.

c. Notice of Commencement filed by Owner

d. Approval of Contractor pre-construction documentation is required prior to Owner's issuance of Notice

to Proceed.

4. PLANS AND SPECIFICATIONS

a. Number of sets provided shall be as per the Contract Documents.

b. Contractor is responsible for all subcontractors having all addenda, ASI, Change Orders, and using
correctly updated Contract Documents in the field.

c. Any discrepancies in the plans, specifications, or details must be brought to the Architects attention and
clarified prior to installation of the work. Assumptions will not justify improper work.

d. All field sets of drawings shall be made available for review by the Administrator at all times.

5. SCHEDULE OF VALUES

a. Submit to Architect within eight (8) business days of Award of Contract. (Form AIA G703).

b. Schedule of Values shall be broken down into each division of the work and will become the basis for
Change Order pricing and payment request review. Multiple buildings shall be broken down individually.

6. PROGRESS SCHEDULE

a. Submit in approved form (CPM, PERT, BAR).

b. Submit revised, updated schedule with each payment requisition. No schedule = No payment.

c. Submit Submittal Schedule for ease of tracking critical path or long lead items.

7. MONTHLY JOB MEETING

a. Set time, date, and location (on site).

b. Includes Owner, General Contractor and Administrator.

8. SHOP DRAWINGS

a. Contractor will review, sign and stamp all submittals to the Architect. Failure to do so will result in a
"Submittal Return Notification" with no action taken on that particular item.

b. ONLY two sizes will be accepted (8 1/2" x 11" and 24" x 36").

c. Shop drawings: Submit four bluelines (4) and one (1) reproducible transparency. Contractor will print all
required bluelines.

d. Product Data and Catalogs: Submit eight (8) copies of each specified item, hi- lited or clouded in red.

e. Contractor is responsible for coordination and interface of materials when shop drawings differ from
information on plans. Deviations from plans or specs shall be brought to the approver's attention in
writing.

f. NOTICE: Mechanical, Electrical, and Plumbing submittals MUST BE COMPLETE. They shall be in ring
type binders with Index I.D. tabs and hi-lighted cut sheets. Anything less than a complete submittal will be
returned stamped "INCOMPLETE".

g. ALL SUBMITTALS SHALL INCLUDE THE SPECIFICATION REFERENCE NUMBER.

9. SUBSTITUTIONS OF MATERIALS

a. Proposed substitutions of materials must be submitted to the Architect for approval prior to bid opening.
**(This requirement may vary, check General and supplementary Conditions of Contract to verify)

b. Substitutions will not be accepted without credit to Owner in time or money. **(This requirement may
vary, check General and Supplementary Conditions of contract to verify)

10. COORDINATION OF THE WORK

a. The Contractor is responsible for coordination of all elements of the work and every aspect of the
coordination of the subcontractors work.

b. Each subcontractor is required to have a competent supervisor in charge of the work at all times.

c. Subcontractors shall verify their work to the Contractor for compliance with the contract documents,
workmanship and completeness.

d. Any minor changes in the work shall be promptly transferred to the record drawings.

11. GENERAL SUPERINTENDENT

a. Contractor shall submit resume and historical data for Project Manager, Superintendent and Assistant
Superintendent.

b. Superintendent shall be on site at all times when work is in progress.

12. FIELD OFFICE

a. Furnish per Contract Documents.

13. SIGNS

a. Furnish per Contract Documents.

14. TEMPORARY UTILITIES

a. Construction water furnished per contract.

b. Temporary toilets furnished per contract.

c. Temporary electricity furnished per contract.

d. Temporary telephone furnished per contract.

15. RECORD DRAWINGS - AS BUILTS

a. Must be updated weekly and will be reviewed at each progress payment meeting.

b. Record drawings will be supplied to Owner upon completion as per contract.

16. OBSERVATIONS - SCHEDULE ON SITE

a. The Administrator shall be on site at regularly scheduled intervals, for additional observation, one day
(24 hrs.) notice shall be required.

17. SURVEY

a. Contractor shall engage a professional surveyor or engineer of verify property survey and building lay-
out information shown on drawings and advise Owner and/or Architect of any deviations.

b. Provide a survey of the building foundation locations immediately upon completion of that phase of
construction to verify actual building location.

c. Prior to Substantial Completion provide final property survey showing all significant improvements on
the property which have resulted from the construction contract. Verify finish floor elevations to Architect
in writing per Contract Documents.

18. SOIL, CONCRETE AND OTHER TESTING

a. Testing as required by Contract Documents.

b. Testing lab to provide services at General Contractors request.

c. Additional testing may be requested by

the Owner and/or Architect, failed tests paid for by General Contractor.

d. Testing lab to provide copies of all test reports to Architect and Owner per Contract Documents.

19. REQUISITION FOR PAYMENT

a. Architect will review percentages of work complete, in place and/or properly stored prior to General
Contractor preparing form G702 in final form at monthly job meeting.

b. Review as-built drawings.

c. Submit updated progress schedule and schedule of values with each requisition per contract.

d. Submit Lien Releases as required by the contract.

e. Correct all non-conforming work prior to next payment requisition, including submittal requirements.

f. Invoices required for all stored

materials shall be included in payment requisition.

20. CERTIFICATE FOR PAYMENT

a. Architect shall forward to the Owner Application for Payment within three (3) days of receipt.

b. Four (4) copies:Owner (2), Architect (1) Contractor (1)

c. All supporting documents must accompany payment requisitions.

d. Notarized documents as required, and Contractor's signed statement verifying payment of previous
request items.

21. PROPOSAL REQUESTS (PR), CHANGE ORDERS (CO), ARCHITECTS SUPPLEMENTAL

INSTRUCTIONS (ASI), AND CONSTRUCTION CHANGE DIRECTIVES (CCD)

a. Owner must authorize all Change Orders prior to commencement of work.

b. Architect to submit Proposal Requests responses to Owner for review and directions.

c. Proposal Requests will not be accepted without proper backup information as per GC Article 1.2.1.

d. Change Orders shall be prepared from and upon Owners approval of Proposal Request.

e. Architects Supplemental Instructions (ASI's) shall be used to document minor, no cost changes in the
work.

f. Construction Change Directive shall be utilized (with Owner approval) when changes in the contract are
required and the costs for the additional work cannot be agreed upon by the Owner, Contractor and
Architects. This action is usually taken to prevent delays in construction while costs are reviewed and
negotiated.

22. STORED MATERIAL POLICY

a. The Owner will pay for stored materials only under the following condition and terms:

1. Materials requiring long lead time for ordering.

2. Payment for materials stored and protected at site will take place only upon receipt of complete backup
documentation attached to each pay request.

3. The following Pay Request will include proof of payment to suppliers and subcontractors.

4. Materials stored off-site shall be in an independent bonded warehouse at no cost to the Owner, with
prior approval of Owner.

23. DAILY LOG (CONTRACTOR)

a. The following shall be included in Daily Log:

1. Daily activities

2. Problems or potential delays

3. Temperatures, general weather

4. Accidents

5. Meetings and significant decisions

6. Unusual events (stoppages, emergency actions)

7. Change Orders received, implemented

8. Partial completion

9. Orders/Requests by governing agencies

10. Submit Daily Log weekly to Administrator.

24. ACCESS TO SITE

a. The Contractor has the responsibility to provide and maintain per Contract Documents.

25. AGENCIES HAVING JURISDICTION

a. City, County, State, Health Department, FDOE, School Board, Utilities, DER, SWFWMD (as required).

26. NON-COMPLIANCE NOTICES

a. The Contractor is responsible for verifying that all work complies with the Contract Documents.

b. Any work observed as defective or non-complying shall be recorded by the Administrator on a non-
compliance notice.

c. All Non-Compliance work not corrected and approved by the next pay request shall be deleted (line
item) from that and subsequent pay requests until corrected.
28. FINAL COMPLETION AND PROJECT CLOSE-OUT

a. Final acceptance and project close-out will not take place until all contract requirements, warranty and
close-out documents along with all punch list items have been resolved.

PRE-CONSTRUCTION DOCUMENTS

Following the Pre-Construction Meeting and prior to beginning construction the Administrator or Owner
and/or Architect, will verify that the following documents have been properly executed between the Owner
and the Contractor:

1. "Notice of Commencement" from Owner

2. "Notice to Proceed" from the Owner.

3. Property survey from the Owner.

4. Permits, Licenses and Governmental Approval as required. (i.e. SWFWMD, County, State and DER)

5. Insurance coverage and Bonds as required by the Contract Documents.

NOTICE OF COMMENCEMENT

The Notice of Commencement is a legal document which is prepared by the Owner's attorney or financial
lending institution and recorded with the Clerk of the County Court. A recorded copy must be posted by
the Owner at the project site. Financing institutions will require the filing of a Notice of Commencement as
a provision of the loan agreement. The Owner and/or Architect should obtain a photocopy of the Notice of
Commencement for his project files.

The purpose of the Notice of Commencement is to provide at the project site and on public record the
name of the Owner, Contractor and Surety, so that those wishing to file Notice to Owner may do so to the
appropriate parties. Work performed at the project site prior to the Notice of Commencement is not
covered by the lien laws.

Although the Notice of Commencement is the Owner's responsibility, the Owner and/or Architect should
so advise the Owner of both the need and benefits of such a document. The Owner/Contractor
Agreement should stipulate that the work shall not commence until the Notice of Commencement has
been filed.

NOTICE TO PROCEED

Work to be performed under the Owner/Contractor Agreement generally commences on the date
specified in a Notice to Proceed, as established in the General Conditions of the Contract for
Construction. The Notice to Proceed should not be issued until the following documents (or copies
thereof) have been received and reviewed by the Owner and/or Architect:

1. Evidence to the Contractor of satisfactory financing for the project, or sufficient funds available, by the
Owner.
2. Recording of the Notice of Commencement.

3. Issuance of a building permit(s) by the applicable governing authorities.

4. Certificate of Insurance from the Contractor as specified in the Owner/Contractor Agreement.

5. Performance and Payment Bonds.

The Owner and/or Architect shall recognize that the "Date of Commencement" is the official date for the
start of the construction project and is specifically identified in the Notice to Proceed. The Contractor
should not necessarily be expected to commence work on the very date the Notice to Proceed is issued
unless the Contractor has had adequate time to mobilize his resources and equipment to the site.

SCHEDULES FOR CONSTRUCTION

The Administrator will receive and review the following schedules from the Contractor prior to processing
the first Application for Payment:

1. Schedule of Values (Figure 1-2)

The Schedule of Values shall be prepared as required by the Contract Documents and equal the total
cost of the project. Line items for the Schedule of Values shall be divided into the appropriate
specification divisions and broken down to reflect material and labor costs for each item.

Unit measurement for the materials described in the Schedule of Values shall be included. The Schedule
of Values for the project will ultimately become the source for verifying costs for additional work (Proposal
Requests) and establishing prices for changes to the Contract Documents (Change Orders).

2. Project Construction Schedule (Figure 1-3)

The Project Construction Schedule shall be prepared as required by the Contract Documents in either
PERT, BAR, GANTT, or C.P.M. format. The Project Construction Schedule shall be updated each period
by the Contractor and verified by the Administrator to ensure that the current schedule is accurate. The
updated Project Construction Schedule shall be a part of each monthly Application for Payment.

3. Cash Flow Schedule (Figure 1-4)

The Contractor will prepare and transmit to the Administrator a Cash Flow Schedule for the Owner's use.

The Cash Flow Schedule will be used by the Owner to facilitate funding for the project by projecting the
estimated Application for Payment amounts and allowing for the appropriation of the necessary funds.
The Cash Flow Schedule shall be updated as required to maintain it's effectiveness.

4. Shop Drawing Review Schedule (Figure 1-5)

The Contractor will prepare and forward to the Administrator a Shop Drawing Review Schedule prior to
the first Application for Payment. The Shop Drawing Review Schedule will list all items to be submitted to
Administrator for approval and an estimated date for receipt. This schedule will allow the Administrator to
ensure that the shop drawings are properly and expeditiously processed by allocating additional time or
personnel for shop drawing review at such times as they may be required.
SHOP DRAWING REVIEW PROCEDURE

The following procedure shall be used by the Administrator for the processing of all shop drawings and
related product data for the project:

1. Shop drawing shall be submitted in the format required by the Contract Documents. Shop drawing
received in any other format shall be returned to the Contractor with a "Not Reviewed" note attached to
the submittal.

2. Shop drawing shall be reviewed by the Contractor and stamped accordingly. Shop drawings which do
not bear the contractors approval stamp shall be returned to the Contractor with a "Not Reviewed" note
attached to the submittal. Regardless of the Contractors stamp, do not process shop drawings which
contain numerous errors and/or indicate that the Contractors review was not sufficient. The Contractor
shall perform the original review of the materials which are supplied by his subcontractors.

3. All submittals are to be date stamped upon receipt.

4. All submittals are to be stamped with the standard office review stamp directly below the date stamp.

5. All submittals are to be recorded using the Standard AIA Shop Drawing Review form. (Figure 1-6) A
separate sheet shall be used for each specification division. Log submittals by CSI number and number
chronologically. (Example: 03000-1(1), 03000-2(1), 03000-3(1) etc.) The number in parenthesis indicates
1st submission for that particular shop drawing. In the event that the 1st submission be rejected, the suffix
number in parenthesis would become (2) upon second submission. (Example: 03000-1(2), 03000-2(2),
etc.)

6. Shop drawings shall be submitted as required by the Contract Documents. Transmit (1) sepia and (2)
blueline drawings to consultants. The consultant shall review, mark-up and stamp (1) one sepia and
return to the Administrator. The Administrator will produce (2) bluelines of the stamped sepia for his files
and distribution to the Owner, the Administrator will then transmit the corrected and stamped sepia to the
Contractor.

In the event that the sepia requires major corrections, the Administrator will note on the return transmittal
that the Contractor is to return (2) two corrected bluelines for his files and distribution to Owner. All
transmittals to consultants shall be recorded in the Shop Drawing Log in the same manner as those
submittals reviewed by the Owner and/or Architect. The shop drawing number should be written in the
upper corner of the transmittal for ease in tracking.

7. The Architect's shop drawing review shall be conducted on the blueline copy of the submittal. Mark
through all items, dimensions, etc., which are correct with yellow marker. Mark deficiencies which require
correction in red marker. Note any questions during review process with green marker. Red/green notes
shall be corrected before reviewed is completed.

8. Upon completion of the shop drawing review, transfer review comments to the (1) one sepia with black
marker. The Administrator will run (2) two blueline copies of the corrected sepia for his files and
distribution to the Owner.

9. The (1) one corrected sepias shall be transmitted back to the Contractor. The sepia will have all review
comments, date stamp and approval stamp with required action indicated.

The return submittal shall be recorded in the Shop Drawing Log with submittal number, date and status of
transmitted item recorded. If the submittal is rejected, note the rejection with a high-liter for ease in
confirming re-submittal.

10. Retain the engineer's marked-up copy of the submittal for reference. It is suggested that the copies be
marked accordingly. (i.e. "mark-up" "Final". "Rejected", etc.)

11. When the shop drawing has been approved, distribute as follows:

General Contractor
Architect Files
Owner
The following steps should be taken in the shop drawing review process to avoid any unnecessary work
or assumption of responsibility by the Administrator:

1. Do not perform the work of the Contractor. Do not accept the responsibility for verifying field
dimensions, confirming compatibility with other submitted items etc., this work is clearly described in the
Contract Documents as the work of the General Contractor.

2. Do not use or sign the Contractor's approval stamp.

3. Shop drawings and project samples should be kept in a file cabinet at the Administrator's desk; not in
the Central File System.

4. Shop drawings should be processed within (10) ten working days. The Contractor should be advised in
writing if the review for a particular item is anticipated to take longer than (10) ten days.

5. When the shop drawings for specialized equipment are furnished by the fabricator, the following
precautions will be taken:

A. Carefully review the Administrator's responsibilities related to the shop drawing.

B. Do not rely solely on statements in the Owner/Architect agreement that may relieve the Architect of
responsibility of design and construction work by others.

C. Determine if enough is known about the specialized equipment to judge the risk involved.

D. Consider having design and construction details checked by a qualified specialist even when our
responsibilities extend only to general design concept.

E. Consider having a specialist (engineer) design and approve the equipment if it presents unusual risks,
not a fabricator. Request the specialist review and approve the equipment.

CONSTRUCTION

OWNER/CONTRACTOR MEETING

The Administrator will represent the Owner and/or Architect at the Owner/Contractor meetings held on the
site as provided in the Contract Documents. The project meeting should be held once per week and
attended by the General Contractor, Owner and the Administrator.

The Administrator will establish who will take minutes of the meeting and verify that all persons are copied
with the minutes. The project meeting is a useful forum for discussions involving Owner requested
changes, problems with construction and/or field observations which the Administrator feels require
correction. All items which may directly impact the completion of the project should be addressed at this
meeting.

PROJECT SITE OBSERVATION

The Administrator will schedule field observation visits to the project as required to properly monitor the
progress and quality of the work. The project scope and budget shall determine the frequency of the field
observations. One beneficial arrangement for the site observation is directly prior to the project meeting.
This schedule allows for the Administrator to verify that directions from the previous meeting have been
followed and also to update himself with the current status of the project before the present meeting takes
place.

Regardless of the schedule for project observation and project meeting, the Administrator should set a
regular time and date for the site observation, this will allow the Contractor to prepare questions and
receive directives crucial to maintain construction progress.

At each site visit the Administrator will tour the entire project and note activities in each building or area of
the project. The Administrator will photograph the project at regular intervals, not to exceed one month,
and also keep photographic records of all construction deficiencies from discovery through the final
correction.

The Administrator should not allow himself to be summoned to the project site more frequently than once
per week. The Contractor will come to rely on the constant presence of the Administrator if he is allowed
to do so, and will attempt to have the Administrator resolve all of the project problems for him no matter
how large or small.

The Administrator will prepare an Administrator's Field Report each time he completes a site visit. The
Field Report will include current status of the project, work in progress, weather, time, special instructions
given the Contractor and questions from the Contractor. The Field Report will be consecutively numbered
and a copy will be entered into the Project Log Book and the Central File System. (See Figure 1-7
Administrator's Field Report)

The Administrator will establish a schedule for site observations by the consultants, based upon the
consultant's opinion regarding when they should review each stage of the construction. The consultants
shall prepare a written field report each time they visit the project, the field reports will be filed in the
Project Log Book and a copy sent to the Contractor and Owner.

Following site visits the Administrator will return to the office and prepare Architect's Supplemental
Instructions for any verbal directions given the Contractor. The Administrator will maintain a list of all
construction deficiencies observed on the project in numerical order. When a defect is observed, verbally
notify the Contractor and record on the list of construction defects. Unless urgent action is required do not
make a formal record of the deficiencies until the second week the defect remains uncorrected. Record
the date that the defect was corrected and what action was taken.

PROJECT PHOTOGRAPHY

The Administrator shall take photographs of the project at regular intervals, not to exceed (1) one month.
The purpose for project photography is to record the quality of the work for items which are to be covered,
provide documentation regarding the proper sequence of the work and to record the progress of the work.

Project photography has proven to be extremely beneficial in dealing with latent defects which were not
discovered prior to covering and also in improving original design concepts when re- issue of project
drawings is required for another project. The project photography shall be included into the Project Log
Book and displayed in chronological order. Major items which should be photographed include:

1. Slab on grade areas prior to concrete placement

2. Above ceiling areas prior to ceiling installation

3. Fire wall penetration prior to ceiling installation

PROJECT SAFETY

The Administrator, Owner and/or Architect nor any field representative are responsible for safety on the
construction project. This does not mean that any major safety or life- threatening conditions are to be
ignored. An unsafe condition is one that would be recognized as unsafe by the average architect or
construction personnel.

Situations which may be considered life-threatening, are any one in which there is immediate danger of
physical harm present. In the event that an unsafe or life-threatening condition is observed by the
Administrator, he shall take the following action, with ABSOLUTELY NO EXCEPTION:

Unsafe Project Condition - The Administrator shall notify the Project Superintendent verbally of the unsafe
conditions and leave the project immediately. The Administrator shall confirm his observation of the
unsafe conditions, in writing to the Contractor's Project Manager with a copy of the notification to the
Owner.

Life Threatening Conditions - The Administrator shall notify the Project Superintendent verbally of the
condition and leave the project immediately. The Administrator shall confirm his observation of a Life
Threatening safety condition, by telegram to the Contractor's Project Manager with a copy of the
notification to the Owner. The Administrator shall follow the telegram with written confirmation of the
observation.

In the event of a construction accident, the Administrator shall verify that the Owner and/or Architect has
been notified and recommend that he notify both his liability carrier and the Owner. The Administrator
shall immediately take extensive photographs of the area and shall make extensive written notes of his
observations. Under no circumstances shall the Construction administrator make any statement regarding
the accident to any media, or construction personnel.

PROJECT LOG BOOK

The Administrator will prepare and maintain a Project Log Book for the project while under construction.
The Project Log Book will contain the following documentation:

Shop Drawing Review Log

A. S. I. Log
Proposal Request Log

Constructions Change Directive Log

Change Order Log

Field Report Log

The Administrator will maintain (1) one copy of all documents related to the project in the Project Log
Book for his reference, a second copy of all important documentation such as A.S.I.s, Proposal Requests,
Field Reports, Change Orders etc., will be filed in the Central Filing System.

The Project Log Book will be divided into the required divisions and separated by indexed tabs. Each
section will begin with a summary sheet as required for reference. (See Figures 1-8 thru 1-11 Change
Order Log, Proposal Request Log, A.S.I. Log etc.) It is imperative that the preparation of all Proposal
Requests, Change Orders, A.S.I.s and Field Reports begin at the Project Log Book so that the proper
consecutive numbering may be assigned by the Administrator.

The Administrator will list each new document on the appropriate summary sheet to avoid any duplication
of the consecutive numbering system. Project photography may be included into the Project Log Book if
this additional service has been retained.

APPLICATION FOR PAYMENT

At lest (10) ten days prior to the date for each payment established in the Owner- Contractor Agreement,
the Contractor shall submit to the Administrator an itemized Application for Payment draft for review. This
"pencil copy" review will take place prior to the preparation of the actual Application for Payment by the
Contractor.

At the beginning of the project the Administrator will establish a set time to meet with the Contractor and
the Owner to review the Application for Payment. This meeting may coincide with the weekly Project
Meeting. The Administrator will make a complete site observation prior to the Application for Payment
review.

The Contractor shall break down the Schedule of Values into items or quantities of work which can
quickly and easily be evaluated by the Administrator when reviewing the work in place. This breakdown is
separate from the Schedule of Values and does not replace it. The sole purpose of the breakdown is to
avoid disagreements between the Contractor and the Administrator as related to quantities of work
completed.

The Contractor shall bring to the review meeting all materials required to properly evaluate the Application
for Payment, including stored material invoices, Release of Liens, etc. The Administrator, Owner and the
Contractor shall review the current project status and the Application for Payment and agree on the
proper amounts of compensation due the Contractor as stipulated by the Contract Documents. (See
Figure 1-12)

The Contractor will then proceed to prepare the certified copy of the Application for Payment in the format
outlined in the Contract Documents. The Administrator shall retain his copy of the "pencil copy" and verify
that the certified copy of the Application for Payment is correct as per the review meeting.

If the Administrator and the Contractor cannot agree on the appropriate amount for the Application for
Payment, the Contractor has the right to prepare and submit an Application for Payment which he
considers correct . The Owner and/or Architect will then, following consultation with the Administrator,
formally recommend to the Owner what amount he feels should be certified for payment.

Following receipt of the formal Application for Payment and all supporting documentation from the
Contractor, the Administrator shall:

1. Review the mathematics to verify that the contractors calculations are correct. The Administrator will
check each column and each row of the Continuation sheet. The Administrator should remember that the
Owner and/or Architect is certifying that the Application for Payment is correct.

2. Prepare a cover letter to the Owner recommending action to be taken by the Owner. The Owner and/or
Architect does not authorize payment. The Owner makes the payment. The Owner and/or Architect only
advises the Owner and certifies that the Contractor is due the amount requested. The cover letter should
also include comments regarding the Contractor's adherence to the Project Schedule and the quality of
the work in place.

3. The Administrator will process the Application for Payment to the Owner within (3) three working days
of receipt.

The Contract Document describe (5) five reasons the Owner and/or Architect may recommend
withholding payment from the Contractor. If these conditions exist, in whole or in part, the Administrator
must advise the Owner and/or Architect of the situations and request that he make the recommendation
to withhold payment.

The basic premise to follow in processing the Application for Payment is that enough money remain in the
Contract Sum to ensure that the project could be completed by another Contractor for the remaining
funds should the original Contractor default.

In the event that payments are withheld for defective work, the Administrator shall recommend that the
Owner and/or Architect withhold (3) three times the value of the defective work. The normal 10%
retainage is not to be considered as sufficient retainage to cover deficient work. Amounts must be
withheld in addition to the normal retainage should deficient work be discovered. The normal retainage
specifically covers defects which are not observed and may be discovered at a later date. The retainage
ensures that adequate funds are available to make corrections to these defects.

If an error is discovered in the formal Application for Payment, the entire Application for Payment must be
returned to the Contractor accompanied by a letter from the Administrator explaining the reason for
rejection and requesting that the Application for Payment be corrected and resubmitted. When the formal
Application for Payment is correct and properly certified by the Owner and/or Architect, the Administrator
will ensure that a copy of the Application for Payment is directed to the Central File System.

CONSTRUCTION CHANGE DIRECTIVE

The Construction Change Directive is not formally accepted by all Owners. Contracts utilizing the 1978
version of the General Conditions do not address the Construction Change Directive at all, however,
since it is a part of the AIA General Conditions of the Contract for Construction (1987 Edition) it has been
included in this manual for your informational use. In most cases, changes in the Contract Sum or
Contract Time may be handled by the issuance of a Proposal Request and subsequent preparation of a
Change Order.

A Construction Change Directive is a written order prepared by the Architect and signed by the Owner
and Architect, directing a change in the work and stating a proposed basis for adjustment, if any, to the
Contract Sum or Contract Time, or both (See Figure 1-13). The Owner may, by issuance of the
Construction Change Directive, without invalidating the Contract, order changes in the work within the
general scope of the Contract, consisting of additions, deletions or other revisions, the Contract Sum and
Contract Time being adjusted accordingly.

A Construction Change Directive shall be used in the absence of total agreement on terms of a Change
Order. If the Construction Change Directive provides for an adjustment to the Contract Sum, the
adjustment shall be based on one of the following methods:

1. Mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to
permit proper evaluation.

2. Unit prices stated in the Contract Documents or subsequently agreed upon.

3. Cost to be determined in a manner agreed upon by the parties and a mutually acceptable fixed or
percentage fee.

If none of the above methods for establishing the proper adjustment to the Contract Sum are acceptable
to the Contractor, the method for adjustment of the Contract Sum shall be determined by the Owner
and/or Architect on the basis of reasonable expenditures and savings of those performing the work
attributable to the change, including, in the case of an increase to the Contract Sum, a reasonable
allowance for overhead and profit. In such a case, the Contractor shall furnish to the Owner and/or
Architect, an itemized accounting of the additional costs involved in the change, together with all
substantiating documentation.

TESTING

Prior to the commencement of construction, a set of Contract Documents should be submitted to the
construction testing agency for their review. The testing agency should provide a copy of their current rate
schedule for such test work and a budget estimate for the particular project for the Owner's review and
information.

After the Owner's acceptance and approval, the Owner and/or Architect will authorize the testing agency
to proceed, in writing, prior to any testing performed. The Administrator will review the billing with the
Owner and/or Architect and transmit the bill to the Owner for payment. It shall be the Contractor's
responsibility to coordinate and schedule all testing activities for the project.

The testing agency shall provide test reports within 48 hours to the Architect, designated engineering
consultants, Contractor, and Owner. The Administrator will act immediately, in writing, in response to any
test reports which indicate that the work does not conform to the Contract Documents. Since the
Contractor is responsible for the construction means and methods, it is the Contractor's responsibility to
propose a method to correct construction deficiencies. It is the Owner and/or Architect's responsibility to
review and act on the Contractor's proposal.

ARCHITECT'S SUPPLEMENTAL INSTRUCTIONS (ASI's)

The Administrator will prepare and issue an Architect's Supplemental Instruction for any additional work
which is not included in the Contract Documents and will not increase the Contract Sum or extend the
Contract Time. The Architect's Supplemental Instruction (See Figure 1- 14) will be consecutively
numbered and recorded in the Project Log Book. The Administrator may prepare the Architect's
Supplemental Instruction for the Owner and/or Architect's signature.
The Administrator is encouraged to attempt to resolve small incidental items by means of the Architect' s
Supplemental Instruction whenever possible. The Architect's Supplemental Instruction shall be forwarded
to the Contractor for signature as an acknowledgment that the work described will not change the
Contract Sum or Contract Time.

PROPOSAL REQUESTS

When changes to the Contract Documents are needed or desired, which involve a substantial change to
the Contract Sum or Contract Time, the Administrator will prepare and issue a Proposal Request using
AIA Document G709. (See Figure 1- 15) The Proposal Request will be recorded in the Project Log Book
and issued a consecutive number. The Proposal Request Summary Sheet will be located at the beginning
of the Project Log Book section for Proposal Requests.

The Administrator will issue the Proposal Request using the following procedure:

1. The Administrator will prepare a formal Proposal Request using AIA Document G709, record the
Proposal Request in the Project Log and assign it a consecutive number.

2. The Administrator will transmit the Proposal Request to the Contractor with a copy to the Owner.

3. The Contractor shall analyze the Proposal request and provide written response containing exact cost
information including General Contractor's overhead and profit, and change to the Contract Time.

The Contractor's response should be accompanied by cost breakdown information necessary for the
proper evaluation of the proposed cost, (i.e. itemized subcontractor's quotations, labor and material
breakdowns, etc.)

4. The Proposal Request and the Contractor's response will be forwarded to the Owner with a letter from
the Owner and/or Architect containing recommendations for action on the part of the Owner. The Owner
should be reminded that work is proceeding and that failure to execute the Proposal Request
expeditiously could increase the cost for the proposed work.

CHANGE ORDERS

When the Owner's review of the Proposal Request is complete and approval for the Change Order
obtained, the Administrator shall prepare a Change Order, as provided in the Contract Documents,
utilizing AIA Document G701. (See Figure 1-17)

The Change Order will be prepared in (3) three copies and forwarded to the Contractor for signature. The
Contractor's signature on the Change order acknowledges that he will complete the work described in the
Change Order for the stated amount in the Change Order. Additional time, if any, required for the Change
Order work will be included in the Change Order.

Failure by the Contractor to request additional days for the Change Order work will prohibit the Contractor
from requesting additional time extensions related to the Change order work at a later date.

Following the Contractor's signature of the Change Order all (3) three copies will be returned to the
Administrator for the Owner and/or Architect's signature and certification. The Change Order will then be
transmitted to the Owner for final signature and distribution. The Owner, Contractor and Owner and/or
Architect will receive (1) one signed and certified copy of the Change Order for their records. The Change
Order will then be included in the next monthly Application for Payment. The Change Order will be
recorded in the Project Log Book and a copy of the Change Order included in the Log Book. A copy of the
Change Order will also be directed to the Central File System.

Some owner's prefer to pay for Change Orders separate from the Application for Payment. The
Contractor may request assurance that the owner has adequate funds to pay for the Change Order
before executing the work. Financing and lending institutions generally require that all Change Orders be
processed through their office before executing the work. Contractor's Performance and Payment Bond,
and Builder's Risk Insurance must be adjusted to reflect substantial changes to the Contract Sum.

The Contractor is obligated to execute any Change Order authorized by the Owner even if there is a
dispute regarding the actual cost of the Change Order work or it's impact on the Project Schedule. These
matters can be resolved by exercising other provisions included in the Contract Documents.

TIME EXTENSIONS

During the course of the construction process the Contractor may request an extension in the contract
time for one of the following reasons:

Changes or additions to the original scope of the work. (ie. Change Order, Construction Change
Directive)

Late materials shipments from suppliers.

Excessive bad weather.

The Administrator shall carefully review the contract for the definition of items which constitute a
legitimate time extension. For a situation to be considered a legitimate extension in the contract time, it
must be absolutely beyond the control the Contractor.

Remember that the Contractor may choose to be the broker of construction services, but he is still
responsible for the building schedule. It is not unreasonable to require the Contractor to resolve a
scheduling problem with a subcontractor or material supplier by replacing them with another company.

When time extensions are requested because of late material shipments, the contractor should be asked
to furnish verification of the original date of which the material order was placed. In most cases, the
Contractor or the subcontractor, did not place the order in sufficient time to ensure the delivery of the
material on schedule.

The most common request for time extensions is for bad weather. The Contractor must make allow for a
normal amount of bad weather in his schedule.

Time extensions are granted only for abnormally bad weather, defined as weather which was both
detrimental to construction activities and more frequent than usually experienced during that time of year.
On the last day of each month, the local newspaper generally publishes weather statistics which can be
used to evaluate the weather conditions experienced during the previous month in comparison with the
statistical average. Except in unusual circumstances, it is a good idea to attempt to retain all time
extension requests until the end of the project.

Although the Contractor may have experienced abnormally bad weather during one month, he may have
benefited from several months of abnormally good weather. It is important to remember that bad weather
during certain phases of construction can affect the construction schedule more adversely than good
weather can benefit the construction schedule during other phases.
The Contractor is required by the Construction Documents to notify the Owner and/or Architect of any
potential claim for additional time, due to delay, within twenty days of the commencement of the delay.
When reviewing claims for time extensions, the Contractors daily log should be reviewed to verify that the
bad weather occurred and that lost time for that period was actually experience by the Contractor.

MANAGING PROFESSIONAL LIABILITY

We are presently witnessing what some people term a " litigation explosion." In this environment, the
private practice of a Administrator can be particularly vulnerable, because of the damage that even an
unfounded lawsuit can do to reputation and financial stability.

What steps can the Administrator take to minimize his risks to litigation? We will begin by looking at the
five major areas of the interaction between the Administrator and the other members of the project team.
These are the areas where the Administrator can do the most to protect himself from liability:

PROFESSIONALISM
INTERPERSONAL RELATIONSHIPS
BUSINESS PROCEDURES
TECHNICAL PROCEDURES
PROFESSIONAL LIABILITY INSURANCE
The purpose for this discussion is to provide a solid understanding of the basic reasons claims and
litigation occur, and the best methods to either prevent or deal with those claims. The success of any
advise depends upon its implementation. Your loss prevention and business management efforts can not
only reduce damaging claims, but will result in a more profitable operation as well.

I. PROFESSIONALISM

It take more than an education in engineering science or architecture to be a true Administrator. While
"design", of course, means work in a conceptually, visually and structurally oriented business,
"professional" implies a higher level of performance, commitment and knowledge than most people
possess.

Design programs at the University level should be restructured to reflect the current conditions of the
design profession and its real opportunities and responsibilities. Students should develop the ability to
analyze, synthesize, evaluate, choose and implement corrections to the problems which arise during the
project.

The first people truly considered professionals were lawyers, physicians, clergymen. Disciplines such as
architecture and engineering slowly joined the ranks of the professionals through legal statues
establishing minimum standards and hard-won public acceptance.

The average person may see his lawyer or doctor many times each year and therefore is reasonably
aware of the scope of services provided by each of these professionals. Not so with the architect, the
average person may only deal with an architect once or twice in his entire lifetime.

This lack of familiarity between the Administrator and his client could lead to unreasonable expectations
on the part of the client. For this reason the Administrator should be comprehensive when explaining the
nature and scope of all services to be provided, with special emphasis on services which are not provided
but could be necessary.

Design professionals are highly vulnerable to claims from clients, owners and users. This vulnerability
stems partly from failure by some architects and engineers to understand the demands of
professionalism. Design professionals must be above reproach in every aspect of dealings with others
and in the management of the firm. This will not only prevent claims but also attract clients.

II. WORKING WITH OTHERS

Litigation of any type results from a breakdown in understanding between the parties involved, either in
the communication of the professional endeavor itself (the contract documents) or in the practical working
communications between the Administrator and others on the construction scene.

Minor disputes are cumulative. They build up to a final breakdown. When the final straw occurs, serious
but otherwise forgivable errors can result in litigation. Efforts to maintain an atmosphere of trust and
cooperation between the Administrator and the builder are rewarded in this scenario.

Communication failures are often at the center of lawsuits. When this happens, the courts are called upon
to decide what was communicated based upon case law. The plaintiff's attorney will build their case
utilizing the Dictionary of Words and Phrases (West Publishing, 1971, 1987-88 ppt.) This comprehensive
dictionary contains 100 volumes each consisting of 700 pages, a total of 70,000 pages of definition. Some
words require considerably more definition than others, the word "final" for example, accounts for a mere
500 pages. Clearly a word to avoid in your communications.

Dangerous words can be categorized into three basic groups:

1. Extreme words; final, all, any

2. Words of multiple meaning; supervise, inspect, approve

3. Words of promise; guarantee, warrant, certify, ensure

These words should be avoided, and if not possible the content of phrases containing these words should
be reviewed very carefully.

Design professionals may need to concentrate more than most professionals on maintaining good
relationships with colleagues and co-workers. They often work with highly complicated concepts on very
expensive projects. When the stakes are this high, they need the extra advantage that a professional
image, a level head and solid training in crisis management provide. It is these attributes that separate the
superior Administrator from the rest.

III. BUSINESS PROCEDURES

It is extremely important to know who your client is, and what kind of business he runs, before agreeing to
perform work. Discover the answers to these questions:

Does the client have a realistic budget and schedule?

Is the client going to be the Owner and user, or is the project being developed for resale. If so, are the
end-users requirements understood?
Does the client understand what is being purchased in the way of professional services and what to
expect from the design firm.
 Is the client financially capable of carrying out the project?
Are all communications clear and direct with the client?
These questions should be thoroughly review and answered, even if the answer indicates that the client
should be avoided. Design professionals need to choose their clients, their projects and their personnel
carefully to protect themselves from costly professional liability problems.

In dealing with clients, it is critical that both the Administrator and the client be absolutely clear on the
contractual provisions that govern their working relationship, and on what their job-related obligations are.
Signing a contract without careful analysis can result in serious problems.

Also important to remember, is that your personnel are your most valuable asset. When you select them
carefully, set high standards for them, provide clear direction and treat them fairly, they will reward you by
helping your firm grow and prosper.

IV. TECHNICAL PROCEDURES

Obviously, technical mistakes cause embarrassment and cost time and money, more importantly they can
cost lives. The true professional regards checking aids, handbooks and other sources of information
enthusiastically - not resentfully -recognizing that anything that produces a better final product has great
value.

A design manual should be created and utilized for each project. The manual should contain check lists
for each stage of the drawing and specification development. The manual should be considered a
dynamic documents and should be updated and include notes for improvement for product and/or
services for the next project.

Owner's expectations are that the Architect will render a perfect set of design and contract documents.
Design professionals know this is a virtual impossibility, but hesitate to discuss the potential of errors and
omissions with the client. This discussion must take place, for the design professionals protection.

An acceptable method for dealing with errors and omissions should be worked out between the Owner
and the design professional in advance. The client should also be advised of the increased potential for
errors, omissions, and concealed conditions, which are inherent to certain types of construction, ie.
renovation, fast-track.

The potential for errors and omissions is always present in design work. The prudent Administrator,
therefore, provides himself with "safety nets" to make sure mistakes are corrected before they cause
major difficulties. Checklists are very valuable, as is construction review.

However, perhaps the most important thing the Administrator can do to control professional liability in this
area is to reach a clear understanding with his client that errors will occur, and that you will work together
to correct them in a timely manner.

THE PAYMENT AND PERFORMANCE BOND

The most treacherous phase of the delivery of a new project is the actual construction. The construction
phase, due to the infinite number of inherent risks associated the activity, towers over the other phases of
the project delivery when it comes to claims, failures, problems and ultimately defaults.

The Administrator must be painfully aware of not only the Owner's rights under the Contract but also the
obligations necessary to protect those rights. Should the Administrator, while acting as the Owner's agent
in the Administration of the new project, fail to properly ensure the rights of the Owner through negligence
of the requirements, incorrect documentation or the untimely issuance of notice, the Administrator may
certainly expect the Owner to hold him responsible for all loses both morally and financially.

No other situation holds more potential for this devastating scenario then the default of the Contractor
during the construction of the project. For this reason, the successful Administrator must exercise both
caution and diligence while reviewing the types of Payment and Performance Bonds required by the
Contract. The easiest method of protection is to specify the standard AIA Bond forms A312 (Performance
and Performance Bonds), these documents are not only respected by the Surety industry, but have been
thoroughly tested and generally upheld through the judicial process.

While the Payment and Performance Bonds offer the Owner the ultimate in protection against countless
scenarios of Contractor default, subcontractor non-payment, material or supplier non-payment and liens,
the Administrator must recognize the Surety and its agents for what they are and not what he wishes
them to be. By the time the Surety becomes involved in a construction project, the relationships between
the Owner, Contractor and Administrator may be very strained to say the least. The Administrator that
believes the Surety to be a deep pocketed, sympathetic benefactor that rolls on to the project doling out
money to those who deserve it most, just because there is a Payment and Performance Bond, is in for a
startling realization the first time he dashes headlong through the gauntlet of Contractor default or major
claim litigation.

At this time he will come to know the Surety and its agents for what they are, extremely sharp and
intelligent businessmen who will live up to all obligations and responsibilities under the bonds, provided all
aspects of the default, are in fact, the Contractor's responsibility. Where the Surety is relieved from their
obligations, in whole or in part, by the erroneous actions of the Administrator or the improper actions of
the Owner, the Surety may be expected to mitigate their losses to every extent possible under the law. As
previously stated, these gentlemen are extremely sharp businessmen, a uniquely hybrid blend of
insurance salesman, accountant and attorney with just a dash of prestidigitator thrown in to help with the
strategically placed magic trick.

The Surety and its agents can be the most formidable of adversaries or the most gracious of financial
saviors, depending upon the particular situations involved and the ultimate causes for their involvement in
the project.

The statements and opinions expressed herein reflect the general attitude of the Surety and its posture
when confronted with differing construction situations. Be aware, that these opinions are generic and are
not legal advise.

The Administrator must read and become familiar with the wording and requirements of each type of
Bond, for as every project is unique so is every situation involving the Surety. There can be no substitute
for studying the requirements of the bond to ensure that each and every action required by the
Administrator is not only completed but completed within the specified time frames outlined in the Bond
documents.

FUNCTION OF SURETY

The basic function of the Surety is to pre-qualify the Contractor for each individual project to ensure that
there will be as limited an amount of problems as possible related to lack of experience with a particular
type of project, lack of financial ability to complete the project and demands of other current projects on
the Contractor which could detrimentally effect the successful completion of the new project. Based on
the Surety's ability to pre-qualify the Contractor they are then prepared to back their decision with their
own money and ultimately pay dearly for any miscalculations in their assumptions.
The standard method of pre-qualification utilized by the Surety consists of the following criteria:

Character - The character of the Contractor indicates his potential for loss and his ability to deals with
the problems associated with construction.
Capital - How much funding ability does the Contractor have on hand and how much is projected in the
immediate future. What is the Contractor's Debt vs. Asset ratio.
Capacity - How much construction may the individual Contractor perform at one time, at what point
does he become overloaded.
Like any insurance underwriter, the Surety has two major objectives when writing a bond for the
Contractor. Since the Surety is a business and depends upon the bond premiums for income they
sincerely want to write as many bonds as possible, however the Surety must carefully consider each
project and evaluate the probability of loss vs. the possibility of loss.

The successful Surety balances the risks of loss equally with the potential for premium income. No Surety
could last in the industry if they were forced to pay major claims on each bond written. The premiums
charged for bonding are insignificant compared to the actual dollars paid out in the event of a failure.
When construction failures do occur, neither the Owner, Administrator or Surety come out ahead.

The Surety industry has recovered from a state of elitist fragmentation in the 80's, the older more
established companies are slowly moving away from bonding the smaller more risk prone Contractors.
These Contractor are forced to utilize smaller more local companies and only involve the larger Surety
when the construction value is more than the local carrier can ensure. This process seems to benefit the
Contractor in two ways, by making the bond more accessible and at the same time decreasing the actual
premium cost for bonding by increased competition between the local bonding companies.

When a potential failure and claim is identified on the construction project the Surety will not attempt to
mediate the dispute. The Surety will be the first to state that they are not construction experts, the Surety
will monitor the progress of the dispute resolution and stand ready to cover all Owner costs, above the
established Contract Sum, to complete the project and deliver a lien free facility to the Owner. When
separate Payment and Performance bonds are established, both for the total amount of the Contract
Sum, it is hypothetically possible for the Surety to be required to pay on each obligation the full Contract
Sum. For this reason, the Administrator is advised to always require separate Payment and Performance
bonds with separate Power of Attorney letters.

When the Contractor defaults in the middle of the project, the Owner may be required to pay the Surety
the remaining Contract Sum while the Surety pays the replacement Contractor to complete the project.
No other scenario demonstrates the importance of the Administrator accurate monthly review of the work
completed prior to certification of the Contractor's Application for Payment.

If the Contractor default occurs at a point in the project where more money has been paid to the
Contractor than the value of the improvements completed, the Owner may be faced with paying additional
money to both complete the project and pay all outstanding debts. Again this occurs only when the total of
both Payment and Performance bonds are exceeded.

In summary, the function of the Surety is to pre-qualify the Contractor and make calculated judgments
regarding his ability of complete the work in question, basing those judgments upon his financial status,
work in progress and expertise in the particular type of construction. If successful in his task the Surety
controls the growth of the Contractor and in some cases actually forces shrinkage of the Contractor when
his plans for growth are unrealistic.

PAYMENT vs. PERFORMANCE BONDS

The Surety offers two standard types of protection for the Owner in the construction process, the Payment
and Performance Bonds. Each obligation covers a different potential problem which could be encountered
during the construction process. The Payment bond assures the Owner that all of the qualified creditors,
subcontractors and materialmen for the project will be fully paid upon completion of the work, provided the
Contractor is properly paid by the Owner.

To be qualified, the creditors located outside the "sphere of privity", or not in direct contract with the
Owner, must file the proper Notice to Owner within the time frames outlined in the laws of the state where
the project is constructed. In Florida this time frame has been established as being within forty-five days
of the first furnishing of work on the project. Subcontractors, suppliers and materialmen who do not
properly file the Notice to Owner will have no recourse in the event of non-payment other than through the
Equity Court system. The Surety will not make payment to even legitimate creditors who has not ensured
their lien rights on the project.

The Performance Bond ensures the Owner that the Contractor will complete all obligations of the
Contract, again provided that no action by the Owner or his agents prevents or inhibits the Contractor
from the completion of the specific Contract requirements. In the event of Contractor default, the Surety
will take one of the following actions:

1. Finance the Contractor or completion.

2. Bring in another Contractor acceptable to the Owner.
3. Pay the Owner the face value of the bond or some negotiated settlement based upon any
improvement completed prior to the default.

The Surety will generally chose option #2 since the financing of the Contractor to completion may end up
costing the Surety more money than simply finishing the project with another Contractor. The face value
payment of the bond is another option that is usually not acceptable to the Owner.

Most bonds written to the Contractor involve some sort of personal indemnity on the part of the
Contractor. In the event of default the Surety will attempt to recover any moneys possible through legal
action to mitigate their losses. The process of attaching personal assets to offset the losses is referred to
as salvage. The Surety will readily admit that they recover little if any money in the salvage process.

Due to the amounts of money at stake when defaults occur, the Surety will generally subjugate the rights
of the Contractor during dispute resolution and make all attempts to either deflect the responsibility for the
default or mitigate the expense of the default. The maximum mitigation of default expense is to avoid any
allegations of frivolous settlement of the part of the Surety which may impact their ability to recover funds
in the salvage process. The Administrator is most acutely aware and rightfully afraid of the deflection of
responsibility posture.

The initial reaction of the Administrator when confronted by the Surety regarding the design of the project
is self-defense, this results from the Surety's ability to assign excellent lawyers and professional
witnesses to a case in an attempt to redirect the responsibility for the default. At this point, there is no
better defense for the Administrator then comprehensive and accurate construction documentation.

EVOLUTION OF THE SURETY

The Surety industry may be utilized by the Administrator as a good indicator of the current construction
atmosphere. More a thermometer of the industry than a barometer, the Surety is best used to monitor the
current effects of the economy on the construction industry. By monitoring the continuous defaults of
small, medium and larger subcontractor, the Surety is painfully aware of the ripple effect caused by the
default of the smaller subcontractors. The Surety industry has recovered fully from a devastating run of
defaults which occurred between 1974 and 1980.

In the six year period between 1974 and 1980 the Surety industry took in 1.2 billion dollars in bond
premiums while paying out over 1.7 billion dollars in construction claims and defaults. The construction
industry was severely effected during this period by high interest rates and a depressed economy. Surety
companies, anticipating the continuation of a strong economy and high interest rates, competed heavily
for the business of each Contractor. The lessons learned by the Surety companies during the late
seventies and early eighties account for their rigid criteria for issuance and approval on bonding capacity
today.

REQUIREMENTS TO ENSURE BOND PROTECTION

The Administrator should be aware of all requirements which are necessary to ensure the protection of
the Payment and Performance bonds. As a construction expert, the Administrator's role in the
administration of the construction contract requires he verify all notices are made and all prerequisites are
followed by both the Owner and Contractor. This process begins with the selection of the type of bonds
required for the project.

The Administrator should specify standard AIA bond forms A312. Separate Payment Bond and
Performance Bond with separate bond numbers and Power of Attorney offer the Owner protection equal
to twice the face value of the construction project. The use of combination Payment and Performance
Bonds should be avoided due to recent legal precedents which have held that the Surety was obligated to
pay only the face value of the construction project through a combination of claim against both sides of
the combined bond.

The next precaution, exercised by the Administrator is to ensure that the Owner files the proper Notice of
Commencement at the beginning of the work. This legal document, files with the Clerk of the Court,
informs the subcontractors, materialmen and suppliers who is the Owner, the Surety, the Administrator
and gives the legal description of the property. This information is mandatory when the subcontractors
and/or materialmen attempt to file their Notice to Owner. Changes in the Florida Lien Law, effective
1/1/92, required that the Notice of Commencement be posted in a conspicuous location, adjacent to the
Building Permit, prior to the first inspection or signature by the building inspector.

During the course of the project the Administrator should receive copies of all Notice to Owner filed on the
project. The Administrator should then require the Contractor to provide documentation with each
Application for Payment showing that the qualified lienors have been properly paid. The preferred method
of receiving Lien Releases is to require Full and Final Release of Liens through a particular date. The
Contractor may attempt to provide Inducement Release of Liens, which may also be referred to as
Conditional Lien Releases. The operable word here is "conditional", the Administrator should not accept
any Release of Lien which is contingent upon events which he has no control over. Should the Contractor
fail to make payment to the lienor who signed the conditional release, the release is voided and
subsequently worthless.

The Administrator should insist on Full and Final Releases which release Owner for any work completed
through a particular date, even after listening to the Contractor's lamentful pleading to avoid being forced
to fund the Release of Liens process through his own resources. Contractors who demonstrate their
willingness to properly and timely make payment to their subcontractors and material suppliers will have
little problem securing Full and Final Releases through the end of each payment period. The Contractors
who protest the most regarding conditional lien releases, may be the ones who are reluctant to pay their
subcontractor and suppliers until forced to do so.

During the course of the construction project changes in the scope of work may be requested by the
Owner and/or Administrator. The changes in the scope of work may or may not effect the total Contract
Sum or Contract Time, in any event the Surety should be made aware of all changes in the contract which
do effect the Contract Sum or Contract Time.

The Surety will qualify the Contractor for the scope of work described in the bid documents, the
Administrator has no way of knowing if the Contractor was qualified by the Surety as marginally qualified
or extremely qualified. The Surety may not wish to extend the coverage for a particular Contractor based
on his ability, capacity or other information to which the Administrator is not privileged. As part of the
Change Order process, the Administrator should request and receive verification from the Surety that the
Payment and Performance Bond have been increased to include the recent change in the scope of work.

At the first sign of serious trouble on the construction project, the Administrator should be prepared to
advise the Surety of a potential situation which may or may not evolve into a claim. The Surety is not
offended by the advisement, rather they appreciate the opportunity to become involved at a time when
there may still be some hope of resolution. The Surety generally believes that the earlier they become
involved in a problem the greater their chances are to mitigate their losses. The Contractor, however, will
not appreciate any letter copied to his Surety agent. Contractors have threatened to sue Design
Professionals for merely advising the Surety of potential problems with the project.

The Contractor may be at his bonding threshold and desperately requesting additional bonding capacity,
an advisement of potential problem at this stage would not enhance his efforts. The Administrator should
exercise caution when advising the Surety of a problem yet not be afraid to do so if situations warrant.
One good way to deal with this situation is to establish a good business like relationship with the Surety
agent, remember, he is there to serve not only the Contractor but the Owner.

At the close of the project, the Administrator will request the single most important documents from the
Surety since the bond itself, the Consent of Surety to Reduction in Retainage and the Consent of Surety
to Final Payment. These documents verify that the Surety has been given adequate opportunity to review
the position of all qualified lienors, suppliers and materialmen and agrees that the Contractor may be paid
the remaining moneys due him under the contract. The receipt of both documents are an important part of
the Administrator's close-out procedure for the project.

Should the Owner reduce retainage or make final payment without the Surety's consent, and the consent
is an established obligation in the bond, the Surety could use this breech of obligation to negate their
responsibilities to the Owner, in whole or in part.

The standard AIA bond forms do not require Consent of Surety to Retainage Reduction or Final Payment
as part of the standard language, however, if these requirements are added under the modification
section, they will certainly be enforceable.

The final aspect of the relationship with the Surety is the advisement by the Owner or Administrator of a
problem following the completion of the project. For the first year, minor warranty items are generally
handled by the Contractor, but, what happens if a major problem occurs related to the installation work
under the Contract. The standard bond forms require that notice to the Surety or claims made upon the
Surety, must be filed within (2) two years of the completion of the project. In this case, completion of the
project shall be the making of final payment to the Contractor.

In the event the problem involves a latent defect, not readily observable, Florida law allows for the Owner
to pursue the Contractor for a period of (5) five years. Needless to say, the Surety and the Contractor
should be notified immediately in the event that problems arise with a new project.
 POST-CONSTRUCTION

SUBSTANTIAL COMPLETION

The date of Substantial Completion is defined in the Contract Documents (GC 8.1.3) as the date which
the Owner and/or Architect will certify that the work, or designated portion of the work, may be beneficially
occupied or utilized by the Owner for it's intended purpose. The actual date of Substantial Completion will
be as noted on the Certificate of Substantial Completion (AIA G704). (See Figure 1-18)

When the Contractor considers that the work, or designated portion of the work as previously agreed to
by the Owner, is substantially complete, he will prepare and submit to the Administrator a punch list of
items which remain to be completed or corrected. The failure of the Contractor to include any items on the
list, will in no way alter his responsibility to complete or correct these items per the Contract Documents.

Upon receipt of the Contractor's punch list the Administrator will review the list and the completed work to
determine that the list is both accurate and complete. Items which require correction and/or completion,
that are not included in the Contractor's list, shall be added by the Administrator. The Owner should be
advised that the items on the punch list shall be corrected and/or completed within the time limit set forth
in the Certificate of Substantial Completion.

The Contractor shall be advised that the correction and/or completion of all punch list items shall be
conducted in a manner not to adversely effect the Owner's occupancy of the facility.

The term "beneficial occupancy" shall be interpreted to mean that the project or portions thereof, are
complete in nature to allow the Owner to utilize the project or portions thereof, for their intended usage.
The mechanical systems, life safety systems, tele-communications systems and any other systems which
are required to properly utilize the project or portions thereof, shall be complete and in good working
order. The remaining items to be completed shall be such that the correction does not cause
inconvenience to the Owner or disruption to the Owner's normal operations.

The Owner should be consulted to confirm that there are no other construction deficiencies that he may
be aware of which are not on the Contractor's punch list. It is very important to emphasize that the
Contractor is the person who is responsible for preparing the original punch list.

If the Administrator is requested to make a Substantial Completion inspection, and it is obvious that the
Contractor's punch list is not comprehensive, the inspection shall be discontinued and the Contractor
advised that his list is inadequate.

Prior to issuing a Certificate for Substantial Completion, the Administrator should verify that the following
conditions exist:

Written statement from the Contractor that the project, or designated portion thereof, is substantially
Complete.
Properly executed Consent of Surety for Reduction in Retainage per the Contract Documents.
Contractor's "Punch List" with Administrator's supplementary comments added.
Certificate of occupancy from appropriate agency.
The Certificate of Substantial Completion shall be prepared by the Administrator and certified by the
Owner and/or Architect, prior to being submitted to the Owner and the Contractor for their written
acceptance of the responsibilities assigned them in the Certificate. The Certificate of Substantial
Completion will also establish the dates and responsibilities of the following transitional arrangements
which will be required between the Owner and the Contractor:

The Contractor's time limit for completing the remainder of the work per the Punch List.

Establish the responsibilities of the Owner and Contractor for security, maintenance, utilities, damage to
the work and insurance.

Establish date for the commencement of all warranties.

Upon successful execution of the Certificate for Substantial Completion the Owner may make payments
which reflect adjustments in the retainage amounts as provided in the Contract Documents. The reduction
in retainage shall be made with the exception of amounts which have been determined to reflect the costs
for remaining work to be completed and/or work requiring correction. In these cases, the Administrator,
upon consultation with the Owner and/or Architect, shall establish the value of the remaining work and
suggest that the Owner retain three (3) times the value of that work.

The minimum amount retained for each unacceptable item should be the estimated cost to have another
Contractor brought in to complete or correct the item. This includes any costs for mobilization and/or
equipment required to correct or complete any outstanding construction deficiencies.

PROJECT CLOSE-OUT

Following Substantial Completion, the Administrator shall receive from the Contractor the following items
and materials which shall be collectively referred to as the Close-Out Documents:

Application for Payment showing all work as completed and requesting retainage.

Punch List showing all items identified by the Contractor and Administrator, certified by Contractor as
being completed.

Properly executed Consent of Surety for Final Payment.

Final Release of Liens for the total amount of Contract Sum.

Record Drawings and record specifications as per the Contract Documents.

Warranty and maintenance information as required by the Contract Documents.

Extra stock materials and special tools as provided in the Contract Documents.

Final Accounting of all Change Order for the project.

In addition to the items listed above, the Close-out Documents shall include proof that all equipment and
maintenance demonstrations required by the Contract Documents, have been successfully completed by
the Contractor for the Owner's staff.

Equipment demonstrations shall be scheduled by the Contractor, with the Owner given adequate notice to
ensure that proper personnel may attend.
The Administrator will review, and transmit to the Owner, the Close-out Documents package. The
Administrator will advise the Owner and/or Architect of the Close-Out Documents received by the
Contractor and transmitted to the Owner, and any outstanding items which may prevent the Owner and/or
Architect from recommending that the project be closed out and Final Payment made to the Contractor.
Should all prerequisites for project close-out be satisfied, the Owner and/or Architect will then recommend
to the Owner in writing that the Owner make Final Payment to the Contractor.

FINAL APPLICATION FOR PAYMENT

The Administrator will advise the Owner and/or Architect when all Close-Out Documents have been
properly transmitted to the Owner, all required punch list work is completed and all requirements of the
contract have been satisfied per the Contract Documents. The Owner and/or Architect will, upon
consultation with the Administrator, recommend that the Owner make Final Payment to the Contractor.

The Final Payment Request from the Contractor will be for the remainder of retainage, should the
retainage have been reduced, per the Contract Documents, at Substantial Completion. The retainage
represents a substantial portion of the Contractor's profit for a project, therefore the retainage is excellent
insurance that the Contractor completes the punch list work, properly executes all warranties and Close-
Out Documents and assembles all required record drawings and specifications per the Contract
Documents.

Do not reduce the retainage amount, other than any reductions provided for related to the Substantial
Completion, the retainage will ultimately become the final motivation for completing any outstanding work
on the project or documentation.

WARRANTY INSPECTION

The final responsibility of the Administrator is to advise the Owner of the date for the One -year warranty
inspection. The Administrator will advise the Owner in writing of the anniversary date of the warranty and
instruct the Owner in how to handle warranty work in the first year of the facilities occupation.

The Owner shall be advised that any warranty work or inspection required will be charged as an
additional service on the part of the Administrator. The Owner should be advised that he may elect to
resolve warranty items directly with the Contractor and avoid additional service charges from the
Administrator.

The Administrator should also take the opportunity, in the final letter to the Owner, to request a brief
evaluation of the services performed for the Owner through the construction project. The information
received from the Owner regarding the services performed, should be reviewed with the Owner and/or
Architect and any improvements in the Administrator's services should be incorporated into the following
projects.

       
  

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