While reading chapter one I had a self-realization: I should
give myself more credit for listening to my husband when he talks about his day
at work. My husband works in architecture and has held positions in both design
and construction administration; including work at a design-build firm. The
sections about the contract system, competitive bidding, construction management,
etc. all ring a very familiar bell. The topic that I found most thought-provoking
was bonds.
Intrigued by bonds? Yes, that’s me. I acknowledge it’s not
the most exciting aspect of construction management, however, you might consider actuaries boring too. But, I beg to differ - I know some crazy party-animals that are actuaries by day. Why am I thinking about parties and actuaries? Well, the similarities
between the construction contract surety bond and another kind of surety bond
struck me. I decided to do a breakdown
of the construction surety bond and, for fun, do a little comparison with the surety bond,
aka bail, my friend the actuary had to pay to get out of jail after his last
party adventure - see, I brought it back around :)
I started my research with the very book that sparked this
concept. Lucky me! I found chapter 7 –
Contract Surety Bonds. According to our textbook, Construction Contracting,
A Practical Guide to Company Management, “it is usual practice for
construction contracts to require two separate contract bonds, one bond
covering performance of the contract and the other guaranteeing payment for
labor and materials.” The reason for this is simple enough; the dual bond
practice provides a more evenhanded distribution of protection by separating
the interest of the owners and contractor’s payees. Under a single bond the
owner has priority for payment over workers, subcontractors, material
suppliers, etc. and therefore has the potential of exhausting the face value of
the bond through its claims before the others even get a crack at recovery.
This practice affords little, if any, protection to injured parties subordinate
to the owner for payment.
The performance bond and the payment bond are the two bond instruments.
The performance bond protects the owner and, as the name
implies, guarantees performance in substantial accordance with the terms of the
contract. If the contractor defaults, the surety is responsible for the burden
of contract performance – customarily covering any warranty period required by
the contract.
The payment bond protects the third parties to the contract
that are used in whole or in part of the performance; i.e. it guarantees payment for labor and materials
used in construction. Potential claimants include those who have direct contact
with the general contractor or one of the subcontractors. A byproduct of the payment bond is protection
for the owner and financiers from liens that can be filed against the project
by unpaid parties to the work.
A Frivolous Comparison
Task #2 – Project Delivery Methods
As one can tell from Task #1 – Chapter One, I like
comparisons and I found this detailed one from CSW
Contractors.
The Design-build method is of most interest to me and
apparently many others as well. According to the Design
Build Institute of American, design-build has been rapidly gaining market
share in the United States. The design-build method combines the design
(Architect-Engineer) with the builder (general contractor) in a single
entity. The article cited in our assignment
mentions two main advantages to using a design-build contract.
1. “the
construction team is motivated to work with the design team to develop a design
with constructability in mind. In that way it is possible for the team to
creatively find ways to reduce construction costs without reducing the function
of the final product. The owner can expect a reduced price due to the increased
constructability of the design.”
2. “early
mobilization and construction activities are able to proceed concurrently with
the design.”
In my opinion there is another significant advantage to the
design-build contract and that is:The most common design-build contracts involve a general contractor hiring an architect for design services of a structure the contractor is building for the owner, its client. However, recently making a comeback is the Architect-led design-build method. I wonder why the set-up went away, honestly. This wiki article about architect-led design build says “historically, most construction from the ancient pyramids to the Eiffel Tower was run by the same person who designed the structure. It was not until the twentieth century, primarily in America, that design professionals (architects and engineers) separated themselves from construction contractors and materials vendors, forming separate professional trade organizations, and popularizing methods of construction that promoted separating design from construction.” This concept of the architect as the Masterbuilder was employed in construction for the millennia prior to the twentieth century.
Task #2 – Construction Bidding
I found the following graphic on the website for PlanSource: OnDemand Construction Software. It is a great depiction of the elements of construction bidding.
I found the following graphic on the website for PlanSource: OnDemand Construction Software. It is a great depiction of the elements of construction bidding.
Task #2 – Building Codes
There is a very cool interactive map on the website for the International Code Council, "people helping people build a safer world" - a noble cause, I might add.
The map lets you select and view states that have adopted the following building codes:
- The International Building Code (IBC) is in use or adopted in 50 states, the District of Columbia, the U.S. Virgin Islands, NYC, Guam, and the Northern Marianas Islands.
- The International Residential Code (IRC) is in use or adopted in 49 states, the District of Columbia, and the U.S. Virgin Islands.
- The International Fire Code (IFC) is in use or adopted in 43 states, the District of Columbia, NYC, Guam and Puerto Rico.
- The International Energy Conservation Code (IECC) is in use or adopted in 45 states, the District of Columbia, NYC, Puerto Rico and the U.S. Virgin Islands.
- The International Plumbing Code (IPC) is in use or adopted in 34 states, the District of Columbia, NYC, Guam, and Puerto Rico.
- The International Mechanical Code (IMC) is in use or adopted in 43 states, the District of Columbia, NYC, Guam, Puerto Rico and the U.S. Virgin Islands.
- The International Fuel Gas Code (IFGC) is in use or adopted in 44 states, the District of Columbia, NYC, Guam, and Puerto Rico
