Architectural Phase 6 - Construction Period Services

This page is the sixth part of the Architectural Phases series. If you are getting a bit lost, that’s ok - feel free to backtrack to the Architectural Process page.

By now Architectural Phase 5 – Contractor Selection should be complete.  By now a builder has been selected and is ready to enter into contract with the client to do the works for a lump sum amount with a time duration for the contract works to be complete.

Pre-Construction

Our office would prepare the contract documents, and arrange for a meeting for a contract signing to take place between you (the client) and the builder (or contractor).  Before entering into a contract, we would recommend that you seek legal advice first.  In any case a signed contract is required before construction can begin.

Construction Period

Once the contract has been signed by the client and builder, the architect will have specific roles and responsibilities.  The role is twofold.  The first part is still playing the role of agent and advisor to the client, being their advocate when dealing the with builder on matters such as time, cost and quality of the project, regularly visiting the site at fortnightly intervals and holding site meetings, answering questions and providing additional material to assist the Builder. 

The other part of the role architects play on site is that of being the Superintendent who will administer the contract, or as we like to call it, The Umpire.  This role feels a bit like the architect is keeping score on the project to make sure that the Client and Builder stick to the rules.  They adjudicate the conditions of the contract when it comes to certifying builder’s payment claims, valuing the work done to date and assessing the quality of the work performed against the Contract Drawings, and instructing the Builder to rectify where required.  Architects are expected to be fair and impartial to both the client and the builder when performing this role. 

Other things that happen during the Construction Period include inspecting the builder’s shop drawings for things like framing, joinery, windows and doors, as well as making inspections on these items made off site.  Also, depending on the size of the project, our office would coordinate the involvement of secondary consultants who may need to be involved.

Doing all of the above is fundamentally about protecting the QUALITY of the design, but also holding the contractor to account in being able to release monies on the basis of works that are complete and defect free, but also to keep you informed about the builder’s progress on the job so they can finish on time.

Lump Sum Building Contracts, are they ‘fixed’?

The short answer is no.  You have to remember that much in the same way that consultants put fee proposals together based on the ‘known information’ at the time for a project, contractors operate in a similar way – because that is what commercial entities do to stay in business.  Any agreement should have wriggle room to allow things to change, and architect-administered building contracts certainly have this. 

What often comes up is Variations, either raised by the client (because maybe there are some items that you would like changed, added or deleted) or perhaps some latent conditions have been discovered by the builder that need to be addressed (i.e existing slab rectification works, existing plant at the end of its life or floating rocks in soil conditions as examples) – sometimes they are avoidable and other times not, in any case our office would ask the contractor for a quote and assess them with the input of the consultant team to determine whether they are fair and reasonable, and instruct them to go ahead.

Practical Completion

The builder needs to not only complete the works to the QUALITY set out in the drawings, but they need to reach the date for Practical Completion.  There are usually there are a few site inspections where the architect will inspect and provide a list of defects and incomplete work for the builder to complete.  To have 2 – 3 attempts at Defects Lists is not uncommon, and Builders find these helpful as it can guide their efforts to finish as soon as they can.

When the architect believes that the project is Practically Complete, that is the majority of the works are complete and defect free, and that the Building Permit conditions are met (and any incomplete works do not impact on the overall use of the building), they can issue the Certificate for Practical Completion which starts the 12 month Defects Liability Period (DLP) – this is a period of time to give the project some time to ‘breathe’, but it also means that the Builder has to attend to defects during this time, promptly.

Defects Liability Period

After the 12 months, assuming the DLP is uneventful, and the client has been enjoying their property, and the builder has finished off any incomplete works, the architect will again visit the site once more, and if satisfied issue the Certificate of Final Completion.  Then, the project is done!

Carrot and the Stick

I apologize to any builders who might read the sub-heading for this section, but I think the reading public at large should have some information on this – and yes, it’s a crude analogy, but keep reading for a moment.  If you are using an architect-administered contract, such as one from the Australian Building Industry Contract series (ABIC), they usually include a few provisions for the benefit of the client which are available as contractual levers, and these are namely…

1) Form of Security (Carrot)

The contract requires that the builder either put up a form of security (Unconditional Bank Guarantee) OR have part of their monthly fee accounts held in trust (Cash Retention).  Half of this gets released at Practical Completion (when the project is deemed safe to use and occupy), and the remaining half at Final Completion (12 months after the project was deemed Practically Complete).

2) Liquidated and Ascertained Damages (Stick)

For every day the Builder is late in missing the contractual date for Practical Completion, and at the discretion of the client, the contractor is liable to pay Liquidated Damages (or LD’s) per day late.  LD’s usually come out of subsequent Progress Certificates (payments).  

The twist in the tail here is that this is not a penalty, but seen as compensation for a break of the contract in late completion.  The amount must be a genuine reflection of the loss that would be suffered by late completion, for not having access to their property.  This means part of their holding costs, alternative rental property, and their consultants fees are things that are still continuing, even though the Builder has still yet to reach competition – having LD’s is intended to mitigate these costs to the client over and above what the client would have otherwise had to bear.

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I just thought I should say that, obviously, no-one would want to actively use these as a way to get their builder to finish on-time, but they are still there for the benefit of the client if in the event they are need.  I would say that the above Carrot-and-the-Stick items above are to be best avoided to be used for all the implications that they contain. 

So how do you help builders finish on time and to the quality desired?  Have the design team regularly involved during construction, so they can support the builder with supplementary information (details, clarifications, alternative solutions et al) to help them do what they do best – that is, build. 

We want everyone to be happy, so hopefully by the end of the project everyone – Architect, Builder and Client -  can come away smiling, a bit like everyone is in this photo below…

What if you weren’t to have an Architect involved?

Some clients feel that paying for an architect to be their very own agent and Umpire during the construction process is a costly extravagance rather than a necessity. 

1) No dedicated consultant to administer the contract

There is no third party between the client and the builder to keep communication lines open, which could create miscommunication, and then leads to disputes.  These can often head straight to unnecessary legal actions, rather than simply referring to the rules of the contract – Your architect can refer to the rules in the contract and proceed accordingly. 

2) No agent or client-side advisor

Your architect is meant to be a dispassionate professional, that is, you should be able to rely on their advice.  You won’t be able to gauge their professional opinion on how well the project is being run by the builder, including understanding whether or not the desired QUALITY is being achieved, whether or not builder will make their Practical Completion date.  Also, what if other issues arise on site that require a response and perhaps implications for safety?

A side note to this point is that there is no party designated with impartially assessing the contractor’s progress claims each month.  Architects who assess progress claims usually do so on the basis of assessing work that is complete and defect free, NOT on how much the contractor wants to be paid each month. 

3) Possible compromised design outcome

Without the architect (and the consultant team) involved during construction, when the builder has questions about details, or needs a bit of clarification – which happens on every project – without the designer involved, the builder will make their own decision which may not be in line with the original design intent.  This is particularly pertinent if the project is particularly bespoke and unique in it’s design.

4) (No carrot-and-the-stick to motivate contractors to finish promptly)

See above.

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Bringing up baby

Being on site is a bit like bringing up baby. It’s one of the main reasons a lot of architects get into the profession – the author is included in this.  Plus whenever we go to site we get a chance to wear our well-worn boots for a change!  Seeing something which started as an idea on your head and slowly built up from the ground to become a real and tangible thing is quite an amazing thing.  Architectural projects, done well, have a transformative power that goes beyond the building materials and the basic human need of shelter.  They can represent the wants, desires and fundamental values of their owners and users to help facilitate their own livelihoods on a journey of life-long development through their experience of space.

Seeing the process unfold and be actively involved in the nurturing is incredibly rewarding, and for an architect who has ambition to build (this author included) generates its own kind of enthusiasm that becomes quickly infectious to everyone involved.

Redmond Hamlett is a Director (Project Architect) of WHDA.  You can get in touch with Redmond on 03 7020 5784.

Disclaimer - nothing within this blog is a substitute for legal advice and we always recommend clients to seek legal advice in contractual matters.