Knowing what you may anticipate - such as the places costs typically "hide" - offers an edge for efficiently managing the construction process. A well-defined interview process will assist you in selecting the very best construction manager (CM) for the job. Be thorough; replacing the CM once the task has begun is costly and raises serious questions of liability. For renovation work, invite only CMs with considerable related experience. Interview previous clients to find out the CM's ability to deal with change orders, unforeseen elements and client decisions.

Insist that the project executive, project manager and project superintendent assigned to the task be present at the interview. (The executive represents the company, the manager spends the owner's money and the superintendent is the on-site contact.) Closely observe the interaction between these people. An effective project can hinge on the working relationship between them. Require all interviewing CMs to submit a detailed account of what they heard and decided to at the interview. This important document will reflect the CM's understanding of your conditions and form the cornerstone for contract negotiations. This document may also serve to suppress potential disputes arising from construction contract issues.

Where costs hide The construction contract between the master and CM is really a legally binding contract but its terms are not universal. The dog owner should negotiate the specifics of the contract requirements and this needs of the project. The more knowledgeable the master - often represented by the facility executive - is about the type of the terms of the contract, the higher the awareness of the possibility of hidden costs. Uninformed owners can unwittingly agree to pay for more cash for a lengthier time period than necessary. Demonstrate your understanding of the construction process by first knowing the machine prices and labor costs of each item you agree to purchase and negotiating these standard construction contract line items.

General Conditions. General Conditions should only be those non-construction costs which are necessary to obtain the task done and are directly applicable to the project. All general conditions should be considered a line item amount decided to and guaranteed ahead of the start of construction. Typical aspects of general conditions include funds for a site office, on-site project administration labor and necessary office equipment. Do not accept an amount that's expressed as a portion of the cost. Substantial savings could be realized by asking the right questions about general conditions. Like, question the site office requirements presented by the CM, including how much new equipment is necessary. Who should assume the cost of purchasing and installing the computer equipment and software the CM lists as a site office requirement?

Overhead. Overhead is the CM's cost of accomplishing business. Should the master be responsible for that cost? A disagreement could be made that the master need only purchase costs directly applicable to this specific project, and not for costs the CM incurs on other jobs. This line item specifically is often the topic of legal disputes. Do not forget to remove components of cost within this category and, again, don't accept an amount that's expressed as a portion of the work. Hourly Wages. Agree to pay for only the wages for focus on your project. The actual hourly wages, taxes and benefits (not a multiple of these) would be the owner's responsibility. Time off and educational seminars are not. Avoid a predicament where you stand asked to pay for wages for an over-all superintendent or some other part-time supervisory personnel.

Construction Fees. To find out a fair construction fee, negotiate a portion based only on the cost of the work. Be careful of the language of the contract. All fees certainly are a direct percentage of the cost of the task, ahead of the contingency and general conditions are added. A reasonable 4 percent construction fee might be 4.5 percent if taken as a portion of a cumulative total. On multi-million dollar jobs, this can represent an amazing level of money. Insist that the fee be converted from a portion to a fixed amount before construction starts. Once construction starts and the possibility of change orders (that can increase the cost of the work) exists, the fee will continue to rise without limit. Don't permit the construction budget to be compromised in this way.

Contingency Fee. Most CMs require that the contingency fee be built into the guaranteed maximum price. The sole responsible way to handle the required contingency fee would be to insist so it be jointly controlled by the master and the CM. Neither the style nor the construction process is really a perfect science; CMs will insist that they have to "manage their risk" with the contingency fee. Maintaining some control over the allocation of funds will enable the master to best justify the expenses. When negotiating the contract, the master must "choose the schedule" with the cost of construction and guard against it slipping toc meaning in construction. Extending the construction phase is a pricey decision.

Acknowledge the completion date of the project and insist that the penalty be levied if the project is delayed. Do not agree, however, to an added bonus if the project is completed ahead of the scheduled delivery date. The CM might deserve an added bonus for early delivery if extraordinary problems were overcome, but does not necessarily deserve bonus dollars for performing the task you hired them to do. Change orders and substitutions In negotiating the change order procedure in the construction contract, the master should demand a "no work stoppage" clause. An excessive amount of time could be wasted if work ceases in anticipation of an over-all agreement of change order amounts and schedule implications. When offered an alteration order, the architect must look into both the money and time the CM is looking to enhance the job. Each is open for discussion. Don't wonder why construction isn't finished and then discover the architect has authorized yet another week of accumulated change orders.

As the CM should aggressively pursue reasonable substitutions on your behalf, be sure you or your architect knows the cost of the originally specified product and the cost of the alternative. The construction contract should state clearly that cost savings realized by the substitution for a specified product go right to the owner. Here, too, substantial savings could be realized. As your architect's last section of control over the grade of the project, the punch list should be an intensive process. Accompany the architect to consider the job. Try to anticipate any problems which could arise once the space is occupied. If a mistake is discovered after the master has released the CM, the issue may well be more difficult, time intensive, and expensive to remedy.