We often approach contracts with the understanding that they are, or contain a lot of, “boiler plate” – that is, something that will protect you in case of an explosion. In the adversarial world of construction contracting, especially when the contract is for a lump sum awarded on the basis of the low bid, the parties to the contract may regard the engagement as dangerous. Construction projects are most successful when those who prepare the documents understand that the real goal of a contract is to make it very clear what everyone is agreeing to – that is, the contract should be designed not so much to protect the parties from inevitable conflicts as to prevent conflicts by preventing confusion.

Keep in Mind…

In earlier columns, I’ve discussed using clear, concise language and standard methods for organizing the written information that goes into the contract. Remember that the contract includes the Agreement and General and Supplementary Conditions as well as the administrative and procedural requirements of Division 1, besides Divisions 2 through 16. The drawings are all a part of the contract as well. This is a huge body of information to create and from which to create a complex object, a building. The real purpose of the contract is the creation of the building. The purpose of the drawings and specifications is to describe the building just as the owner wants it and as the designers have designed it so clearly, that when the contractor, subcontractors, and suppliers follow the written and drawn requirements, the desired building is the result.

And How Do You Do That?

Typically, the design team creates the contract. Some institutional owners create their own bidding and contracting documents, but usually the primary designer (typically the architect) prepares Division 1.

Architects, engineers, kitchen consultants, audio-visual consultants, and others prepare Divisions 2 through 16, commonly called the technical sections. These may be based on guide specifications, commonly called masters, which may be published nationally and subscribed to by designers, such as SpecLinx, SpecText, or MasterSpec, for example, or guides developed by the designers themselves. It is also not atypical for designers to use specifications prepared for one project on other projects.

In every area, specialized knowledge is brought to bear. Will the project have standard or custom steel doors and frames? Will the fire-suppression sprinkler system need a fire pump? What types of chillers will be selected? Are special panel boards or transformers required? How about the data cabling systems? The designers make basic choices, sometimes based directly on the owner’s wants and needs (program) and sometimes based on technical judgments about how best to accomplish the stated program requirements. In making final selections and writing the specifications, which include requirements for installation and testing as well as for products, designers depend especially on suppliers, manufacturer’s representatives, and experienced installers. The people with the most detailed, specialized knowledge about each different item are those who manufacture, install, and maintain it. At the same time, each manufacturer has an interest in promoting his own product, and each distributor wants his product to be named among the specified acceptable manufacturers.

To create the best contract, the designers have to learn from these experts but not be bamboozled by any of them, and then to clearly describe the project requirements in such a way that every estimator who reads the documents will understand what to estimate and bid. A significant criterion for judging whether a bid construction contract has been well prepared is that most of the bids are within 10% of the estimate and close to the same amount; this is evidence that everyone got the same meaning from the documents. Designers typically have specialized educations that prepares them for their work. Engineers understand engineering principles and calculations. But to select materials, systems, and equipment from available manufactured products and to combine the various items into operating systems, designers have to constantly learn about what is being manufactured and what is available in the area where the project is to be built. Both designers and contractors have the responsibility to be acquainted with the building codes applicable to each project, and code officials in some places have programs for educating their local construction industry in adoptions, revisions, and interpretations.

Constant Comment, Lifelong Learning

The world in which construction contracts are prepared is a world of constant communication and lifelong learning. Designers have to constantly hear and learn from people who have specialized knowledge of the materials and products the designers specify, and yet they sometimes mistrust their experts because they are aware that each expert may have a special interest in promoting the thing he sells. Nevertheless, the bottom line of creating the building the owner wanted for a predictable cost requires shared knowledge and basic trust among the participants. Well-researched and well-written documents are essential to meet that goal.