We have found that many associations are not fully aware of the duties and responsibilities of a construction manager, and are therefore hesitant to hire one, because they feel that they are just adding an additional layer of cost to the project.
Regardless of what caused the problem that you’re facing, i.e., construction defects, a catastrophic event, or just deferred maintenance, the solutions are not always as simple as they might appear. There are many complex issues that must be considered and dealt with properly in any construction project of this nature for the project to be successful.
Who will handle the following issues?
- Design, engineering and budget requirements
- Analyze the feasibility of materials, methods and other construction factors relating to cost
- Coordinate contract documents, drawings, specifications and schedules
- Qualify and coordinate contractors, either general or specialty contractors
- Hold a pre-bid conference and/or explain the project to the contractors
- Receive and analyze the bids for correctness and adherence to the specifications
- Secure the construction contract and schedule
- Coordinate the contractors’ activities to meet the association’s needs
- Review the work in progress to verify compliance with contract specifications, schedules and invoice requests
- Review change orders for accuracy and reasonableness
- Maintain cost accounting records
- Make sure lien releases are the proper release and correctly filled out
- Provide interpretations and resolutions to issues that arise
- Verify certificates of insurance for each contractor
- Review and identify problems with a contractors license
- Review and approve product samples, shop drawings, or other submittals
- Conduct final inspection of the project and develop a “punch list”
- Verify the receipt of all guarantees, affidavits, releases and manuals
This list could go on and on. The point of this is that someone must first know that these items (and many others like them) need attention and then must have the expertise to make sure that every item is properly addressed. Any one of these issues that is ignored or left to chance creates a potential for a much larger problem.
Your association would never consider defending itself in an accident liability case, and yet a disastrous construction project could easily cost you the same in damages. In either case you must have expert representation!
And, don’t think that the contractor that you hire is the one to do this for you. He has a profit motive while your motive is to accomplish the highest quality job at the least expensive price. The conflict between these motives is one that must always be kept in check by a knowledgeable advocate of the owner. In my experience most homeowner association boards are made up of intelligent, well meaning individuals.
However, these same individuals are generally not experienced at the business of managing a construction project, nor are they generally knowledgeable as to the laws and practices of the industry. Rarely do they have any experience when it comes to judging the construction materials, methods and techniques used by various construction trades. These same concerns would apply to your management company. Although some management companies are somewhat familiar with the process involved, many are not. Most management companies work hard to handle their daily tasks for the association and are not experienced construction managers. Once a management company handles a large reconstruction project for an association they quickly understand that this is a very specialized process that takes a great deal of time. It is a process that they are generally not equipped for and the typical management fees in no way cover the added work and responsibility of dealing with all the project issues.
In my opinion, it is also very important that the construction manager not be contractually or in any other way related to the contractor. There are contractors who will represent that they will handle both the duties of the construction manager as well as that of the contractor. There are also construction managers that will want to contract directly with the contractor. When either of these contractual conditions occur, there is great potential for a conflict of interest to arise. It is therefore my further opinion that the construction manager should be directly contracted to the homeowners association as an agent for the association working on the association’s behalf. Likewise the contractor should be hired directly by the association and paid directly by the association but managed by the construction manager. This arrangement greatly reduces the exposure for any conflict of interest between the contractor and the construction manager.
A competent construction manager should have strong communication skills and should have experience dealing with a wide range of individuals who can impact the outcome of your project. The following graphic demonstrates many of the relationships that a construction manager could have to deal with during the course of a project.
If your association is currently contemplating major reconstruction of any kind, do yourself and your association a big favor and consider hiring a knowledgeable advocate to help you through the process. In my experience a qualified and competent construction manager will provide an association with all that is necessary to achieve quality construction, a timely and well organized construction schedule, and cost savings. All this while giving them the peace of mind that they have made and are making the right decisions every step along the way.
Written by Dennis E. Brooks and Published in the May/June 1999 CAI Channels of Communication magazine.