The Devil Is In The Details, aka The Specifications
For the most complete picture, don’t gloss over the specifications
A picture is worth a thousand words.
There is a lot of truth in this old saying, and this is why when handed a set of construction documents the drawings are typically the first part to be scrutinized. Reading a set of drawings provides a quick understanding of a construction project. But the construction drawings provide only a partial and incomplete picture of the overall project scope and must be viewed in the context of the requirements embedded in the written specifications.
What’s fascinating, and quite frankly disappointing, is how often the written specifications get glossed over, at best, if not completely ignored by project stakeholders as they focus on the drawings during design reviews, estimating, and proposal efforts. Considering that in most cases, the specifications take precedence over the drawings in case of conflicts, it is even more surprising how little attention specifications often get.
On the other hand it is understandable. Written specifications are about as dry and unexciting prose as can be written and for large projects can be hundreds or even over a thousand pages in length. In today’s hectic environments where time is of the essence, and deadlines must be met, it is easy to rely on the drawings and assume the specifications will reflect “industry standards.” And this becomes the root-cause of many construction related issues and conflicts as the project progresses.
GETTING WHAT YOU PAID FOR
I have known several projects where general contractors “divided up” the specifications to the respective trades, subcontractors, and vendors/suppliers in lieu of providing each with a complete set for their use in providing proposals for their respective scopes of work. Many of the subcontractors were unaware of significant CSI Master Format Division-00 (Procurement and Contracting Requirements) and Division-01 (General Requirements) specifications related to various issues regarding changeorders, substitutions, project management & coordination, commissioning, training, warranties, and close-out documentation requirements, etc., that directly affected the deliverables and level of effort they were required to provide.
When the owner and/or construction manager brought up these requirements after contracts had been awarded and executed, it became painfully obvious that large gaps existed between what was valued for in the bid pricing and what was specified in the contract documents.
When owners find themselves in this situation, they are inevitably faced with a set of difficult choices. One option is to simply enforce the contract requirements and force the contractors to comply. This can result in contract disputes between the general contractor and the subcontractors, contractors faced with reduced profit margins, or even potential losses, and inevitably impacted parties seeking opportunities to cut costs (by sometimes cutting corners). Overtime gets reduced, legitimate changeorders suddenly are priced at premiums rates, contractors stop paying expediting fees for deliveries, etc., all of which can potentially impact project schedule, costs, and quality.
Another option is to provide relief to the contractors by either approving extra fees through contract modifications, authorizing change orders at premium rates, extending schedules and deadlines, or compromising on the quantity and/or quality of deliverables. Faced with these choices it is no wonder that “preferred” contractors and vendors get favorable consideration during bid awards. Past experience in performing similar work for an owner at least minimizes the “ambiguity” excuse for not knowing expectations.
AVOIDING THE LOWBALL BID
The opposite is also true in some cases where unsavory contractors scrutinize the bid set drawings and specifications and then “bid the holes,” or in other words look for gaps and ambiguities that allow them to make assumptions in their favor that will allow for lower pricing and/or likely opportunities for change orders when the gaps become apparent during construction. This is akin to “low-balling” in order to win the contract with the assumption that there will be ample opportunity to recoup fees and profit margins through lower quality products or services, or change orders.
Again, in many instances, these gaps and ambiguities reside in the Division-01 specifications regarding commissioning, training, close-out documentation, etc. Some typical examples are issues regarding who will provide load banks, load bank cables, and of what size, quantity, and for what duration. Who provides the testing meters and trained technicians? Will load testing be required and at what load profiles? Who pays for the diesel fuel oil for operating the generators during load tests? Who writes the methods-of-procedures (MOPs) when the project affects critical operating sites? Who provides the training and to what extent? Who has to be present during inspections, testing, and commissioning?
When owners find themselves in this situation, they are again faced with a set of difficult choices. One is to accept the resulting change orders necessary to bridge the gaps between what was expected vs. what was specified, and accept the associated impacts to schedule and budget. Again, the other option is to compromise on the quality and/or quantity of deliverables and services.
Another somewhat intangible impact is that the quality contractors either have to “bid the holes” as well in order to compete, or hope that their higher priced bids will become competitive by virtue of a bid-leveling process and/or that they will win the project based on “best value” or reputation.
Regardless, the result of both scenarios is a lose-lose situation where neither the owner nor the contractors achieve the original goals embarked upon at the project onset. At best, good contractors and benevolent owners work together to find optimal compromises and solutions that minimize impact to each and result in satisfactory outcomes for both. At worst, the project gets delayed as issues go to arbitration or litigation, and only the lawyers come out ahead.
BE AS SPECIFIC AS POSSIBLE
Fortunately, there is a simple and easy solution that preempts both situations from occurring. The first step is to establish very detailed, comprehensive drawings and specifications that have minimal conflicts, accurately depict both prescriptive (means, methods, products, etc.), and performance-related requirements. This eliminates the “gaps and ambiguities” and places the onus for understanding, complying, and delivering what the owner expects on the contractors. This also sets an even playing field for the reputable, high quality contractors so they can compete without sacrificing the quality products and services they provide.
Second is to solicit bids from reputable contractors with not only extensive experience in the type and magnitude of proposed work, but also those with reputations for delivering quality results with minimal changeorders. It doesn’t hurt to include new contractors provided the process includes a detailed “bid-leveling” process in the bid review and comparison phase. This process must include detailed scrutiny of the technical content and approach, and be set up so potential bidders are queried to explain in detail what they have valued for where significant differences are identified when comparing the respective proposals.
But the most important action is to require all contractors attend a pre-bid meeting where the project specific scope and requirements are described and discussed in detail. This should occur on-site and include a work space walkthrough for projects on existing facilities. A word of caution here: it is crucial to point out where existing conditions do not comply with the new requirements and specifications.
The key is to ensure the pre-bid meeting includes presentations by not only the owner, but also the architect and/or engineer of record and the commissioning agent. This presentation should address the project purpose, goals, and objectives as described in the owner’s project requirements (OPR) document; the project specific details, and a cursory review of the A&E’s basis-of-design (BOD) including a review of any non-standard requirements and expectations; and a review of the Division-01 specifications related to commissioning requirements, training, close-out documentation, meetings, and expected roles, responsibilities, and participation required by not only the general contractor, but also any sub-contractors. It is beneficial to also include templates and examples of submittals, commissioning plans, forms and documents, MOPs, training plans, and close-out documents where available.
The general contractors should be encouraged to invite and require potential sub-contractors to attend and participate in the pre-bid meeting when they have been identified. Regardless, the owner should require in the RFP that all general contractors identify who their major subcontractors and vendors will be and include in their bid proposals similar background and qualification information for each.
Prior to contract award, the owner should require each responsive bidder to attend a “technical interview” and present their proposed team, qualifications, and detailed proposal. At this interview, each contractor and associated subcontractor team should be required to acknowledge that they have read and understand all of the project requirements, state any identified gaps or ambiguities they may have identified or perceived in the bid package, and clearly state any exclusions or exceptions to the RFP and project requirements. This interview should again include not only the owner’s representatives, but also the A&E and commissioning agent to address any questions or clarifications that arise.
The goal is to get the devil out of the details by ensuring all parties have a thorough and comprehensive understanding of what the project goals and requirements are, and to value providing the products, services, and level of effort necessary to comply in their bids and proposals. This requires aligning all stakeholders’ (owners, A&E, commissioning agent, and contractors) expectations before contracts are awarded and commitments made. When this occurs, it will almost always result in a win-win situation where the project is delivered to the satisfaction of the owner on schedule and on budget and at a fair profit for the contractors.