Attendees Will Learn

1. How to avoid making costly mistakes when entering into construction contract agreements

2. Key steps to help ensure the best value is received when the CM/GC contracts with subcontractors

3. Critical process to ensure subcontractor change orders are fairly priced

4. Process to control costs related to materials purchased by the Contractor including material escalation/de-escalation and the current volatile climate surrounding tariffs

5. How to structure your contract to limit exposure to potential excessive billings for contractor-owned equipment

6. Possible overcharges for third party equipment to watch out for

7. How to avoid making excessive payments for Subguard® (Subcontractor Default Insurance) and/or Contractor Controlled Insurance Programs (CCIP)

8. Methods to effectively minimize the loopholes in contracts that create opportunities for contractors to realize excessive hidden profits

9. Strategies for partnering with management/construction consultants to ensure construction cost controls are working as anticipated to benefit the project

10. Owner’s Project Managers will learn specific problems to watch out for when managing their projects to avoid significant overpayments to their construction contractors

11. Owner’s Project Managers will learn how to effectively partner with their construction oversight teams to prevent significant overcharges and/or overpayments going undetected

 

Learn The Pros and Cons of

1. Cost reimbursable pre-construction services versus Lump Sum payments for pre-construction services

2. Pre-established labor billing rates versus reimbursement of actual wages and verifiable labor burden

3. Lump sum general conditions versus cost reimbursable general conditions

4. Lump sum self-performed contractor work versus cost plus fee with GMP for self-performed contractor work

5. Converting GMP contracts to lump sum contracts

6. Supported payment applications versus percentage of completion payment applications

7. Pre-agreed labor burden percentages versus reimbursement for actual defined labor burden costs

8. Bonding both the prime contractor and the subcontractors

9. Subcontractor default insurance aka Subguard® versus conventional performance and payment bonds

10. Savings Sharing clauses versus no savings sharing clauses

11. Worker’s Compensation and General Liability Insurance – Conventional insurance versus Contractor-Controlled Insurance Programs (CCIP)

12. Worker’s Compensation and General Liability Insurance – Conventional insurance versus Owner Controlled Insurance Programs (OCIP)

 

Other Learning Points To Be Covered

• Typical contractor fees for cost plus fee with GMP construction manager/general contractor projects of various sizes

• Whether or not to reimburse for general liability insurance or have it covered by Fee

• Typical charges for general liability insurance

• Typical charges for Subcontractor Default Insurance (Subguard®)

• Typical charges for Contractor Controlled Insurance Programs (CCIP)

• Typical charges for worker’s compensation when the contractor is self-insured and/or uses high deductibles

• Change order markup percentages allowed on subcontractor self-performed work and work performed by sub-subcontractors

• Actual material pricing and labor analysis for trade subcontract change orders

 

Course Outline

Introduction to Effective Management of Construction Activity

• Cost control objectives for construction projects

• Project team roles and responsibilities

• Delivery systems – fast track, design build, conventional

• Contract procurement methods, types, and phases

Cost Plus and Time and Material Contracts – Typical Overcharges

• Design contract billings for time and reimbursables

• Billings for personal computer and/or mainframe computer time

• Construction contractor and/or construction manager billings for labor and labor burden

• Billings for contractor-owned equipment, third-party equipment rental, expendable tools, equipment and

• consumables, and material used during construction

• Transactions dealing with subcontractors

Construction Change Orders

• Typical overcharges in lump sum change orders

• Electrical change order – discussion exercise

• Change order labor and labor burden pricing

Lump Sum or Unit Price Contracts

• Quality and scope of work overcharges

• Substitution of materials or methods

• Not performing required services

• Not installing proper quantities

• Special types of lump sum contract overcharge situations

• Adjusting allowances

• Required bonds and insurance

• Improper charges for sales tax

• Special unit price overcharge situations

• Excessive quantities billed

• Improper measurement method used

• Inaccurate measurements

• Billings for excessive quantities actually performed