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post #1 of 25 (permalink) Old 10-05-2011, 11:04 AM Thread Starter
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Anyone work for a general contractor or manages construction projects at their employ

I am reviewing these construction projects and have noticed a different level of supporting documentation for subcontractor expenses between two projects.

The two contracts do not specify exactly the level of required documentation, so I am looking for best practice measures. The explanations that I have received so far is that the Lump Sum contract does not require as much support as does the GMP contract. It makes sense, but I would like to verify or compare this concept to some proven best practices.

The Lump Sum project is only supported by Applications for Payment and Schedules of Values and Lien Waivers, while the GMP project has that plus invoices, and material and labor breakdowns, as well as the same detail for sub-subcontractors.

I am all over google on this, but I am starting to go blind and still have not found anything that I can reference with comfort as guidance.

Thanks!

Greg

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post #2 of 25 (permalink) Old 10-05-2011, 11:11 AM
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I'll be your huckleberry.

Definitely the norm to have less documentation on lump sump projects as the unit price contracts have to have a multitude of supporting measurement and survey information to support the quantities.

What specific questions do you have? ...also, it depends greatly on the nature of the project, public/private, contaminated soils/remediation, site develepment/road or highway. That sort of thing.

Tom

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post #3 of 25 (permalink) Old 10-05-2011, 11:33 AM Thread Starter
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These are a private projects of healthcare nature subjected to certificate of need approval. I am comfortable with the compliance aspects of the projects, I am just reviewing the support for the expenses incurred by the general contractor and subcontractors.

Would there be a source that I can reference that would directly state that expenses under a GMP contract require detailed “x, y, and z”? While expenses under a Lump Sum contract can be satisfied with the standard AFP, SOV and Lien Waiver?

The more I think about it and through conversations with people in charge of the projects I am concluding that this should be just common sense. However, it would make my boss feel better and make me look better if I could support those assumptions with a regulation or standard from an “authority”.

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post #4 of 25 (permalink) Old 10-05-2011, 11:37 AM
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Many organizations that do not have their own contracts terms and conditions reference AIA contract documents.

They can be found and reviewed here:
http://www.aia.org/contractdocs/index.htm

I've used them a bunch in the past when I was on the bidding/contract preparation side of things...now I'm with a general so I'm dictated TO

Tom

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post #5 of 25 (permalink) Old 10-05-2011, 11:38 AM
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A better question, what does it matter? Its all fluff anyways.

Jordan
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post #6 of 25 (permalink) Old 10-05-2011, 11:38 AM
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A better question, what does it matter? Its all fluff anyways.


Sure it is.

Please do not jack an honest thread request for information.

Tom

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post #7 of 25 (permalink) Old 10-05-2011, 11:46 AM
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Sure it is.

Please do not jack an honest thread request for information.
It was a serious question... Its amazing what you can do in photoshop...

Jordan
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post #8 of 25 (permalink) Old 10-05-2011, 11:48 AM
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Contract documents are contract documents. You can't change them in photoshop. They're controlled a bit tighter than that

...back on topic.

Tom

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post #9 of 25 (permalink) Old 10-05-2011, 11:51 AM
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Contract documents are contract documents. You can't change them in photoshop. They're controlled a bit tighter than that

...back on topic.
The supporting documentation is what can be photoshopped or made to be whatever the sub contractor wants them to be. Why waste your time getting extra paperwork that is irrelevant?

Smarter to spend the time and energy getting a comprehensive bid process

In the future keep your ignorant remarks to yourself.

Jordan
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post #10 of 25 (permalink) Old 10-05-2011, 11:54 AM
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Destroying yet another thread. What the heck are you talking about? Contract documents ARE the bidding process.

Who is cluttering up a perfectly fine thread with ignorant comments? Stay out of this thread unless you have something constructive to add to it.

Tom

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post #11 of 25 (permalink) Old 10-05-2011, 11:54 AM
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Originally Posted by gsd656 View Post
I am reviewing these construction projects and have noticed a different level of supporting documentation for subcontractor expenses between two projects.

The two contracts do not specify exactly the level of required documentation, so I am looking for best practice measures. The explanations that I have received so far is that the Lump Sum contract does not require as much support as does the GMP contract. It makes sense, but I would like to verify or compare this concept to some proven best practices.

The Lump Sum project is only supported by Applications for Payment and Schedules of Values and Lien Waivers, while the GMP project has that plus invoices, and material and labor breakdowns, as well as the same detail for sub-subcontractors.

I am all over google on this, but I am starting to go blind and still have not found anything that I can reference with comfort as guidance.

Thanks!
Talk to your accountant and see what they want. Its usually a financial reason for the supporting documentation - especially taxes and devaluing.

Jordan
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post #12 of 25 (permalink) Old 10-05-2011, 11:56 AM
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Destroying yet another thread. What the heck are you talking about? Contract documents ARE the bidding process...dude.

Stay out of this thread unless you have something constructive to add to it.
The bid form is part of the contract documents, but can be utilized to the owner/project managers advantage. It can be used to qualify/disqualify bidders, it can also be used to get broken out prices for trades, supplies, vendors, etc.

Jordan
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post #13 of 25 (permalink) Old 10-05-2011, 11:57 AM
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When did I reference the bid form?

Lecture me some more on the bid process, please. I haven't a clue how it works.

Tom

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post #14 of 25 (permalink) Old 10-05-2011, 11:59 AM
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When did I reference the bid form?

Lecture me some more on the bid process, please. I haven't a clue how it works.
Obviously not by your previous responses. When you want to sit down and go through it let me know (although I do charge by the hour for consulting).

GSD talk to your financial people, if they don't care - save yourself the extra paperwork and save your contractors some grief.

Jordan
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post #15 of 25 (permalink) Old 10-05-2011, 12:01 PM Thread Starter
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Thanks, the contracts in place are a customized versions of those available through the AIA. Unfortunately, they only stipulate that besides the standard AFP, SOV and Lien Waiver the remaining supporting documentation should be “satisfactory to Owner”. LMAO

The information I am reviewing is “satisfactory to Owner” and I am trying to determine if this “satisfaction” is warranted or supported by some kind of authority or at the least best business practice.

Greg

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post #16 of 25 (permalink) Old 10-05-2011, 12:02 PM
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Obviously not by your previous responses. When you want to sit down and go through it let me know (although I do charge by the hour for consulting).

GSD talk to your financial people, if they don't care - save yourself the extra paperwork and save your contractors some grief.
...and put a lawyer on retainer if you're not going to clarify the payment and QA/QC process that goes hand in hand with an efficient construction project. You know, all that "fluff" in the contract docs.

I'll have to pass this around the office over here for some lunch time comedy!

Tom

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post #17 of 25 (permalink) Old 10-05-2011, 12:04 PM Thread Starter
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Loki, I think you are missing the point of my question or I may not have communicated it correctly. Of course there is always a potential for fraud, but if the right controls are in place, you can minimize most of it.

As far as your suggestion, thank you, but it does not address my concern.

Greg

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post #18 of 25 (permalink) Old 10-05-2011, 12:05 PM
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Thanks, the contracts in place are a customized versions of those available through the AIA. Unfortunately, they only stipulate that besides the standard AFP, SOV and Lien Waiver the remaining supporting documentation should be “satisfactory to Owner”. LMAO

The information I am reviewing is “satisfactory to Owner” and I am trying to determine if this “satisfaction” is warranted or supported by some kind of authority or at the least best business practice.
Having gone through a contract takeover while managing construction ops on a pretty large municipal contract I can sympathize. The general was filing for bankruptcy and actually paying old subs from other jobs with current pay outs! I had to roll through all of the financials with him, set up an escrow for a third party direct pay system and talk the Village down from the ledge

I can shoot you my cell number if you'd like to discuss over the phone?

Tom

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post #19 of 25 (permalink) Old 10-05-2011, 12:10 PM
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...and put a lawyer on retainer if you're not going to clarify the payment and QA/QC process that goes hand in hand with an efficient construction project. You know, all that "fluff" in the contract docs.

I'll have to pass this around the office over here for some lunch time comedy!
I plan on doing the same for yours. The supporting documentation (unless you audit the contractor is useless).

Jordan
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post #20 of 25 (permalink) Old 10-05-2011, 12:15 PM
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Thanks, the contracts in place are a customized versions of those available through the AIA. Unfortunately, they only stipulate that besides the standard AFP, SOV and Lien Waiver the remaining supporting documentation should be “satisfactory to Owner”. LMAO

The information I am reviewing is “satisfactory to Owner” and I am trying to determine if this “satisfaction” is warranted or supported by some kind of authority or at the least best business practice.
What information has been provided besides the Pay App, Values and Waivers? In general, as long as your field notes and construction schedule are matching up with the requested pay and all of the bottom dollars are adding up properly I've been good with those documents. Of course, pay history and contractor performance have to be weighed as well. What is your involvement in the project, if I may ask? That can have an impact in how you assess these things as well.

Tom

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post #21 of 25 (permalink) Old 10-05-2011, 12:16 PM
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I plan on doing the same for yours. The supporting documentation (unless you audit the contractor is useless).
Ooookie dokie my man.

Tom

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post #22 of 25 (permalink) Old 10-05-2011, 12:18 PM
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...and put a lawyer on retainer if you're not going to clarify the payment and QA/QC process that goes hand in hand with an efficient construction project. You know, all that "fluff" in the contract docs.

I'll have to pass this around the office over here for some lunch time comedy!
Whatever makes you happy. And I would assume everyone in this business has lawyers in house or on retainer.

GSD sorry, counldnt be more help. Good luck.

Jordan
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post #23 of 25 (permalink) Old 10-05-2011, 12:32 PM Thread Starter
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Cerk, thanks for the number, I may reach out to you next week if more questions come up.

I am doing a Certificate of Need audit, vs a true construction process/project audit. So I am much more high level, verifying that dollars add up and are “supported”, verifying that the proper review by project managers and architects was done, to ensure project progress is reflected reasonably, before payments are authorized and so on.

So far I have not encountered any material issues. The question stemmed from the fact that on one project I am swimming in documents supporting each draw and on the other project, the documentation is much more limited.

Greg

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post #24 of 25 (permalink) Old 10-05-2011, 12:38 PM
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Cerk, thanks for the number, I may reach out to you next week if more questions come up.

I am doing a Certificate of Need audit, vs a true construction process/project audit. So I am much more high level, verifying that dollars add up and are “supported”, verifying that the proper review by project managers and architects was done, to ensure project progress is reflected reasonably, before payments are authorized and so on.

So far I have not encountered any material issues. The question stemmed from the fact that on one project I am swimming in documents supporting each draw and on the other project, the documentation is much more limited.
That's not atypical...given first the difference in contract structure and second the potential difference in Owner/Contractor and the associated relationship. If they are different owners/developers between the two they can have drastically different structures in place for invoicing and payment.

We see it all the time...frankly we've passed on some projects because of the multitude of paperwork required! Just be sure to double and triple check any change orders, especially high dollar items as that's one place contractors can get a leg up cost wise on the pay app.

Feel free to give me a ring any time next week if need be.

Tom

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post #25 of 25 (permalink) Old 10-05-2011, 11:29 PM
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This is why you bond your contracts. Nobody is more thorough on contract docs than insurance companies that are indemnified on the project.
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