General contractor v. CM, page 8

Sunday, April 01, 2007 at 5:04 PM EDT

REMINDER: all these blogs' references to construction manager are to the particular form of construction management services being used on public school building construction in which the work of the project is bid by “work packages” directly to the school district.

If the school district is using a construction manager, the CM will first establish an office at the site of the project, and will begin the paperwork trail of shop drawings, submittals, etc. This process will be similar to that of the general contractor, with crosschecks and approvals tracked. Subcontractors for site work and underground utilities will be called to the site, and work will begin. Each subcontractor from this point on will rely on the previous subcontractor to have done his work correctly. If there are errors to be corrected at any point, any subcontractor who was scheduled to follow may have a claim for delay and extra work. Many things can go wrong and must be handled by the school district. A few are listed below.

A common error is missed rebar dowels from the footing into block walls at the correct spacing. When this happens, the remedy is usually drilling holes in the footing, inserting the correct rebar at the proper spacing, and epoxying it in place. This leads to extra costs for the subcontractor in terms of both material and labor. Depending on the extent and size of the project, the masonry subcontractor may have a claim for delay and/or re-mobilization.

If a subcontractor is scheduled to arrive with his work forces on a certain day, and is not able to work due to something that occurred before, or there is not enough work area for his crew due to poor scheduling of the work, he may have a claim for delay and/or re-mobilization.

If a subcontractor has developed a cash flow problem, whether on this job or another job he is contracted to do, he may be unable to get materials delivered, or may no longer be able to hire adequate workmen to do the project. His contract is with the school district, and he is in default. Under the construction manager system, the school district must find an answer, first notifying the bonding company used by the subcontractor, and then working with the bonding company to find another subcontractor to take over the contract. In the meantime, claims by the rest of the subcontractors affected are piling up and the work is not proceeding. Even if the CM had proposed a scheduled date of completion, no such date has any validity for any subcontractor and penalties cannot be imposed.

All school districts are required in Missouri to assure that workers are paid the "prevailing wage" for their county. There is at present a $10.00 per day per workman penalty, in addition to back wages, for failure to pay this wage rate. Under the CM system, the school district is the next responsible party if a subcontractor does not pay.

All claims are the responsibility of the school district; the construction manager is only the paper pusher acting on behalf of the public owner. By law, the construction manager has only contracted with the owner to furnish his "skill and judgment in cooperation with, and reliance upon, the services of the project architect or engineer." (Missouri Statute Chapter 8, Section 8.683).

If a general contractor had been chosen by competitive bidding, all of the above responsibilities and costs would have fallen to that contractor, and the school district would still be on track to completion by the scheduled date. The school district could have specified a completion date and daily damage amount in the contract with the general contractor. This is not an option under the CM method.

Next: what does each method really cost?