Today I came across a great article that outlines what owners need to be aware of when undergoing a construction project.
Some excerpts that struck me were:
“Waste, excessive cost and delays can result from poor coordination and communication among specialists. It is particularly in the interest of owners to insure that such problems do not occur. And it behooves all participants in the process to heed the interests of owners because, in the end, it is the owners who provide the resources and call the shots.”
“To carry this protective attitude to the extreme, the specifications prepared by an A/E firm for the general contractor often protects the interest of the A/E firm at the expense of the interests of the owner and the contractor.”
This is what we need to pay attention to:
“In order to reduce the cost of construction, some owners introduce value engineering, which seeks to reduce the cost of construction by soliciting a second design that might cost less than the original design produced by the A/E firm. In practice, the second design is submitted by the contractor after receiving a construction contract at a stipulated sum, and the saving in cost resulting from the redesign is shared by the contractor and the owner. The contractor is able to absorb the cost of redesign from the profit in construction or to reduce the construction cost as a result of the re-design. If the owner had been willing to pay a higher fee to the A/E firm or to better direct the design process, the A/E firm might have produced an improved design which would cost less in the first place. Regardless of the merit of value engineering, this practice has undermined the role of the A/E firm as the prime professional acting on behalf of the owner to supervise the contractor.”
What are your thoughts, comments or ideas?
Gina,
ReplyDeleteIn plain and simple English please tell me who are the owners? When you say the owners are you referring to the shareholders? If I'm correct in my assumption the owners would be the Board of Directors(unit owners). Also, what is an A/E firm?
The A/E firm would be Mr. Antonucci. So, where does the managing agent fit in the scheme of things. I have not read the complete article have some other things to do but I'm sure I would have some additional questions once you answer the ones submitted.
After that I will have a clear concept in my mind about who we are talking about.
thanks,
Jimmy.
Jimmy,
ReplyDeleteThe owners can be the shareholders, but since they have to make these decisions, it's the Board with at times a vote from the Shareholders.
I saw your post on Facebook, so I know that you know what a A/E is...Antonucci's firm is that. What I was highlighting to everyone here are the cautions about giving them too much power.
I'm still trying to figure out the Managing Agent's role. If we had the managing agent's contract we could figure out what their current roles and responsibilities are and where this project fit into that.
Gina
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ReplyDeleteGina,
ReplyDeleteWell, when I asked the question the phone rang at the same time and I got distracted with something else. So, having read further into the article everything became clear, in between looking up words (smile). Keep in mind, that I'm not a weekend Engineer.
For the first time ever, we on the same page but I will eat my hat if they let you see the contract between Hudson court's and the Managing Agent.
Clearly, I understand everybody's role except Gramatan Management. Despite all this, when we can get an answer to that question I’m going to throw a party, and hey, ha, ah I’m not cheap.
Jimmy.