CONTRACTORS

Recapitulation
Managing Contractors
What is a Contract and why is it Important
The Tendering Process
Supply-chain Management
Contractor Objectives vs Client Expectations
Contract Review Process & Dealing with Contract Variations
Common Loophole in Contracts
How to Handle Disputes and Contract Termination

OUTLINE

RECAPITULATI
ON

The main purpose of regular maintenance is

TO ENSURE THAT ALL EQUIPMENT REQUIRED
FOR PRODUCTION IS OPERATING AT
100% EFFICIENCY AT ALL TIMES.

HE IMPORTANCE OF MAINTENANCE

RECAPITULATI
ON

TPM

is a production management
method which has been
developed in Japan over the
past few decades.
TOTAL PRODUCTIVE
MANAGEMENT

REASONS for:
No
No
No
No
No

TPM AS A STRATEGY FOR

Accidents
Breakdowns
Small Stops
Slow Running
Defects

EXPANDED ROLE OF THE ARCHITECT IN THE BUILT ENVIRONMENT

SPP DOC. 205 POST-CONSTRUCTION
SERVICES

BUILDING & FACILITIES

ADMINISTRATION
Building Maintenance

RECAPITULATI
ON
Grounds & Landscaping
Supervision

2
Business Development &
Management

Building Equipment
Maintenance

SUPPLEMENTAL SERVICES OF THE ARCHITECT

SCOPE OF SERVICES
Building and Facilities Administration

RECAPITULATI
ON

ASSIST THE PROPER THIRD PARTIES

in seeing to it that all equipment are properly
maintained and in good working condition

air-conditioning
sprinkler system
generators
transformers
tele-communications equipment, etc.

BUILDING EQUIPMENT MAINTENANCE

THIRD PARTIESCONTRACTORS
A person or business which provides goods or services
to another entity under terms specified in a contract.
Unlike an employee, a contractor does not work regularly
for a company.

is anyone
you get in to work for you
who is not an employee
DEFINITION OF CONTRACTORS

Understand what
they want

Make them feel part

of the team

Set expectations

Give feedback

Build the relationship

Dont micromanage

When people work for

you,
you want to do right by
them

Pay them well

TIPS OF MANAGING CONTRACTORS

CONTRACT
is an agreement between two parties agreeing
upon the terms and conditions of a transaction

IMPORTANCE OF A CONTRACT

Facts
in Place

Fixed
Costs

Minimize
Risk

TENDERING
Process of competitive bidding
based on a defined scope of works
OBJECTIVES OF TENDERING
select a main contractor to
undertake the construction
phase of the project
achieve value for money
(cost, quality, innovation) in a
fair and equitable manner

All it takes is
commitment,
a bit of time to
understand
what is required, and the
willingness to give it a go.

DEFINITION OF TENDERING

1
2

PRE-TENDER
Expression of
Interest
Tender
Documents

TENDER

Call Tender
Tender
Tender
Addendums
Close Tender

3
EVALUATION

Tender Opening
Tender
Evaluation

4
AWARD & CONTRACT

Preferred Tender

Tender
Interviews
Tender
Recommendation

THE TENDERING PROCESS

CONSTRUCTION PROJECT DEVELOPMENT

SUPPLY CHAIN
used to describe the linkage of companies
that turns a series of basic materials,
products or services into a finished product
for the client

SUPPLY-CHAIN MANAGEMENT

GENERAL CONTRACTOR
SUPPLY-CHAIN

CONSTRUCTION SUPPLY-CHAIN

IMPORTANCE OF SUPPLY-CHAIN

SUPER

6
SIX

APPROACH

Build a relationship with your client

Communicate often and identify problems
Agree on what success is (goals and timelines)
Offer advice, direction, and input
Listen; and make sure you understand
Be transparent (Budget)

1
2
3
4
5
6

CONTRACTOR OBJECTIVES
VS CLIENT EXPECTATIONS

CONTRACT REVIEW PROCESS AND

DEALING WITH CONTRACT VARIATIONS

VARIATION
is a change to a contract
VARIATIONS may include:
Alterations
Alterations
Alterations
Alterations
Alterations

to the design.
to quantities.
toquality.
to working conditions.
to the sequence of work.

CONTRACT REVIEW PROCESS AND

DEALING WITH CONTRACT VARIATIONS

LOOPHOLE
A way of avoiding or escaping a cost or legal burden
that would otherwise apply by means of an omission
or ambiguity in the wording of a contract or law.

an accidental technicality
or unclear section of a
written document that
allows someone to avoid
following
a
rule
or
fulfilling an obligation
COMMON LOOPHOLE IN CONTRACTS

Mediation is a voluntary process in which

all parties to a dispute work with an
impartial mediator whoassists themin
finding ways to resolvetheirconflict.
Different than litigation or arbitration,
mediation is not a win/lose
determination. A skilled mediator
facilitates a solution to the problem
which best fits the needs of both parties;
the mediator does not decide who is
right and who is wrong. Because
mediation is similar to negotiation
(except that there is a neutral party
guiding the process), it is often referred
to as facilitated negotiations. The terms
mediation and facilitated negotiations
are used interchangeably in this article.

HOW TO HANDLE DISPUTES AND

CONTRACT TERMINATION

When a conflict arises with a contractor, you have several options.

EASIEST
NO COST
Kitchen table conference or phone call between you,
the homeowner, and contractor. Prepare by looking at your
contract. Find any paper records that are important. Bring to the
table family members and others. Pick people who have been
involved in talking with the contractors. Write down notes in
advance so you wont forget to discuss something important.
Listen carefully if the contractor explains something. Even though
you are not an expert, you can offer suggestions. You can also
offer ideas that other people suggest. If something has made you
angry, have this discussion after you have cooled off. Namecalling, tears or other expressions of emotion make others
uncomfortable. If others are uncomfortable, positive results and
solutions are less likely.
EASY
LOWEST COST Mediation. A neutral, third person helps the
parties to
discuss the situation,
HOW TO HANDLE DISPUTES AND
find the facts
CONTRACT
makes sure the parties
are really TERMINATION
hearing each other,
find alternatives to resolve the dispute.

Time: 2-10 hours; may take several weeks or more to arrange if there are
few arbitrators in your area.
Cost: Avg., $300+ (If you live in an area that has very few arbitrators,
then you may have to pay the travel expenses for an arbitrator to come
to your area.)
Read the Law: Maryland Uniform Arbitration Act, MD Code Courts & Jud.
Proc. 3-201 et seq. (link is external)
Note: The American Arbitration Association provides more in depth
information about arbitration on their website.
MORE FORMAL
SOME COSTS
Filing suit in Small Claims Court. If a claim is $5,000 or under, you may
want to represent yourself and file suit in small claims court. Prepare by
reading the contract. Be ready to point out where the contractor failed.
Bring a copy of the signed contract for the judge. Bring any witnesses or
papers that prove your point. If pictures would help to describe the
problem, bring them. Take notes on the problem and be ready to explain
carefully
what you think is wrong;HOW TO HANDLE DISPUTES
why the contractor is at fault; and
CONTRACT TERMINATION
how it can be fixed

AND

MOST FORMAL
MOST COSTLY
Hire a business lawyer for negotiation and/or to take
the case to court. Parties hire attorneys to negotiate
for them. Direct communication between parties is
difficult or prohibited if they are represented by a
lawyer. The end result in court is a judges decision.
Time: May take months or years for formal factfinding, trial and decision.
Cost: Avg. $500-3,000

HOW TO HANDLE DISPUTES AND

CONTRACT TERMINATION