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Director of Building Commission Offers Advice on Contracts

Wed February 15, 2006 - Southeast Edition
CEG



Changing project delivery systems make contracts and defining the role of the contractor more important than ever.

“Your contract defines your relationship,” said Alabama Building Commission Director Kippy Tate. “The owner might be your good golfing buddy, but you need to define the business relationship in a contract.”

Tate, speaking at a Birmingham Section meeting, said a construction manager (CM) sometimes is brought on board before an architect or a general contractor. The use of a CM is increasing on public work and is often misunderstood, he said.

“All contracts are public record,” Tate said. “If you are being brought into a CM job, you need to know what your role is. The contractor often doesn’t see the CM contract and he needs to.

“You should modify the special provisions in a contract, otherwise the bed is already made. Go into special provisions and qualify your involvement.”

The Building Commission director also said a contractor should identify how liquidated damages are defined up front. The same goes for dispute resolution. All this should be defined in the contract before the job begins. He said the contractor also should determine who controls the cost of the job before putting a bid together.

“I would imagine it’s pretty expensive to put together a bid,” Tate said. “You want to be sure the job will get built.

“Another thing that leads to a problem is being paid and being paid on time,” he said. “There should be a payment provision in the contract and it should be well defined. Put an active process in place to track your money. To think that money is just sitting on some bureaucrat’s desk just infuriates me.

“Don’t be shy about getting your money. You’re not doing this for charity. Just as the owner may want liquidated damages on you, I’d put penalties on the money owed you.”

Some more advice: “Ask questions. When you volunteer to put a bid in without asking questions whose problem is it if something goes wrong? Yours. Be honest about it, ask questions: who are the owner, the user and the architect? Ask around and find out how the architect does on the type of job you are bidding.”