November 2018 — The terms construction documents and contract documents are often used interchangeably and casually in everyday practice. Technically, construction documents are two of several components of construction contract documents.
Construction Contract Documents
In a contractual sense, a construction contract consists of four separate types of documents:
- The written legal agreement between the building owner and the builder
- The construction drawings and specifications
- The addenda to the drawings and/or specifications
- Change orders to drawings, specifications, and/or the written legal agreement
Written Legal Agreement
The actual written agreement serves as a legal umbrella for a range of other documents that provide the specific details of what is to be accomplished. The written agreement spells out the times of performance; the responsibilities of the GC to the building owner and to his or her subcontractors; the cost of construction; procedures for creating, approving, and processing change orders; progress payments for work performed; legal procedures for resolving disputes; and other general matters.
The written agreement incorporates by reference the other contract documents: drawings and specifications, addenda, and change orders. The contract language referencing these items is what gives them legal power in the construction contract.
Construction Drawings and Specifications
As distinguished from contract documents, the construction documents are the final, detailed drawings and specifications that completely document the scope of the general contractor’s (GC) responsibilities and those of the subcontractors. Construction documents describe in detail what each and every building component is made of, and how they are fastened, connected, and put together.
The Addenda
Addenda are revisions to drawings, specifications, or bidding instructions issued after contractors have been invited to submit bids, but before the bid due date. Their inclusion in contract documents is vitally important to avoid or resolve disputes over what is and is not included in submitted bids.
Addenda often change the scope of the contract. In this context, scope refers to the outside limits of the time, cost, and physical space allocated for performance of a contract. Any addendum that changes one or more of these contract limits constitutes a change to the contract scope.
Change Orders
Change orders are similar to addenda, but they refer to changes in contract scope made after the construction contract has been awarded to a particular builder. Of all the components of construction contracts, change orders create the most difficulties because they almost always involve increased costs and may extend time frames, both of which have adverse consequences to the building owner.
Where Construction Documents Fit in Typical Project Delivery
Construction documents are developed relatively late in the entire project delivery process, near the end of the design stage of project implementation. The completion of construction documents is often rushed in an attempt to make up time lost in earlier project stages.
Many types of drawings are produced to finalize a wide range of decisions that will be defined and detailed in the construction documents. A great deal of work and decision making must be done before the construction documents are begun. It is critical to make all major space decisions before work begins on the construction documents. At this stage, time is most likely scarce. Construction documents are labor intensive, and any revisions of project scope will be very expensive and time consuming. Therefore, revisions should be avoided as much as possible and kept to an absolute minimum.
Construction documents also form the foundation of all the services performed in the construction stage of project implementation. If the construction documents have been well prepared and coordinated, it is likely that construction will proceed relatively smoothly. If they are hastily prepared, vague, sloppy, or uncoordinated, construction will be plagued with delays, disputes, and cost overruns.
Contractual Significance
To fully recognize the significance of construction documents, the functions they are intended to serve must be understood. Construction documents:
- Define exactly what is to be built
- Enable enforcement of the terms of the construction contract and support the legal position of the owner if disputes arise
- Define the limits of the contractor’s responsibility
- Enable development of accurate construction cost estimates and bids, and provide the basis for calculation of change order costs
- Provide guidance to subcontractors on how to coordinate their work
- Demonstrate the owner’s intention to comply with applicable building codes
- Affect rates for commercial liability insurance premiums
- Become integral parts of loan application packages if funding must be borrowed
Notice that construction documents are intended to serve these functions. In practice, there are many instances in which the documents fail to perform as intended and create severe contractual difficulties that adversely affect project management.
Enforcement of the Construction Contract
Most facilities customers assume that, after all the preliminary drawings and projects requirement program (PRP) approvals, there is no question in anyone’s mind as to exactly what is required, and they will get exactly that. In many cases, however, this does not happen. The results are a profound sense of discouragement and frustration just before the project is completed and a major management headache for the project manager. How does this situation come about?
In most cases, the construction drawings and specifications are not explicit enough to squarely define a contractor’s responsibility. For example, if a drawing identifies millwork on a floor plan but provides no elevations or details that describe how it is to be built, a contractor has basically two choices. The contractor can either keep costs down by building the minimum acceptable, for example, using the cheapest grade of wood, fasteners, braces, and hardware, or build a high-quality product and estimate a much higher cost (a risky position for a competitively-bid project).
If the facility manager and the GC have a dispute over what the contract calls for, the GC has the right to assume that any solution that looks like the description on the floor plan will suffice, and any arbitrator or judge will support that position. Many courts find themselves unable to support an owner’s position because the drawings do not provide anything that the court can enforce.
This article is adapted from BOMI International’s Facilities Planning and Project Management course, part of the FMA designation program. More information regarding this course or BOMI International’s new High-Performance Sustainable Buildings credential (BOMI-HP™) is available by calling 1-800-235-2664. Visit BOMI International’s website, www.bomi.org.