ETHICS

Canons are generalized as broad principles of conduct

GO.PCPCE
1. Canon I : General Obligations
a. Knowledge & Skill
i. Strive to improve
b. Standards of Excellence
c. Natural & Cultural Heritage
d. Human Rights
i. Discrimination
e. Human dignity and health safety and welfare of public
2. Canon II : Obligations to the Public
a. Conduct
i. Shall not violate law
ii. Payments or gifts
iii. Fraud or wanton
iv. If employer or client violates law
1. Advise person against
2. Refuse to consent decision
3. Report to local officials
v. Should not direct clients in an illegal manor
b. Public Interest Services
i. Probono is encourage
c. Civic Responsibility
i. Involvement in civic activities to improve appreciation of arch.
ii. When making public statements need to state if you are being paid
3. Canon III : Obligations to the client
a. Competence
i. Service clients in a timely and competent manor
ii. Take into account applicable laws
iii. Not undertake projects beyond ones capabilities
iv. Not alter scope w/o clients knowledge/consent
b. Conflict of interest
i. Professional judgement effected by another project
c. Candor & Truthfulness
d. Confidentiality
4. Canon IV : Obligations to the Profession
a. Honesty & Fairness
i. No wet stamping
ii. No false statements or material facts
b. Dignity & Integrity
i. No falsifying professional qualifications
5. Canon V : Obligations to Colleagues
a. Professional Environment
b. Intern & Professional Development
c. Professional Recognition
6. Canon VI : Obligations to the environment
a. Sustainable Design
b. Sustainable Development
c. Sustainable Practices
NCARB CODE OF CONDUCT

• Rule 1 : Competence
o Protect the health safety and welfare
o Account for all applicable state and municipal building laws and regulations
o Qualified by education training and experience
o Shall not practice if in the boards judgement such persons professional competence is impaired
by physical or mental disabilities

• Rule 2 : Conflict of Interest

o Shall not accept compensation in connection with services
o Disclose any direct or indirect financial interest which is substantial enough to influence
judgement in connection with the performance of professional services
o No kickbacks from equipment or material suppliers in connection with specifying or endorsing
their products
▪ Does not mean customary and reasonable business hospitality, entertainment or
product education
o Impartial decision maker
• Rule 3 : Full Disclosure
o When making public statements, shall disclose whether or not compensation was accepted
o Accurately represent qualifications, capabilities, experience and scope of responsibility of work in
which claiming credit
o If ever employer or client against architects advice violates applicable laws or regulations which
will affect the safety to the public, shall:
▪ Report the decision to the local building inspector or public official charged with
enforcement of the applicable laws
▪ Refuse to consent decision
▪ Terminate services with reference to the project
• If termination, shall have no liability to client or employer
o No false statements
o Do not assist someone for registration that is known to be unqualified in education, training,
experience or character
• Rule 4: Compliance of Laws
o Shall not violate laws
o No gift to government official with the intent of influencing the judgement in connection with a
prospective or existing project
o Disciplinary action
o Fair labor standards act and discrimination
• Rule 5 : Professional Conduct
o An architect shall be a resident and regularly employed in office
o May sign and seal technical submissions only if
▪ Prepared by the architect
▪ Prepared by persons under architects responsible control
▪ Prepared by another architect registered in the same jurisdiction if the signing and
sealing architect has reviewed the other architects work and either has coordinated the
preparation of the work or has integrated the work into his own technical submission
▪ Prepared by another architect registered in any US jurisdiction and holding the
certification issued by NCARB
• The signing and sealing architect has reviewed the work and integrated into
own technical submission
• The other architect technical submissions are prototypical building documents
o Not make any gift other that nominal value (hospitality or entertainment) with the intent of
influencing the judgment of an existing or prospective client in connection of a project
o No fraud or wanton
o Not make misleading, deceptive or false statements or claims
OFFICE ORGANIZATION
• Departmental Organization
o Most traditional structure
o Aka horizontal or flat structure
o Very efficient, standardize and fine tune
o Difficult for employees to gain experiences
o Project moves from department to department
o Assembly line
• Studio Organization
o Aka vertical or tall organization
o Each studio responsible for entirety of a project
o Work well with a strong project manager
o Sometimes combined with specialized studios
o Close knit and communicative

RESPONSIBILITIES FOR A PROJECT

• Owner
o Regulations permitting and compliance
o Traffic
o Survey
o Hazardous materials
o Geotech (subsurface soil analysis – anything underground)
o Legal/permitting

• Architect
* Denotes a base service per B101
o Structural base services *
o Civil
o Landscape
o MEP *
o a/v
o Lighting
o Acoustic
o Cost estimator
o Code consultant
o Sustainability
PROJECT DELIVERY

• Agency : The relationship of the owner-architect-contractor

o 3 Parties
▪ Owner : Principal
▪ Architect – Agent
• The IDM to the contract, UNO
• Responsible for administering the contract
• The “Fiduciary” to an Owner
o Fiduciary : entrusted with a property for safekeeping
▪ Contractor – Vendor/3rd Party
• Contract Types:
o General Prime contract:
▪ Single agreement with one contractor
o Multiple Prime Contracts
▪ Major parts of project contracted separately with the owner
• , ie: mechanical, electrical, plumbing,
▪ Variation of Design Bid Build
▪ 3 Reasons to select MP
• Some states require it
• If schedule is an important factor, for accelerated schedule
• Some owners have capacity to manager work of multiple contractors
▪ Architect prepares separate bid packages
• Structural, mech. Elec., plumbing
• Demo and excavation may also be bid separately, to expedite process
▪ AIA A101
o Many Prime Contracts
▪ One portion of work is begun before others are designed
▪ Used typically in Fast Track
▪ Also should use a CM and an Expeditor
• Selection Procedures
o Contractor Procurement Options
▪ Direct Negotiation
• Based on Experience, reputation, performance
• Negotiations occur between the contractor and owner
▪ Qualifications based selections
• Based on demonstrated competence and qualifications only
• Not based on cost, man hours, fees, etc
▪ Best Value Fees
• Based on qualifications and fees
▪ Best Value Total Cost
• Based on total cost and qualifications
▪ Low Paid
• Based solely on lowest price
o Architect Procurement Options
▪ Direct Negotiation
• Based on reputation and past experience
• Fee negotiated between arch and owner
▪ Qualifications based selection
• Based on demonstrated competence and qualifications
• Owner should not request fees
▪ Best Value Fees
• Based on weighted options of qualifications and fees
▪ Low Fee
• Based solely on lowest fee
METHODS OF PROJECT DELIVERY

Design-Bid-Build
▪ Driving Factors : Cost & Risk
▪ “Traditional method” well defined roles, linear process
▪ Public Projects : Lowest Bidder
▪ AIA A101
▪ Owner carries all Spearin Gap Risk
▪ 3 Roles
• 1. Owner: Principal
• 2. Architect – Agent
• 3. Contractor – Vendor/Third Party
▪ 3 Phases:
• 1. Design : CDs and Specifications
• 2. Bid : Multiple contractors, selection based on low bid or best value
• 3. Build
▪ 2 Separate Contracts:
• B101 : Owner Architect Agreement
• A101 : Owner – Contractor Agreement
▪ Construction Cost is determined after design
▪ One Construction Contract
▪ Best for owners who are not under a tight timeline and have a limited budget, cost is
the driving factor and quality is not
▪ Drawings must be @ 100% before construction can begin

▪ Advantages:
• Competitive bids, maximize the built product for price
• Architect is the owners advocate
• Architect is active in CA so design intentions are followed
• Minimal coordination issues
▪ Disadvantages:
• Sequential phases that involve more time
• Owner at risk for final construction costs
• Not good for a building that needs to be done quickly
• Creates an adversial relationship with contractor
Negotiated select Team
▪ Variation of Design Bid Build
▪ Contractors selected early in design phase
▪ Construction cost is determined after design
▪ One construction contract
▪ Owner carries spearin gap risk
▪ Not permitted for publicly funded projects

Construction Management
• Used when additional support of construction management services are needed
• CM can play one of 3 Roles

• CM as Advisor
o Driving Factors : Risk & Quality
o Constructability and cost management consultant
o Does not build the project
 o Does not provide construction costs
o Many contracts
o 3 Payment Types
▪ Stipulated Sum
▪ Cost Plus w/a GMP
▪ Cost Plus w/o a GMP
• CM as Agent
o Driving Factors : Risk & Time
o One or More Prime Contracts
▪ Architect – Owner – CM
o Construction cost is determined at completion
o Compensation Methods:
▪ Stipulated Sum
▪ Cost Plus w/ a GMP
▪ Cost Plus w/o a GMP
o Provides early cost estimating, scheduling and assistance
o Provides services for a fixed fee but passes along savings and cost overruns to the owners
o No risk for actual construction costs
o Advantages:
▪ Reduces owners burden to manage the project
▪ Project scheduling can speed process to save money
▪ Cost estimating monitors costs
o Disadvantages
▪ Added costs, final construction cost is unknown until design is complete
▪ Multiple prime contracts increase administration costs can lead to claims and disputes
▪ Cant resolve design-construction issues only serves as a mediator
o 2 Payment Types
▪ Cost Plus w/a GMP
▪ Cost Plus w/o a GMP

• CM at Risk (as Contractor(Vendor))

o Driving Factors: Time, Cost & Risk
o 3 Prime Players
▪ Architect – Owner – CM@R
o 2 Separate Contracts
▪ Arch – Owner
▪ Contractor – Owner
o Selection based on
▪ Qualifications based or best value fees
o Selected during design phase
o Construction cost is determined after design
o Overlapping phases : Design & Build
o Architects CA services commence when one of the three occur
▪ CMs GMP
▪ Owner Approves control estimate
▪ Owner accepts approval to proceed
o Compensation methods:
▪ Guaranteed Maximum Price
• Commitment by cm to provide services in a specified price
• Owner may want to use open book cost estimates
• If project is completed for less, the owner receives those cost savings
 • This amount should be set after the design is fully resolved in order to reduce
risk for the CM
▪ Fixed Price or Stipulated Sum
• Set price for completing the project
• Owner is aware of final cost and is not responsible for cost overruns
• Contractor does not share cost savings w/ owner
▪ Cost Plus Fee Method
• Actual labor and material costs (direct & indirect)
• Fee for coordination of trades
• Inventive may be added if project is completed early
o Advantages:
▪ Architect acts in owners best interest
▪ Cost security
▪ Responsibility of managing costs and consultants
▪ Reduces owners burden of management
▪ Cm receives project for constructability cost and schedule reduces change orders and
delays
o Disadvantages:
▪ Added Cost
▪ Conflict of interest as role of cm & Contractor
▪ Competitive bidding is lost

Design Build
o Driving Factors: Risk & Cost
o Owner contracts with single entity for design & Construction
o One Contract
o 2 Prime Players:
▪ Owner : should have construction knowledge to utilize this method effectively
▪ Design Build Entity
• Can be architect, if architect, architect assumes responsibilities of contractor
o Selection based on
▪ Direct Negotiations
▪ Qualifications based selection
▪ Best value fees
▪ Total Project Cost
▪ Lowest Bid
o Methods of Compensation
▪ Stipulated Sum
▪ Cost Plus w/a GMP
▪ Cost plus w/o a GMP
o Construction cost determined before design
o Overall collaborative project planning
o Overlapping phases
o Preconstruction services
o Emerged from dissatisfaction of tensions between arch & contractors
o Typically a fixed fee
o Beneficial for owners who have construction experience
o Typically will hire an additional CM Agent
o Arch is a vendor not an agent
o Advantages:
▪ Fastest Project Delivery Method
▪ Single entity of responsibility
 ▪ Lower chance of cost overruns
▪ Early cost and scheduling commitment
▪ Conflicts w/ professional are internal do not involve owner
▪ Lower chance of cost overrunsfast track
o Disadvantages:
▪ Owner involvement is limited in early phases
▪ Non competitive costs – less building
▪ Hidden reductions in quality & design & finishes
▪ CDs not complete upon commitment
▪ No objective agent for owners best interest
o Owner assumes construction contract admin duties normally provided by architect including:
▪ Certifies substantial completion
▪ Submittals
▪ Approving changes
▪ Rejecting nonconforming work
▪ Site visits
▪ Develops project criteria

Bridging
o Driving Factors: Risk & Quality
o Combination of Design Bid Build w/ Design Build
o Construction cost determined after design
o 2 Architects
▪ Acts as project manager/Designer for basis of project
• Not responsible for final construction documents, but reviews them
• Provides performance specs
▪ Design Build Architect provides technical drawings based off of design architect
o Advantages:
▪ Lowest cost/fixed price
▪ Owner has an agent
▪ Owner doesn’t have to develop project criteria
▪ Competitive bidding & fixed cost
▪ Single source of responsibility
▪ Meets owners requirements

Design Assist
• Specialty subcontractors or trades are included early in the design and construction document phases to
help with the development of complex or unique portions of the project
• When a project requires specialized detailing and specifications
• Best when used with Design Build or Construction Manager at Risk
• Not appropriate for projects that will be bid
• Subcontractor is paid by owner a design fee for its services
• The subcontractors documents may be used instead of shop drawings
• Three Phase Process
1. Architect & Owner decide which portions of the project will utilize this method
and write an RFP for those services
2. Responses are reviewed and Architect & Owner select a subcontractor
3. The selected contractor works with the architect to provide technical advice to
detailing the specific system, and writes the specifications

Integrated Project Delivery

o Driving Factors: Collaboration, Communication, Respect & Trust
o Collaborative arrangement of stakeholders in project
o Technology necessary : BIM
o Shared financial risks & rewards
o Fiscal Transparency
o 3 Prime Players
▪ Owner – Architect – CM
o Less issues w/ lower cost and quality construction
o AIA A295 General Conditions of Contract for IPD
o Multi Party Agreement: single agreement of multiple parties
o Single Purpose Entity:
▪ Architects role at construction is similar to A201
▪ Independent LLC created for sole purpose of planning, designing and constructing
o Phases: MacLeamy Curve
▪ Conceptual Design (Pre-Design)
▪ Criteria Design (Schematic Design)
▪ Implementation Documents (Construction Documents
▪ Agency Review
▪ Buyout (bidding from that of which is not included in ipd team)
▪ Construction Administration
▪ Closeout
o Total Project Delivery is substantially shorter using this method
o Owner is required to be fully present in order for success
o Advantages:
▪ Better Design
▪ Shorter project delivery time
▪ Lower cost
▪ Quality construction
▪ Fewer problems during construction
o 10 Fundamental Principles:
▪ Mutual Respect & Trust
▪ Mutual Benefit & Rewards
• Incentives may be added from profit pool
▪ Risks identified and accepted early
▪ Collaborative innovation & decision making
▪ Early involvement of key participants
▪ Early goal Definition
▪ Intensified planning
▪ Open Communication
▪ Appropriate collaborative technology
▪ Organization and leadership
o IPD Contractual Principles
▪ Shared financial risk & reward
▪ One contract
▪ Decisions based on project outcome
▪ Fiscal transparency
▪ Liability waivers
▪ Early involvement of key players
▪ Jointly developed goals
▪ Collaboration
o Architect has limited duties in preconstruction since no bidding is required
o Benefits:
▪ Architect
 • Design and facilitate the process
• Lead collaborative teams
• Communication in myriad ways
• Develop analyze and evaluate a model quickly
• Analyze and develops options quickly
• Shares knowledge and data immediately
• Participation beyond a design role
• Reduced risk
• Increased profit
• Improve high performance buildings
▪ Contractor
• Influence on construction early
• Aware and contributing to design changes
• Influence construction means and methods
• Elimination of changes orders
• Collaboration
• No adversial relationships
▪ Owner:
• Predictability
• Reduced risks
• Better overall experience
• Greater flexibility
• Increased owner value
o Challenges:
▪ Owner
▪ Proprietary information being shared amongst all parties
▪ Insurance

Accelerated Schedules
• Directed Acceleration
o Owner directs contractor to speed up
o Change order
• Voluntary acceleration
o Contractor may decide to speed or catch up for a bonus or to get on another job
• Constructive acceleration
o Situation causes excusable or unavoidable delay
o May incur a claim

Changes in the Work

• Minor Changes:
o Does not involve change in contract sum or time and is consistent with contract documents
o Can do so w/o approval of owner or contractor
o Example: moving door 6”
• Construction Change Directives
o When a change needs to be made immediately but contractor and owner cant agree on price,
architect writes a CCD
o Allows owner a way to unilaterally issue a change w/o changing terms of contract
o May involve additions or deletions
o AIA G714: construction change directive
o Services rendered from a CCD may be constituted as “Additional Services”
o Must be signed by arch and owner (contractor not required)
 o Must include:
▪ Description of changes
▪ Basis to determine cost and time
• If involves change in cost, architects basis of adjustment must be based on one
of four methods
o If a cost adjustment is needed, must be based on 4 Methods
▪ Lump sum, itemized
▪ Previously agreed upon Unit Prices
▪ Mutual agreement of Fixed or Percentage Fee
▪ Provided for in a clause (general conditions)
• If contractor
o Agrees : change order
o Disagree: arch determines methods and adjustments for cost savings
and workers benefits, equipment rentals, supplies, premiums for
bonds and insurance, field supervision, permit fees & profits
• Change Order:
o Document authorizing a variation that effects the contract
o Services rendered from a CO may be constituted as “Additional Services”

• AIA G710 : Architects Supplemental Instructions

o Used for minor changes in work (means for the architect to address change)
BID PRICES
• Stipulated Sum
o Lump sum or fixed sum bid
o Single value that represents all costs to build a project
o Competively bid projects typically use this
▪ Publicly funded
▪ Design bid build
▪ Design build
o Best for projects that will use Unit Costs and repetition, hotels, hospitals
o Lowest fee
• Guaranteed Maximum Price
o Cost of construction that the contractor assures to the client that the project will be built for
o GMP is developed prior to completion of construction documents
o Includes line item pricing and allowances
o “Open Book” accounting
o Typical for projects with accelerated schedules
o Subcontractors receive early bid packages to procure materials and equipment
• Cost Plus
o Time and material pricing
o Based on actual cost of the work
o Contractors provide detailed accounting of :
▪ Cost of materials, equipment and systems
o Contractors receive overhead and profit at a fixed rate
o Used for:
▪ small scale projects,
• projects with unknown existing conditions,
o scope is difficult to define
o or for change orders within a stipulated sum or GMP
• Unit Prices
o Typical for projects full scope of work is unknown
o Cost for each specific unit of work
o Great for projects with repetition, ie : hospitals, hotels
• Target Price
o Often used for Design Build
o When price is identified in procurement documents
FIRM STRUCTURE

Sole Proprietorship
• An individual conducting business in an unincorporated format
• No legal arrangements w/ other individuals
• Not required to file state documents & legal tax forms
• Business and personal expenses should be kept separate
• No federal tax return, included in personal Taxes
• Taxable year: Calendar Year
• Net profits : Taxable
• Self Income : Taxable
• 100% of Health insurance may be deducted from gross income
• Self Employment Tax : ½ of SE deducted from gross income
• Capital losses are carried forward indefinitely, 3,000 per year
• Transfer of ownership typically occurs with assets not business

• 2 Factors
o Liability
▪ Liable for all business claims
▪ All assets, personal and business are at risk
• Professional liability insurance can protect from claims
o Death or Retirement
▪ Would terminate SP, unless:
• Successor is assigned to purchase practice
• Estate or liquidation plan
• Advantages
o Low Cost and easily setup
o Tax Advantages
o Total management control over owner
• Disadvantages:
o Owner liable for all debts/losses
o Personal assets at risk
o More difficult to raise capital if you have bad credit

Partnership:
• Not a sperate legal entity distant from partners
• Unincorporated association of 2 or more people
• Not required to file state organizational documents or federal tax id’s
• Partners share losses and profits equally and are personally responsible for any claims, even those of
others

• Agreements:
o Financial contribution agreements
o Responsibility and authority delineation
o Fiduciary duties of partners
o Operation and management responsibilities
o Distribution of profit and losses
o Dispute resolution
o Dissolution of partnership

• Uniform Partnership Act:

 o Establishes legal requirement to govern relationships between partners
o Profit and loss and how it relates to contributions
• Liability & Taxes
o Only responsible for claims incurred while a partner
o Personal tax returns, taxed @ individual tax rates (disadvantage of this method)
o Information Return
▪ Separately filed tax return
▪ Does not pay federal income tax on profits
• Limited Partners
o NO say in management
o Investors who receive profits

Corporations
• Existence transcends those who own and manage it
• Must be filed w/ state to notify public of establishment
• Governed by laws of individual states
• Shareholders are not protected from professional liability
• Shareholders only financially responsible for amount invested
• Cannot reach personal assets
• Separate Tax Paying Entity
• Shareholders who are employees are taxed on salary
• Compensating Retiring Partners:
o Buy/Sell Agreement : Must sell back shares to corporation

• Taxes
o Taxed @ lower rates than individuals
o 2 Ways:
▪ Profit of corporation
• Salaries and business expenses deducted to determine revenue which is taxed
o To reduce this amount, may be divided into bonuses, pensions or
donations
▪ Shareholders Dividends

Sub Chapter S Corporations

• Certain eligibility requirements
• All advantages of a corporation
• More favorable tax rates
• No corporate income tax
• Shareholders similar to a partnership for tax purposes
o Deducted from personal income taxes in proportion to stocks held
• Must be a domestic company (no international work)
• Limited to small business corporations
• No corporate income tax
• Liability limited to shareholders investment
• Beneficial when tax rates are lower for individuals
• Max of only up to 100 employees

Limited Liability Companies

• Hybrid that combines advantages of partnership and corporations

• 2 Levels of Participants
 o Owners and investors : Members
▪ Does not have to be managed by members
o Managers : Managees
• Ownership may be transferred similar to corporation
• Classified as a partnership for federal tax purposes
• Characteristics similar to a corporation
o Conducts business in name
o Losses passed through personal income while limiting liability
• Liability is limited to investment
o Members have no personal liability, personal assets are not at risk
• May Elect to be taxed as SP, Partnership or Corporation

Joint Ventures
• Temporary association of 2 or more persons or firms to complete a project
• Used when experience is lacked or project is too large

Partnering Agreement
• Before a joint venture is formed, this should be developed
• Defines: roles, responsibilities, and contractual relationships that will be established if the firms are award
the project and the join venture is formed
• If a team wants to forma prime consultant agreement
• Aka a Memoranda of Understanding

Teaming Agreement
• Not a contractual relationship
• An agreement between the parties to work together toward the common goal of constructing a building
• May or may not be a written document, aia recommends using a partnering charter, developed during a
workshop facilitated by someone not involved with the project in which all team members participate
that outlines the responsibilities and goals to the team
PROJECT MANAGEMENT

Two Sides of Project Management

• Objective Side
o Contractually defined
o Responsibilities defined by architects service contract
▪ Preparing budgets
▪ Reporting site observations
▪ Assisting with bidding
▪ Reporting meeting minutes
▪ Issuing notices
▪ Providing certifications
▪ Reporting findings, decisions and observations
o Industry standards
▪ Attending meetings
▪ Preparing agendas
▪ Writing meeting reports
▪ Correspondence and documentation
• Subjective Side:
o Soft Skills
o Intangible responsibilities, broader application of judgment
▪ Leading team
▪ Effective communication
▪ Attitude
▪ Behavior
▪ Personal habits
o People skills
▪ Good listener
▪ Advising subordinates and superiors
▪ Motivating team members
▪ Conflict resolution

Project Management Models

• Pyramid (Problem)
o Delayed process, all information coming from principal.
o “Bottleneck”
o No time for management
• Matrix (Solution)
o Professional staff are project managers
o Principals have more time for marketing and firm development
o Gives selected employees more billable work
o Growth is positioned in matrix model not in pyramids
o “Responsibility Matrix” Assigns tasks to specific team members

METHODS TO SCHEDULE DESIGN AND CONSTRUCTION

• Bar Chart or Ghantt Chart
o 2nd and most often used method
o Tasks that must be done in specific order
o If one task must be done before another can begin a line is drawn , showing “dependency”
o Suitable for all sized projects
o Shows project descriptions (tasks), start and end dates and overlaps
o Does not show all sequences
 • Critical Path Method (CPM)
o Most complex method
o Uses interdependent activities with applied mathematic analytics
o Activity lists, duration periods and dependencies between activities
o Better for larger projects

o Tasks need to complete a project, sequences and earliest and latest start and finish dates
o Defines tasks and start & end dates which must be adhered to for success
o Arrows : represent tasks
o Tasks beginning and end points represented by a numbered circle
o Next task cannot begin until all tasks pointing to circle have been completed
o Dashed arrows : Dependencies
▪ Do not represent tasks and have no duration
o Heavy arrows : critical path
▪ Must finish on time
o Non critical task may start or end later without effecting final completion
▪ Max length, non critical task may take without effecting deadline is called “float”
• Milestone Chart
o Used for short duration projects with few tasks
o Low project fees
o Easy to prepare track and communicate
o Shows : tasks, start and end date, hours allocated, billing rate, percentage complete and earned
value
• Wall Schedule
o Preliminary schedule using index cards that involves time and involved parties, requires all
parties to review before finalized documented and transferred to bar chart
o Typically used to create a project work plan

Work Plan
• Aka fee projection
• Detailed project schedule which breaks project into tasks and assigns staff to tasks
• Details fee after deductions will be used to pay staff
• Primary element of the work plan is the schedule often presented in the form of a bar chart
• Should show
o Scope of services
o Breakdown of services to be provided into phases and tasks
o Dependencies
o Milestones
o Staffing requirements and consultant and fee requirements
o Allocation of time and fees
1. Project Descriptions and Client requirements
• Description of the project, scope, clients budget and record of what client has authorized
• Clients primary goals and quality of project
2. Statement of deliverables
• Reports, sketches, drawings, specs, models
• Work plan should include estimates for each deliverable and quantities
• Provides basis for schedule and staffing and budgets
3. Team organization
• Defines hierarchy of architects team
• Responsibilities for assignments
• Relationships of team members
4. Responsibility matrix
 • Companion to defining deliverables is who will do what
• Understanding what deliverables each consultant will provide
5. Preliminary project schedule
• Preliminary driver of architects assessment of staffing needs
• Key milestones to meet delivery
6. Preliminary staffing needs
• Determined once scope has been finalized
• Key personnel available and what support staff is required
7. Project directory
• Listing of all project entities and key personnel
8. Internal project budget and profit plan
• Allocation of fee to tasks to determine profit
• Also known as project budget or “job cost budget”
9. Code information

Types of Work Plans :

• Used to organize and schedule a design project. A contingency plan allows the project team to
address unforeseen issues that may arise during the course of a project
• What architects call a project work plan is a type of a tactical plan
o Includes : assigning responsibilities for each task, determining how much time and
money is allocated for each task and charting when tasks must be completed to keep
the project on schedule, including deadlines or submission requirements
o A tactical plan has a level of detail that falls in between a strategic plan and an operation
plan
o Tactical plans do not break down topics into specific tasks
• Strategic Plan
o Project Program
o Information used from this is used to create a tactical plan which lists and schedules activities
that must occur to accomplish the goals defend in the strategic plan
o High level plan that outlines broad scope project objectives
o Example : the program for an architectural project
o The owner, with the assistance of a programmer or the architect prepares the program
o The architect becomes familiar with the requirements and determines both the design approach
and the production plan to satisfy the program
• Operational Plan
o Overall work plan, responsibilities list, task checklist
o Used by a project manager who is responsible for a smaller part of the project
o May be implemented through a responsibilities matrix or a task checklist
o List of activities that the firm must complete to develop the design of a system
o Lists required tasks
• Contingency Plan
o Can be enacted at any level
o Additional time, money or staff
o Allows project team to address unforeseen issues that may arise during the course of a project
o Way to rescue a troubled project, proposed in advance of a project being in trouble
o If a project encounters unforeseen issues or conditions related to the site, a delay in the
approvals process, a change in the owners direction or available resources or a delay caused by a
natural disaster
o Helps the architect respond to the issues quickly and thoughtfully
o Example : if a project misses or a planning meeting is rescheduled for a month
o Builds extra contingency into the project
Project Teams
• Architect/client + contractor
o Smaller projects
• Architect/Client/Construction Manager
o Complicated renovation
o Tight schedule
o Difficult site constraints
• Architect/client/contractor
o Design build
o IDP

Project Management Report Types

▪ Narrative Report
o Description of decisions made by professionals and client
o Feels less concrete/intimidating to clients
o Gives a history of the project
▪ Action Item Report
o A list of items or issues designated with a unique nonrepetitive number
o Items are keyed to the particular date of meeting where they were issued
o Each item are given a due date
o More defined items
o Items are listed on a tracking sheet with assigned due dates
o Not removed from list until they are completed.

Meeting Management
▪ Occurs in either one large session or spread through out a longer schedule
▪ Two Key elements for effective agendas
o Time block for discussion items
o Attachments that support agenda

▪ Meeting schedule
o Regularly and as required
▪ Meeting agendas
o Purposes, attendees, etc
▪ Executive Session
o Critical decision making and progress based discussion
o Key points to meetings
o Meeting where decisions happen
▪ Project design meeting (internal)
o Flexible and frequent
o Used to prepare for client meetings
▪ Coordination meetings
o Periodically and after design meetings
▪ Redline
o Key designers and professionals

Project Teams:
Typical teams by delivery methods
▪ Owner/Architect [Working with Contractor]
o Design bid build
o owner and architect : key figures until bid phase
▪ Owner/Architect/Construction Manager
 o CM@R or Agent
o CM advices on construction means and methods
▪ Owner/Architect/Contractor
o Design build
o Well defined project early, overall lower cost
▪ Owner/Architect/Contractor
o IPD
o More effectiveness through risk/reward sharing
▪ Architect/Architect Teams
o When one architect lacks technical expertise in specific project and needs to team with another
architect
o Primary architect has relationship with client but lacks jurisdiction code knowledge

Architect Firm Staff

▪ Unlicensed design staff
▪ Architect Level 1-3
o Same Job Function as unlicensed, but is licensed
▪ Project Manager
o Full responsibility for project
o Client point of contact
o Coordinates project
o Prepares proposals
▪ Senior Project Designers
o Coordinates design efforts
o Client point of contract
▪ Directors
o Responsible for firm standards
o Client pint of contact
▪ Senior leaders not responsible for day to day project responsibilities
▪ Development of firm and client relations

Project Teams Best Practices

▪ Internal design meetings
▪ Client meetings

▪ Responsibilities of PM

o Budgets
o Work planning
o Scheduling out activities
▪ Budget
o Predesign : controlled by client
o SD, DD, CD : controlled by architect
o Bidding : controlled by contractor
▪ Work planning
o Customizable by project manager
o Number of milestones
o Drives all factors at once
o Assignment of tasks
o Client influences of goals, deadlines and define deliverable
o Internal collaborative benchmarks
▪ Not for clients influence
▪ Freedom of defining strategy
Managing Scope & Services
▪ Project Scope
o Owners design requirements : program, site area, and volume and levels of quality
▪ Scope Creep
o Project grows beyond contracted scope
o Ways to manage : milestone checks
Managing schedules and Budgets
▪ Project schedules
o Defines target completion dates and major milestones
▪ Budget monitoring
o Periodic review of time and expenses charged against the project
▪ Project overruns
o Hours over what was budgeted
o Causes
▪ Unrealistic fees
▪ Scope creep
▪ Poor project management
o Options
▪ Charge for additional services
▪ Overtime
▪ Alternatives for completion (staffing)
▪ Take the loss
Managing Billing and Compensation
▪ Billing requirements
o Invoice frequency
o What is included
o Time for payment
o Interest rates on overdue payments

Resource Management:
• Ways for Architecture firm to increase profit
o Accept more projects
o Increase architectural fees
o Reducing administrative salaries
• Productivity:
o Degree of direct efforts of firm can generate revenue
o Measured by net multiplier which is the best measure for productivity
o Creating a through business plan
o Stimulate employees and encourage how their work helps the business
o Giving clear direction and guidance to employees
o Creating a staff manual for employees
o Best way to track progress during cds: view timesheets

▪ Instruments to monitor utilization:

o Time analysis to record individual and cumulative expenditures of staff time
o Income statement that records direct and indirect salary expenses
▪ Reasons to terminate an employee (at will agreements)
o Low business volume during a recession
o Negligence

o Moonlighting while unethical, should only be a reason for termination if directly stated as against
employers standards in a previously provided employment agreement or contract or firm manual
▪ Performance Evaluations
o Do not have to be formal
o Do not need to occur annually
o Awareness of strengths and weaknesses of employees
o Basis for promotion and raises
INSURANCE TYPES

Insurance Required per B101 : Owner – Architect Agreement

• Workers comp
• General liability insurance
• Errors and omission insurance (Professional Liability Insurance)
• Automobile Liability Insurance

Professional Liability Insurance

• Also referred to as “Errors & Omissions”
• “Triggering Date” is date in which the claim is filed
• Covers firms liability for negligent acts, errors, or omissions resulting from performance of professional
services
• Broad policies protect: partners, shareholders, employees
• Results from:
o Inaccurate specifications
o Mistakes on drawings
o Negligence
• Excludes:
o Wrongful acts
o Claims for cost estimates
o Claims from warranties

General Liability Insurance

• Involves claims for doing business not providing services
• Property damage, liability and personal injury resulting form
o Architect or employees
o Consultants or anyone hired by the architect
• Sometimes purchase for contractors if theirs is not valid
• Injury and property

Employment Practices Liability Insurance

• Employment practice claims
• Harassment, discrimination and wrongful termination

Project Professional Liability Insurance

• Covers design professionals and consultants
• Lasts for duration of project and set time after completion
• Only used for one project
• Required for projects that have beyond the normal requirements

Property Insurance/Office Contents

• Protects office and contents from fire, flood, theft
• Basically renters insurance

Personnel Injury Protection

• Protects architect against
o Slander, libel, defamation, misinterpretation and other torts
▪ Tort: Civil Wrong that causes injury

Automobile Insurance
 • Liability and property damage to vehicles used or owned by the business
• Includes protection against claims made by employees using personal cars & taxis

Business Interruption
• Natural Disasters
• Pays the expenses and loss of profit if work is interrupted

Property & Casualty Coverage (P&C)

• Specific business exposures
• Computer equipment, cell phones, valuable papers and media, accounts receivable

Commercial General Liability

• Incidents that occur on or off premises that occur from nonprofessional business operations
• 3 Types
o Property Damage
o Bodily Injury
o Personal & Advertising Injury
▪ Libel, slander, copyright
o Additional: premises & operational, medical payments and contractual

General Liability Coverage

▪ Injury & Property damage that could impact the business

Employment Practices Liability Coverage

▪ Claims by employees, discrimination, sexual harassment, wrongful termination

Fidelity Bond
▪ Covers employees for theft of $

Workers Comp + Health Insurance

AIA B101 (Owner-Architect Agreement) Requires Architect to have

• Professional Liability
• General Liability
• Automobile Liability
• Workers Comp
AIA A201 (General Conditions of the Contract for Construction) Requires Contractor to have:
• Liability Insurance, including
o Workers Comp
o Bodily injury or death
o Damages to the work
o Personal injury
o Motor vehicle
o Claims to contractual liability
• Contractor must add arch and owner & consultants as additional insured parties for claims of contractors
negligence
• Coverage must be max liability as stated in contract or min. by law, whichever is greater
AIA A201 (General Conditions of the Contract for Construction) Requires owner to have:
• Liability , including property damage for full value of work
o Insures against physical loss or damage caused by fire, theft, vandalism, collapse, earthquake,
flood, windstorm or mischief
• Must be ALL risk type: includes all hazards, except those specifically not included
 o Includes : boiler explosion, fire damage, theft (not by employees), vandalism
o Does not include:
▪ Fire, vandalism, malicious mischief or riot
▪ Explosions from all causes
▪ Water damage
▪ Testing and startup
▪ Mechanical or electrical breakdown
▪ Theft collapse
▪ Earthquakes, floods, or windstorms
▪ Falsework
▪ Temporary buildings
▪ Debris removal, including demolition occasioned enforcement of any applicable legal
requirement
o Some common exclusions are:
▪ Act of war
▪ Terrorism
▪ Nuclear hazards
▪ Fraud by the insured
▪ Employee theft
▪ Inventory shortage or mysterious disappearance
▪ Mold
▪ asbestos
• Also required to carry boiler and machinery
BONDS & PUBLIC PROJECT FINANCING
• Surety
o A person who takes responsibility for another’s performance of an undertaking, for example
their appearing in court or the payment of a debt, guarantor, sponsor or money given to support
an undertaking that someone will perform a duty, pay their debts, etc ; a guarantee
• Bond:
o Issued by a government entity to raise money for a construction project
▪ Principal + Interest
▪ Individual investors or investment companies
• Bid Bonds:
o Debt secured by a bidder for a construction job or similar type of bid based selection process, for
the purpose of providing a guarantee to the project owner that the bidder will take on the job if
selected.
o Covers the owners risk that before construction, the bidding contractor wont enter into a
contract or agreement to provide the work described in the bid
• Performance Bond
o The contractors failure to finish the project due to bankruptcy or for any other reason
o Contractors failure to pay subcontractors or vendors for work or materials the owner has paid
the contractor for causing the subs or vendors to file a claim or mechanics lien against the
owners property for payment
• Payment Bond
o Cover the second kind of risk to an owner, claims made by unpaid subs or vendors
• Revenue bonds (rate supported bonds)
o Backed by revenue or rates from customers using the service that bond funding paid for
o Municipal bonds that finance income producing projects and are secured by a specific revenue
source
o Can be issued by any government agency or fund that is run in the manner of a business – those
entities having both operating revenues and expenses
▪ Bonds issued by municipalities to finance facilities for revenue producing public
enterprises
o Backed by revenue or rates from customers using the service that bond funding paid for
▪ City water and sewer facilities
• General Obligation bonds
o Municipal bond that uses legally available resources to repay bondholders
o Issued by a city or state and backed by general tax revenue and the issuers credit
o Used to finance acquisition or construction of specific public capital facilities
o Jurisdiction issuing the bond is required to levy a property tax at rate necessary to repay the
principal interest of the bonds requires approval from voters, voter majority required
o Municipal bond backed by the credit and taxing power of the using jurisdiction rather that the
revenue from a given project
o Issued with the belief that a municipality will be able to repay its debt obligation through
taxation or revenue from projects
▪ When a state or local government wants to finance the acquisition or construction of
public facilities, they issue a general obligation bond. Shareholders are guaranteed to be
repaid using future tax revenues
▪ Since the bond uses the taxpayers money, each measure within the bond must be
approved by voters
• Museums, libraries and schools are typical projects that use GO bonds
• This bond is backed by taxpayers and not an FDIC insured bank
• They can finance the acquisition of specific public capital facilities
• They can finance the purchase of real property
• Public Enterprise Revenue bonds
 o Issued by cities or counties for revenue producing public enterprises. Paid off by revenue
generated from facility
o Airports, parking garages, hospitals
• Tax Increment Financing
o City can use to pay for improvements based on increased taxes due to increase in property value
o To create an incentive for private development
o Does not require a vote
o Assessed values determined and taxes are frozen until development is complete
• Development Impact Fees:
o Charged to developers for infrastructure improvements made necessary by the project
o Makes developers and not residents responsible for the costs
• Subdivision Extractions:
o Requirement that developers dedicate some land for public use or contribute cash for purchase
of land and facilities made necessary by local government
• Special District Assessment
o Business improvement districts or benefit assessments used to fund public space improvements
o Majority of owners in neighborhood need to agree then contribute
o Not intended to encourage private development

PROJECT FINANCING
• Blanket loan or Blanket Mortgage
o Funds large piece of real estate that borrower intends to subdivide and resell as each parcel is
sold a portion of the mortgage is paid off
• Bridge Loan
o Short term load used to purchase property or finance project quickly before long term financing
can be arranged
• Construction loan
o Finance a project for duration of construction the converted to longterm payment load
• Hard money Loan
o Short term loan with a distressed financial situation such as foreclosure, bankruptcy, etc.
o Loan based on quick sale value, increased interest rates
• Mezzanine Loan
o Used by developers for a large project loan is secured by collateral in stock of company
• Mortgage Loan
o Provides cash to buyer to purchase property in exchange for a lien on a property until loan is
repaid
• ProForma Statement
o Statement or model of all the expected expenses, initial and long term of developing a project,
Compared against the expected income and increase in value of a project
o Proforma is latin for “As a matter of form”
o Determines whether a project can be financially successful
QUALITY MANAGEMENT
• Lean Systems
o Based on eliminating waste
o Manufacturing model that is based on 5 Principals
▪ Specify Value in Eyes of the customer
• Define processes around customers needs and requirements
▪ Identify the value stream
• The steps in a process that add and don’t add value
▪ Make value flow
• Cutting out as many steps as possible for value purposes
▪ Institute pull
• Delivering to the customer what they need and when they need it
▪ Pursue perfection
• Learning the process
• Improving the processes

• Six Sigma : Eliminating Variation

• Define : problem, input, goals
• Measure: process and associated data
• Analyze : data to seek cause of investigation
• Improve or Optimize : current process through experimentation or trials
• Control : future processes

• 4 Types of Quality Costs

• Prevention Costs : staff training and education
• Appraisal Costs : quality control, review and checking
• Internal Failure Costs : associated with project delivery processes, failures, including
uncoordinated drawings
• External failure costs : incurred after delivery of services to the client

• Pareto Theory
• 80% of all work can be standardized

• Measure Performance
▪ Lagging
• Orders filled
• Training hours
• Customer retention
▪ Leading
• Orders in process
• Staff enrollment in training
▪ Auditing
• Post occupancy evaluations
• Client satisfaction surveys
• ISO 9001
• 8 Management Principles
▪ Client focus
▪ Leadership
▪ Teamwork
▪ Process approach
▪ System approach to management
 ▪ Continual improvement
▪ Evidence based approach to decision making
▪ Mutually beneficial consultant relationships
• Library of constantly updated guidelines
RISK MANAGEMENT

• Standard of care, when architect try to be near perfect

• Professional services indemnities are an issue when they are too broad

4 Basic Ways to Handle Risk

1. Retain it
a. Described in owner-arch agreement
2. Reduce it
a. Increase services
3. Transfer
a. Professional liability insurance
b. Assigning responsibilities to others via contracts
4. Avoid It
a. Contractual or avoiding contain projects

Ways for the Client to Reduce Risk

• Limit scope & services

4 Greatest Risk Areas:

• Negotiations and Contracts
o Contracts not reviewed or industry standard or provided by client
o No evaluation of project risks
o No contingency
o No ca services
o Unclear scope of services
• Client Selection:
o Not a repeat client, client with a record of litigation, inexperienced client
• Project Team Capabilities:
o Inexperienced and insufficient staff
• Communication : Number 1 cause of claims
o Errors and omissions
o Scope of services not explained to client
o Know the Contract

Project Delivery Methods

• Design Bid Build:
o Yields highest claims of all delivery methods
• Negotiated Contract
o Best for least amount of claims beside using the right builder
• Fast Track
o Decisions are made fast
• Public vs Private
o Public has more risk

Assessment
• Is there experience there or hire someone w/experience
• Sufficient staff or hire more
• Financial capacity
• Successful or similar projects in past

Client Selection
 • Research clients
• Past experience & Repeat Clients
• Flexibility
• Client matrix & updating client lists

Ways for a client to reduce Risk

• Limit scope and services

Project Selection
• High Risk Projects
o Condos
▪ Typically done by developers, and need to be done fast and cheap
▪ Cheap labors and materials
▪ If doing one of these projects, staff on should be the best staff that creates the best
documents
▪ Maintain thorough record keeping
o Hazardous Conditions
o Asbestos Remediation
o Publicly Controversial Projects
o Public Projects
o Projects that adapt cutting edge technologies

Design Team Selection

• What critical skills and qualifications are required for the project
• Are team members available or too busy
• Does the firm need more staff
o Or can you train the current staff
• Can other staff pitch in

Project Manager Selection

• Leadership skills
• Experience
• Ability to determine & satisfy clients needs
• Skills ins scheduling accounting and documentation
• Good oral and written communication skills
• Understand effective risk management

Consultant Selection
• Vicarious Liability: legal responsibility of one party for the acts of another party
o Legally responsible for conduct of consultants as if they are the architects own employees
• Selection based on qualitative factors not based on a price
• If owner selects consultants, architect should provide an indemnification clause

Most Risk for Architect

• Improper communication
• Breakdown of relationships
• Poor business practices

Insurance
• Admitted carrier:
o Licensed and authorized insurance carrier in a specific state and subject to specific state
regulations
 • Non Admitted Carrier
o Not subject to same scrutiny
• Claim :
o Demand for money, service or property based upon a right typically found in a contract
• Claim Expense:
o Cost associated with handling of a claim, example : defense attorney
• Claims Made Policies
o Date in which claim is filed for event

Liability
• Legal responsibility for injury or damage to another person or property

Negligence
• Failure to use due care to avoid harming another person or property
• 3 Ways an architect can be found Negligent
o Legal Duty established between the parties
o Architect Breached that duty
o Break of duty was cause of damage or injury

o Duty: Most owe a legal duty to another party

▪ 3 Ways to establish duty

• Terms of contract
o Written or oral
o Aia contracts
• Legislative enactment
o Building codes
o Arch licensing laws
• Architects conduct
o Courts look to implied duties based on how individuals conduct
themselves during course of performance
▪ Examples of implied duties:
• Architects duty to cooperate w/ contractor
• Architect not to interfere with contractors work
• Architect to inform contractor of problems or errors
• Assist owner in scheduling of consultants
• Vendors not under control of GC
o Breach : one fails that Duty
o Cause : Breach of Duty is the cause of damages
o Damage : Actual Harm or Damage is caused

Ways to Reduce Risk

• Avoid, Transfer, Assume, Control
• Active Reduction
o QA/QC
o Observation, we do not ensure construction (unless, is design build entity)
o Talent retention
o Professional development
o Specialty consultants
o Quality control
▪ Well defined program and objectives
▪ Standard checklists and procedures
 ▪ Using proven construction methods and details and specs
▪ Maintaining communication
▪ Ensuring team understands obligations and responsibilities
o No last minute changes or surprises
o Guidelines to third party claims
o Sufficient liability insurance
o Well documentation through meetings, observation, etc
o Understand the geographic region of where providing services
o Understanding and experience in building types of which providing services
• Contractual reduction
o Indemnification
o Delivery Methods
• DO NOTS
o Language that expresses management, supervision, coordination of construction
o Point out and provide written notice of safety concerns w/o suggestion

Contractual Protections
• Project Scope
• Project Time Frame
• Project Fees

Limitation of liability clauses

• Without one, there is no limit to an architects liability
• An agreement to not seek damages in excess of a preestablished and agreed upon amount
o Limit must be relative too the appropriate scope of work
• Should apply to full sum of all claims
• Sets a limit on liability
• Limits claims to a certain amount

Mutual waiver of consequential damages

• Not direct damages
• Consequence of an act or omission
o If something was not complaint and caused delay in opening

Indemnification Provisions :
• Defined in A201
• Owner and Architect are not responsible for any damages claims or losses resulting from any performance
of work whether by the contractor or others whom architect has no contractual relationship
• Contractual requirement that architect reimburses if any acts of error or omissions
• Some courts may not support this clause
o Directions arch gave/failed to, were primary cause of damage

Privity:
• Architect is protected from claims by parties with whom has no contractual relationship
• No contractual relationship, third party actions
o example : a claim from a subcontractor whom architect has no contractual relationship with

Hold Harmless:
• One party assumes another’s liability

Statue of Limitations:
 • Timeframe in which a claim must be asserted
o Negligence claim 3-10 yrs after completion
• When a mistake or flaw is discovered, a party has a limited time to report the damage and file a claim

Statue of Repose:
• Commences at the time of discovery
o Completion of construction or occupancy begins
• Time to submit is much shorter than the statue of limitations
• Three years after substantial completion with a 6 year cut off date
• Begins to run at the end of construction or whenever services were last provided. Construction contracts
may contain provisions that modify or further define these statuory time restrictions
• “There is some mistake or flaw that is in repose (asleep) waiting to be discovered after construction has
been completed, if its not found in time then the architect and contractor cannot be held liable for it”

Betterment:
• Concept that applies to some negligence claims against architects, the act of trying “better”
• Can be asserted either for an error or an omission
o Errors :
▪ design not code compliant
▪ Responsible for full amount
o Omission :
▪ neglecting to include required elements
▪ responsible for a fraction of amount

Subrogation
• a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to
the insured. This is done in order to recover the amount of the claim paid by the insurance carrier to the
insured for the loss
• one party has the right to “step into the shoes” of another party for the purposes of bringing a claim for
damages. Not all types of claims may be subrogated. The most common type that can be subrogated is
property damage claims
• Example: if you are involved in an auto accident where no one is injured, but the vehicles are damaged,
and you are completely free of fault, your insure will pay to have your vehicle damage repaired. If your
insurer pays for the property damage to your vehicle, your insurer then becomes subrogated to your
rights for that property damage. In other words, your insurer can step into your shoes and make a claim
against the other driver in your accident that caused the damage to your vehicle for which your insured
had to pay the repair cost. If the other driver does not voluntarily pay for the damage, your insurer may
bring a lawsuit against the other driver, and your insurer may bring that claim into your name just as if
you were bringing the suit yourself
• A waiver of subrogation clause is placed in the professional services contract to minimize lawsuits and
claims among the parties. The result is that the risk of loss is agreed among the parties to lie with the
insurers and the cost of the insurance coverage is contractually allocated among the parties as they may
agree. The risk once assigned to the insurers by the parties, is determined to stop there, without allowing
the insurer to seek redress from the party at fault
• Intended to minimize the potential for lawsuits, cross suits and counter suits arising from property loss
that may occur during the project. An effective waiver will prevent the various insurers involved from
suing the parties to the construction contracts. One reason to use the available form contracts is that the
entire network of the waiver of subrogation provisions has already been through that, drafter, is in place
ready to use and has been tested in the courts to a greater or lesser extent. The clause quoted from AIA
B141 has a sister provision in the AIA owner and contractor agreements

Vicarious Liability: legal responsibility of one party for the acts of another party
 • Legally responsible for conduct of consultants as if they are the architects own employees

Tail Insurance
• Addressed retirement or withdrawal from practice

Surplus Lines
• Insurers not licensed in a particular state, but are surplus carriers because licensed insures wont provide
necessary coverage

Copyright
• Protection for architectural work
• 2 Categories
o Traditional:
▪ Drawings, specs, other pictoral/graphic representation
o Architectural works Copyright Protection Act
▪ Building itself
▪ Applies to buildings erected after Dec. 1, 1990
▪ Graphic representation of building
▪ Overall form, layout, arrangement, composition of spaces and design elements
▪ Owner cannot make unauthorized copies of building or derivative works
• Substantially similar or slightly modifies
▪ Architect owns copyright unless if an employee of owner or if architect assigns copyright
to owner
▪ B101 States, “Architect is owner of instruments of services
▪ Architect should specially claim ownership rights of building copyright
▪ Architect should register work w/ us copyright office
• Not required but recommended
• Made w/in 3 months
▪ Architect grants instruments of service of intended project
▪ If agreement is terminated, the owner, cannot continue to use instruments w/o
payment of licensing fees
DISPUTE RESOLUTION METHODS

Litigation
• Initial step : Complaint
• Discovery Stage: After responses have been filed the Discovery Stage begins
4. Submission & Response to Interrogatories : Questions
5. Submission of Relative documentation
6. Taking of depositions
a. Interview of a party or witnesses
• Trial Procedures
• Appeal Process
o Reasons for an appeal
▪ Trial judge was mistaken on submission of evidence
▪ Trial judge was mistaken in submission of an issue
▪ Judge gave incorrect directions
▪ Jury guilty of misconduct
o If verdict is overturned, a new case will begin
• Advantages & Disadvantages:
o Very Expensive
o Very Timely
o Can last awhile until all appeals are exhausted
o Decision is based upon an unbiased jury
o Binding resolution method

Arbitration
• Disputes are handled by an arbitrator who has knowledge of the construction industry
• Lawyers not always necessary
• Discovery is not necessary
• Disputes and hearings are private
• Typically resolved quickly, less than a year
• Fees for arbitration may be significant
o Dependent and in conjunction w/claim amount
• Arbitrators, are typically diverse and either an, architect, lawyer or has construction experience

• Advantages & Disadvantages

o Costs can be very high
o Speedy resolution
o Fairest decision
o Decisions are final and
o Legally binding
o Privacy

• The Process
o Filing for demand for arbitration
▪ One page statement that:
• Identifies parties
• Amount is quantified
• Statement describing nature of dispute
o Party is notified about arbitration filed
▪ The person has the option to
• File an answer to allegations
• Or file a general denial
 • File a counter claim
• Do nothing and would be considered denied
o After Demand and answer is filed a case administrator will be assigned
▪ Sends out a list of prospective arbitrators
• If parties cannot decide on an arbitrator case administer will chose one
o Pre-hearing conference (Only one will occur)
▪ By phone or in person
▪ Both parties and representative or lawyer, arbitrator & case administer
▪ Nature of dispute is discussed
▪ Schedule is established w/ dates for the following:
• Itemization by each party of respective monetary claim
• Exchange of relative documents & records
• List of witnesses
• Exchange of hearing exhibits
• Establishment of hearing dates
o Hearing will commence and at end arbitrator must submit a decision w/in 30 Days
▪ Grounds to overturn decision is very slim unless arbitrator acted unethically
• Three Arbitration Procedures
o Fast Track Procedures:
▪ $75,000 or less
▪ Only one arbitrator
▪ Must be completed within a few months
o Standard Track
▪ $75,000 - $1,000,000
• Up to $500,000 : 1 Arbitrator
• Over $500,000 : 3 Arbitrators
▪ Pre-hearing is held w/in 60 Days of selection of arbitrator
▪ Arbitrator requires
• Exchange of project documents
• Itemization of claims and counterclaims
• Disclosure of identity of experts and their reports
• Pre-hearing briefs
• One or more case management conference
o Large Case Track
▪ Multi Million dollar cases
▪ Usually involves discovery

Mediation
• Also administered by the American Arbitration Association
• Initiated by a demand for mediation similar to arbitration
• Selection of a mediator, similar to selecting an arbitrator
o Assists parties in settling the dispute so that it does not end up in court or arbitration
• Pre-Mediation Conference to select date for mediation
• Documents submitted are submitted privately
• At mediation, parties will submit positions then each party privately w/ mediator shuttle diplomacy
o Offers and counter offers are considered
• Suggestions a mediator may provide
o Monetary settlement
o Reduction of amount if brought court
o Parties should chose arbitration or litigation
• Up to parties to accept or reject solutions
o If so then will go to arbitration or litigation
 • Use a written settlement statement

• Advantages & Disadvantages:

o Relationships are not tarnished
o Low cost and fast
o Parties must mutually agree
o If settlement is reached then decision is final

Dispute Review Board

• Similar to arbitration
• If used it must be selected at project inception
o Real time, as disputes arise

Initial Decision Maker:

• Typically the architect unless noted otherwise in Owner-Contractor Agreement
• 10 Days to resolve a claim

• Appropriate Actions include:

▪ Request additional supportive documentation
▪ Suggest a compromise
▪ Accept the claim
▪ Reject the claim
▪ Lack of sufficient info or not appropriate to resolve
o If IDM requests additional info
▪ Must be provided within 10 Days
▪ Give response or info
▪ Tell IDM when response will be furnished
▪ Tell IDM the info will not be provided
o Demand for Mediation may be made
o Common Claims:
▪ Additional Time
▪ Unknown conditions
BASIS OF PAYMENT

Stipulated Sum:
• Fixed fee for a known scope of work
• Knowing cost of work at time contract is signed
• Most Successful when:
o Fully Defined scope
o Architect is familiar with
▪ Client
▪ Project type
▪ Local jurisdiction
▪ Project delivery process
• Determined by:
o Hours estimated
o % cost of construction
o Comparable projects
• Typ. Invoiced monthly by percentage completed

Cost Plus Fee

• Owner reimburses cost of
o Labor
o Materials
o Expenses subcontracts
• Another fee for
o Overhead and profit
▪ May be fixed or a percent
• Owner does not know cost of work when contract is signed
o May be outweighed by
▪ Meeting owners completion date
▪ Doesn’t work well with Design Bid Build
▪ Construction quality more important than cost
• Control estimate or target price used on larger projects

GMP
▪ Contractor assumes risk that cost will not exceed an amount
▪ Must have defined scope of work
▪ Entitled to increase for change in scope
FINANCIAL MANAGEMENT

Architecture Billings index

• Diffusion index derived from the monthly work on the boards survey, conducted by the AIA economics
and market research group.
• Serves as a leading economic indicator that leads non residential construction activity by approximately 9-
12 months
• A score above 50 indicates that firms in aggregate are reporting an increase in activity that month
compared to the previous month
• A socre below 50 indicates that firms are reporting a decrease in activity

Direct Expenses:
▪ Salaries
▪ Consultant fees
▪ Reimbursables (typically paid for by client
o Travel, expenses, phone, printing
▪ Insurance
Indirect Expenses or Overhead
▪ Payroll burden : insurance, workers comp. payroll taxes
▪ Administrative expenses and managers
▪ Items that do not support project activities
▪ Rent
▪ IT Maintenance
▪ Direct Personnel expenses
o Salary expenses & payroll burden
Revenue:
o Fees received from providing services (Fees billed)
o Reimbursable expenses
o Outside consultants
o Project related expenses
o Additional Sources of Revenue:
o Capital Raised
o Revenue from associated businesses
o Income from interest, rent or sale of assets
Profit:
o Difference in revenue + expenses
o Excess of revenue over expenses
o Required at 3 Levels
1. For The firm
▪ In the form of retained or reinvested earnings to provide for :
• Capital investments
• Endure downward economic cycles
• Sustain growth
2. For Producers
• Those who produce profit
3. For the Owners
• For the risk taken and a return on that investment
Practicing at a Loss : no profit and costs are not being covered

Normal Project Cash Cycle

o 3 Steps
o Performing Services
 o Invoicing
o Collecting Cash to Cover Costs
▪ Both direct and indirect

Profit-Loss Statement
▪ Reflects results of a firms operations in terms of revenue, direct and indirect labor, indirect expenses and
net profit for given accounting period
▪ 4 Most Important Factors
o Net Operating Revenue
o Direct Labor
o Total Expenses
o Net Profit
o Profit + Expenses = Revenue
o Revenue – Expenses = Profit

▪ 7 Key Performance Indicators

1. Utilization Rate: aka Chargeable Ratio
▪ measures overall efficiency and effective use of labor.
▪ Does not measure productivity.
▪ Does not measure number of hours billed, only hours charged to projects
▪ Target:
i. Entire Firm 60-65%
ii. Professional & Technical Staff : 75-85%

(Direct Labor / Total Labor Hours) x 100

2. Overhead Rate
▪ Cost of operations, not directly attributable to a project
▪ Target:
i. 1.3-1.5 of Direct Labor

Total InDirect Labor / Total Direct Labor

3. Break Even Rate

▪ Measures total cost of operations for every dollar spent on direct labor
▪ Target : 2.3 – 2.5

Method 1:
Overhead Rate + 1.0
(Represents one unit of cost for an hour of salary)

Method 2:
(Direct Salary Expense + Total Overhead) / Direct Salary Expense

Example : an employee makes 35$ per hour and has an overhead rate of 1.7, what is their
break even rate :
1.7 + 1 = 2.7 (overhead +1)
2.7 * 35 = 94.5$ per hour

4. Net Multiplier
▪ Measures revenue generated for every dollar spent on direct labor
▪ Must be greater than break even rate for a net profit to be realized
▪ Target : Greater than break even rate
 Net Operating Revenue / Total Direct Labor

Break Even Rate / Inverse of Target Profit% OR Overhead Rate + 1.0 / Inverse of Target Profit %

5. Profit to Earnings Ratio:

▪ Measures firms effectiveness in generating a net profit
▪ Target : Equal or greater than anticipated net profit

Net Profit (before distributions & taxes) / Net Operating Revenue

6. Net Revenue per Employee

▪ Measures revenue per employee
▪ Establishes net revenue for coming year
▪ Target : $100,000 + per employee

▪ Revenue per total staff

i. does not give a good outlook of the firms ability to make money because it involves
the principals and admin staff which do not have positive utilization rates

▪ Revenue Per Technical Staff

i. Will give a good outlook for firms ability to be profitable because these employees
are the highest utilized within the firm to generate revenue

Annual Net Operating Revenue / Number of Employees

7. Aged Account Receivables

▪ Shows all invoices and brings attention overdue ones
▪ Average of time, interval in days from date of invoice til date of payment
▪ Target : 60-90 days

Avg Annual Accounts Receivable / (Net Operating Revenue/365)

Financial Statements a firm Must Have

▪ Balance Sheet:
o Description of firms current financial condition for any given accounting period (realtime)
o Summarizes all assets & liabilities, all assets must equal all liabilities
o Important Part : NET WORTH: total assets less total liabilities

o 2 Factors: Assets & Liabilities

▪ Current Assets
▪ Current Liabilities : Less than 12 Months
▪ Long Term Liabilities : 12 + Months
▪ Equity = Liability – Assets
▪ Total Assets : Cash on hand, accounts receivable, unbilled

o Financial Performance Indicators:

▪ Solvency : aka current ratio
• Ability to pay debt, ability to meet its current obligations
• Target : 1.5 -1.0
• Current Assets / Current Liabilities
 • To ensure that firm is profitable
▪ Liquidity : aka quick ratio
• Assets to Cash
• Target : 1.0 min.
• (Cash + Account Receivable + Revenue Earned) / Current Liabilities
• Will not tell one the solvency in the upcoming year
▪ Leverage :
• Ability to manage debt effectively
• Target : Less than 35%
• (Total Liabilities / Total Equity) x 100
▪ Return on Equity
• Amount of money returned on a stockholders investment
• Target : Greater than Anticipated Net Profit
• (Total Net Operating Revenue – Total Expenses) / Total Equity x 100
▪ Cash Flow Statement:
o Shows inflow and outflow of cash
▪ Income Statement
o Measures a companies financial performance, revenues expenses, profits or losses
o Profit and loss for revenue and expenses
o “Nitty Gritty”

▪ Time Analysis Report

o Lists employees and time spent on direct and indirect labor
o Generates chargeable ratio (aka utilization rate)
o Used to monitor Utilization
▪ Project Progress Report
o Compares current hours to estimated hours + costs
o Shows hours & labor costs for each phase of the project
o Shows direct costs for consultants, overhead and reimbursables
▪ Office Earnings Report:
o Summarizes projects revenue generated, expenses incurred, unbilled services, percentage of
completion and profit or loss to date
▪ Fixed Expenses
o Office and facilities
o Office misc. (phone, internet, website)
o Business insurance
o Auto expenses
o Tax expenses
o Direct and indirect labor expenses
o Payroll and benefits
▪ Net Operating Revenue
o Net dollars remaining after deducting invoiced consultants fees and all reimbursable and non
reimbursable project related expenses
▪ Direct Labor
o Time charged to projects
o Same as direct salary
▪ Indirect Labor
o Time charged to non project related activities
o Same as indirect salary
▪ Reimbursable expenses
o Project related expenses charged to client in addition to fees
▪ Direct Expense
 o Project related expenses
▪ Indirect Expenses
o Non project related expense
▪ Net Profit:
o Amount remaining after all have been paid before taxes
o Gross Revenue – (Total Labor + Indirect Expenses)
▪ Current Earnings
o Net amount after all have been paid and taxes applied
▪ Net Multiplier
o Measures revenue generated for every dollar spent on direct labor
▪ Working Capital:
o Current Assets – Current Liabilities
▪ Current Liabilities
o Items due within 12 months
▪ Average Collection Period:
o Accounts Receivable / Average Revenue per Day
▪ Average Revenue Per day:
o Gross Revenue / 30 Days
▪ Firmwide Profit
o Profit / Net Revenue
▪ Revenue Projection:
o Existing Projects to be completed
o Outstanding proposals
o Unidentified future work
▪ Staffing Expenses
o Billing Rates
▪ (Hourly Rate + Indirect expense) + Profit % = Hourly Rate
▪ Billing rates are dependent upon : salary, indirect expenses (benefits), overhead, profit
o Direct Labor costs + Payroll Burden
o Admin Expenses
o Target Profit
▪ Overhead Expenses
o Uses previous expenses to determine overhead rates
▪ Overhead Rate = Total Overhead / DSE
▪ Direct Salary Expense
o Total overhead (indirect expense) / total budgeted direct salary expense
o Chargeable hours x hourly rate
▪ Direct Salary Expense Break Even Multiplier
• (Direct Salary Expense + Total Overhead) / Direct Salary Expense
▪ Direct Salary Expense Profit Multiplier
• Projected net fees / DSE
▪ Indirect Salary
o Non chargeable hours x hourly rate
▪ Indirect Salary Expense
o Salaries for marketing, admin, education, training, PTO, holidays, sick

▪ Time Utilization Ratio

o Direct Chargeable hours / total hours
▪ Payroll Utilization Ratio
o DSE / Total Salary Expense
▪ Direct Personnel Expense
 o Payroll burden is removed from overhead and added to salaries before overhead rate is
calculated
▪ DPE Break Even Multiplier
DSE
+ Payroll Burden (% of dse)
+ Overhead w/o burden (overhead – payroll burden)
/ DSE
• Indirect Expense Factor
o Ratio of all indirect expense to DSE
o Total indirect expense / DSE
▪ If indirect expense factor = 1.5, then you need 1.5 per $1 of DSE
• Billable Revenue
o DSE x DSE Multiplier
• Net Multiplier
o Net Revenue / DSE
▪ Net revenues excludes cost of consultants and non salary direct expenses
▪ Best measure for productivity
ACCOUNTING METHODS
▪ Cash Method
o Does not consider invoices sent until they are paid
o How much do we make, how much do we spend
o Costs may be incurred before you are paid
o Better at tracking actual cash flow
o Typically used by Sole Proprietorships
▪ Accrual Method
o Accounting for invoices in the real time
o Advanced payments
o Better picture of long term financial status
o Uses double entry bookkeeping
▪ Modified Accrual Method
o Records fees, revenue, expenses billed to the client and invoices to the firm from outside
consultants
o Doesn’t include earned but not yet billed
▪ Mattox Format:
o Measures profitability and performance
o Incorporates Profit & Loss and Balance Sheet
▪ Revenue, direct labor, indirect expenses & Misc. revenue
o 6 Column Component Sections : P-L
▪ Current Month
▪ % for current month
▪ Year to date
▪ % for YTD
▪ YTD Annual Budget
▪ % for YTD annual Budget
o 2 Components Balance sheet
▪ Assets (Current & Long Term)
▪ Liabilities (Current & Long Term)
▪ Scheduled Performance Index:
o Earned / Expected
o Goal is to keep this value as close to 1
▪ General Ledger Accounting
o Tracking money flowing in and out, needed for day to day operations, baking, taxes &
accounting
o Better than project cost accounting in making firm wide decisions and highlighting overall
financial standings
▪ Project Cost Accounting
o Tracks revenue, expenses and profit by individual projects
o Shows impact of each individual project to the companies financial health and helps in identifying
which projects are making money and which are not profitable
o Helps in allocation of resources, management of projects and creating accurate proposals
Building Fees
▪ Bottom Up Analysis:
o Project work plan is basis for this method
o Project planning builds the fees by phase based on :
▪ Scope, schedule and tasks required to complete the work
o Uses staff hours planned for tasks and builds fees by phases using firms hourly wages
o Based on effort
o Effort associated w/ task and
o Effort to reduce risk
 o Tends to be high and non competitive
▪ Top Down Analysis
o Formula driven, based on a percentage of construction cost
o Needs historical data to be accurate
o Does not respond to scope of services and provide assurance of schedule and budget
o Idea of total Fee @ inception
o Based on
▪ Experience w/ similar projects
▪ Specific market
▪ Competition
▪ Fee based on % of construction cost or other method
o When fee is determined break down for all indirect expenses to see net architects fee
▪ Divide that into each phase and task
o May be used to verify bottom up
o Fee Distribution
Construction cost
Gross Fee (% of construction cost) - Consultants fee (% of Gross Fee)
=
Net Service Revenue – (Direct Expense Budget – Contingency Budget)
=
Project Labor Budget (used for fee distribution by phase)
Fee Distribution by phase : takes project labor budget + breaks down percentages per
each phase required or allocated for specific phase
▪ Staff Analysis
o Consider staffing and durations required to complete a phase
▪ Contingencies
o Allow for contingencies in all methods
o 3 Types
▪ No intention to spend : will give you profit
▪ Intention to Spend : allows for variation
▪ Special Situations : if additional effort is required
PAYMENTS

Progress Payments:
• Intermediate payments
• Notarized payment
• 10 days before date established for each payment
• Includes value of work for up to that date
o Including
▪ Value of materials purchased and storage
• If storage if off site this must be agreed upon and costs associated w/
transportation and insurance must be included
• Architect to approve but not responsible to review in depth the requisitions
• Amounts due are based on schedule of values that is due after contract is awarded
• Retainage withheld
o Used to satisfy potential liens
o Leverage

Reasons to withhold payment requests:

• Materials not properly stored
• Amount of work is not complete
• Defective work
• Third party claims or probability of claims
• Failure of contractor to pay subs
• Evidence that work cannot be completed for balance
• Damage to owner or sub
• Evidence that work wont be completed on time or amount remaining wont be enough to finish
• Repeated failure of contractor to follow the CDs

Final Payment
• If all work conforms a final certification for payment is issued to the owner
• Prior to certificate being issued contractor must submit the following to the architect:
o Affidavit that payrolls, materials and debts are paid
▪ AIA G706 contractors affidavit of payment of debts and claims
o Certificate showing insurance wont expire
o Statement that no reason insurance will not be renewable
o Consent of surety of final payment AIA G707
o Releases and waivers of liens

Project Closeout
• Contractor notifies architect in writing list of outstanding items

Substantial Completion
• When work is sufficient w/ contract documents and can be utilized for its intended purpose
• Date is important
o End of contractors schedule
o Errors by architect

Punchlist:
• List of items by architect
• Contractor must submit:
o Warranties, maintenance contracts, operating instructions, certificates of inspections and bonds
 o All items for documentation of final payment
o Set of record drawings
o Certificate of occupancy
o Excess materials
o Cleaning
o Keys and keying
• Architects services are complete when final certificate of payment is issued
TYPES OF SPECIFICATIONS
• Descriptive
o Technical descriptions of exact characteristics of materials and products
o Utilizes proprietary product names to specify a “Basis of Design”
• Performance
o Describing performance qualities of a material or product
o Example : specifying the strength of concrete
o Often mandated by government agency clients, otherwise its seen as preferential
o Commonly used in Design Build
• Reference Specifying
o Reference standards by industry associations and allows industry accepted standards of practice
and performance
o Published by industry associations and tasting organizations
▪ ANSI, ASTM, UL
• Proprietary
o Preferred method, simple
o Specifier is familiar with qualities of specific products
o Supplemented with reference standards and performance requirements
CONTRACT DOCUMENTS

Consist of the following:

• Owner – contractor agreement
• General conditions of the contract
• Supplementary conditions (if any)
• Drawings
• Specifications
• Addenda issued prior to execution of contract
• Additional documents as listed in agreement
• Modifications : change order, construction change directive, written order by arch for minor change,
written amendment signed by both parties

Architects Base Services Include:

• Administering the contract
• Assisting the owner in preparation of bidding forms and owner contractor agreements
• Preliminary cost estimates

Architects Additional Services Include:

• Services rendered from Construction change directives and change orders

The Only Parties allowed to STOP WORK are the owner and the contractor since they are contractually obligated
to one another, unless other method is used… Architect typically does not have this ability.

AIA CONTRACTS
• SP after X### Designation represents a project that involves Sustainability, Sustainability Project
• Bim Projects will utilize, B, C, E & G series ONLY
• A Series : Owner Contractor Agreements
o A101 : Stipulated Sum
▪ How to remember : 1+1 = 2, reverse your 2 to represent an S, SS, Stipulate Sum
o A102 : Cost of Work Plus a fee with GMP
o A103 : Cost of Work Plus a Fee without a GMP
o A105 : residential or small commercial Project
o A107 : Project of Limited Scope

o A132 : Construction Manager as Advisor

o A133 : Construction Manager as Constructor where the basis of payment is Cost of Work Plus a
Fee With a GMP
o A134 Construction Manager as Constructor where the basis of payment is Cost of Work Plus a
Fee without a GMP

o A141 : Design Builder

▪ How to remember… 4 = D, (1+1 = 2) = B… DB, Design Build
o A142 : Design Builder & Contractor

o A195 : Integrated Project Delivery

▪ 95, IPD

• A Series : General Conditions

o A201 : General Conditions of the Contract
o A232 : General Conditions, Construction Manager as Advisor
 o A295 : General Conditions, IPD
▪ 95, IPD

o A305 : Contractors Qualifications System

▪ How to remember… 3 = C, 0 representative of a Q, 5 representative of an S… CQS
o A701 : Instructions to Bidders
• B Series : Owner – Architect Agreements
o B101 : Owner & Architect
o B102 : Owner & Architect, predefined scope of architects services
o B103 : Large or Complex Project
o B104 : Project of Limited Scope
o B105 : Residential or small commercial project
o B106 : Pro Bono Services

o B143 : Design builder & Architect

o B195: Integrated Project Delivery

• C Series : Consultant Agreements
o C401 : Architect Consultant
o
• G Series : CA Services
o G612 : Owners Instructions to the Architect
o G701 : Change Order
o G703 : Continuation Sheet
o G704 : Certificate of Substantial Completion
o G714 : Construction Change Directive
o G716 : Request for information

AIA B101 OWNER-ARCHITECT AGREEMENT

Article 1 : Initial Information

• Requires architect and owner to give project specific info assumptions
• Includes
o Project objectives
o Site information
o Owners program
o Physical, legal and time parameters
o Key personnel

Article 2 : Architects Responsibilities:

• Standard of care
• Code of ethics
• Requires architect and owner to agree on insurance requirements
• Owner must reimburse architect for any additional insurance

Article 3 : Basic Services:

• Covers structural, mechanical and electrical that the architect customarily provides
• As soon after agreement is signed, architect will provide a schedule
o Must include:
▪ Time for owners review
▪ Performance of owners consultants
▪ Approval of authorities having jurisdiction
 ▪ Dates of inception and substantial completion
o Additional provisions
▪ Project Administration services
• Must manage arch services and administer the project
▪ Evaluation of budget and cost of the work
▪ Evaluation of planning services
▪ Design services
▪ Construction procurement services
• Must assist in obtaining bids and awarding the contract
• Architect is authorized to act as an agent
▪ Contract administration services
• Site visits
• Owners Responsibilities
o Owner must provide arch with program, schedule and budget
o Owners consultants
▪ Land surveyor G601
▪ Geotechnical Engineer G602
o Must furnish insurance, legal and accounting services

Article 4 : Additional Services

• When additional services are required in order to maintain construction schedule
o Reviewing a contractor submittal outside of the construction schedule
o When a contractor provides an RFI that can be found in construction documents
o Preparing cost and construction change directives that require evaluation of the contractors
proposal
o Evaluation of extensive number of claims
o Substitutions that require change in CDs
o Providing construction phase services 60 Days past expected substantial completion

Compensation Methods
• Stipulated Sum/Fixed Fee
o Fixed sum for a specific set of services
o Architects fee does not include reimbursable expenses
• Cost Plus Fee
o Actual cost to do the work and a fee for profit
o Multiple of direct Personnel Expense
▪ Direct salary is determined and multiplied by a factor to include personnel expenses and
taxes, healthcare, sick leave, etc. then increased by a multiplier for overhead and profit
o Multiple of direct salary expense
▪ Sim to above but includes larger multiplier for employee benefits
o Hourly Billing
▪ Multiplier is built into hourly rate
• Percentage of Construction Cost
o Fixed percentage of the cost of construction
• Unit Cost
o Fees are based on a defined unit for example : square footage
o Used on projects with a great deal of repetition, hotels, hospitals, etc..

AIA B101 SP : OWNER – ARCHITECT AGREEMENT FOR A SUSTAINABLE PROJECT

• In addition;
o C401 Between Arch and Consultant
o D503 Example of a Sustainability Plan
 o B214 Standard form of Arch Services, Leed Certification
• Sustainability Objective
o The goal to be achieved by incorporating sustainability measures into the design, construction,
maintenance and operations
o May be based on a calc or other jurisdictional requirements or it may be voluntary.
• Sustainability Workshop
o Before schematic design, may be held earlier in programming
o Between arch, owner and consultants
▪ To confirm sustainability objective
▪ Establish goals and expectations
▪ Discuss possible Sustainability Measures:
• Specific design or construction element or a post occupancy use, operation,
maintenance or monitoring requirement that must be completed to meet
sustainability objective
• Sustainability Plan
o Identifies:
▪ Sustainability object
▪ Sustainability measure
▪ Strategies to implement measures
▪ Responsibility of owner, arch and contractor
▪ Details about design reviews
▪ Details about resting required
▪ Details about documentation
▪ D503 provides format to completing sustainability plan
• Sustainability Certification
o Certification of sustainable design, construction, energy performance and environmental
performance
o Based by Agency Certifying Authority such as :
▪ Green Building Certification Inc, which issues LEED
o If objective is certification, will take form of a spreadsheet
o Sustainability plan if accepted must be incorporated into drawings and used as an attachment
• Architect does not warrant that project will achieve objective

AIA A101 : OWNER-CONTRACTOR AGREEMENT

Article 1 : Contract Documents

• Contract Documents Include:
o The agreement
o The general and supplementary conditions
o Drawings specifications
o Addenda
o Modifications
o And other documents listed elsewhere in agreement
▪ In Article 9:
• Change orders
• Amendments
o Does not include : Bidding Documents
▪ Contractors bid form
▪ Program
• Provisions common to all owner contractor agreements
o Description of the work
 o Times of commencement and substantial completion
o Contract sum

Article 2 : The Work of this Contract

• Contractor is to execute work in accordance to the drawings and specifications

Article 3 : Date of Commencement & Substantial Completion

• Date of commencement states when construction completion or contract time is measured
• Substantial completion
o When the work or a designated portion of it is sufficiently complete so that the owner can
occupy per its intended use
• Completion time may be extended as stated in general conditions when delay is by no fault of the
contractor
o Example : weather

• Liquidated Damages :
o Fees paid by contractor for everyday the project is late
o Typically will be supplemented with a Bonus Provision:
▪ Payment for early completion
▪ Based on an amount owner expects to save if project is completed early
• Additional Penalty
o Included sometimes with liquidated damages
o If this is used, must be accompanied with a Bonus Provision

Article 4 : Contract Sum

• Covers the amount of compensation the contractor will receive

Article 5 : Payments
• Covers how owner will pay
• Amount due at any period is based off of a percentage of completion plus amount allocated for materials
stored

• Retainage : percent from each payment withheld until final completion

o Architect cannot revise retainage without owners permission

Article 6 : Dispute Resolution

• IDM : typically the architect, has 10 DAYS from receipt of claim, must take one of the following actions
o Request additional supporting data
o Project in whole or a part
o Approve
o Suggest a compromise
o Advise that is unable to resolve
• If claim is rendered, it is binding, but subject to mediation, if fails through mediation, subject to binding
dispute resolution which must be specified in contract : arbitration, litigation or other

Article 9 : Enumeration of Contract Documents

• Lists all contract documents
o A101 & A201
o Supplementary general conditions
o Specifications
o Drawings
o Addendums
 o Any additional documents

Compensation Methods
• Stipulated Sum
o Fixed price
o Competitive bidding always uses this
o Attractive to owners, costs are known as soon as bid is made
o Best used for projects that involve unit pricing, hospitals, hotels, etc…
o Lowest cost and total fee prior to starting work
• Guaranteed Max. Price
o If project is done for less, owner receives that money
o If project exceeds cost, contractor pays
• Cost Plus Fee
o Compensation for actual costs of labor, materials and subcontractors plus a fixed fee
o More flexibility than fixed fee, and allows construction to proceed before design is complete
o Disadvantage : cost is unknown but can be mitigated through :
▪ Guaranteed maximums
▪ Target prices with incentives, establishes a likely project cost and savings shared
▪ Partial cost guarantees
• Involve obtaining fixed fee from subs or material suppliers
• Unit Pricing
o Used for portions of project, when not possible at bidding to quantify
o Frequent in excavation projects, and hotels and hospitals

AIA A201 : GENERAL CONDITIONS OF THE CONTRACT

Article 1 : General Provisions

• Contains definitions such as Contract Documents:
o Contract documents do not create a contractual agreement
• The Work : contractors obligation to provide improvements to project
• The Project : may include construction by other contractors or the owners forces

Article 2 : The Owner

• Outlines duties, responsibilities and rights of the owner
• Among responsibilities, the owner must furnish that financial arrangements have been made
o Once work begins, the contractor can request again if
▪ Owner fails to pay
▪ Contract sum changes
▪ Contractor receives in writing a concern of owners ability to pay
• Contractor would file a Mechanics Lien
• “Carry Out The Work”
o Owners right if contractor fails to perform
o Owner must give written notice first for the contractor to fix work
▪ Contractor has 10 DAYS to correct problem
▪ If no response, owner has right to move forward with arbitration or legal action for
breach of contract
▪ May execute a change order or construction change directive for cost to fix work,
including owners expenses and compensation for additional arch. Services, should be
deducted from contract sum
• Must be approved by architect

Article 3 : The Contractor

 • Contractor not liable for errors and omissions unless they failed to report it to the architect
• Not contractors responsibility to make sure CDs are in accordance with codes. But if knowingly notices
code errors must report to architect or assumes full responsibility
• Other responsibilities:
o must warranty that work is not defective
o Permit : must pay for permits
• Concealed or unknown conditions must be reported within 21 DAYS
• Allowances :
o do not include overhead and profit costs
o Does not include : unloading, handling and installing
o Cost of item, delivery to site and required taxes
• Record documents and submittals
o Must be kept at job site
• Design Services : Design Delegation
o Allows use of performance specs for products and building assemblies
o If a consultant needs to be hired by the contractor

Article 4 : The Architect

• Change Order
o Written by the architect and signed by the owner and contractor
o Includes change and how it effects cost and time
• Construction Change Directive
o Requires agreement only by owner and architect
o Once cost has been evaluated by architect and owner a change order is produced
• Minor Change in Work
o Ordered by architect
o Does not change sum
• Mechanics Lien
o Claim by one party for a satisfaction of a debt
o A property with a lien cannot be sold until lien is resolved, except through foreclosure
o Example : if a contractor doesn’t pay a sub
▪ Methods for protecting owner in Section 9 : Waiver of Lien at Substantial Completion

Article 10 : Protection of Persons and Property

• Contractor is solely responsible for taking precautions against injury and damage to
o Contractors employees
o Other people effected by the work
o The work itself
o Other property or neighboring property
• 10.3 Hazardous Materials
o Contractor must notify architect and owner in writing
o Contractor must indemnify owner for cost of remediation

Article 11 : Insurance and Bonds

• Architect cannot advise owner or contractor on insurance and bonds
• Contractor must have liability insurance including:
▪ Workers comp
▪ Bodily injury or death
▪ Damages to the work
▪ Personal injury
▪ Motor vehicle
▪ Claims to contractual liability
 o Contractor must add architect and owner and consultants as additional insured parties for claims
of contractors negligence
o Coverage must be max. liability as stated in contract or min. by law, whichever is greater
• Owner must have liability including Property Damage : Must be all risk policy
• Contractor may be required to carry Surety bond aka Contract Bond
o Agreement of 3 parties
o Surety : bonding company agrees to be responsible to the oblige (owner) for the default of debts
by the principal (contractor)
o Protection for owner if contractor defaults
• If any work after a year of substantial completion is found not in accordance with the CDs, the contractor
must fix within 10 DAYS
• If owner accepts non-conforming work, it must be done through a change order

Termination of a Contract
• 7 DAYS written notice
• Contractor:
o If work has stopped for 30 + DAYS, at no fault of the contractor
▪ Reasons including:
• A court order
• Act of government
• Architects failure to issue a certificate of payment or give a reason for not
doing so
• Owners failure to make payment within a reasonable time as stated in the
contract
• Owners failure to give evidence that financial arrangements have been made
o If work has been delayed for 120 DAYS in a 365 DAY PERIOD or for a total number of days equal
to construction time frame
o Cannot be delays due to contractors errors
• Owner:
o May suspend work for any reason without cause
o If contractor fails to have sufficient man power at site, or fails to pay subs, disregards laws, or is
guilty of substantial breach of contract

Article 15 : Claims & Disputes

• Claim :
o Assertion made by a party to the contract that he is owed payment or other relief
o Must be initiated within 21 DAYS
o While claim is being resolved, contractor must continue work
o Claims are referred to by IDM, if parties disagree it goes to mediation, if mediation doesn’t work
it goes to method of arbitration or litigation
o Claims can only be made for DIRECT DAMAGES
▪ Includes cost of repairing defective work or completing unfinished work
▪ Contractor and owner waive Consequential Damages (indirect)
• Owner:
o Rental expenses
o Loss of use, income, profit, financing, business, reputation
o Loss of management ore employee productivity
• Contractor:
o Expense for running principal office including staff compensation
o Loss of financing, business, reputation
o Loss of profit not associated with project
A201 SP : GENERAL CONDITIONS OF THE CONTRACT FOR A SUSTAINABLE PROJECT
• Similar to A201
• Contractor must provide a waste management plan
o Recycle, reuse, remove, dispose
• Additional conditions separate from contract
o Bidding documents
o Administrative and procedural requirements

C401 : ARCHITECT – CONSULTANT AGREEMENT

• Communication must be done through the architect
• Architect must inform consultants of code requirements and design decisions that may have code
implications

OTHER DOCS
• Consensus Docs:
o Used by other (contractors, owners) to end the bias in architectural favored agreements
EMPLOYER COMPLIANCE

Any Number of Employees

• Equal pay act
• OSHA
• I9
• Fair Labor Standards Act
• Personnel Files (2 years)
• HIPPA
• American Recovery and Reinvestment Act
• Employee Retirement Income Security Act
• National Labor Relations Act (The Wagner Act)

15+ Employees
• Cobra
• Civil rights act
• American with disabilities act

20 + Employees
• Age Discrimination in Employment Act (40+)

50 + Employees
• Family medical Leave Act (12 Weeks)
• Affirmative Action Plan
• EEO Reporting
• Annual Report (Form 5500)

Davis Bacon Act

• Requires workers to be paid local prevailing wages when public funds are used
• Supports public good

Clinger Cohen Act

• Allows the use of design build contracting on federally funded projects

Miller Act
• Requires contractors to post performance and payment bonds

Brooks Act
• Requires federal agencies to award projects to architecture and engineering firms based on qualifications
based selection processes.
• Firms submit evidence of their experience and qualifications but do not submit cost proposal
• After the firm is selected the agency negotiates with the firm to determine the fee
METHODS OF FIELD MEASURING AND REPORTING
• Electromagnetic distance measurement
o Laser based instrument with an onboard computer to measure distance, horizontal and vertical
angle to a reflective prism
o Two people are required to operate
o Accuracy of 1/64” @ 1600 feet
• Reflectorless electromagnetic distance measurement
o Does not require reflective prism, relies on return signal of object being measure
o Accuracy of 1/8” at 100’
• Rectified Photography
o Uses digital cameras to photograph facades
o Cameras focal plane is set perpendicular to façade and gives flat image with no perspective
distortion
• Orthophotography
o Similar to rectified photography but uses digital photography and computer software to correct
for optical distortion
• Photogrammetry
o Surveying objects or spaces through photography and associated software
• Stereo photogrammetry
o Two overlapping images in a computer program to create a digital stereo image
o Used to create 3D models
• Convergent Photogrammetry
o Multiple photographic images of an object at different angles
o Creates measurements and 3D models
o Reference must be created using surveying techniques
o Accuracy of .05%
• Laser scanning
o Uses medium range pulsing laser beams that pulsate over an object to obtain 3D coordinates of
points on surface being scanned
o Resulting image is a “point cloud” which forms a 3D image
▪ Computer software can develop drawings from this
o Accuracy of .05-.01 or better
o All info can be gathered from a single point
ZONING TECHNIQUES
• Bulk Plane Restriction
o Imaginary inclined plane (center of a street or lot line) & sloping at a prescribed angle over lot.
Building cannot extend into this plane.
o Ensures lights and air to neighboring properties
• Eminent Domain:
o Right of government to acquire private property for a use that is determined to be in the public
interest.
o It is granted by the fifth amendment
o Intended to allow public projects to move forward while fairly complicating private property
owners for their property and any other damages, such as relocation expenses. Sometimes
known as condemnation
▪ The condemner must prove the property to be acquired for a public purpose in order to
determine fair market values
• Easement
o Right of one party to use a portion of land of another party in a particular way
▪ Example : utility company can install equipment but no structure can be built without
permission of party holding the easement
▪ Utility, access, support (party walls), joint use (share common feature, ie: driveway)
▪ Scenic: protect views and development
▪ Conservation : limit land use in large areas
• Right of Way
o Right of one party or the public to transverse land belonging to another
• Deed Restriction
o Rules and regulations that govern one or more lots or parcels of land
o Created in a document that is recorded with the county register of deeds records where the
property is located
o Permanent and run with the land, bind all current and future owners of the lot or parcels
involved
o Set of regulations imposed by a land developer when created a plan, condominium development,
multi parcel land division
o Negative or restraints on the use of land
• Restrictive Covenant
o Provision in a deed limiting the use of the property and prohibiting certain uses
o A clause in a deed or lease to real property that limits what the owner of the land or lease can do
with the property
o Allows surrounding property owners, who have similar covenants in their deeds, to enforce the
terms of the covenants in a court of law
o Intended to enhance property values by controlling development
o Not established by the federal government, established by any landowner who limites of use of a
property
▪ In addition to any local zoning ordinance restrictions
o Must be reasonable, and not so unfair that its unreasonable.

o May include setbacks, min. square footage, types of exterior materials

• Conditional Covenant:
o Permits the title of property to revert to the original owner fi the restrictions in the deed are not
followed
• Affirmative covenant
o Commits a buyer to performing a specific duty in the future
 o Example : a garden must be maintained
• Conditional use Permit
o Provides permission from a zoning board to use property for a special purpose if the propose
may not comply with the zoning restrictions in force in that area. But it is permitted because the
use services the public interest
• Planned Unit Development
o Typically reserved for larger scale developments
o Ability to arrange land uses with greater flexibility
• Incentive Zoning
o Aka zoning bonuses
o Allows owner greater development density or bonuses if they provide benefit to the
communities
▪ Example : public parks
• Performance zoning
o When a development is evaluated on a measurable characteristic
▪ Example : pollution or traffic generated
• Overlay zoning
o A zone that overlays and modifies an underling district
o Typically used to support historic districts
• Transfer development rights
o Allows an owner who desires to build at a higher density rate, to purchase unused development
rights from another property owner
o Has been used to preserve historic properties and agricultural
• Form Based Codes
o Informed by design characteristics
▪ Forms, design character and contextual relationships
o Accompanied by illustrations
• Smart codes:
o Addresses dense urban core to rural
o Promotes compact development and walkable communities to conservation of rural land
• The Rezoning Process
o Involves changing the zoning classification
o Occurs at both planning commission and governing body
o 2 Steps
▪ Hearing at the planning commission, decisions typically advisory
▪ Hearing before governing body, uses political judgement in their decisions
• In most cases a board of zoning adjustment or appeals occurs, similar to a planning commission
hearing. Somewhat judicial process, typically no additional hearing by a governing body
• Subdivision regulations
• Minimum standards for the sudations of a property
• Division of parcel into two or more parcels
• Intended to insure a property maintains continuity and connections neighborhoods, adequate
service, etc.
• Subdivision process similar to rezoning
• Recorded by jurisdiction in maps known as PLATS
• SEE PAGE 894

LAND VALUES
▪ Influenced by 3 Factors
o Location
o Local market conditions
 o Potential for generating profit
▪ Land Value Is calculated:
o Market Approach
▪ Based on comparisons in surrounding neighborhood “comps”
▪ Land value based on , value per sf, acre or other unit quantity
o Income Approach
▪ Potential that property has to yield a profit
▪ Gross income estimated than various expenses deducted
o Cost Approach
▪ Estimated at highest and best use, then cost to renovate or rebuild is calculated
▪ Estimated depreciated is deducted

TAX STRUCTURE
▪ Mill Levy
o One thousandth of a dollar or one 1oth of a cent
o Assessed Value
▪ X Percentage of actual value multiplied by actual value = X
▪ Yearly Tax = Y
• X x Mill Levy = Y

Acre : the most common shape for an acre is 1 furlong by 1 chain or 660 feet by 66 feet = 43,560 sf
BUILDING CODES AND STANDARDS
▪ Construction Classification
o A vs B
▪ Designation of whether you are protecting materials with fire rated protection. NOT
sprinkler system or similar
o Type 1 : Non combustible – Reinforced masonry, concrete or steel
o Type 2 : combustible– Reinforced masonry, concrete or steel
o Type 3 : Exterior non combustible, interiors are not
o Type 4 : Exterior non combustible, heavy timber
o Type 5 : any material
▪ Lot Coverage vs. Buildable Area
o Lot Coverage :
▪ Percentage of overall site area that footprint of building is permitted to cover
o Buildable area
▪ Area of site within setbacks from property line that is permittable to be built
• Example: buildable area may be 80% of lot but lot coverage may be 40%,
reducing building area to lot coverage
▪ Net Area
o Does not include circulation, mechanical rooms, walls and structural elements and thickness
o Only includes main building functions
o Aka net assignable area
o Secondary spaces : non assignable areas
▪ Gross Areas
o Non assignable + Net
o Ratio of non assignable to net is known as : efficiency, efficiency ratio or net to gross ratio
o To find gross area : net / efficiency % = Gross area
▪ Floor Area Ratio:
o Example : Coverage 40% of 10,800 sf lot
▪ Building footprint 4,000 sf
▪ FAR 1.3
▪ Can you build 4 Stories : NO
• 10,800 x 1.03 = 14,040
• 4,000 x 4 = 16,000 (EXCEEDS)
▪ 3 Stories @ 12,000 sf allowable
▪ Rentable Area
o Gross Area x Load Factor
o Includes circulation and service spaces (prorated)
o Determined by occupant area x load factor
o BOMA Measures
▪ Demising walls : to centerline
▪ Multi occupant corridor walls : inside finished surface
▪ External wall
• If 50% or more is glass : measured to inside face of glass
• Or inside face of wall
▪ Columns, recessed entries : ignored
o ANSI BOMA Methods to determine rentable area
▪ Method A : Legacy Method
• May result in different load factors for different floors
• Uses separate R/U ratio (rentable area / usable area) for each floor
▪ Method B : Single Load Factor Method
• Same load factor for all floors
• Use R/O Ratio (Net floor area / usable area)