Pro Practice

Pro Practice A Profession: 1. Involves a store of knowledge that is more than ordinarily complex 2. Intellectual enterprise 3. Applies theoretical and complex knowledge to the solution of human and social problem 4. Strives to add to and improve the stock of knowledge; 5. Passes its knowledge to novice generations, usually through universities; and 6. Tends to organize in peer formation that establishes criteria for admission, practice, and conduct - Altruistic and profit oriented Licensing - Professional licensing laws, “title acts” what you are allowed to call yourself, “practice acts” what you’re allowed to do National Council of Architectural Registration Boards (NCARB) – help test and accredit States issue license - Meeting educational requirements by obtaining professional degree from an accredited program in an academic institution - Obtaining practical experience by working for a licensed architect, - Passing series of licensing exams, Architectural Registration Examinations (AREs), written under the auspices of NCARB - Assuring good character IDP, Intern Development Program – track aspiring architect American Psyche - Richard Swett, ambassador to Denmark, on architect: 1. Educated themselves quickly to solve new problems and to analyze a great deal of data, often incomplete and conflicting 2. Create ideas that synthesize the information, often using other seemingly unrelated arts or technologies 3. Communicate ideas verbally and graphically 4. Figure out the best process for implementing the ideas 5. Get it done, as conceived, utilizing entities that have conflicting interests Design – Service has three components: (1) independence/integrity; (2) usefulness; (3) reliability Business – providing challenging/satisfying work environment; fair profit Parties in the Construction Industry Owners - Private Clients (owner-uses, developers) - Public Clients Design professionals

- Architects, (joint venture/associated architects); Engineer (structural, foundations, mechanical, electrical) Constructors Contractors, subcontractors Finance Owner’s equity Mortgage: a loan with the property as collateral Construction loan, for new construction, paid out as the construction progresses, which is paid off and converted to a permanent loan (mortgage) Appraiser, professional qualified to judge the value of a property, that the loan is less than the expected/projected value of the completed building Foreclosure, the bank wanting to know it owning something worth more than the amount that it lent Commitment letter: promising to lend the owner the agreed-upon amount upon satisfactory completion of the project - For commercial properties, it may go beyond getting certificate of occupancy but renting a percentage of the space at agreed rents Permanent loan: does not address how to pay for costs incurred before completion, (land acquisition, architect/engineer fees, payment to the contractor) - Covering these interim costs, you need a construction loan Mortgage Broker; find funding on the most favorable terms and at the best rates Major pools of capital in USP pension funds and insurance companies - Loans are often administered through banks, but large projects money from these sources is often lent directly to owners - Sometimes banks aggregate or “bundle,” groups of mortgages and convert them into securities, (mortgage-backed securities) Marketing, Sales, and Others Marketing specialists, real estate agents, brokers Marketing specialists – guide the design, show the completed spaces, and arrange for showings to other brokers to expand the field of sellers, advertise the project, Owner’s rep, -- handles the administer of a large construction project Independent testing organization: Underwriters Laboratory (private), U.S. bureau of Standards Governmental officials Zonings and building codes, OSHA (Occupational Safety and Health Administration) ADA (Americans with Disabilities Acts) Construction Industry Organizations American Institute of Architects (AIA) Professional Engineers (PEs)

Association of General Contractors (AGC) National Association of Home Builders (NAHB)

3 Marketing Architectural Services Media: editorial coverage and paid advertising Request for Proposals, open bid Satisfied Clients Civic networking Competitions - Pros: test yourself on larger project, develop portfolio, may win - Cons: spend a lot of time and money; design vacuum (no input from client); waste design ideas; produce work on behalf of a client who doesn’t or underpays for the design; judged on looks 4 Project Delivery Methods - Design-bid-build/design-award-build - three parts: (1) Owner: person/group organizes all the aspects of the project and ends up owning the completed work; defines the needs, site, arranges the financing, pays architect and builder; (2) individual or firm that creates, documents and manages design; (3) contractor, people who carry about the construction

Design-Bid-Build Sole prime general contract vs multiple prime contracts - Variables: scope of work (quantity/quality), schedule (time it takes to do each portion); money (cost of each component); risk (how certain it is that the other factors will turn out as expected and desired Construction management - Owner hires CM early in the project for advice on budget, schedule and constructability, CM puts out the bid packages one the architect completes the CDs, - Supervision and management throughout the construction period, providing a professional service at very little economy risk (fixed fee) - CM may act as the agent for the owner and signs the contracts with the selected subcontractors - GMP, guaranteed maximum price (GMP) for all the work) Takes on a degree of risk - Permits the fast-track of jobs, beginning stages while other are still in process Design-build Owners retains one firm that both designs and build the project for an agreed sum

- Owners must be able to clearly define their needs and produce very detailed requirements for buildings, including size, quality, configuration, and performance requirements regarding daylight, environmental conform levels, energy consumption - Prevents architect from creating design that comes over budget but architect no longer uninterested arbiter in affairs Bridge design-build: owner hires design architect for schematic design, and design documents given to the design-build firm - These drawings are reviewed by design firm Owner builders: owner is also a the constructor, either acting as general contractor and hiring the subcontractors or acting as GC providing most of all of the subs - May hire architects to design and construction documents but do things themselves Owner designers Chapter 5: Owner/Architect Agreements Agreements: clarify communicate expectations and roles Fees -services to be provided - Responsibilities of each party Enforced by law Legal: mutual assent

Forms of agreement (4 Architects responsibilities, Communications Change in scope and services provision 82 AIA B141 Agreement between Owner and Architect Client’s standard Form- - desire and risk

Services General services: administers the project; consults regularly with the owner; researches issues; considers alternatives in design, material, systems, and equipment; provides “valueengineering”; attends meetings; makes presentations; issues reports; prepares and updates project schedules and budgets; keeps the owner and all other parties fully informed; submits designs and documents to owners for approval; assists owners in all governmental and regulatory filings Owner’s responsibilities: providing the program (needs, resources, parameters, goals, site information) (50)

-

Site information: site survey, topographic/utility information;

117-119, Accounts payable, 118 Accounts receivable, 118 Accrual accounting, 118 Owner’s obligations; timely answer architect questions, stick to decisions, pay architect for services and expenses, Task 1: Agreement Task 2: Evaluate proposed program, budget, schedule, site, and method of contracting for construction services Task 3: assemble team for project: consultants (review with owners) ● review their professional liability insurance coverage Standard services (considered in discussion with :) Changes in services Fives Phases: Schematic design, design development, construction documents; bidding and negotiation; construction administration phases Additional services: energy audits, sustainable design considerations, security design, and indoor air quality Schematic Design 1. Prepare an outline specification (scope of work): Earthwork, Foundations ,Structure, Finishes, Mechanical Systems CSI (Construction Specification Institute) 2. Review the project schedule (54) 3.

Prepare a statement of probable cost (54)

Unit costs (square feet) Escalation (price increase) Design contingency (“improvement”) Bidding contingency (uncertainty of marketplace) Construction contingency (unforeseen site and filed conditions, omissions)

Design Development “Refine the design prepared in the schematic design phase so that every design decision necessary to build the project is considered, revised if necessary, and confirmed.” (55) Interplay of all parts Review zoning/building codes Repeat schematic design tasks of specification, schedule, probable cost Get client to sign design development drawings, specifications ,schedule, budget Construction Documents Two parts: working drawings (graphic) and project manual (text portion)—known incorrectly as specification Construction documents state exactly the scope and quality of work the owner is purchasing from the contractor for a sum of money to be specified.” (56) Working Drawings: Drawing order: architectural, structural, mechanical, electrical, plumbing, sprinkler Project manual: Front End: includes all the business parts of the agreement and the conditions of the relationships of the parties: 1. Invitation to Bid Letter - invites contractors to submit bid Describe project in general terms Information about the bid (# of bidding documents, due date, location, private/public bid 2. Instruction to bidders: AIA A-701: their obligations to carefully review all contract documents/conditions 3. Bid form: bidder’s name, over contract sum, contract sum breakdown, general conditions, overhead/profit, and unit price list, prices for alternate, cost of bonds, time to mobilize and being work, period to execute work 4. Form of contract, A-101: contains list of contract documents with their dates, terms prices 5. General conditions of the contract: rules for the prosecution of the work. AIA A-201 6. Supplementary Conditions (also called riders) itemize additions, deletions, and modifications, by paragraphs, section and line to AIA A-201 in order to adapt an architect’s preference of details of practice or to fit the particulars of the project. 7. Unit Prices: agree-in-advance list of prices and costs to add/subtract different quantities of these components 8. Alternates: possible changes to the basic work shown in the construction documents; addition or subtraction of a chuck of work/ or substitution 9. Allowances: provisions for items that haven’t been designed yet or that can’t be known at the time of the agreement 10. Phasing Requirements: phases if building cannot be built as one continuous process 11. General Notes: Segue to technical sections, instructions to contractors about issues that apply to every trade - try to put every trade on notice about conditions and requirements that apply to all trades on a job

Project Manual: Technical Sections /specs CSI (Construction Specification Institute), technical sections, describe each type of work/trade, same order Specifying work: “prescriptive method”, specific materials and means; “performance method” describing final results Technical sections: scope, related work, reference standards, submittals, warranties and guarantees, products, labor, execution Submittals (before the subs order or make the actual products or materials” Can include shop drawings, physical samples, cuts (catalog or product description listing all relevant specifications) Standard Construction (defined in the AIA A-201 General Conditions) comes with one-year warranty Warranty: covers services or products of the party making the warranty Guarantee: made by one part for goods and services of another party Labor: certain kinds of work must be done by specifically trained Execution: necessary site conditions, preparations, remedies of reinstallation, adjustments, cleaning Bidding and Negotiation (63) Method of bidding: open bidding (advertising) and closed bidding (list of qualified, appropriate bidders) Researching bidder: ask other architects; look at recently built works and recommendations Owners might bring in their own contractor Bid period: the time between sending the bidding documents to the bidder and when the bids are due, architect arranges site visits for contractors (keep log), answer questions Bid addenda: periodically prepared answers (w addendum number and date) Bids are date- and time-stamped on receipt Opened either with contractors present (public) or not (private) Bid summary: spreadsheet tabulating bidders; contract sums, trade breakdown, cost for unit price items, alternates, bond costs, and dates for starting and completing the work Bid bond: offered by insurance company and submitted with a bid Bid security: a certified check for a specified dollar amount or percentage of the bid, along with the bid. Contract Administration (65) Makes typically 20% of architect’s fee Longest part, involved third party contract, where most problems occur Arbitration between contractor and owner: not giving into demands of owner but ensuring the level of quality from the contractor the owner has contracted Once construction begins, schedule in contractor’s control Construction administration phase Signing three complete sets of contract documents, working drawings project manual, bid addenda, contract

Final completion (all contractor’s obligations to the owner have been met) Sixty days after substantial completion (premises are able to be occupied for their intended use) Post sixty days, time is considered change in services Site observations (periodic) Inspections (67) at substantial completion and final completion Construction means and methods (68) OSHA (Occupational Safety Health Administration) Communication protocol (68) standard owner/architect agreement Should be in writing Processing submittals: “submittals called for in the project manual are sent during the course of the work to the architect, who reviews them for conformance to the design intent and points out nonconformance to specification requirements.” (69) Submittal log (required submittals) Submittal schedule Request for Information (RFI), contractor question for architect Notice of Proposed Change (NPC), describing change Proposed Change Order (PCO), information regarding changes in contract sum or construction period Change Order (CO), describes change in scope of work, contract sum and contract period Signed by contractor, owner and architect—part of contract documents Requisition of Payment (req) consisting of: 1. requisition certificate, spelling out original contract sum, changes made, current contract sum; summarizes work to date, payments to date, and amount currently due, 2. Continuation sheet, lists every trade of work, the full value of that trade, the portion of the work completed to the date of the requisition, and the calculated amount thus due - Retainage, a fix percentage of the amount due - over-requisitioned (71) Punchlist (71) after substantial completion, list of all items uncompleted or done incorrectly Contractor submits close-out documents, guarantees, warranties, final waivers of liens (sworn statement that no claims will be made against the project for nonpayment) Changes in Services Preparing the program for the project, assisting the owner in site selection, providing a clerk of the works, evaluating an excessive number of change orders, changing previously approved drawings, changing the documents due to a substantive change in the project size/quality/complexity/schedule/budget, assisting in correction of fire or water damage or vandalism, assisting in litigation, providing services to complete the project after sixty days beyond substantial completion, carrying out post-occupancy evaluation, doing the project as multiple prime contracts or as “fast track”, providing assistance in corrective work or retrofitting, providing inspection prior to end of guarantee periods 6 Fees for Architects’ Services Fee Bases

Percentage of construction cost, fixed fee, or time charges Limited fee—limited services Architect’s services, two kinds, standard services and change in scopes of services Percentage-of-construction-cost Basis (74) Fee-fixed Basis (76) Time-charge Basis (76) Billing rates, legal structure of firm, staffer salary + “mandatory and customary benefits” Mandatory, pro-rata, Federal Insurance Contributions Act (FICA), unemployment insurance, workers’ compensation insurance Direct Personal Expense (DPE): hourly rate of salary + benefits Overhead (OH), cost of doing business besides the direct costs of people (rent, telephones, furniture, computers, software, etc…) Profit Other methods: architects taking an equity position/share of ownership in a project, rental profits Chase of scope of services Prior notification Reimbursable expenses (large-format copying, plotting, photocopying, graphics services), postages and delivery costs, travel and lodging costs… 7 Business Terms of Owner/Architect Agreements Project parameters, instruments of service and copyright law, dispute resolution, consequential damages, publicity and photographic rights, timeliness of payments, and initial payment Project Parameters (1) The parties, project description, budget, proposed schedule, consultants Instruments of service: sketches, drawings, project manual and other work products done by the architect Owners get the right to use, not ownership 1986 copyright laws protects plans and buildings (85) Dispute resolution American Arbitrage Association (AAA) Nonbinding mediation – both parties meet with a mediator and present their sides of the dispute Binding arbitration: once arbiters have ruled, neither side can appeal the ruling unless fraud can be proven Joinder: can’t sue two parties together without their permission Consequential Damages (88)

Publicity and Photographic Rights Timeliness of Payments Initial Payment: initial minimum payment 8 Owner/Contractor Agreements and Contractor’s Services Forms of Agreement AIA A101 Owner/Contractor Agreement AIA A201 General Conditions Stipulated sum sole prime general contract “stipulated sum” work that is clearly defined in the contract documents done for a fixed, agreed-upon amount of money “sole prime” owner entering into one agreement for all work “general contract” AIA A201 General Conditions, code for execution of agreement spelled out General Provisions (92) (1) The contract document are defined as those listed in the agreement (2) Concept of correlation and intent establishes that it is as if it were mentioned in all places (3) The organization of drawings and information does not determine who the contractor should engage to do any particular part of the work (4) Ownership of documents is the architect’s Contractor has the right to ask for evidence that the owner has the money for the project, either in hand or committed by a lender Communication of the owner through the architect Contractor Contractor affirms that all documents have been thoroughly review Responsible for providing labor, materials, supervision by a competent superintendent, management, and direction to complete all the work (means and method) (1) Keep/update project schedule (2) Obtain all required submittals, conformance with contract documents (3) Keep a full set of documents and submittals (Shop drawings, samples, schedules, product description sheets) (4) Keep site clean (5) Indemnify against persona and property damage caused by work (6) Provide all required cutting and patching Contractor Administration (94) The architect should (1) Handel all communications between owner and contractor as agreed (2) Review and certify requisition, applications for payment submitted by the contractor (3) Prepare change order and construction change directives (4) Conduct observations and inspections

Mediation > arbitration > court Subcontractor (94) Work by Owner or by Separate Contractors (95) Owner/contractor agreement calls for this mutual respect and responsibility Changes in the Work (95) Developed field conditions/unforeseen conditions (1) The architect defines the scope of the work thoroughly and clearly (provides construction sketches (CSKs), architect submits notice of proposed change (NPC) (2) Contractor prepared a proposed changed order (PCO) describing work, changes to contract sum… (3) Architect reviews PCO, may request further explanation (4) Architect prepares Change Order (CO) including scope of the work: all three parties need to sign to approve CO (5) Construction change directive (CCD), orders the contractor to proceed with the change for a stated (or TBD) sum. (6) Contractor makes change Time Contract time: time which the contractor must complete the work Schedule showing each state and lists milestones (like foundations, steel erection, and enclosure) Changes achieved by COs Liquidated damages: contractor to pay a predetermined amount, often assessed per day, representing the actual cost to the owner of the contractor’s lateness Bonus-and-penalty clause, award the contractor a set amount of money if the work is finished early and penalized the contractor if it is finished after the stipulated date Force-majeure: circumstances beyond the control of the parties Payment and Completion Schedule of values: requisitioning purposes Application for payment: made by contractor at specific intervals Includes a certificate of payment/requisition cover form, and continuation sheet, which shows the details of the requisition by line item (98) Retainage, held by owner until completion of project Substantial completion; certified by the architect Final completion; contractor fulfilled all contractual obligations Certificate of final completion; issued by architect, monitoring the punchlist, producing final waivers of liens from all subs, suppliers, and the contractor itself, delivering all manuals, certificates of compliance, final certificates of occupancy, sign-off, “as-built” drawings, if required, and warranties.”

Close-out reconciliation of monies between owner and contractor by adjusting the final contract sum for allowance and contingency balances, contract savings, unresolved change orders… (99) Protection of Persons and Property Insurance and Bonds Worker’s compensation; mandated by the State, protecting the worker Project policies; cover all aspects of the project Sureties (risks) Bid bond, covering the risk that the contractor won’t enter an agreement Bonds—can cover two risks, contractor’s failure to finish project and to pay the subs which cause the subs to file a claim (a lien) against the owner’s property for payment Performance bond Uncovering and Correcting Work Give notice to the architect in advance… otherwise contractor must to uncover work at no additional cost Miscellaneous Provisions Cost plus or cost plus a fee, when construction has to being before all the drawings are done, the contractor may charge the owner for the actual costs, adding overhead and profit either as an agreed-upon percentage or the costs to o be reimbursed or as a fixed amount. (102) Guaranteed maximum price (GMP): maximum price 9 The Architect’s Office Core values, services and kinds of clients (1) Expertise, experience and execution(103) Business versus practice-centered Forms of Ownership (1) Sole proprietorship, has one owner liable professionally and financially for everything the firm does a. Income and expenses of a sole proprietorship are considered part of the sole proprietor’s personal tax filing b. Business expenses + employee’s salaries are entered as expenses on the sole proprietor’s tax returns (2) Partnership: owned by two or more partners a. Partners may share ownership equally or unequally b. Joint and several liability: each partner is liable for actions of every other partner, to the full extent of each partner’s personal assets c. Files a partnership tax return (3) Professional Corporation: company owned by stock holders a. Simplifies process of adding and removing owners

b. Personal assets of firm’s owners may be shielded from firm’s business liabilities c. Owners’ assets not protected from liabilities caused by their actions as professionals (4) Limited liability partnerships (LLPs) and limited liability corporations (LLCs) a. May shield owners from liabilities of a business nature bot not of professional wrongdoing. Owners are always personally liable for professional errors or omissions, aka malpractice Staffing a Firm Organization of large firms: (1) horizontal/departmental method, dividing into different department: project moves through the various departments a. greater staff expertise for each type of task (2) vertical/project method, project teams that handles the project from beginning to end a. continuity and “the “thread” of how (3) matrix method: team leaders are involved from beginning to end but each team is assisted in each phase by office specialists (4) studios, horsepower and scale, manageable working group a. may be organized by typology Seven key situations (1) hiring: should describe responsibilities, compensation, benefits and other terms of employment, preferably in writing (2) personnel policies: document that clearly state the firm’s employment policies: the criteria for advancement and dismissal; holidays observed, vacation (3) Delegation of responsibility and authority (4) Motivation (5) Evaluation (6) Compensation (7) Employees or consultants 10 Insurance, Legal, and Accounting Matters Carrier = insurance company Insurance premium, payment to share the ability to collect larger sums of money should something unpredictable happen to them Coverage: maximum amount recoverable from the company that collection and redistributes the money Underwriting: evaluating the risk of each potential insured, determining the cost of carrying that risk Policy: insurance company’s agreement with the insured Event: a loss against which the policy insures Claim Covered event Deductible, amount the policyholder pays below the payout General Business Insurance

Property and liability insurance (fire, theft, flood and client slip/falls in office) covered in Multiperil business owner’s policies (BOP) or commercial general liability insurance (CGL) Business interruption insurance: covers continuing fixed expenses, lost profit, and even temporary or permanent relocation if your business is prevented from operating Workers’ compensation, covers employee injury on the job and unemployment insurance are generally required Elective form of insurance include health, dental, disability and life insurance Non-insurance benefits include retirement plans, 401-K tax-deferred savings plans, and profitsharing plans Construction and Professional Insurance Bonds: bid bonds, performance bonds, and payment bonds Contractor’s insurance Project insurance: covering all the risk and liability for all parties of a project, Architect’s professional liability insurance: covers a firm’s past and present employees and owners for claims and claim adjustment expenses (mainly lawyers’ fees) arising from suits for negligent acts, errors, and omissions in their performance of professional services Third parties: non-owners Claims made basis vs occurrence basis (112) Prior acts: services performed before the current policy period and covered by the current policy “Tail” Self-insure Legal Issues Legal obligation incurred in three ways (1) Contract (2) Statute (3) Common law (precedents and decisions of courts at all levels) Standard of care (normally judged by society, in a lawsuit, judge or jury in court or in arbitration) Proving negligence (1) Duty. That the architect had legal obligation to do something, providing a reasonable standard of care (2) Breach. The architect failed-by action; by error; by omission—to perform the duty (3) The breach of duty is proximate cause of harm to the plaintiff (4) Damage. Actual harm or damage occurred as a result. Statue of repose: time limit on the right of a plaintiff to bring an action Trigger date, the beginning of the time may be either substantial completion or when the potential problem was observed Statues of limitations Design errors vs construction error Indemnification

Antitrust: (1) to fix or maintain price, (2) to boycott a competitor or customer, (3) allocate business or customer Accounting issues Tow issues: flow of money in or out over a given period of time, and the value or worth of the firm at any one point in time (117) Income/Expenses Income and expenses statement Profit/Loss Profit and loss statement Expenses> Direct/indirect expenses (specific projects/overhead) Accrual basis: income and expenses as happening when the obligations occur Cash basis: income and expenses as happening when the actual transactions occur Two different ways of keeping track of transactions Value of a firm: cash in bank accounts; accounts receivable (AR), what clients or others owe, value of equipment, office improvements made, real estate holdings Obligations (liabilities) of a firm: taxes due, what is owed to employees, consultants, suppliers, and vendors (accounts payable/AP); outstanding loans The different between assets and liabilities is net worth

11 Project Management Project schedule (120) Milestone list, Expanded Schedule, Gantt chart, Critical Path Method (CPM) or PERT chart Project organization Hub-and-spoke method: all communications flow through one central party that makes all decisions Partnering, encourages teamwork, prevent disputes by means of workshop and team building sessions, sometimes organized by outside facilitators Project insurance, reducing disputes Bonuses Project Budgeting Detailed quantity take-off: lists exact quantity, by count, square footage, linear footage, and so on of every item of construction Detailed cost estimate: inventories the quantity and applies appropriate market costs per unit Life-cycle cost analysis, determines the real cost of a building over its lifetime use 12 Zoning and Building Codes

Zoning: macro, controls the allowed uses and size and shape of a building an a given site and other issues that have an effect on a building’s surrounding Building codes: deal with micro issues, primarily the safety of buildings States have the authority to impose zoning and building codes—the states transfer this authority to local government to enact, administer, and enforce them. The Architect’s role Zoning Every local jurisdiction, according to tis sate’s laws, can have a zoning code (or "law” or resolution”) -Statues (enacted by the legislative branch) and regulation (enacted by the administrative branch) guide and control the physical development of the jurisdiction Codes divided in two parts: map and text