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Construction Quality Management Resources


  1. The "Definition of Quality"

  2. Managing Construction Quality

  3. Construction Quality Management

  4. Lean Construction

  5. Punchlist Management Software

  6. The Cost of Quality

  7. "Really, Really Good Reading"

1. The "Definition of Quality"


We have found, in our search for a definitive definition of "quality," that a single definition is impossible (I dare you to Google "definition of quality," you'll be going down a rabbit hole). The definition depends on who you are, and what you're talking about.

For the purpose of this "definition of quality" article, here is our definition....


  • For the purpose of aiding owners and contractors in construction quality management, we propose the following definition of "Quality" and a "Quality Product."

  • Quality is fitness for use (Juran 1974), including meeting or exceeding needs, now and in the future, reliably, durably, with limited variation, and virtually defect free; and it helps if joy is sparked in those who recognize excellence.

  • A Quality Product meets or exceeds the customers needs, now and in the future. Aspects of a Quality Product include it being: (1.) fit for its intended use, (2.) cost effective, (3.) delivered on time, (4.) reliable, (5.) durable, (6.) with limited variation, (7.) virtually defect free; and (8.) it helps if joy is sparked in people who are able to recognize excellence. To deliver a Quality Product a system, with the objective to deliver a Quality Product, must be employed. Components of the system must include definition of: (A.) the customer needs; (B.) the product itself and acceptable variation; (C.) the budget/costs; (D.) the time of delivery; (E.) the process for creating the product; (F.) the process for verifying the parties are capable of "doing the right things right, every time"; (G.) the process for verifying the parties involved are actually "doing the right things right, every time" during creation of the product; (H.) and the process for verifying that the right things were done right, at the time of delivery.

2. Managing Construction Quality


Several articles included in the top 10 results for Managing Construction Quality emphasize the difficulty encountered in attempting to manage and/or ensure construction quality. Regulations, communication, measurement, and other techniques for ensuring management of quality are addressed.

Top 10 Results

  1. First Time Quality Blog Post. This is a blog that discusses construction quality control plans and how they should outline a systematic process to manage them to consistently deliver quality results.

  2. Managing Construction Quality by Pete Fowler Construction Services, Inc. This article outlines the Gold Old Days versus the New World in Managing Construction Quality. It outlines the DBSKV Construction Management method and highlights the ABCs of Risk Management. It explains project definition and integrates Quality Planning and having a quality management plan.

  3. This is a link to a Purdue University Catalog for BCM 52500 – Managing Construction Quality and Production. It includes advanced techniques for assessing the success of construction project management including schedule cost, safety and quality measurements. Impacts of pre planning, human factors, and communication systems on quality and productivity.

  4. This is an article outlining public policies for managing construction quality: the grand strategy of Singapore. This article argues that vulnerability of the construction industry to fluctuations in the economy requires the involvement of the government to maintain workload stability in order to deliver high quality standards in the industry.

  5. This link refers to two articles: one on CDM (Construction Design and Management) Regulations and another on Stakeholder Management. The art of stakeholder management is proactively building on shared synergies and heading off any major confrontations. The easiest way to do this is to communicate and consult at all stages so the stakeholders’ needs are understood and impacts are understood by all stakeholders. CDM Regulations apply to the design and construction process on all projects, where construction is to take place (however small), from concept through completion and ultimate de-commissioning.

  6. This article is on Property Analysis by Pete Fowler Construction Services, Inc. It outlines the services offered by PFCS, the types of clients, and links articles and whitepapers as well as the process that PFCS uses for its projects.

  7. This is a repeat of the Singapore article, above.

  8. This links to an article outlining what constitutes quality, how quality can be determined, the ISO definition of quality, difficulties encountered in the process of achieving product quality, development and maturation of IT in terms of improving quality management practices, and the steps for producing product quality.

  9. This article discusses building commissioning: is it really the best method for managing construction quality? Building commissioning provides documented confirmation that building systems function according to criteria set forth in the project documents.

  10. This article discusses a comprehensive process designed to assure quality, implementing quality control plans, assessing safety issues, and other items related to quality control in order to execute a successful project.

3. Construction Quality Management


There are several articles and links in our top ten results that emphasize processes and planning. It includes two training manuals and other writings spotlighting the failures in quality management.

Top 10 Results

  1. eSUB: This is construction software on how to improve construction quality management. This lists some tips for improving construction quality management including; What is Construction Quality Management, Where Quality Management Fails, and Construction Quality Management Process Elements.

  2. U.S. Army Corps of Engineers Professional Development Support Center and U.S. Naval Facilities Engineering Command (NAVFAC): This is a pdf of a student study guide for the construction quality management for contractors. This is to help familiarize contractor personnel with the Construction Quality Management concepts and procedures. This guide was designed to be used as a workbook during the training program. It is intended that, after the training, it be included in your office bookshelf as a helpful tool to be used when needed.

  3. IRMI: This article discusses how to achieve the overall success to a construction project by describing the following steps: the processes of contractor quality management, quality assurance and quality control, elements of a quality management process, and managing quality.

  4. University Northern Florida (UNF) Division of Continuing Education: This is a course catalogue for Construction Quality Management for Contractors (CQM-C).

  5. Eventbrite: This is a website that lists different seminars including Construction Quality Management and other related construction topics.

  6. Eventbrite: This is the same website as #5 but different dates that lists different seminars including Construction Quality Management and other related construction topics.

  7. First Time Quality: This is a blog that illustrates a step by step process on how to write a project-specific quality plan. The following are the steps; project personnel, quality communications, quality assurance surveillance, subcontractors and suppliers, project quality specifications, inspections and tests, control of nonconformances, and project completion inspections.

  8. Layton Construction: This is a manual that can be downloaded and created by Layton Construction for quality management. It includes core values that Layton Construction wants their employees and subcontractors to embrace.

  9. AutoDesk BIM 360: This is software/app that allows the team to participate is quality inspections from their mobile devices. It includes (but not limited to) quality checklists and issues, punch lists, and quality issue resolution.

  10. ETQ: This is a paper that can be downloaded and describes seven key elements for the implementation of a quality management system.They state “Research shows 71% of software rollouts fail, are late or are over budget.”

4. Lean Construction


Many if not all of the articles listed below in our top 10 results for Lean Construction emphasize stakeholders, relationships, and adhering to strict principles. All suggest that improvements are expected when integrating the facets of Lean Construction to project management.

Top 10 Results

  1. This article covers the transformational improvement in the delivery of value to the stakeholders and improvement in the quality of the work environment for all participants. It claims that Lean delivers better employee retention and quality of life, safer worksites, reduced project waste and greater project value.

  2. This article Lean methods seek to develop and manage a project through relationships, shared knowledge and common goals. Traditional silos of knowledge, work and effort are broken down and reorganized for the betterment of the project rather than of individual participants. The result? Significant improvements in schedule with dramatically reduced waste, particularly on complex, uncertain and quick projects.

  3. This article claims that getting work to flow reliably and predictably on a construction site requires the impeccable alignment of the entire supply chain responsible for constructed facilities such that value is maximized and waste is minimized. With such a broad scope, it is fair to say that tools found in Lean Manufacturing and Lean Production, as practiced by Toyota and others, have been adapted to be used in the fulfillment of Lean construction principles.

  4. This article explains that there are guiding principles that help firms achieve lower costs, reduced construction times, more productivity and efficient project management. They represent a holistic approach to the construction process. These are called the 6 Principles of Lean Construction, which include: Identify Value from the Customer’s Point of View, Define the Value Stream, Eliminate Waste, Flow of Work Processes, Pull Planning and Scheduling, Continuous Improvement.

  5. This article is regarding lean construction and is aimed at maximizing value and minimizing costs involved during construction project maintenance, design, planning, and activation. Worldwide, the use of Lean construction increases the productivity of the construction industry.

  6. This article explains that Lean construction is a way of designing production systems in a construction environment with the aim of decreasing time, effort, and a waste of materials.

  7. This article argues that cutting costs, reducing construction times, increasing productivity and efficiently and effectively managing projects can all be achieved through successful implementation of lean principles. These principles should drive and guide you to discovering and developing the tools and methods to achieving the goals of lean construction and taking a more holistic approach to project delivery.

  8. This article attempts to define Lean Construcion. Inviting all parties to the table to plan, design, estimate, budget and optimize. All stakeholders collaborate and plan together; owner, contractor, sub-contractors, designers, engineers, schedulers, cost engineers, etc. The team will often prototype a design, rather than forge ahead and build. Prototyping provides us with a visual and functional model that we test and evaluate.

  9. This article explains applying Lean construction management principles, and some of the key benefits that can be achieved: Higher Quality Work, Increasing Employee Collaboration and Accountability, Greater Project Satisfaction, Increasing ROI and Improving Risk Management.

  10. This article attempts to bridge the divide between Lean Construction and CPM (Critical Path Method). The key is digitizing and simplifying Lean to optimize its impact while providing a unified platform where Lean and CPM can coexist, thrive, compliment each other, and deliver compounded benefits.

5. Punchlist Management Software


The applications and articles in our top ten results for Punchlist Management Software focus on managing time, effort, and keeping construction professionals up to date with the current technology necessary for effective construction management.

Top 10 Results

  1. The punch list app for the jobsite, Fieldwire. This is an app that provides punch list management. Fieldwire is a popular app that provides many features for a company that is looking for an app that provides an easy to manage punch list. Using the app you can easily include location on blueprints, checklists, categories, and photos when searching for construction deficiencies. This app can be used on your iPhone, iPad, and Android. Fieldwire makes QA/QC review easy to do with the ability of people across the organization to make updates.

  2. Punch List Software. This is a list of Punch List Software companies can utilize. There are numerous apps companies can choose from but the top apps have reviews from numerous people.

  3. Punch List Software Comparison. This is the comparison list of different software that companies use for punch list management. This is a good website to use if you are looking for a comparison tool to use when choosing a website.

  4. SKYSITE is software that can be used for punch list management. This software claims to make punch list management simple by allowing you to see documents and the punch list side by side. This can all be done on your smartphone. Other features include adding custom fields, an app for QA/AC tasks, and hyperlinked task details.

  5. Procure is software for construction. This software allows you to punch list items directly from the field, use QR codes, and maintain a real-time history of all actions. The company offers case studies, webinars, and dates for road shows.

  6. FinishLine is a software app. This app is for construction professionals including owners, architects, subcontractors, etc. FinishLine results in a 30-40% reduction in time to inspect. Some perks include accurate data entry, visual navigation, status at a glance, and checklist ready. Training to use FinishLine is easy to use.

  7. BuildUp is a punch list software app. This app allows construction teams to manage uses for the whole duration of the project. Some features of this app include issue management, collaboration of all construction project stakeholders, and is easy to use for the non-tech savvy users.

  8. PlanGrid is a software app. PlanGrid offers the ability to track punch lists in one place, identify punch list items, and allow your team to complete work on time. You will also be able to close out and inspect straight from the field, identify cost or schedule impacts, and generate rich reports.

  9. KO Punchlist is a software app. This apps is free to download, and every new project has a one time fee of $4.99. This app offers fully functional punch lists, can work offline and can combine punch lists created by other team members.

  10. What is a Punch List? This is a post on how to effectively use a punch list. Punch lists are used to make sure the project has been completed and they are most effective when completed at the start of the project. Punch lists allow for contractors to make sure details are not forgotten and if misunderstandings arise they can be easily solved. Players involved in punch lists include owner/client, contractors, and subcontractors.

  11. Punch List Manager. Punch List Manager is a warranty management software. Features include managing pending requests, service work, and the ability to use a collaborative schedule to know where field technicians and your trade partners are scheduled for inspection and repair.

6. The Cost of Quality


Our research into the Cost of Quality has revealed information related to the comprehensive concepts of poor versus good quality, what the Cost of Quality is and how to measure it, different types of quality costs and the four main categories of the Costs of Quality: appraisal, internal failure, external failure, and typical values.

Top 10 Results

  1. ASQ. This is a website that gives a brief description of Cost of Quality and offers a membership that provides cost of quality support including tools, networking, and knowledge.

  2. SixSigma: Cost of Quality Not Failure Costs. This is a blog that explains the cost of quality as a more comprehensive concept covering the cost of poor quality and the cost of good quality.

  3. Wikipedia. This is someone’s definition of Quality Costs. It also includes quality cost area descriptions and examples defined by Armand V. Feigenbaum in a 1956 Harvard Business Review and Joseph M. Juran.

  4. Quality One International, gives a brief description about cost of quality including an introduction, what it is, how to measure it. It’s a service that offers quality and reliability support for product and process development through consulting, training and project support.

  5. Accounting Tools breaks quality costs into four categories and describes each: Prevention costs, appraisal costs, internal failure costs, external failure costs. 2/4/2018. It also offers accounting CPE courses and books.

  6. Total Quality Management addresses the cost of quality including (but not limited to); definition, historical views, the definitions of the four categories of cost of quality. Joel E. Ross, 9/12/2018.

  7. Tallyfy explains what the cost of quality and how it works including (but not limited to); how it’s evolved, three ways of perceiving cost of quality, the four categories, and quality-related workflows matter. Sonia Perason.

  8. SCORTEX is a company that offers services for quality such as to automate visual quality control. They also explain how higher cost and lower cost differ and define cost of quality, the four categories, and give examples of each type of cost utilizing an automotive company.

  9. This is an article from Quality Magazine explaining how to convey the definition of quality and explain cost of quality.

  10. This is a blog that discusses the four categories; appraisal, internal failure, external failure, typical values, and has examples of each.

7. "Really, Really Good Reading" (a.k.a., Further Findings During the Proving the Obvious Using Google Research)

Construction Project Management in the US vs. EU

Construction Project Mngmt US vs EU_ SOCIAL 2018-11-19 A.png

In this article I am going to review construction project management practices across the Atlantic. The topic is related to the construction management process which is often the main area of concern for successful construction project implementation. The client expects that effective project management will enable the project’s completion, by the time when it is wanted, of a standard and quality that is required, and at a price that is competitive. Our goal in the series of articles is to help the owners minimize adverse impact on their business from failures in project delivery and increasing construction disputes and claims, focusing on the role of risk management as a proactive approach to project planning in order to make timely and informed decisions towards reducing negative effects to project goals.

What is Construction Management and what it is not?

Project management was introduced to construction projects in the late 1950s. Much of the earlier codification of the principles and practices of project management was developed in the United States and in the United Kingdom.

The Construction Management Association of America (CMAA) is the leading professional association serving the construction industry in the US.

CMAA definition: “Construction management is a professional service that uses specialized project management techniques to the planning, design, and construction of a project.”

The Chartered Institute of Building (CIOB), UK is the world’s largest and most influential professional body for construction management, with nearly 50,000 members in more than 100 countries.

CIOB definition of project management: “The overall planning, coordination and control of a project from inception to completion aimed at meeting a client’s requirements in order to produce a functionally viable and sustainable project that will be completed safely, on time, within authorized cost and to the required quality standards”

There are four types of construction projects:

  • Residential construction

  • Heavy industrial construction

  • Commercial and institutional construction

  • Civil engineering construction

Essentially, a construction manager is project manager with a specific area of knowledge in built environment. Construction management is compatible with all project delivery systems including design-bid-build, design-build, design-build-operate and construction management at-risk.

For all types and scale of projects (large, small, vertical, horizontal, domestic, or international) a construction manager is the person who ensures the scope of work is skillfully adhered to and the project is successfully delivered. At its core a project involves three main parties, excluding the construction manager,

  • The owner, who commissions and funds the project

  • The architect or primary designer, who designs the project

  • The general contractor, who oversees day-to-day construction operations and manages specialized subcontractors

An owner’s project manager is controlling and monitoring the full scope of project from inception to close-out. A construction manager works as the owner’s representative, and this role often is limited to the construction phase of project. Construction managers involvement in planning, pre-design and hiring of architect, designer, and general contractors can assist owner to make informed decisions at the earlier stages of construction project.

Project management is the professional discipline which separates the management function of a project from the design and execution functions. Professional construction managers are not GC’s nor are they constructors. They typically do not perform the actual construction tasks, but act as advisors, assuring the project progresses according to plan and that it achieves the owner’s business objectives.

Construction Management in the U.S. vs EU

American construction management and leadership thinking historically comes from the United Kingdom (UK), which is the also the home of the European construction management certification system widely validated in the construction industry globally.

There is a great migration of engineers and construction managers in the construction sector due to the different states of economic development of different countries worldwide. For this reason, it is extremely important that construction managers’ qualification and skills are recognized and certified in a comparable way.

Construction has taken on an increasingly global character. US based firms are providing services to international clients just as international firms have become more active in the Americas. Owners in major markets all over the world insist on high performance in every aspect of construction project management: the planning, execution and operation of their capital assets.

In recent years owner priorities are shifting emphasis from initial construction costs to “triple bottom line”, including an asset’s lifecycle performance, environmental and social impacts. Traditional project constrains in terms of cost, time, quality extends for function and sustainability.

Are there differences between the Old World and North America?

The main differences in the approach to construction project management were discovered during this research are in the structure all involved parties and specialists bring their knowledge and experience into the project team and contribute to decision making at every stage of projects.

In construction projects, there are too many specialists involved for it to be practical to bring them all together at every stage.

The different stages of the project lifecycle across the industry in the US and EU have been summarized below. In the UK Code of Practice has defined eight project stages while CMAA have established five phases of main project management activities.

2018-11-19 161307.jpg

CMAA Construction Management Standards of Practice define 10 core responsibility areas of a construction managerI:

  • Project management

  • Cost management

  • Time management

  • Quality management

  • Contract administration

  • Safety management

  • Program management

  • Sustainability

  • Risk management

  • Building information modeling

CBOI suggested project managers duties is an extensive list of responsibilities that may be modified depending of client’s needs and nature of project. All duties can be eventually summarized under similar core areas of responsibilities as provided by CMAA.

Key aspects of Success

Success of project can be measured in terms of the actual time, budget and quality of the completed work against the planned goals. The following are key aspects in the CM discipline before and during the project execution that are considered essential by most of construction industry professionals (including developers, owners, GC’s, insurance specialists), both in the US and Europe:

  1. Clearly defined goal and objectives

  2. Defined plan and responsibilities

  3. Informed, timely decision making

  4. Proven risk management system

  5. Effective communication system

  6. Complete and accurate project documentation

  7. Quality control system

Construction management competencies usually are built around these key factors:

  • Competencies = the ability to meet goals by drawing on and mobilizing resources and capabilities on personal and organizational levels

  • Resources = physical assets, human resources, and organizational capital

  • Capabilities = operational activities that are practiced and honed over time until they are mastered, they contribute to the company’s competitive advantage and profit potential

Risk Management As A Core Competency of Project Management

A capability or resource is valuable when it allows the company to capitalize on opportunities or defend against external threats. In theory both opportunities and threats are considered risks. Construction risk management competencies are essential to build and protect competitive advantage in the volatile construction industry, both in the US and EU.

Competitive advantage can be maintained in the construction industry if efficient risk management decisions are made in the earlier phases of construction project management.

Depending on a construction business’ scale, project portfolio risk management competencies vary from entirely informal (ad-hoc) to fully integrated and formal (optimized) risk management systems. More optimized risk management use feedback from the lessons learned for continuous improvement, the advancing and complex global construction industry demands more efficient management systems.


Using proven construction management practices is essential in the inherently risky and volatile construction industry. Many companies still rely on individuals’ expertise and experience when it comes to identification, assessment, mitigation and monitoring construction project risks. Sadly, there are growing number of construction claims and disputes which increase both the costs of the projects, as well as cause headaches for construction professionals. Most of the claims resulting from failures in project delivery can be related to failures in risk management in the earlier phases of construction project management, including making sure there is adequate construction project management expertise among project stakeholders

In my further articles I will offer some findings how construction management processes can benefit using past construction claims and litigation data and improve risk related decision making at each phase of construction project management.

Articles in This Series

  1. Introducing Our Latvian Interns

  2. Construction Risk & Claims Management in the US vs. EU

  3. Construction Management Process in the US vs. EU (THIS ARTICLE)

  4. Comparison of Common Law (US) vs. Civil Litigation (EU) Practices

  5. Top Issues in Construction Projects in US vs. EU (COMING SOON)

  6. Construction Risk Management in the US vs. EU (COMING SOON)

  7. Construction Claims Management in the US vs. EU (COMING SOON)


  1. What is Construction Management? by CMAA

  2. Construction Management Evolution of a Profession by CMAA

  3. Construction Management Standards of Practice by CMAA

  4. Code of Practice for Project Management for Construction and Development 5th edition by The Chartered Institute of Building (CIOB)

  5. Redefining Construction Management by CIOB

Construction Risk & Claim Management in the US vs. EU

Construction Risk & Claim Mngmt US vs EU by PF_ SOCIAL 2018-10-09 C.png

Introduction to Our Research Project

So you’ve been introduced to our Latvian Interns Anete and Helmuts. Now it’s time for me to introduce our research project. Since Anete is an engineer and construction manager, Helmuts is a construction lawyer, and PFCS is in the business of building inspection, construction management, and building claims & litigation, it seemed natural to investigate and summarize best construction risk & claim management practices from both sides of the Atlantic.

As I often do at the beginning of an investigative endeavor, I used our "Proving the Obvious Using Google" method to begin this research. I searched the terms "Construction Risk Management" and "Construction Claim Management." The full results are below in the respective sections and at the bottom of this article in the "Research" section. The point is that construction risk & claim management are topics deeply considered by professionals at the top of the construction industry all around the world, and there is a lot to learn and consider for our projects.

A Map of the World

For those new to construction risk management and/or construction claim management, we want to create "a map of the world" so that anyone interested can understand the big picture, and more quickly learn to recognize important landmarks along the trail. One of the many things that makes construction an interesting business is that no two projects are exactly alike. Of course, this also creates difficulty, since construction projects are generally expensive and complex, which creates risks. And sometimes these risks turn into claims.

Construction risk management happens primarily before and during construction, and construction claim management takes place mostly during and after construction. Professional risk and claim management are deeply integrated. In the most sophisticated organizations, claims that arise downstream were considered early in the project, and processes were outlined for what to do, first to avoid them, and second to mitigate the harm they can cause.

The Size of the Global Construction Industry

The global construction industry generated an estimated total revenue of $8.6 trillion in 2016, representing a compound annual growth rate (CAGR) of 7.1% between 2012 and 2016. According a to report by ResearchMoz ("Global Construction Industry Guide 2017…") growth is forecast to accelerate and reach a value of more than $13 trillion by the end of 2021.

In the U.S. the construction industry has more than 650,000 employers with over 6 million employees and creates nearly $1 trillion worth of structures each year. Construction is one of the largest customers for manufacturing, mining and a variety of services. A study performed for AGC by Professor Stephen Fuller of George Mason University found that an extra $1 billion in nonresidential construction spending adds about $3.4 billion to Gross Domestic Product (GDP), about $1.1 billion to personal earnings, and creates or sustains 28,500 jobs.

The European construction industry as a whole is worth more than $1 trillion. With 3 million enterprises and a total direct workforce of 18 million people, the construction sector contributes at around 9% to the GDP of the European Union. 99.9% of the European construction sector is composed of small and medium-sized enterprises (fewer than 250 employee). In the EU, the average size of construction enterprises is of 4 workers (employees or not). Small and medium businesses produce 80% of the construction industry's output. Small enterprises (less than 50 employees) are responsible for 60% of the production and employ 70% of the sector's working population.

Construction Risk Management

When you search "Construction Risk Management" in Google you get "Risk management in construction is designed to plan, monitor and control those measures needed to prevent exposure to risk. To do this it is necessary to identify the hazard, assess the extent of the risk, provide measures to control the risk and manage any residual risks."

Our top-level framework, we call the ABCs of Risk Management, includes:

  • Avoid potentially dangerous situations

  • Be really good at what you do

  • Cover your assets

In the following articles we will examine sophisticated strategies for identifying risks and the steps professionals take to mitigate them. The point of all this is to identify (inventory) potential risks, then analyze and control them. Common strategies include transferring risks through contracts and insurance, and reducing them through process management and quality control.

Common Construction Project Risk Management Activities Before and During Construction

  • Composing or adopting and customizing a Risk Management Plan

  • Composing or adopting and customizing a Quality Management Plan

  • Making sure all key team members are adequately skilled, experienced, and capitalized

  • Insurance requirements that are appropriate for all applicable team members

  • Contract terms that distribute risks to the appropriate parties

  • Building in quality control check points and verification mechanisms

  • Documenting the quality of the processes and work, sometimes by independent third parties

  • Identification of potential claims and addressing them prior to their becoming a dispute

Construction Claim Management

We have been working on construction claims since the 1990's, and writing and presenting on the subject for almost 20 years now. As with risk management, there is a spectrum of professional practice that runs from "close to criminal incompetence" at one end, to "so much management that you might as well pay your opposition whatever they have asked for." We want to teach people to avoid either of the extremes.

After more than a decade in the business of dealing with claims (in 2010), we outlined our "Claims Management Strategies" continuum:

  1. Head-In-Sand: Delegation outside the organization = Abdication

  2. Hope and Prayer: Hope is a strategy. But a bad one.

  3. Cowboy / Caveman / Swashbuckler: Yee Haw!! Usually O.P.M.

  4. Project “Piles”: Most common.

  5. Force of Genius: Closely related to Project Piles, only better.

  6. Project Files: We’re getting there :-)

  7. Project Level Data Structure & Analysis: Yea Baby!!

  8. Portfolio Level Analysis & Analysis: The Promised Land.

Common Construction Claim Management Activities During and After Construction

  • Understanding the contract documents, especially as they relate to the scope of work, and change management

  • A professional file (document) management process discipline, so that all relevant files can be easily and quickly retrieved (this is WAY harder than it seems like it should be)

  • A mechanism that verifies files and project documentation are being managed consistent with the plan (inspect what we expect)

  • Structured training for construction managers in documenting changes in the scope, budget, and schedule for the purposes of assigning responsibility for these variations from plan (or contract)

  • Third-party verification of conformance with plans and contracts compared to actual scope (including quality), budget, and schedule

  • Regular (monthly) reports to management regarding potential claims or quality problems

  • A team “First Responders” is identified prior to or immediately upon notice of a potential claim: Lawyer(s). Expert(s) (internal and third-party)

  • A written Claim Management Plan

  • A Claim Management Budget (best, probable, and worst case scenarios) that considers the cost of lawyers, experts, expenses, time, and settlement or verdict

  • A structure for regularly updating the Claim Management Plan and Budget to reflect current realities

Our Method

We always make a preliminary review of the existing literature.

Then we have meeting and conduct interviews with the smartest people we know. In this research, this will include:

  • Contractors

  • Risk Managers

  • Insurance Brokers

  • Lawyers

  • Mediators / Arbitrators

From there, we will publish our findings via this blog, eventually more formally in printed articles, and maybe even presentation at a construction risk and claim conference.

Articles in This Series

  1. Introducing Our Latvian Interns

  2. (THIS ARTICLE) Construction Risk & Claims Management in the US vs. EU

  3. Construction Management Process in the US vs. EU

  4. Comparison of Common Law (US) vs. Civil Litigation (EU) Practices

  5. Top Issues in Construction Projects in US vs. EU (COMING SOON)

  6. Construction Risk Management in the US vs. EU (COMING SOON)

  7. Construction Claims Management in the US vs. EU (COMING SOON)


  1. Google "Construction Risk Management"

    1. Construction Risk Management by IRMI

    2. http://constructionexec.com/article/the-basics-of-risk-management-in-construction-contracts

    3. https://blog.capterra.com/the-ultimate-guide-to-construction-risk-management/

    4. https://www.stakeholdermap.com/risk/risk-management-construction.html

    5. https://cdn.intechopen.com/pdfs/38973/InTechRisk_management_in_construction_projects.pdf

    6. https://www.fminet.com/fmi-quarterly/article/2016/06/a-blueprint-for-risk-management-in-construction/

    7. https://www.spireconsultinggroup.com/en/professional-services/risk-management/

    8. https://geniebelt.com/blog/risk-management-plan-in-construction-guide

    9. http://www.cbre.us/real-estate-services/investor/construction-risk-management

    10. https://www.constructconnect.com/blog/operating-insights/identifying-managing-construction-project-risks/

  2. Construction Claim Management

    1. https://www.pmi.org/learning/library/construction-project-claim-management-7582

    2. https://www.sciencedirect.com/science/article/pii/S2212567115003275

    3. http://constructionexec.com/article/claims-management-a-problem-solving-approach

    4. http://constructionexec.com/article/claims-management-a-problem-solving-approach

    5. https://www.hillintl.com/PDFs/How%20to%20avoid%20CC,%20and%20what%20to%20do%20about%20them%20if%20they%20occur-MGriffin.pdf

    6. https://www.researchgate.net/publication/215908277_Contractors'_Construction_Claims_and_Claim_Management_Process

    7. https://www.managementconcepts.com/Course/id/1020

    8. http://www.xperagroup.com/services/construction-claims-management-process

    9. https://www.petefowler.com/construction-claims-management/

    10. https://www.projectcubicle.com/claim-management-in-construction/

Professional Construction Contracting Discipline

What it is and how to get it

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The ability to define precisely a 100% complete scope of work for a construction project, to budget and schedule that work, to professionally contract for that work at the prime level (directly between the Owner and Contractor), to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor, to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule, to coordinate all of those scope-budget-schedules in executing the construction, to manage changes to the scope-budget-schedule at the prime and sub levels, and to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts. 


Date: Wednesday, Dec. 18
Time: 10 a.m. PT
Duration: 60 minutes


Pete Fowler Construction does three things: building inspection & testing of many types; construction management, specifically estimating and building maintenance and rehabilitation management for owners; and building claims and litigation consulting related to everything imaginable that could make someone sad about real estate. We have refined processes, technology, and staff who are experts in building performance analysis, building economics, and construction management.

Since so many of our technical staff are "forensic consultants" who testify as expert witnesses, we have to create plain English definitions of what otherwise could have stayed techno-speak in the Nerdville that exists in the engineering and construction management departments of universities. We have to do this so that the non-technical people we work for can make informed and smart decisions, And this exercise has helped us to improve our own construction management practices and processes. As we have written in our internal training documents: (1.) Define what awesome work looks like, and (2.) train to mastery.



Professional Construction Contracting Discipline

Level 1 Work Breakdown Structure (WBS)

  1. The ability to define a 100% complete scope of work for a construction project, 

  2. to budget and 

  3. schedule that work, 

  4. to professionally contract for that work at the prime level (directly between the Owner and Contractor),

  5. to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor, 

  6. to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule, 

  7. to coordinate all of those scope-budget-schedules in executing the construction, 

  8. to manage changes to the scope-budget-schedule at the prime and sub levels, and 

  9. to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts. 

Professional Construction Contracting Discipline
Level 2 WBS with discussion and key deliverables

1. The ability to define a 100% complete scope of work for a construction project, 

  • A. WBS (Basis of Schedule of Values)

  • B. Estimate Details with trade/sub scopes broken down (No Prices) 

  • C. RFIs / RFI Log

2. to budget and 

  • A. Budget (Worksheet - Basis of Schedule of Values)

  • B. Estimate Details with Labor, Material, Equipment, and Trade Contractor Prices

  • C. Budget to Actual Comparison

3. schedule that work,

  • A. Progress Schedule

  • B. Progress Schedule Updates / Comparison of Plan to Actual

4. to professionally contract for that work at the prime level (directly between the Owner and Contractor),

  • A. Prime Contract

  • B. Insurance Requirements

  • C. RFP

  • D. Other Addenda

5. to break that 100% scope-budget-schedule into manageable chunks by trade or subcontractor, 

  • A. Trade/Sub Scopes of Work

  • B. Trade/Sub Budget

  • C. Trade/Sub Progress Schedule (Integrated with the Project (Master) Progress Schedule)

6. to contract for each of those individual trade or subcontract scopes of work with a corresponding budget and schedule,

  • A. Subcontracts

  • B. RFP

  • C. Contractor Solicitation & Pre-Qualification

7. to coordinate all of those scope-budget-schedules in executing the construction,

  • A. Project Kickoff

  • B. Meeting Management

  • C. Trade/Sub Progress Payment Application Processing

8. to manage changes to the scope-budget-schedule at the prime and sub levels, and

  • A. Prime Contract Change Order Processing

  • B. Trade/Sub Change Order Processing

  • C. Change Order Log

9. to verify with precision that each of those scope-budget-schedule packages is being executed in conformance with the plans, specifications, trade standards, budget, schedule, and contracts. 

  • A. Progress Schedule QC Hold Points

  • B. Inspection Checklist(s)

  • C. Managing Construction Quality

  • D. Inspection

  • E. Issues Management, Followup, and Closure

  • F. Punch List

  • G. Payment Application Approval memos

  • H. Report to Management (As GC this is prior to Payment Application. As CM this is between receipt and approval of payments.)

Project Team

  • Construction Manager

  • Project Coordinator

  • Project Executive(s)

  • Other

Meeting Rhythm

  • Project Kickoff

  • Daily

  • Weekly

  • Monthly

  • Project Close

Understanding Green Building, LEED Certification… And Their Risks



  1. Introduction to Green Building Projects

  2. LEED Certification

  3. Building Systems, Techniques & Strategies

  4. Costs

  5. Risks

  6. Claims & Litigation Case Studies

  7. Deep Thoughts

  8. Codes & Standards

  9. Research & Links

1. Introduction to Green Building Projects

This is a brief introduction to the design, construction, maintenance, and management of Green Building projects, which are sometimes also referred to as “sustainable”, “high-performance”, or “passive.”

“Green Building (also known as green construction or sustainable building) refers to both a structure and the application of processes that are environmentally responsible and resource-efficient throughout a building's life-cycle: from planning to design, construction, operation, maintenance, renovation, and demolition.” (Wikipedia)

The intention of Green Building is to reduce the environmental impact of building projects by:

  • Lowering energy and water use;

  • Using environmentally preferable materials;

  • Increasing durability, which allows buildings to last longer before requiring rehabilitation or replacement, which saves resources over the building lifecycle;

  • Reducing waste during construction and operation & maintenance;

  • Reducing toxins;

  • Improving the indoor environment for occupants, including air quality (IAQ); and

  • Creating neighborhoods designed to lower environmental impact and improve human health.

The point is that buildings consume something like 40% of the energy we use, and making buildings more resource-consumption-efficient in every way, including during constructing, using, repurposing, and even decommissioning, is a good thing.

Green Building is about more than design and construction. Maintenance and management of Green Building projects is, arguably, more important than the design and construction process since the total cost of ownership (TCO) of building projects and facilities over time is always many times the cost of design and construction. The Green Building movement recognizes that facility and property managers require extensive training in making the investments in Green Building design and construction worth any additional expense on the front end.

There are many available Green, Sustainable, High-Performance, or passive building certifications. The most popular in the U.S. is from U.S. Green Building Council (USGBC) called Leadership in Energy and Environmental Design, commonly referred to as LEED.

2. LEED Certification

“Leadership in Energy and Environmental Design (LEED) is a set of rating systems for the design, construction, operation, and maintenance of Green Buildings which was Developed by the U.S. Green Building Council." (Wikipedia)

The LEED rating system is owned by U.S. Green Building Council (USGBC), which began in 1993 and is now an organization with more than $60 million in annual revenue, 200,000 LEED certified individuals, 92,000 total projects, 39,000 certified projects, 1.6 million registered or certified homes, 6,000 certified schools, 2,900 certified local government buildings, and 1,000 certified state government buildings. A division of USGBC is Green Business Certification Inc. (GBCI), which administers LEED, performing third-party technical reviews and verification of LEED-registered projects including technical reviews to ensure the building certification process meets the highest levels of quality and integrity.

LEED Professional Accreditations

  • LEED Green Associate requires the candidate to study and take a test.

  • LEED AP (Accredited Professional) requires the candidate to study and take a harder test.

  • LEED Fellow requires the candidate to show at least 10 years of exemplary impact with LEED, be nominated by a LEED professional, and have a team of endorsers who will write about the candidate’s contributions.

LEED Certification Levels for Building Projects

  1. Certified: 40-49 points.

  2. Silver: 50-59 points.

  3. Gold: 60-79 points.

  4. Platinum: 80-110

3. Building Systems, Techniques & Strategies

LEED Certification Prerequisites

  1. Sustainable Sites: Construction Activity Pollution Prevention

  2. Water Efficiency

    1. Outdoor Water Use Reduction

    2. Indoor Water Use Reduction

    3. Building-Level Water Metering

  3. Energy and Atmosphere

    1. Fundamental Commissioning and Verification: USGBC and the LEED certification materials use the term “Commissioning” (Cx) to describe a quality assurance (QA) process, to ensure the plan for mechanical, electrical, plumbing, and renewable energy systems and assemblies that is submitted to USGBC for certification is executed in the field.

    2. Minimum Energy Performance: There are multiple paths to ensuring the energy performance designs will meet current standards from ASHRAE and other specified standards.

    3. Building-Level Energy Metering

    4. Fundamental Refrigerant Management: Don’t use chlorofluorocarbon (CFC)-based refrigerants… Phase-out existing use.

  4. Materials and Resources

    1. Storage and Collection of Recyclables

    2. Construction and Demolition Waste Management Planning

  5. Indoor Environmental Quality

    1. Minimum Indoor Air Quality Performance: Meet minimum requirements for ventilation and monitoring.

    2. Environmental Tobacco Smoke Control: Prohibit smoking in or within 25 feet of the building.

LEED Certification Points for Building Projects (110 points total)

The outline here is from the LEED v4 Checklist

  1. Integrative Process (1 point) Think hard and analyze the energy and water-related systems from the earliest phase of design, including to inform the owner’s project requirements (OPR) and basis of design (BOD).

  2. Location and Transportation / Neighborhood Development (16 points) “To avoid development on inappropriate sites. To reduce vehicle distance traveled. To enhance livability and improve human health by encouraging daily physical activity.” Points are given for promoting aspects of the objective.

  3. Sustainable Sites (10 points) Assess the site before the design using a structured process and consider strategies including: Protect or Restore Habitat, Open Space, Rainwater Management, Heat Island Reduction (i.e. avoid giant, uncovered asphalt parking lots), and Light Pollution Reduction.

  4. Water Efficiency (11 points) While indoor and outdoor water use reduction and metering are prerequisites, points can be earned for low or zero irrigation designs, calculated savings of indoor water use from 25-50%, and management of cooling tower (HVAC system) water use.

  5. Energy and Atmosphere (33 points)

    1. In addition to having the longest list of prerequisites (see above), this category has the most point-value. The section mixes both energy savings with quality control (“Commissioning”); surely due to haw closely connected the two are.

    2. “Enhanced Commissioning”, a more complete and intensive QA / QC process, must be performed by a third party Commissioning Authority (CxA), and to receive maximum points the building envelope must be part of the commissioning plan and process, in addition to the mechanical, electrical, plumbing, and renewable energy systems and assemblies required in the prerequisites.

    3. Energy related points can be earned for Optimizing Energy Performance even further than the minimum standards, Advanced Energy Metering, Demand Response through load shedding or shifting, Renewable Energy Production (like solar), Enhanced Refrigerant Management and Green Power and Carbon Offsets where 50-100% of energy use comes from a green source.

  6. Materials and Resources (13 points) In addition to the prerequisites, consideration should be given to Building Life-Cycle Impact Reduction (reuse of existing buildings or materials), Building Product Disclosure and Optimization - Environmental Product Declarations including the Sourcing of Raw Materials and Material Ingredients, and Construction and Demolition Waste Management.

  7. Indoor Environmental Quality (16 points) In addition to the prerequisites, design consideration should be given to Enhanced Indoor Air Quality Strategies (like enhanced ventilation and contamination prevention), Low-Emitting Materials, composition and execution of a Construction Indoor Air Quality Management Plan, Indoor Air Quality Assessment, Thermal Comfort considerations, Interior Lighting strategies to promote comfort and well being by offering controls throughout, Daylight, Quality Views, and Acoustic Performance to limit noise.

  8. Innovation (6 points) Points can be earned for Innovation using a strategy not addressed in the LEED system or exemplary measurable performance in a addressed area. There is also one credit available for having at least one LEED Accredited Professional on the team.

  9. Regional Priority (4 points) Specific credit can be earned for issues important to the project’s region as identified by the USGBC regional councils and chapters and articulated in database of Regional Priority credits and their geographic applicability.

4. Costs

So the “accounting” on the costs of LEED Certification are either very high level or fuzzy. And as I mention in the Deep Thoughts section below, the costs are commonly downplayed and the calculable benefits are sometimes exaggerated. The science here appears to remain very soft. And few of the studies I have found appear to be by disinterested professionals with expertise in building economics.

Sources claim a range of additional costs for LEED Certification between 0-30%. The claim of zero additional cost seems, at first blush entirely absurd; the cost of registration and compliance alone is well above zero. The more common figures suggest a range between 2.5-8.5%, depending on the level of certification. I remain skeptical. In one of my case studies, the “additional cost” of the project over a reasonable square foot cost made the project 80% more expensive than a more common facility of identical size. And if you include the cost to make the repairs, then the project cost was 155% above the cost of a common facility (not +55%, +155%!). Granted, this was also a more beautiful building project than a more common facility; and much of the cost for a building that looked the same, would have been incurred even if the Green Building design & construction techniques and requirements were removed.

I acknowledge that the rigorous process that LEED Certification imposes, to think the project through at a painstaking level of detail, can lead to innovative design that could contribute to a net savings. I look forward to additional research into the economics of Green Building. Check back for more in the months and years to come.

5. Risks


Energy efficiency is great! But it has its risks. The tighter building envelopes required by Green Building standards remind me of the "Sauna Exercise Suit" I remember my grandmother wearing around the house when I was a small child. She would vacuum and dust and sweat like crazy, thinking it was helping her to get more fit. She lived a long happy life, so it appears to have done her no harm, but buildings constructed of moisture sensitive materials, like engineered wood (including oriented strand board or OSB) often don't fare as well. 

The risks of building problems increases for Green Construction projects due to:

  • More complex building envelope

  • Use of new material technologies

  • High performance and more complex mechanical systems

  • Additional warranty requirements

  • Increased performance targets

Problems That Could Be Caused by LEED Certification

  • LEED standards can end up forcing a dramatic increase in building system complexity.

  • These standards are being built as we go along and they are changing the built environment faster than our understanding.

  • In some cases these requirements are adding costs, which causes stress to the economic viability of projects.

  • These LEED Certification requirements do not address the costs compared to the potential benefits.

From a Zurich document outlining the risks of Green Building, 5 categories of risk include…

  1. Financial risks: The additional costs of Green Buildings may affect completing projects on time and on budget, but must be weighed against the cost of not going green.

  2. Standard of Care/Legal: Mandates regarding LEED certification bring an increased risk of legal liability for Green Building design and construction professionals.

  3. Performance: Project owners/developers are starting to require additional contract provisions and warranties regarding the energy efficiency of Green Buildings, causing increased exposure to potential liability for breach of contract or warranty.

  4. Consultants/Subconsultants and Subcontractors: Lack of experience by these parties in green construction can lead to problems obtaining LEED certification, delays and improper material specifications.

  5. Regulatory: New building codes and mandates associated with green construction can mean an increased liability to everyone involved in the green construction process.

The Construction Defect Litigation Business Model

It seems to me that “the construction defect litigation business model” came about because (1.) construction is complex, (2.) no construction project is perfect, (3.) most construction contracts have indemnity agreements, (4.) common commercial general liability (CGL) insurance policies have a duty to defend the insured when sued, and (5.) plaintiff attorneys are very clever and assertive. So considering this, I have said things similar to the following, many times, related to new advances in technology: If I were unscrupulous and did not love the construction industry, I would put together a team of plaintiff-oriented attorneys and experts, I would comb through the LEED Certification Database, I would plan and execute a marketing campaign to find every project that had even the most mildly disgruntled LEED project Owners, and I would encourage them to get involved in construction defect litigation using our team. It seems to me that the LEED certification database is the best marketing list possible for sophisticated plaintiff construction defect lawyers. 

Also see The Good, The Bad, and The Ugly in the Deep Thoughts section below.

6. Claims & Litigation Case Studies

PFCS Projects

  1. A “Net Zero” Educational Facility Gets A Big Repair: Defects introduced during construction, plus operational problems lead to repairs totaling more than 40% of construction cost.

  2. Leak Investigation Involving Solar Panel Installation: A national solar system manufacturer / installer litigated with a homeowner who had multiple leak sources.

  3. A Hygrothermal Study Leads to Pre-Litigation Resolution: An elegant solution to a divisive and expensive issue, allegedly related to condensation, is resolved using building science, which then leads to resolution of all remaining construction defect allegations, prior to filing of a lawsuit.

Litigation From Around the Country

  1. Chesapeake Bay Foundation, Inc. et al. v. Weyerhaeuser Company:

  2. Southern Builders v. Shaw Development:

  3. Gidumal v. Site 16/17 Development LLC:

  4. Flincto Pacific Inc. v. City of Palo Alto (2014)

  5. Burchick Construction Company, Inc. v. Pennsylvania State System of Higher Education

  6. Hampton Technologies, Inc. v. Department of General Services (2011)

7. Deep Thoughts

My experience and research lead me to the following conclusions.

The Good

  • 1. The hard-thinking that is forced by Green Building principles generally, and LEED certification specifically, during the design phase, is wonderful in many ways: Environmental protection, lower energy use, human health and well-being, and on and on.

  • 2. The potential for the process to transform the built environment through the integrative approach, rather than the more traditional focus primarily on esthetics and economics or return-on-investment (ROI), is exciting.

  • 3. The requirement for “Fundamental Commissioning” is something that every building owner should require as a minimum quality control function.

  • 4. Enhanced Commissioning should be a model for a superior level of quality control throughout the building industry.

The Bad

  • 5. LEED certification can cause an explosion of building system complexity during design & construction as well as operation & maintenance.

  • 6. Increased complexity in building systems increases costs.

  • 7. Increased complexity in building systems increases risk of building system failure.

  • 8. There is no built-in cost-benefit analysis mechanism, and surely no requirement therefore, built into most of the Green Building standards, including LEED.

The Ugly

  • 9. The costs of Green Building and LEED are commonly down-played.

  • 10. The quantifiable benefits of Green Building and LEED are commonly exaggerated.

  • 11. Case studies of Green Building project failures are limited.

  • 12. Costs for operation & maintenance (O&M) for the more complex mechanical systems appear to not have been closely studied.

  • 13. Ultimately, additional costs of Green Building and LEED Certification are being passed to the people who can least afford it (low-income individuals and families).

8. Codes & Standards

  1. IBC International Building Code

  2. IgBC International Green Building Code

  3. CBC California Building Code


  5. ASHRAE Guideline 0–2005

  6. ASHRAE Guideline 1.1–2007

  7. CA 2008 Long Term Energy Efficiency Strategic Plan

  8. CA 2019 Building Energy Efficiency Standards

  9. CA Green Building Code: 2013 edition went into effect 1/1/2014. 2016 edition went into effect 1/1/2017. PDF Copy of CA Green Building Code 2013 edition.

  10. U.S. Department of Energy

9. Research & Links

We have a not-so-scientific research method that generally yields some amazing results. It's called PFCS Proving The Obvious Using Google Method. I began by searching "Green Building Summary" and received these results

Search Results "Green Building Summary"

  1. Green Building From Wikipedia, the free encyclopedia

  2. Summary of Green Building Programs by National Association of Home Builders (NAHB) Research Center, Inc

  3. EPA's Web Archive on Green Building

  4. Energy-Efficiency Standards and Green Building Certification Systems Used by the Department of Defense for Military Construction and Major Renovations (2013)

  5. A Green Building Overview by HGTV

  6. ASSESSING GREEN BUILDINGS FOR SUSTAINABLE CITIES from The 2005 World Sustainable Building Conference, Tokyo, 2005

  7. What is a Green Building? by Sunpower


  9. LEED Cost Analysis Summary by Green Building Solutions

  10. WHAT IS A “GREEN” BUILDING ACCORDING TO DIFFERENT ASSESSMENT TOOLS? from Department of Technology and Built Environment, University of Gävle, Sweden

Search Results "Costs of LEED Certification"

Coming Soon


  • PFCS Case Study: Plumbing Leaks in High-Rise Condo. Complex investigations require development and testing of hypotheses. This is an example.

  • Green Building: What are the Risks? 2011 document by Zurich Insurance

  • California Becomes First State to Order Solar on New Homes (Bloomberg): In May 2018 the California Energy Commission decided that most new homes and and multifamily units under 4-stories built after 2019 will be required to include solar systems. They estimated the systems and complying with energy-efficiency measures will add $9,500 to the cost of a new home, which would be offset by $19,000 in energy and maintenance savings over 30 years. California is already the nation’s largest solar market and Governor Jerry Brown’s has an effort underway to slash carbon emissions by 40 percent by 2030. This will exacerbate the issue of high housing costs, seen as a drag on the economy and contributes to rising social tensions. The state only adds about 80,000 new homes a year, and the state issued permits for fewer than 480,000 new residential units in the last 5 years, yet California’s economy added 2.3 million jobs over the same period, which is about one home for every five additional workers.

  • Hidden Risks of Green Buildings from RCI's Interface Magazine

Contracting 101


Explain It Simply

"If you can't explain it simply, you don't understand it well enough." - Albert Einstein

The building industry is terrible at explaining how it does what it does. And this is coming from a guy who has a Bachelor of Science in Construction Management! It’s so bad that I was once working on a construction litigation matter and needed the most basic of organizational charts to explain to a jury the most common roles, relationships, and responsibilities of the various parties involved in a typical construction project; but there was none to be found. I would have loved to have had a reliable source like American Institute of Constructors, The Construction Specifications Institute, the American Institute of Architects, or some similar organization to rely on, to tell my story to the jury. I searched and searched and there was just nothing simple enough to use for a group of people with no construction experience. Everything was overly complex, attempting to account for every possibility. So I locked myself in my office alone one weekend with a pile of flip-chart paper and made iteration after iteration, and finally I nailed it. That was more than a decade ago. Since that time almost every trial or arbitration I have testified in has included some version of this org chart to explain the roles of the parties to one another and to the physical work.

The Contracting 101 Framework

  1. An Owner wants a project, similar to anyone who wants to buy something, such as a car, but with a construction project the product being purchased is not something that is already built.

  2. The Owner goes to an Architect (or in some cases a non-architect designer) to translate his/her desires into a set of documents. This process is intended to “define” what the Owner wants to buy (often from a General Contractor).

  3. The Architect works with Specialty (Sub) Designers such as structural engineers, mechanical engineers and interior designers to further detail the Plans and Specifications (also referred to as Construction Documents) because buildings are so complex that many specialized professionals are required.

  4. The Plans and Specifications are sent to qualified and interested General Contractors, who submit proposals to the Owner. Ultimately the Owner and a General Contractor compose an Agreement (or Contract).

  5. An Agreement for construction is simply a promise by the Contractor to deliver what is described in the Plans, Specifications, and other contract documents, and a promise by the Owner to pay for it.

  6. The Agreement refers to the Plans & Specifications and should include clear definition of the Scope, Budget, and Schedule, including at Scope of Work document that includes: Inclusions and Exclusions, Allowances, a provision for handling Change Orders. The Agreement should include a Schedule of Values and Payment Milestones (for management of the Budget). And finally, the Agreement should include a Progress Schedule.

  7. GCs usually hire specialty trade contractors, commonly referred to as Subcontractors when they are working for a prime (or general) contractor, who are specialists in their respective trades, to help deliver what has been promised in the Agreement. This is, again, because buildings are so complex that many specialized professionals are required.

  8. There is nothing in this scheme that prohibits the Owner from directly hiring Specialty/Trade Contractors (that are called Subcontractors if they are working for a General Contractor) for work that is not in the Scope of Work in the Agreement with the GC. In this situation they are Prime Trade Contractors.

  9. Most of the Subcontractors, and Prime Trade Contractors, have their own suppliers and subcontractors: these are called Sub-Subcontractors. (See diagram below)


Using the Contracting 101 Framework

So the point of the Contracting 101 Framework is to foster understanding of the project at hand. Begin by printing the diagrams above and writing the names of the project players over the generic descriptions. Virtually every project will be different than the Contracting 101 Framework, so you might have to compose multiple iterations, moving the boxes around to fit the peculiarities of your project. I often do this in my office where we have multiple whiteboards and I move back and forth from one to the next until I get my organizational chart to accurately reflect the complexity of the roles and relationships of the current situation. The "compare and contrast," from the simple "Contracting 101 Framework," to the complexity of the real world, is often incredibly instructive. 

Sample Project: Custom Single Family Residence

project_org_chart_14-301 Redacted.jpg

This project was a train wreck. 

The Architecture firm and the General Contracting firm were both owned by the same person, but the Owner did not know that (which is unethical and illegal without following strict consent laws). By the time the Owner tried to get control of the project, the two firms had taken $3.5 million dollars to turn a $2.9 million home (initial purchase cost) into a lumber pile. The contract called for distinct design phases but the design was never finished, and it called for the Architect to serve as the Construction Administrator (Owner Representative), but that was a sham since the entities are so closely related and have employees who work for both businesses. The construction work, based on an incomplete design, was executed negligently at inflated prices. The construction work onsite should have been halted long before it was. When the Owners finally asked for a legitimate halt to the construction work, to sort our a plan to go forward, both entities terminated the agreements (using the same lawyer) and engaged in a scorched-earth litigation policy that ensured the maximum economic damage possible from this terrible situation.

Sample Project: Construction Site Accident


Above is a slide from a 2010 trial presentation. This case came precariously close to trial. 

The project was a four story 445-unit apartment community. The property Owner was also the developer. The General Contractor entered into a cost-plus prime contract with Owner. The General Contractor entered into an agreement with the Plastering Contractor for $6.5 million. When asked by the General Contractor to perform scaffolding work outside their scope, the Plastering Contractor contracted with a specialty Scaffolding Contractor to furnish a system to access the interior walls of the air shafts at the project. So the key parties included the Owner, General Contractor, Subcontractor (plaster), Sub-Subcontractor (scaffolding), and all of their respective staff. 

The injured individual was the crew lead for the Sub-Subcontractor. That day he was part of a three-man crew setting up scaffolding in an air shaft of one of the buildings. The crew was removing the temporary wood flooring previously installed by another subcontractor and the injured employee fell approximately 35 feet to the concrete floor below. 

Sample Project: Claim for Nonpayment / Counter Claims for Defects & Delays


This project was the complete renovation of a commercial retail center. The Owner entered into a direct contract with our client, a Paving Company, as well as many other contracts with prime and trade contractors. The Owner had an independent contractor, who was a formerly licensed general contractor, on-site as a supervisor. Our client's initial complaint and mechanics lien were filed to collect $282,400 in work performed. The Owner cross-complained that the work was not completed in the 30-day agreed time limit, that some items were not completed ever, that some work was performed that was outside the contract scope of work (all of which had very sensible explanations).

The primary argument the Owner / Developer was trying to make was that they were NOT playing the role traditionally played by a general contractor or construction manager (which was RIDICULOUS). The Contracting 101 / Roles & Responsibilities Analysis PFCS performed in this matter, particularly the organizational chart above, made their argument seem silly (because it was). 

Sample Project: Condominium Conversion

This project arose from construction defect allegations related to the conversion of a 32 unit apartment complex originally built in 1975 into condominiums. The Developer/Converter purchased the 32 unit apartment complex and almost immediately began the conversion to a condominium complex utilizing a Specialty General Contractor (our client) and many other other contractors. Plaintiff alleged that the Specialty General Contractor's scope included defective work. Our client was a general contractor who, according to invoices, performed property maintenance, repair and improvement work related to the conversion including demolition, work in garages, on balconies, stucco, fences/gates, finish carpentry, doors, and electrical totalling $186,165.00.

One of the key allegations was that our client was THE General Contractor, which was not the case. You will see from reading two and a half pages from the 56 page report that our Roles & Responsibilities analysis made clear that the Owner/Developer was in the drivers seat for all important decisions on this project. 

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A Sensible List


The rumors are true. I am a crazy person. Anyone who knows our company knows that we are REALLY into training. And this training module, called "A Sensible List," has been included in more of our training programs than any other. BY FAR! And the reason is (as Charles Kettering said): "A problem well stated is a problem half-solved." And our job, above all else, is to solve problems. 


So yes; I am a crazy person. Any time someone brings me a collection of data that is not first organized into A Sensible List (or some sensible order), it makes me feel sad. So sad that people who won't stop bringing me "project piles" rather than sensible project files, are invited to work somewhere else, where they might better thrive. 

But people protest: "'Sensible' is SO subjective!" 

No it's not.

Organizing our world "sensibly" has been obvious since the dawn of civilization, and ultimately research psychologists figured out why. When you get bored or need a sleep aid, read "The Magical Number Seven, Plus or Minus Two." This is one of the most highly cited papers in psychology. It was published in 1956 and argues that the number of objects an average human can hold in working memory is 7 ± 2. This is why SO many things are arranged in groups of 5-9. It's not a miracle. It's just how humans think. 

So over time the folks who manage big, complex projects made some rules about making lists that conform with the way the human mind works, and they called their Sensible List a "Work Breakdown Structure." I highly recommend you study the subject, even further than I will go in this post. 


As it says on the slide above, I highly recommend you Google (search) each of these Work Breakdown Structure (WBS) terms. Until then, take my word for the following: 

  1. A Work Breakdown Structure (WBS) is a decomposition of a project into smaller components.

  2. 100% Rule: This means your list needs to add up to 100% of whatever it's summarizing. Not 99%. Not 101%.

  3. The magical number seven, plus or minus two: In general, each level of the WBS should be no more than 9 items long. In construction cost estimating, this rule gets broken. It's OK in this circumstance because most of the audience for construction cost estimates are people who deal with them often and can conceptualize these longer lists due to this familiarity. But any time we can't get the list on a single sheet of paper, we should usually "chunk" it down to size. At PFCS we usually arrange our WBSs using numbers at Level 1 (L1) and capital letters (A, B, C...) at Level 2 (L2). That way, if you get past Z at L2, you know you're in trouble and should consider re-thinking your list. 

  4. Mutually Exclusive Elements: In addition to the 100% rule, it's important that there is no overlap in scope definition between different elements of a work breakdown structure because this ambiguity could result in duplicated work. But sometimes an element of your list could fall naturally in two locations on the WBS, so from time to time we have a "zero value" item that refers to another element, just so everyone is clear. An example of this might be if we decided to sort documents first by "Who," then chronologically, where the name of the person or organization (Who) = L1 and the individual documents, that are listed in order by date, are each a L2 item (a common organizational scheme). If a document in this collection was authored by two parties we might list that document in both places (under both names), but refer from one of those items to the other so that we don't need to duplicate the document. 


So the only thing I don't like about the diagram above is that they call the entire bike "WBS Level 1". Bit it's NOT broken down yet! So I call their "WBS Level 2," a Level-1 WBS because it's the first level of breakdown. It's a sensible 100% list. That is: A Sensible List. 

The PFCS Standard WBS numbering-lettering scheme for this example would be: 

1. Frame Set

A. Frame

B. Handlebar

C. Fork

D. Seat

2. Crank Set


The numbering scheme used in the slide above is appropriate for highly technical documents, like codes and standards. But our work at PFCS needs to be consumed and understood by smart but NOT technical people. Literally, our job is to help our clients make smart, informed decisions about buildings and property, and we know that if they don't understand our work, then we have not served them well. My experience is that some people get confused when you refer to section 1403.2.2.4. So we prefer an approach that is as simple as possible (but no simpler), conforming with the way humans best understand things. 


If you've studied project management then you know "The Golden Triangle" includes the project "Scope, Budget, and Schedule." These are the big three aspects of getting a complex project planned and done.

In addition, if we layout our WBS just right, then we can manage all three aspects in lock-step, as depicted (in a simplified way) below. 


“No plan can be considered complete - or satisfactory - until it produces measurable outcomes and incorporates mechanisms that allow mid-course corrections based on results.” - Judith Rodin

That is my favorite management quote (well... I have lots of favorite quotes :). It's so true! Most people's plans are more "hopes" than plans. I have worked on many projects in litigation, where the owners had no idea how far over budget they were until they had already paid MORE than 100% of the original contract price, because the plan did not "incorporates mechanisms that allow mid-course corrections based on results." I had a mentor who used to say to me "Pete: Hope is not a strategy." I would always retort: Yes it is! It's just a terrible one!! I recommend you NOT use hope as a strategy in your planning. 

As you can see from the slide above, with the right WBS (Sensible List) we can summarize the scope, budget and schedule, then we can compare actual performance compared to the plan throughout the life of the project, so that we can "incorporate mechanisms that allow mid-course corrections based on results." This is the promise of professional project management. And the foundation of project management is a well designed WBS. And a well designed WBS is the most Sensible List. 


In a construction project it's not only the scope, budget, and schedule that should be connected using A Sensible List (WBS). Most construction documents will either be organized or filed using the Sensible List (WBS). Often this is simply by Who, then When; that is, by party (name) and then chronologically (by date). That would be a 2-Level WBS (who-when). Other schemes go another level deep. 

An example 3-Level WBS for Construction Document Organization: 

1. Name 1

A. Contract Documents

1. YEAR-MO-DY Document 1

2. YEAR-MO-DY Document 2

3. YEAR-MO-DY Document 3 

B. RFIs and Change Orders

C. All Other

D. Correspondence

1. YEAR-MO-DY Document 1

2. YEAR-MO-DY Document 2

2. Name 2

By the way: If we adhere to this scheme electronically, with individual electronic files organized with the date first and the format of the date YEAR-MO-DY, or 2017-10-20 for today's date, then we always know the most current version of any electronic file is the one at the bottom. Any other scheme adds complexity, which adds the likelihood of error. Even if the file has lots of different files, you can easily scan from the bottom to find the most recent version of a file (Ex. 2017-10-20 Change Order 17). So I highly recommend this scheme. 


And the same goes for construction claim and litigation matters: A Sensible List often makes the difference between order and chaos. 


I said above that people protest that "'Sensible' is SO subjective!" And that I totally disagree. This is not to say there is only one way to be "sensible." There are lots of ways to be sensible... And even more ways to be NOT sensible. So suffice it to say: Use one of the sensible ways. Think about how your Sensible List might get used before you begin, and work backward. Planning backward from a successful end is the essence of excellent planning. 


When PFCS is making lists of building elements, we use Uniformat, unless there is a compelling reason to use some other scheme *. "UniFormat is a standard for classifying building specifications, cost estimating, and cost analysis in the U.S. and Canada. The elements are major components common to most buildings. The system can be used to provide consistency in the economic evaluation of building projects. It was developed through an industry and government consensus and has been widely accepted as an ASTM standard."

Lots of construction professionals use CSI Masterformat because most specifications manuals from architects are often written using this scheme, but since PFCS does so much building performance analysis, and we store building data (forever, for free) Uniformat is a better standard for us. 

* In claims and litigation, we need to be very careful about making our Sensible List(s) because so much of the work is about comparing and contrasting. If we are on the plaintiff side, then all the other parties will likely use our list to respond to our claims. When we are on the defense side, and someone else has created a reasonably sensible list, then it's usually better to adopt their's, rather than re-inventing the wheel. Unfortunately, the work of others is sometimes so poor that we have to create our own organizational scheme. But we only do this as a last resort. 


Unifromat's Level-1 structure is a simple, Sensible List that categorizes all aspects of any building project, using capitol letters at Level 1 (because there are WAY more than 26 Level 2 options, and they wisely switch from letters to numbers when going from L1 to L2): 

A. Substructure

B. Superstructure

C. Interiors

D. Services

E. Equipment & Furnishings

F. Special Construction & Demolition

G. Building Site work

H. Other (This is added by PFCS because lots of our projects are in litigation and the issues don't always fit into Uniformat's building element codes. 

The actual building elements nest comfortably at Level 2 under the respective L1 categories. 


In lots of what we do, we explain things by "working from large to small." I have explained this hundreds of times by asking people if they ever used Google Earth, where you start with an image of the entire Earth. You type in your address and the globe turns to orient toward your hemisphere, then it starts moving in toward your continent, then the your country, then your state, county, city, neighborhood, and ultimately your rooftop. And in going from large to small way we have been oriented perfectly to where in the world we are. First explain the forest we are in, then talk about trees. 

So buildings are, for the sake of consistency in naming, composed of "Elements" like foundations, walls and roofs. A "masonry wall" is a particular type of building element (at Level 2 in Uniformat). The bricks and mortar are "Components" of that building element, that would be at Level 3 or deeper. 


This project was a Property Condition Assessment for twin high-rise condominiums, so virtually all of the building elements were addressed in our report. 


This project was a construction defect litigation matter with discrete problems and repairs for all of those issues. 


Even our Core Values are laid out in a 2-Level Work Breakdown structure! 

And from there, so, so many of the things we do have to be arranged in a sensible list: 

Contractor Pre-Qualification Checklist



Background checks are necessary. There is a reason you are screened before buying a car, a gun, or getting hired for a prestigious new job. Pre-qualifying contractors and subcontractors is one of the most important steps in reducing risk associated with construction projects. It is crucial to outline the expectations of a contractor in order to make sure they can handle the work you want them to do.

At PFCS we have found that pre-qualifying contractors is an important step in our own unique system for hiring. In a blog post called "Avoid Bad Contractors: Basic Due Diligence in Hiring," Pete Fowler outlined 17 crucial steps in order to hire a good contractor. Pre-qualification falls on number 8. It is such an important step that it has seven sub-steps for ensuring the pre-qualification process is done thoroughly.

The following is a checklist compiled by FIRST, VERIFY that details the important steps in pre-qualifying a contractor.

The Checklist


Business Attributes
Corporate Officers and/or Shareholders/Partners/Proprietor
Parent, Affiliate, and/or Subsidiary Companies


Contact for Insurance Information
Insurance Information
Surety Relations


Job History
Largest Contracts
Anticipated Annual Volume


Banking Relations
List three (3) major suppliers
List three (3) General Contractors for whom you have worked in the last three (3) years

Bidding Interests

Add Bidding Interests

Safety Statistics

Experience Modification Rating
Contact for Insurance Information
Workers Compensation
OSHA Recordkeeping
Safety Performance History

Safety Programs & Procedures

Written Safety and Health Program
Written Safety Program Administrative Procedures
Site-Specific Safety Plan
Substance Abuse Policy
Respiratory Protection
Utilize Services
Accident Investigation Procedure
Safety Inspections
PPE, Equipment Inspections, Audits
Safety Training/Orientation
Training Records
Safety Orientation Program for Newly Hired or Promoted Foremen/Supervisors
OSHA Construction Safety Courses
Craft Training

Supporting Documents

Certificate of Insurance
OSHA 300 Log
NCCI Letter (EMR)
Contractor General Conditions Agreement
Other Desired Documents

Avoid Bad Contractors: Basic Due Diligence in Hiring



We recently published a post called Who Would You Prefer As Your Contractor? So here is our method to find professional (not criminal or incompetent) Contractors or consultants. The process works for any type of hiring BTW, including doctors, lawyers, accountants... Seriously, anything. In list form, it seems like more work than it is. Jump to the bottom for an abbreviated procedure for small jobs. 

Big Picture Hiring Process

  1. We define what good performance looks like.

  2. We identify minimum qualifications, keeping in mind that the only reliable predictor of future performance is past performance.

  3. We find candidates and ask them if they are interested.

  4. We negotiate the terms of a win-win performance agreement, based on our definition of what good performance looks like.

  5. We create and follow-through on a mechanism to verify that the good performance, defined at the beginning of the process, and communicated clearly in the win-win performance agreement, is taking place.

This applies to: 

  • Hiring a plumber to fix a leak

  • Hiring a part or full-time employee

  • Hiring an Independent Contractor to perform a specific scope of work

  • Hiring an architect to design a home

  • Hiring a contractor to build a $50 million project

  • Hiring a dentist!

Hiring Procedure

  1. Outline the Scope of Work in a Sensible List.

  2. Define the Scope of Work clearly enough so the contractor knows exactly what to do and where, including material specifications and so that a third-party inspector can verify conformance with the specification.

  3. Layout a Budget and Bid Form using the Sensible List.

  4. Layout a Progress Schedule form using the Sensible List.

  5. Use a blank contract form in coordination with the Owner’s lawyer.

  6. Write a "One Minute Summary" (less than 250 words) of the project and what you're looking for.

  7. Package all of the above in an RFP (Request for Proposal), including an invitation to bid document that includes the One Minute Summary, minimum contractor requirements and qualifications, your selection process, some project images to give an idea of where and what the project is, etc.

  8. Identify and pre-qualify interested contractors, and send them the RFP Package. If you don't know any contractors, then first apply Proving the Obvious Using Google to find some, then:

    1. Call anyone remotely connected to the contracting specialty we're looking for. Get them on the phone and:

    2. Read the One Minute Summary and ask if they offer the kind of help we're looking for. If yes:

    3. Interview them and take really good notes. Ask all the who, what, when, where, why, how, how many, and how much (8 W's) questions. If no:

    4. Ask them if they know who can help, and try to get more than one referral, if possible. Ask "Who is the best person in this field?"

    5. Repeat this from item 8.1-8.4 until you have spoken to AT LEAST 3 qualified, interested vendors. More than 3 is WAY better; up to as many as 10 because people often fail to deliver the bids they promise.

    6. Each vendor we speak with we learn something important, so after the last one we sometimes need to re-interview the earlier people before making a decision.

    7. If you are new to an area, this could take 2-4 hours but you will begin to hear the same names over and over. This is when you know you've made enough calls. It's best to keep track of how many people referred you to each of the prospective contractors.

  9. Job walk the contractors.

  10. Accept bids only on the Bid Form and with a Progress Schedule filled in by the contractor and a list of 3 current and applicable references with contact information.

  11. Evaluate proposals, contractors, bids and schedules.

  12. Call references and verify contractor's license and insurance.

  13. Make a hiring decision.

  14. Execute the agreement.

  15. Collect all insurance documents.

  16. Set a date for the Project Kickoff Meeting.

  17. Keep planning for project success.

Abbreviated Process to Quickly Hire a Specialty Contractor for A Small Job

  1. Write a "One Minute Summary" (less than 250 words) of the situation and what we're looking for.

  2. Call anyone remotely connected to the specialty we're looking for. Get them on the phone and:

  3. Read the One Minute Summary and ask if they offer the kind of help we're looking for. If yes:

  4. Interview them and take really good notes. Ask all the who, what, when, where, why, how, how many, and how much (8 W's) questions. If no:

  5. Ask them if they know who can help, and try to get more than one referral, if possible. Ask "Who is the best person in this field?"

  6. Repeat this from item 2. until we have spoken to AT LEAST 3 qualified, interested people / vendors. Each one we speak with we learn something important, so after the last one we sometimes need to re-interview the earlier people before making a decision.

  7. Verify contractor's license and insurance.

  8. Review notes and make a hiring decision.

  9. Update the One Minute Summary and use it as part of the written "Agreement" (contract) with our chosen professional. Make sure the Objective is stated really clearly. For construction, you also need a detailed, written Scope of Work (too much detail for this post).

  10. Refer back to the written Agreement throughout the engagement, especially when payments are being made, to make sure the objective is being met.

A Super Simple Example

One of my friends reached out for help with a problem he needed solved at his home due to vandalism. So I used Google Docs and spent 5-10 minutes to compose a "One Minute Summary" of what my friend needed.

"We are looking for an electrician to replace and install the keypad for a residential gate, check the motor, and reprogram the keypad. The home is located at 1234 Main Road in Happy Town, USA. The keypad at the gate on Main Road needs to be replaced because it was cut and taken in the course of a minor vandalism. Please call XXX-XXX-XXXX or email (xxx@xxxx.xxx) for details or to arrange a visit. As you can imagine, time is of the essence."

It always takes several passes to get a One Minute Summary right. The goal is to make it easily understandable and readable by anyone, in less than 250 words. We use small words and short sentences, all in a sensible order. We usually work from large to small. Use the 8 Ws as a checklist: Who, what, where, why, when, how much, how many, how. The best way to know if you have succeeded is to find someone to "peer review" your work. Before they read, tell them "The objective is to make this easily understandable and readable by anyone. I am completely open to constructive criticism." If they have to ask a question about what you have written, it needs another pass.

Then I used Google Maps and a very simple screenshot program (Faststone Capture) to create a few images that showed exactly where the work was to take place. I saved the images with the One Minute Summary as a 2-page PDF file that served as a mini-RFP (Request for Proposal). The original document was 4-pages, so I made the images a bit smaller and changed their order to get it down to 2-pages.

I did all of this work to make the project seem small, simple, and as easy to understand as possible. I know from experience that this attention to detail makes a difference in the quality of the proposals we receive and their price. If contractors think the work is going to be easy, the price is lower; if they perceive it as difficult, the price will be higher. By thinking through these details, as simple as it may seem, we make the project easier for the contractor to quote, easier to contract, easier to plan, easier to perform, easier to complete successfully, and easy to get paid quickly. THIS is how we get the highest quality and lowest prices!

Since this was my friend, and not a client, I then explained that he (rather than I) should ask for referrals from friends and colleagues, and search for qualified companies on services like Yelp, Angie's List, and other local sites that have a mechanism for ratings from past clients. Most people think getting a referral from a friend is better than a site like Yelp, but as a construction litigation consultant, my experience leads me to disagree. My experience has taught me that only competition leads to higher quality and lower prices; nothing else. I told my friend that he should send the document (our mini-RFP) to somewhere between 5-10 companies that seemed qualified. Not 100% will even respond. Then talk on the telephone to each who responds. Ask the 3-5 smartest sounding contractors to give you a proposal.

When making a selection, don't only consider lowest price. Sometimes “lowest price” means “dumbest contractor.” And when you get a dumb contractor, it leads to headaches, defects, and usually an even higher price than you would have paid a competent contractor with a higher (more sensible) price. I highly recommended that my friend ask for and call references.

When my company hires contractors, we typically do so using an industry standard form (like ConsensusDocs or AIA), but this is a small project, the Owner does not have easy access to standard form agreements, and he wants to make it easy on the most qualified contractor to get to work, so I told him to just make sure there were no really egregious terms, and to verify that the contractor carried a current Commercial General Liability (CGL) insurance policy. Most state contractors license boards keep this information current, so I advised my friend to check there for license and insurance status.

Finally, after receiving the price, but before signing the contract I told him to ask "What are the most likely ways this could cost me more than your proposal amount? I understand that if the motor does not work any longer, replacing it will be an additional charge. So what else could happen to cost me more? And if one of these happens, how do we price that additional work?" I told him to make sure to write down the contractor’s answers to these questions.

With all that, my friend was ready to get his gate fixed at a fair price by a competent contractor. But of course he said "Ugh. That seems like a lot of work! I am busy and just want my gate fixed." I explained that most work like his project is contracted by owners using the "Hope & Prayer Method" rather than mine, and that he was welcome to do that, but it's the reason the home improvement industry competes every year with used car dealers for the most consumer complaints. Granted, my method will take 1 to 3 hours, but it will likely save 10% to 300% (literally) and is the closest thing possible to a guarantee of success.


Who Would You Prefer As Your Contractor?

You Might Be Surprised By My Choice

I have said this hundreds of times, and I have even testified to it once or twice: I would prefer a competent criminal contractor over an incompetent contractor. Time and again I have seen incompetent contractors cost Owners more than a criminal would ever dare to steal. 

I am working on a project now where the Owner signed a contract with a general contractor for $850,000 to construct a new home. He chose this contractor because the competing bid was $20,000 higher. Through negligence in the contracting process, negligence in the building process, and negligence in the billing and change management process, the project cost the Owner more than $1.2 million. The project changed VERY little from the time the design was completed by the architect to the time the project was completed. And yet the cost increased more than $350,000.   

So if the Owners would have chosen the other contractor for $20,000 more, they would have been FAR better off, even if he was a criminal who stole $100,000 from them at the end of the project. Think of that. I'm not kidding. 

Open Source Construction Contracts

2017-09-21 121212_2_OpenSwissKnife.png

Are you tired of the existing methods for getting a construction contract drafted, negotiated, finalized and signed? So are we. And we think we have a solution. 

What is Open Source? 

Open Source is a development model that promotes universal access via a free license to a product's design or blueprint, and universal redistribution of that design or blueprint, including subsequent improvements to it by anyone.

Did you ever see the game show Who Wants To Be a Millionaire?" Remember how when the contestant would "Ask the Audience," the audience was almost always right? The cleverest among us have known for a long time that "Everybody is smarter than anybody." Open Source is a technology-enabled way for us to take advantage of the wisdom of the crowd. 

Probably the most commonly used and known Open Source body of material is Wikipedia: The Free Encyclopedia. There have been many research studies that have verified that the content is equally reliable as other scholarly sources such as Encyclopedia Britannica. 

Why Should I Care About Open Source Contracts? 

2017-09-21 4427310974_05b9faae8a (1).jpg

I think the industry standard contracts that we are all using now are terribly flawed. And they are expensive. And they are cumbersome. Since Everybody is smarter than anybody, we should all get together and write a great contract. Then we can all use it on our client's behalf, for free.

In addition to a place where we can all contribute a small amount of time and get the HUGE reward of a really good construction agreement, we will also have training modules and recommendations showing how to use these awesome documents. Maybe we will even host open training forums, seminars, and webinars that will count toward continuing education requirements! 

Just imagine: Someday the Contracting 101 family of open source construction documents might be more popular than the standard form agreements that are so widely used today! You could be one of the founding members of a movement that improves contracting henceforth and forever more! 

What's Happening at Contracting 101.com?

We are getting smart people together to draft and continuously improve a family of inter-connected construction contract documents. 

These documents might include: 

  1. Owner-Owner's Representative (CM) Agreement

  2. Owner-Designer Agreement

  3. Owner-Prime Contractor Agreement & General Conditions

  4. Owner-Prime Contractor Change Order

  5. Owner Purchase Order (For purchase directly by Owner)

  6. Contractor-Subcontractor Agreement

  7. Contractor-Subcontractor Change Order

  8. Purchase Order

  9. Payment Application

How Do I Get Involved?

At this point, all you have to do is tell someone at PFCS that you want to be involved, and poof! You're involved. We will maintain a list of people who want to be involved and we will send update messages from time to time. 

Next Actions

  1. DONE Setup documents for electronic collaboration (probably Google Docs and Sheets)

  2. IN PROCESS Collect and organize what other industry standard documents (AIA, AGC, Etc.) have to say on these key subjects (sections and clauses).

  3. IN PROCESS Get a diverse team of collaborators together including property owners & managers, developers & contractors, product manufacturers & suppliers, insurers and lawyers.

  4. Outline the first document to identify all sections and clauses.

  5. Make another draft of the list of documents that will be included in this family of construction documents.

  6. Start writing our own clauses.

  7. Make a more detailed plan :)

  8. Publish our first draft document for use.

Who Needs a Contractors License? Everyone, It Appears... Well, not quite.

Surprise! You're a contractor!!

Yes, you Mr. Interior Designer. And you too Ms. Community Manager... Wait... The community managers were saved by an exclusion added after the fact. 

In 2012 California Assembly Bill 2237 turned anyone who oversees bids for construction, on behalf of homeowners, is a contractor, and requires them to obtain a license with the CA Contractors State License Board. Then, in 2013 CA Senate Bill No. 822 clarified the term "Contractor" and "Consultant" to NOT include community managers. But the language of California Business & Professions Code Section 7026.1 remains pretty broad. 

The Law

CA B&B Code Section 7026.1.

(a) The term "contractor" includes all of the following:


 (2) (A) Any person, consultant to an owner-builder, firm,
association, organization, partnership, business trust, corporation,
or company, who or which undertakes, offers to undertake, purports to
have the capacity to undertake, or submits a bid to construct any
building or home improvement project, or part thereof.
 (B) For purposes of this paragraph, a consultant is a person,
other than a public agency or an owner of privately owned real
property to be improved, who meets either of the following criteria
as it relates to work performed pursuant to a home improvement
contract as defined in Section 7151.2:
 (i) Provides or oversees a bid for a construction project.
 (ii) Arranges for and sets up work schedules for contractors and
subcontractors and maintains oversight of a construction project.


 (b) The term "contractor" or "consultant" does not include a
common interest development manager, as defined in Section 11501, and
a common interest development manager is not required to have a
contractor's license when performing management services, as defined
in subdivision (d) of Section 11500.

Why We Care

Lots of people engage in activities related to contracting. Many are nice people with good intentions, just trying to make a living. But because they are not educated, licensed or registered and regulated after having undergone a rigorous process of verifying they have the appropriate professional knowledge and level of skill, they inadvertently cause harm to their clients. 

Construction management is hard and it’s complex. Construction management is a professional discipline that should be regulated like architecture, engineering, or even cosmetology; but it’s not. This lack of recognition, that there is a set of well-defined construction management principles, leads property owners and managers to try to save money by managing complex projects themselves. Our experience is that for maintenance, improvement or repair projects that cost $50,000 or more, our professional construction management services are cost-neutral. For projects of $100,000 or more, well-executed construction management services are a cost saver. So technically, these services can be FREE, plus a profit (I'm only half-joking)! In addition to the economics, these services create the closest thing to a guarantee of success that the construction industry can offer. 

Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

Welcome to the third post in our series on Building Information Modeling (B.I.M.)! If you haven't read the first two posts, I encourage you to read them! The first post in this series introduces the concept of B.I.M., and the second post explains why everyone needs to care about B.I.M. For those that just need a refresher, here’s a recap of what we covered in the last post:

"B.I.M. is beneficial to everyone who deals with buildings needs to care about B.I.M.:

  1. A three-dimensional (3D) computer model provides a central place for all parties to contribute to and pull from;

  2. Data about each of the physical building elements can be used during all phases, from construction through building maintenance;

  3. Information related to time (4D) can be used for scheduling during construction, communicating changes, and incorporating maintenance intervals and maintenance plans;

  4. Information related to cost (5D) will help produce lifecycle cost data as well as set reasonable service-life expectations and maintenance costs;

  5. And all aspects of the project lifecycle (6D). Need to know who designed the buildings being worked on? Or who applied the peeling paint on the exterior doors? And what the expected service life of that paint was, who made it, and how much did it originally cost? B.I.M. helps answer all of these questions."

Today I’d like to discuss the profound impact that BIM will have on all phases of Building Lifecycle Management, from planning and design up to and including decommissioning a building project.

  1. Plan/Design:

    • All designers will work in the same model (database). This way, any coordination issues can be worked out in the design phase rather than interrupting the construction phase.

    • Total Quality Management (TQM) can only be fully implemented when it begins in the design phase.

    • Project Management and planning data (scope, budget, and schedule) are integral to BIM.

    • Cost-benefit, if-then scenarios can be considered cost effectively. For example: Comparing a more durable and expensive deck assembly against a less expensive alternative that will require more frequent maintenance.

  2. Build/construction:

    • Clarifications (RFIs) and changes in the field will (1.) be reduced significantly by planning and designing using BIM, and (2.) be updated in the model (database) as the project progresses.

    • Because the scope, budget, and schedule were coordinated during the planning phase, and will be updated in real time, coordination and “Just-In-Time” delivery will, for the first time, come to construction projects with the kind of regularity that we see in manufacturing.

  3. Use:

    • The model will pass from the construction team to the facility management team during the commissioning process.

    • Significant configuration of interiors for use will be updated in the model. Details such as communications cabling will sometimes be included in the model. The model may even include information on who is sitting where, so that the space can be optimized.

  4. Maintain:

    • What was originally the Construction Progress Schedule will become the Maintenance Schedule.

    • All operation and maintenance (O&M) documentation for each and every element will be available in, or referenced from, the model.

    • Building maintenance, both planned and unexpected, will be updated in the model. “Best Practices” for maintaining structures and contracting for maintenance services will be applied by integrating data into the model, and owners of multiple projects will share these best practices from model-to-model. This will include who, what, when, where, how, how much, and how many.

    • Contracts for maintenance should be maintained element-by-element, location-by-location, and player-by-player (contacts) in the model.

  5. Repair & Improvement:

    • All repairs and improvements should be updated into the model. This will include who, what, when, where, how, how much, and how many.

    • If it is found that some element or elements were constructed in a way that is not consistent with the applicable standards, and the building is not performing as expected, the model will include information from construction about who designed, approved, supervised, executed, inspected and approved the assemblies, so that any disputes should only address the applicable elements, locations, and players.

  6. Learn:

    • Over time, since that data is structured, it will become information that smart people can use to make smart, informed decisions.

    • Not only will the decision makers have the structured information for the project at hand, they will also have the data from other, similar projects to aid in decision making across projects. This metadata (a set of data that describes and gives information about other data) can be created to further inform best practices.

    • See PFCS’ publications on Building Lifecycle Management, which argue the position that collecting and organizing building data such that it becomes actionable information is the only way to make smart decisions about building projects. Therefore, a central database of all building related data (BIM), searchable and able to output by building element, location, person/company, or timeline, is an amazing decision-making resource.

    • See a sample PFCS Building Lifecycle Management Matrix (BLMX).

  7. Decommission:

    • The decision to update or demolish is a tough one. But it will be made much easier when we can do multiple, cost-effective, A to Z, what-if analysis.

PFCS Building Lifecycle Maintenance Matrix (BLMX

PFCS Building Lifecycle Maintenance Matrix (BLMX

Decisions, Decisions...

There are many aspects of B.I.M. that seem small, but will have a profound impact:

  • For the first time in the history of building construction, all parties from design to decommissioning will use common names for all of the physical elements and locations of the project.

  • We will be able to finally know what the physical elements cost to design, build, use, maintain, repair, improve and decommission, since we will have a central repository for all information about each of the physical elements. And the actual history of costs associated with each phase in the lifecycle will be readily available.

  • Naturally, financial accounting will need to evolve to make costs associated with the respective physical elements available through the lifecycle, but this will be easy once the data has a home and its use begins to save building owners and users money over time.

  • The implications for the science and profession of construction Project Management are profound. The key fundamentals for all management of all projects are scope, time and cost management. BIM has these aspects of the "building information" built in as part of the "model" so project management software tools should be interacting with the model (BIM database) in a way that is very similar to the way all of the designers are interacting with it.

  • Financial management of the building lifecycle will become integral with building information modeling. Electronic financial tools (like the almost ubiquitous financial software Quickbooks) will eventually communicate directly with the model, with data that flowing out of, and back into a project's BIM. Periodic reports as well as permanently stored historical financial information should be integral to the model, even moving from owner to owner when the property is sold. Therefore the entire, uninterrupted economic history of the project will be able to be known. This will be similar to the record keeping of a fastidious automobile owner, who maintains records and receipts of every service appointment.

  • Naturally, changes to the scope of work will be limited when projects are fully modeled in 3D due to all of the physical elements being fit together in the virtual model before actual construction begins.

  • The simple avoidance of re-typing the same information over and over and over will save many thousands of dollars over the lifetime of the building.

This series on Building Information Modeling continues: 

  1. Building Information Modeling: What is B.I.M.?

  2. Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. (This post) Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

Who should care?

  • Property Owners & Managers

  • Developers & Contractors

  • Product Manufacturers & Suppliers

  • Attorneys and Insurers

Welcome to the second post in our series on Building Information Modeling (B.I.M.)! If you don’t know what the heck we’re talking about, I encourage you to read the first post in this series which introduces the concept of B.I.M., talks through an industry definition, shows the opportunity for expansion, and even includes a fun video to help break it down.

For those that just need a refresher, here’s a recap of what we covered in the last post:

"B.I.M. is a sharable collection of building data, including:

  1. A three-dimensional (3D) computer model of the entire project;

  2. Data about each of the physical building elements including their location, number, and size;

  3. Information related to time (4D);

  4. Information related to cost (5D);

  5. And all aspects of the project lifecycle (6D).”


"So what?"

Now that you know what B.I.M. is, you’re probably asking, “So what?” Why should you care about B.I.M.?

The truth is that B.I.M. introduces a transformation in the way we think about, document, and share information related to building projects – and the results have serious implications and unrealized benefits for users across every industry that deals professionally with buildings (not just the construction industry).

We’ll illustrate this with an example. As you probably know, buildings are traditionally designed graphically, even when using three-dimensional computer aided design (CAD). It’s common for an architect to design a building project using 3D CAD, then print the contract documents but not share the electronic files. Contractors offering proposals then have to manually measure the scaled drawings and input their own interpreted data in order to develop their estimates and proposals.

As you can imagine, this traditional methodology is inherently inaccurate and inconsistent. Even two estimators in the same office will have different datasets. And this messy process is repeated for each and every contractor involved, which is terribly wasteful when you consider that large projects can have hundreds of players involved.

B.I.M. presents an alternative to this inaccurate and inconsistent approach.

Accurate, Consistent Information with B.I.M.

At its core, B.I.M. is a methodology that transforms the underlying design of a building into data that can be shared with all stakeholders, without interpretation, for reuse throughout the building lifecycle.

Recall our flooring contractor from the first post: Having one dataset about the building, that can be easily shared throughout the building lifecycle, will decrease historic inefficiencies associated with parties needing to create and re-create data over and over.  These savings will naturally lower the total building lifecycle costs. Those who participate by using this data will be at an advantage over those who continue to operate in the older, less efficient way. In addition, this data will make smart decisions easier, so in addition to lower costs, the performance will be better and more durable. Better and more durable building performance usually means “longer lasting,” so the cost over time is lowered ($/year).

Let’s discuss how each of our B.I.M. components becomes a living data set to be used virtually by all key players in a building project's lifecycle:

  1. A three-dimensional (3D) computer model of the entire project:

    • Build a true 3D model of the building project, representing the elements (floors, walls, roof, windows, doors, etc.) that will make up the real building in three-dimensional space. This is in contrast to 3D CAD (computer aided drafting), which is a purely graphical rendition requiring interpretation (which often leaves chances for error).

    • Create a “home base” model from which all players in the design of the building project contribute to and pull data from.

    • Leverage your 3D B.I.M. as a sophisticated database to output building information in various forms, including all elements in "one dimension" like Excel spreadsheets, two dimensions like traditional construction drawings, or three dimensions from any vantage.

    • Eliminate costly errors in dimensions and conflicts in physical space associated with the traditional methodology.

  2. Data about each of the physical elements including their location, number, and size:

    • Incorporate all physical elements of your project in your 3D model, accounting for the way that manufactured products are actually put into a real building.

    • Pull precise specifications and information related to physical elements that are not pre-manufactured.

    • Automatically account for every element, a process that traditionally requires calculations and scaling.

    • Incorporate service-life and maintenance information associated with each discrete building element (walls, windows, roof, mechanical equipment, etc.).

  3. Information related to time (4D):

    • Associate progress schedule and sequencing information with each discrete element, combining and associating with other interrelated elements that will be combined during construction.

    • Efficiently and effectively communicate changes to the construction schedule with a sophisticated B.I.M. scheduling mechanism.

    • Incorporate maintenance intervals for each element, and output maintenance plans for those elements that require periodic attention.

  4. Information related to cost (5D):

    • Include the cost of each physical element in the model.

    • Associate each discrete element with service-life expectations and maintenance costs, and manage throughout the building lifecycle.

    • Integrate lifecycle cost analysis data, including that for reserve studies.

    • Accurately evaluate the performance of the building against the expectation, as described in your model.

  5. And all aspects of the project lifecycle (6D):

    • Do we know who designed all of the buildings we worked on? This is an easy question if you have a complete Building Information Model.

    • How about trying to figure out who applied the paint that is peeling off the exterior doors?

    • How long did we expect that paint to last anyway? And who made it? And what color is it?

This series on Building Information Modeling continues: 

  1. Building Information Modeling: What is B.I.M.?

  2. (This post) Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM)

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

Building Information Modeling: What is B.I.M.?

Welcome to the first post in our series on Building Information Modeling! I invite you to take a few minutes (3.5 to be exact) to watch this introductory video from Graphisoft on Building Information Modeling – just keep in mind, they are selling software to designers.

What is B.I.M.?

According to Wikipedia:

Building information modeling (B.I.M.) is a process involving the generation and management of digital representations of physical and functional characteristics of a facility. The resulting building information models become shared knowledge resources to support decision-making about a facility from earliest conceptual stages, through design and construction, through its operational life and eventual demolition.

Translated into English, B.I.M. is a sharable collection of building data, including a three-dimensional (3D) computer model of the entire project. This model includes data about each of the physical building elements (foundation, windows, plumbing system, site lighting, etc.) that make up the project, including the location, number, and size of those elements.

The model can also include information related to time (adding a 4th dimension to the B.I.M.), cost (a fifth dimension), and all aspects of managing the project lifecycle (a 6th dimension).

Levels of B.I.M.

  • 3D B.I.M.: Building Information Models in 3 Dimensions

  • 4D B.I.M.: 3D + Time (Think Einstein’s Space-Time Continuum)

  • 5D B.I.M.: 4D + Cost (Think Project Management’s Scope-Budget-Schedule. All 3 are now covered.)

  • 6D B.I.M.: 5D + all aspects of project life-cycle management information


Benefits of “6D B.I.M.”

Imagine a flooring contractor preparing a proposal for a project. If the project was designed using B.I.M., the contractor would simply search the B.I.M. database for all of the flooring types, their locations and exact quantities. A perfectly accurate list could be generated along with links to all applicable specifications.

This method is far more accurate and efficient than the traditional method – which involves reviewing a set of paper drawings and specification manuals, making hand measurements, calculations and notes (which are never perfectly accurate). Just think how many times the floor area of a public building gets measured over the course of its service life. With today’s technology, this is a silly waste of time.

When B.I.M. is fully executed, it will save contractors unimaginable hours performing tasks that have no lasting value to the building owners.

And in a full 6D B.I.M. implementation, the flooring contractor would also have access to bidding and contracting information including the progress schedule. The general contractor (GC) would accept proposals electronically, and all of this information would be forever stored in the B.I.M. model for easy reference.

This series on Building Information Modeling continues: 

  1. (This post) Building Information Modeling: What is B.I.M.?

  2. Building Information Modeling: Why Everyone Who Deals with Buildings Should Care about B.I.M.

  3. Building Information Modeling: B.I.M. and Building Lifecycle Management (BLM )

  4. Building Information Management & Modeling

To learn more about how PFCS leverages B.I.M., browse our services or give us a call at our Southern California Office (949) 240-9971 or Portland Office (503) 660-8670.

General Conditions to a Prime Construction Contract

From PFCS's Training Construction Document Literacy:

"General Conditions to the Contract describe the general guidelines for administration of the Prime Contract. The document includes information like how to terminate a contract under various circumstances, obligations of the parties to a construction contract, and important definitions. It is intended to guide the Owner and Contractor through all agreed upon aspects of general contract administration. By reading an industry standard document like AIA 201 you can learn a tremendous amount about how construction projects are supposed to work."


If you deal with construction regularly, I highly recommend that you print out one or more of the documents below (or upload to your iPad), put it on the nightstand, and let it bore you to sleep a few nights in a row. It will solve insomnia and enlighten you significantly. Then, any time there is a problem with a construction project you are working on, just remember the old favorite acronym: RTFC. Read the f-ing contract! Since you will have read these General Conditions, you will know generally what should be in the contract and how the clauses work together. This will allow you to make smart decisions in applying specific contract language to specific situations.


Window and Door Installation and Defects

On January 31, 2012 Pete Fowler presented a 1-hour webinar called Window and Door Installation and Defects.  Pete explained the basics of modern window and door installation techniques and introduced the principles of design, construction, and installation of window and door components. Improper installation of windows and doors is one of the leading sources of building performance failures that lead to construction defect litigation.

This is the first in our Construction Defect Seminar/Webinar Series which will be presented throughout 2012. A complete list of the dates for the remainder of the series is listed on the Events page of our website.

The programs are recorded and available to PFCS clients free of charge. If you are a client and would like access to this program, or if you would like to schedule a PFCS Expert to deliver a presentation live at your conference or in your office, please contact marketing@petefowler.com.

Read more about our Window and Door Installation and Defects program