- Project Planning, Overview
- Project Planning, Nature of the Job
- Project Planning, Nature of the Deal
- Project Bidding
- Project Administration/Auditing
The devil (and the dollars) are always in the details.
When community common elements – that is, roads, roofs, siding, landscaping, etc. – are reaching the end of their useful life, they must be replaced. As a result, HOA Boards find themselves involved in capital improvement projects.
Regardless of their size, such projects become the stage upon which owner concerns regarding community business behaviors, the value of project deliverables, and project accountability play out…often in very public ways. Indeed, showing owners they have done the “right thing” with community resources is a major challenge faced by volunteer Boards and their Property Mangers. To execute this work well, requires expertise and a lot of communication – written and otherwise – that not everyone may possess.
At the end of the day, the absence of comprehensive project planning can leave the Board and owners wondering if valuable community resources have really been properly used and managed.
CPLLC’s approach to planning and bidding capital improvement projects takes the guesswork out of the capital improvement process…providing owners the information and the tools to need to insure they receive “apples to apples” bidding, project buying choices, and the project outcomes they want.
When you don’t have your work clearly defined, there can never be any finish point.
Irrespective of projects size, it is essential that HOAs pursuing capital improvement projects create a formal document – a Project Plan (also Project Manual or Work Description for smaller projects)- that is used for bidding, contract agreements, and project management purposes. These documents can vary in size from ten pages to over a hundred pages. The project plan and details must be appropriate to the work.
However, any Project Plan worth its salt must define
1. The Nature of the Job – i.e., technical specifications and drawings.
2. The Nature of the Deal – i.e., the Bid Form/General Conditions and any other documents that define business behavior requirements of both the Contractor and Association.
The Project Plan document and Bid Process simply resumes the work of the HOA’s Facility Plan … confirming that the ideas and budgets set forth in the Facility Plan are valid…and adding additional technical details/standards…which ultimately determine project outcomes and costs.
There is no project manager or contractor that can eliminate the negative consequences of a bad project plan. No such magic exists.
Therefore, Project Plans need to be developed by individuals or companies that can assume legal responsibility for that work…which excludes HOA Boards…as well as most property managers and contractors.
At Community Planners, we take this responsibility seriously…bringing $1 million in errors and omissions insurance for architectural design and engineering to all of our projects.
CPLLC’s success is measured not just by immediate project outcomes; but also, by the testimonials of clients – HOA Boards, Property Management companies, and contractors – regarding the efficacy of our work and how is has withstood the test of time.
Plan to build…build the plan.
It is vital to the success of any project, that bidders and the Owner understand and agree upon the technical requirements and standards associated with the work. These written materials – technical specifications, specifications, or simply “specs” – are often a mix of construction practices as defined by the Building Code, installation requirements set forth by a manufacturer, construction drawings/details, or performance outcomes the designer (and HOA) seeks.
Regardless of where they come from, once a HOA has determined the outcomes they seek from a project and decided to proceed with the work, it is imperative to create technical specifications that define construction tasks, methods, materials, and processes that the successful bidder must bring to the project.
Aside from their importance in setting work standards for the work, the specifications – in conjunction with other bid materials – become part of the legal documents (the Contract) of your project once work begins. No small matter.
Nature of the Deal
Some people believe that fairness comes with obeying the rules. I’m one of those people.
Aside from being a “tool time” event, capital improvement projects are also interactions where Owners and Contractors will enter a business relationship. In order to achieve success, there must be agreement concerning the rules of engagement – quite separate from the technical aspects of the work – concerning matters of price, business behaviors and field conduct. Without such an agreement, the project possesses an intrinsic absence of fairness…making it flawed and unlikely to succeed.
To that end, a good project plan must contain language that speaks to a host of behaviors and responsibilities – “standards”, if you will – to which the HOA and Contractor must agree.
How much…and for what. This information – including bid alternates that help Owners and bidders price different approaches to the work in a competitive way – is set forth in the Bid Form that is part of all CPLLC Project Plans.
Length of the Job:
How project time is computed and the consequences of not meeting the project timeline. Time is money for everyone.
Who/what is insured and for how much.
How payment information is presented to the Owner, the Owner’s responsibility for payment within a determined time period, when invoices are paid, and whether a portion of invoices are retained (held back) until project completion.
What constitutes a project change and how that work is computed, approved, billed, and paid.
Conflict and Dispute Resolution:
People can/will disagree. If it becomes particularly egregious, there needs to be rules regarding how those disagreements can and will be resolved.
Contractor’s use of the owner’s property; and, their responsibility for protecting it and keeping it clean.
Contractor’s responsibility to demonstrate compliance with regulations…building permit, environmental, etc.
Job Oversight & Job Documentation:
Contractor’s responsibility to supervise work and demonstrate (prove) they have performed the work per the technical specifications.
For projects of significant consequence and size, Community Planners includes a General Conditions for the Contract of Construction that sets forth these ideas in more detail.
See Resources for Project Plan samples.
Behavior and expectations matter…even the simple things, when left undone, can lead to massive headaches that seriously affect project success and cost.
In our experience, it is the inability of HOAs to define and enforce contract standards as it relates to the “Nature of the Deal” – the fundamental business behaviors and deliverables for the Contract – that often tarnish great projects.
CPLLC places tremendous importance on these ideas in all our projects.
You should too.
A lack of transparency results in distrust and a deep sense of insecurity for all.
When it comes to bidding capital improvement projects, CPLLC had found that projects must be bid in ways that are competitive, transparent, and fair. That is, all bidders are bidding the same job, at the same time, and in the same way.
In addition, there must be very straightforward commitment by the Owner to award the project to the “lowest, responsible bidder”. That is, the project is awarded to the bidder with the lowest bid price…that provides evidence they have the requisite technical expertise, experience, and business/financial capabilities to meet the required project standards.
These ideas speak to the Board demonstrating to owners the intelligent, efficient, and fair use of community resources.
It also speaks to the perception of bidders regarding the fairness of the bid process, the credibility of the community as customers, and the extent to which the project is a legitimate business opportunity for them.
Project size doesn’t matter.
For CPLLC, this means conducting a formal, sealed bid requiring:
1. A mandatory Pre-Bid Meeting for all bidders where all project bid materials are reviewed and discussed.
Depending upon project size, we recommend a minimum of three, and not more than seven, bidders. Bidding, particularly larger projects, is a significant investment of resources by bidders. Bidders will make a genuine effort to provide comprehensive, competitive bids if they feel they have a fair chance at a project opportunity.
That said, a Pre-Bid Meeting insures that all bidders are bidding the same project tasks, details, and; have an opportunity to openly provide input/comment on those project details and materials. This is a very public conversation that is efficient, comprehensive, and fair….resulting in a better project and more competitive pricing.
Upon completion of the Pre-Bid Meeting, CPLLC will prepare written Pre-Bid Meeting Minutes and/or Bid Addenda that are sent to the bidders, the Board, and other project stakeholders. See Resources for Pre – Bid Minute samples.
2. Bids are sealed bid only and submitted on a Bid Form that is the only acceptable format for bid submission.
Boards and owners should receive bid information in a form they define. This insures the HOA receives “apples to apples”, identical project pricing from all bidders.
Sealing bids simply ensures the bid is principled – i.e., the result of “fair and open competition”.
3. Sealed Bids are opened only in the presence of the Board.
Fundamental to the legitimacy of the bid is the assurance that no one, particularly the Board and their immediate representatives, has the opportunity to influence the bidding process in any way… thus, further confirming the bid is the result of “fair and open competition”.
Once Bids are opened by the Board, they are reviewed and tabulated by CPLLC. This includes seeking further clarification from Bidders regarding their bid as needed. Once complete, CPLLC makes an Award Recommendation to the Board…and the Board will select a Contractor for the work…which, should the work proceed, culminates in a Contract.
Community Planners believes in the power of a formal, public, and comprehensive project bid process. It is fundamentally efficient, fair, and the pathway to project savings and success.
Just because someone has the right to do something does not mean they are doing it right.
Projects are not built in books or drawings. They are built in the real world of imperfect people and ever-changing, unpredictable conditions that can affect the work…and, irrespective of size, can derail a good project in a hurry.
Capital Improvement projects are also very much a team endeavor. In most CPLLC projects the “Project Team” includes the Contractor, the Owner, the Property Manager, and the Project Administrator/Auditor. It is important to know “who” does “what”.
When it comes to Project Management and Oversight of workers in the field, the entity with a front row seat to that event is the Contractor. It is their contractual obligation to supervise the work at all times and demonstrate they have performed the work per the technical specifications. They are the Project Manager…always. To pretend otherwise is terribly misleading and enables Contractors to evade their contractual responsibilities.
That said, the Contractor’s performance of the Contract – field performance, deliverables, billing, etc. – must be audited for compliance and efficiently administered. CPLLC performs this work on many of our projects as follows:
1. CPLLC monitors work as it progresses in the field and confirms that the Contractor’s work is in compliance with their contractual obligations to the Owner. This includes inspection of the actual work itself, the Contractor’s use of the site, Contractor supervision/staffing and work safety compliance, Contractor Field Reports, and more. The intent is to guard against defects and deficiencies in the work.
CPLLC sets forth its findings in Field Reports that are shared with the HOA Board, the Contractor, and the Property Manager. This includes recommendations of action to the Owner when requirements of the Contract are not fulfilled or when the Contractor encounters unforeseen conditions. See Resources for CPLLC Field Report samples.
2. Schedule and conduct meetings – regular Project Meetings, BOD Meetings, and other meetings as needed – with the Contractor and the Owner to discuss such matters as procedures, progress, scheduling and maintain, unforeseen field conditions, etc. A written record of all such meetings are maintained by CPPLLC and made part of the Project Record. This includes – Pre-Construction Meeting Minutes – that is required prior to the start of any work. See Resources for Pre-Construction Meeting Minute sample.
3. Review requests for Change Orders, confirm they reflect actual work performed and are cost reasonable. CPLLC then prepares appropriate documents for HOA review and/or approval. See Resources for Change Order sample.
4. Administer and make recommendations to the owner regarding; Payment Requests to confirm that they are appropriate and reflect completed work.
This work encompasses all project charges…as well as Release of Lien that are signed by the Contactor prior to the receipt of any HOA payment.
This work is made part of a monthly Project Budget Update showing actual project costs to budget. See Resources for Project Budget update sample.
5. Perform Project Closeout…which includes final inspection of the work, reviewing all project records to insure they are in order, providing the Owner a Certificate of Completion attesting that all work is complete, assembling all warranty information, approving Final Payment, and conveying the Project Record – the permanent record of the Project – to the HOA.
CPLLC’s approach to Project Administration and Auditing provides that vital information our clients seek. That is, verification the Contractor has met their contractual obligation to the Owner; and, the documentation of project history and details supporting that fact.