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ParsCo completed a project last week for a high-rise condominium development that was only 6 years old but riddled with latent defects. ParsCo was diligent in assisting the client in formulating a plan to address the issues, and completed the work to everyone's satisfaction. This recent project brings to light that so many beautiful projects here along our Gulf Coast may have hidden defects. This brings us to the question: What are construction defects?
In construction and engineering projects the nature and type of defects can vary dramatically, as can the point at which they become apparent. At one end of the scale minor defects can easily be corrected before the building is handed over to the client, while at the other extreme significant defects may occur long after the original work has been completed and require extensive remedial works to fix. If you believe your building has construction defects, contact ParsCo for a free survey and assessment.
Defects can arise because the work was not carried out in a 'good and workmanlike manner' in accordance with good practice or a particular design, or because the wrong materials have been used – matters which would usually be the responsibility of the building contractor and its supply chain. Alternatively the designer could be at fault, because a particular design is not working in the manner that it should. In the frequently used design and build scenario, the contractor would normally have primary liability for both types of failure – although it may have consequential claims against its designers and supply chain.
On one view identifying a defect should be easy: something has usually not been provided in the manner that it should have been, the foundations of a building could crack and subside, the air-conditioning units fail or the roof leak. However, in considering 'defects' as a matter of principle, work may be defective even if it has been carried out with all due skill and care but it fails to meet a particular specification. For example, brickwork may be erected correctly but the wrong type or colour of brick could have been used in breach of planning permission. This usually is averted during construction through the submittal process but many times contractors don't follow procedures and overlook these requirements.
Potentially difficult arguments can arise where work has been carried out incorrectly by the contractor but the architect or engineer's design is also at fault. In these situations, the contractor may deny liability on the basis that even though the work was carried out defectively, it did not cause the damage complained of. An Owner will not be as concerned as the contractor and architect to get to the bottom of exactly who is at fault for that as long as it can claim against one or both of the parties and both still exist.
It is often important to distinguish between patent and latent defects.
A patent defect is one that is detectable either at or before apparent practical completion or during the defects liability period. In the past, the courts have held that patent defects must be apparent on inspection but need not necessarily have been seen by the people carrying out that inspection. By contract, a latent defect is one which has been concealed in the works and may not become apparent for many years.
ParsCo Approach
Whether something is defective will often depend not so much on whether it is completed competently from a workmanship perspective but on the precise standard and specification to be met. Similarly, if specific tests are to be passed these will need to be provided for contractually, and consideration given to whether damages should apply in the event of failure. Careful consideration should be given to whether the work is defective or whether the issue is due to lack of maintenance or damaged due to normal wear/tear even. Regardless, engaging ParsCo to review the issues is our best step to determining a clear assessment and what risks the defects may hold.
If a defect occurs within a defects liability period under a contract then in all probability the client will be entitled to have the contractor to correct the defect. In some forms this is the case even if it is not clear that the defect is the contractor's responsibility, although the contractor will be entitled to payment if it is proved the defect is not one for which is it responsible. Even if the defects liability period has ended the original contractor will in the vast majority of cases remain liable in damages.
Contact ParsCo if you believe your project has a construction defect.
Construction on Phase 1 of the Mississippi State University Davis-Wade Stadium Addition continue.
ParsCo, LLC
O: 850.696.7656
F: 850.390.4943
Visit us on the web at www.parscoconstruction.com
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At the Planning stage of development, there are additional benefits to be derived from a ParsCo Value Engineering Workshop. The ParsCo team can:
The benefits are tremendous.
This is the stage that ParsCo is used to becoming involved, when the design has at least made it to the schematic stage. Most government agencies require at least one VE session at the design stage on projects over a certain $ size. The primary tool available to the VE team is the ParsCo Workshop—typically a 40-hour session (or less for smaller or less complex projects).
The ParsCo Workshop is an opportunity to bring the design team and client together to review the proposed design solutions, the cost estimate, and proposed implementation schedule and approach, with a view to implementing the best value for the money. The definition of what is good value on any particular project will change from client to client and project to project.
During the actual ParsCo Workshop portion of the VE study, the five-step Job Plan is followed:
The ParsCo VE Job Plan follows five key steps:
These five key steps are described as follows:
1. Information Phase:
At the beginning of the ParsCo VE Study, it is important to:
2. Speculation (Creative) Phase:
This step in the ParsCo VE study involves the listing of creative ideas.
3. Evaluation (Analysis) Phase:
In this phase of the Project, the ParsCo VE Team, together with the Client and/or Users,
4. Development Phase:
During the development phase of the ParsCo VE study, many of the ideas are expanded into workable solutions. The development consists of:
5. Presentation Phase:
The last phase of the ParsCo VE Study is the presentation of the recommendations in the form of a written report. A briefing/oral presentation of results is made to the Client and Users, as well as the Design Team representatives. The recommendations, the rationale that went into the development of each proposal, and a summary of key cost impacts are presented at that time so that a decision can be made as to which Value Management proposals will be accepted for implementation and incorporation into the design documents.
In addition to the monetary benefits, a VE Workshop provides a valuable opportunity for key project participants to come together, then step aside and view the project from a different perspective. The ParsCo VE process therefore produces the following benefits:
During this phase value engineering is still possible through the use of Value Engineering Change Proposals (VECP). ParsCo, a Certified General Contractor, can propose solutions that offer enhanced value to the owner, and share in the financial benefits realized. Clearly the owner must consider the proposals very carefully, from a life-cycle perspective and a liability perspective. The A/E team must be brought in to the decision-making process to agree to the proposed change as not having any negative impact on the overall design and building function. The evaluation of a VECP is treated similarly to any change order during construction, with issues such as schedule and productivity impacts being considered along with the perceived cost savings generated.
In the final analysis, Value Engineering is not only beneficial, but essential because:
ParsCo Construction recently completed a new restaurant project in Downtown Pensacola in a historic building. The Owner didn't have a set of design drawings and was limited to a tight budget. With this in mind, ParsCo used past methodologies and design approaches to assist the Owner in saving money on the restaurant design and putting that money towards construction. In the end the project was completed and the Owner was satisfied.
If you are planning a new restaurant project it is important to plan/budget properly for the following:
Restaurant Design and Construction Budgets – Usually one of the first questions we’re asked by those embarking on restaurant projects relates to budget. How much does it cost? Well, budgets can swing dramatically from project to project, but here are some rules of thumb. Generally, restaurants are built between $25 – $300 a square foot (some mega projects or ultra-high-end projects have gone for a few thousand a square foot), but this also depends on whether we are doing a renovation, or new construction. The cost for “restaurant design” and planning is often around 5-10% of the construction budget (considering strictly the design phases of the project, not larger concept development issues involved in large scale development projects). The type of restaurant you are building is certainly a factor – you’ll spend more per square foot for a fine dining restaurant than a fast-casual concept, generally speaking. Also, you should expect an entirely different financial model in approaching the creation of a new restaurant concept you plan to roll-out nationwide versus a single one-off concept. The former requires much more planning and development. An average Red Lobster is believed to cost around $120 per square foot and an average Starbucks around $85 per square foot. However, these companies have spent millions and millions in design, branding and purchasing planning/efficiencies, so a start-up shouldn’t expect to be anywhere near these ranges in creating a new concept from scratch. It is amazing how often someone thinks they will be the next Starbucks within a 10 year period and with a $500,000 investment. Starbucks has spent hundreds of millions of dollars to perfect what we see today in their latest restaurant prototype. It’s more than just wishful thinking to think it can be duplicated as a growth concept within the cost of what they can today build a single unit they’ve spent so much perfecting. Mega chains can afford seven-figure per year Executive Vice President’s and teams of hundreds working on a new concept. It’s believed well over $10M (“soft” costs) is spent developing just the prototype plans some projects. So can a new prototype be created for less than $10m? Of course. By all means. It’s less likely though that the next billion dollar brand can be conceived within less than the cost of opening a single unit though. At a minimum, you can expect to spend a lot more in the years to come correcting the mistakes of the under-funded prototype. There’s a saying, “Measure twice and cut once”.
ParsCo prides itself in working with customers that don't have the budget but have the vision to create a new concept and make it a reality. This requires the ParsCo construction team to assist them through the design and building process. No matter how large or small a new project is, ParsCo will work with you on developing the design and budgets necessary to make your project a reality.
Construction Documents - If you’re going to build or remodel a restaurant, ParsCo will need a set of scaled construction documents, often called "working drawings". These documents can be drawn on a CAD system or by hand and consist of space plans, elevations, schedules and details. These drawings are generally prepared by several design consultants and engineers, integrated into one set for submittal to your local building and health department.
Building Codes - All your plans, drawings and specifications should be in compliance with the building and health codes that are applicable to your location. Your drawings, plans, equipment and finish specifications should be approved by the following regulatory agencies:
Each department will have an application and permit/licensing and possibly even a plan review fee. Note that during this review process it is not uncommon to find out that additional design changes may be required which may also change the costs of the construction for your project.
ParsCo, LLC
O: 850.696.7656
F: 850.390.4943
Visit us on the web at www.parscoconstruction.com
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