Part I: Administrative Requirements

01 31 01 Project Management and Coordination

As a contractor’s administrative requirements general conditions represent no capital gain to a project, owners frequently take for granted these services as having no value, despite the real cost to the contractor. Project general and administrative requirements are recognized even less so. For that reason, contractors will seek to spread any expected excess of these costs elsewhere, where they draw less attention. These costs are often bundled into other line-items.

For example, 10% is an average factor for overhead, yet in a construction budget, overhead is a) bundled in labor costs, b) added on as a percentage of total costs c) carried in general conditions, or all three. In reality, there are few projects that maintain a 10% overhead, which makes us wonder what 10% actually represents. 

Project management experience teaches that there is enormous risk of cost and schedule overages attributable to specific categories of Administrative Requirements that contractors routinely absorb without compensation, often forcing them to reconsider their contractual position: “do we make up the shortfall “elsewhere” or “do we simply ignore it?” It therefore helps to have an understanding of how these costs are distributed.

Section 01 of the CSI Masterformat section of project specifications details the Administrative Requirements to facilitate a given project. These are often misconstrued as ‘General Requirements’ by the design team or specifier. Not infrequently, these requirements can be exhaustively iterated in the project manual to the extent that full adherence to them would be utterly implausible.  

The cost of administrative requirements is borne by the contractor or design team. It was never the intention that all categories or line items in CSI be assigned a cost or resource. Despite that, many project manuals merely regurgitate exhaustive boiler plate specifications, much of which are not germane to every project, are redundant, or defy quantification. CSI provides all of the subheadings from which a specifier should draw a subset – never the whole.

Because project requirements vary, there are always discrepancies in what is necessary and what isn’t. Rather than assess and contract a specifier to customize these requirements for each project, a designer will continually use a boilerplate project manual, adding pages as necessary. 

On a good day, a contractor has the entire CSI masterformat at his disposal to develop cost scenarios for each service. In reality, such a work-up is rarely undertaken. The frequent use of boilerplate specifications with unnecessary ‘fluff’ often makes it unclear which categories to plan  for and which can be ignored. Rather than ask for clarification – considered a ‘dumb’ question by most – contractors use their intuition about these expectations. They have a general sense of the work and the cost of it – perhaps from other projects, but can’t really project, track, or otherwise quantify it.

‘A Certificate of a (AIA) Substantial Completion is ubiquitously stated as a requirement in most project manuals, however, few of us has ever seen one executed.

On another good day, the contractor has a risk assessment (RA) to refer to for various administrative requirements scenarios. Projects have different vulnerabilities that should be added to the risk register. This assumes that an RA has been done in the first place, which is never a safe assumption. Despite the volatility of administrative requirements, RAs seldom include a line for them in the risk register. Furthermore, if there is a risk workshop, the contractor is often not invited. Contractors rarely create their own RAs. 

The average contractor calculates projected general conditions and overhead by multiplying the salaries of administrative personnel by the project duration, and generating a percentage from that sum. In doing so, administrative requirements become an invisible subset. This becomes a slippery slope when a project is plagued with delays and disruptions, redesigns and change orders. All of these project challenges require enhanced resources that contractors seldom allocate or bill the client. That’s because (see above) owners conveniently dismiss the value of any Administrative Requirement, or even refuse to acknowledge it.

In addition to mixing general conditions with general and administrative requirements and overhead, many contractors conflate administrative requirements with the labor requirements necessary to facilitate them. For example, it may take sixty administrative hours to develop a Facility Services Coordination plan, and six-hundred man/hrs to make it so. These costs should be kept separate.

One exception to the rule is public and government work, which carry a notorious burden of labor on the contractor to produce volumes of documentation. Contractors in these sectors must recognize the enhanced requirements of this work if they are to survive, otherwise administrative requirements will prove cumbersome and untenable to maintain. Moreover, they face much more scrutiny and enforcement than private work, where a contractor can get away with doing the bare minimum or less.

Although administrative requirements may be exhaustively specified by the designer, most contractors are unable to project or track these costs other than in a general sense. Under CSI Administrative Requirements are found three subheadings, the intent of which is to establish some structure to a complicated mass of documentation: 

01 30 00 Administrative Requirements

It is within the delivery of these three subheadings that an insidious, ineffable, black-hole of budget overages develops and eats away at budget contingencies, frequently causing insurmountable deficits that defy analysis, and preclude analytical of forensic quantification. This phenomenon is generally associated with scope-creep or exhaustive changes in the work for which the contractor is not always responsible, however, he may exacerbate the condition with poor responses, or slowed progress, thereby owning part of the burden. The allocation of such burden is always a red-herring that is closure resistant.

In this post, the subheading 01 31 01 Project Management and Coordination will be discussed, with the remaining two to follow in subsequent posts. A theoretical risk assessment (RA) is assigned (low-high) and discussed for each service. For the sake of brevity and relevance, not all categories of the subheadings above will be explored.

01 31 01 Project Management and Coordination

01 31 13 Project Coordination

To a contractor, the notion of Project Coordination as a subheading is a broad stroke term impossible not to overlap with other requirements. At best, it can be thought of as a masterplan for the site that takes into consideration all moving parts as part of the whole. 

Project coordination plans are generally created by a project manager who relies on lower management to facilitate it: superintendent, assistant project manager, and office staff. These activities are purely administrative: for example, the planned repositioning of pylons is part of the Maintenance Protection & Traffic plan (MPT) administrative requirements, yet the actual work is done by laborers – General Conditions. 

However, the administrative requirements of changes in project coordination are generally small – the physical and enhanced resources represent most cost overages: a plan may be developed once to reposition pylons daily. If the pylons need to be repositioned twice each day, the plan need not be redeveloped – merely resources enhanced – general conditions, as opposed to administrative requirements.

The exception is when project coordination enhanced requirements involve submittals and approvals from public agencies of which a contractor has no control. Applications, reviews, and approvals by such agencies can be notoriously glacial, involving unpredictable resource allocation.

Project coordination is a dynamic moving target, never a predictably static service. As a project’s needs change, increase or decrease, the project coordination plan must be flexible, and take changes in stride. If base contract coordination effort can’t be separated from change order coordination work, the actual delta cannot be extracted or quantified with exactitude.

Project coordination is complex, and is easily conflated with other CSI categories. Project coordination administrative costs escalate depending on complexity of a project. They can, in fact, become a constant concern, using up vast chunks of a problem project’s resources. At worst, project coordination can seemingly be an endless Sysiphusian effort, a bottomless money pit. 

RA: low (may escalate general conditions)

01 31 14 Facility Services Coordination

Facility Services Coordination is a factor when the work is part of a larger system or network that must remain functional during construction. It can involve the planning of protection for existing structures, maintenance of work and storage areas, and safeguarding of personnel. If Facility Services Coordination is not well defined, a contractor may have to provide more than he bargained for. This section only provides plans administrative requirements, not the implementation of plans, which is carried under general conditions.

Projects requiring Facility Services Coordination might be utilities, processing plants, manufacturing, hospitals, schools, retail, and other entities that must keep in operation for the construction period. This plan must be done in concert with the owner, and it should be documented such that a contractor can calculate resources and costs associated with it, and establish a budget.

RA: low to medium. Since it’s a service that only facilitates benefit to the owner, the contractor must expect fair compensation. In other words, the contractor’s work carries on regardless of existing facility operation status.

01 31 16 Multiple Contract Coordination

Multiple Contract Coordination may include construction manager administrative requirements of multiple primes, or prime contractor administrative requirements of multiple subcontractors and vendors. Change orders documentation may be included here. Multiple Contract Coordination requirements are often confused or redundant with CSI 01 20 00 Price and Payment Procedures.

Because change order work cannot be planned, neither can the administrative costs to facilitate it. This invariably leaves the contractor footing the bill for Change Order Administrative Requirements, which may be higher than the work itself. For example, a revised drawing set may net a negligible change to the contract sum. Suppose it takes one-hundred man/hours to estimate, one-hundred man/hours of assistant project manager to draft, twenty man/hours of project management, and twenty hours administration? The contractor will be unable to recover the two-hundred man-hours necessary to administer the change order.

What Multiple Contract Coordination does not include, unless specified, is the coordination of forces owner force work (OFW). This requirement is often stated elsewhere in the contract documents. A construction manager may provide for such coordination as a billable fee, but seldom the general contractor who does so or is adequately compensated. Contractor’s must be clear which OFW work they are coordinating, and what the scope of this work is, lest an owner seek to gain the service free of cost. After all, OFW is designed to save the owner mark-up and coordination fees.

RA: low to high. Depending on the volume and complexity of change order management. Note, Change Order administration is not included under Administrative Requirements, but under 01 20 00 Price and Payment Procedures. That’s confusing, as it’s natural to think of the majority of Change Order administration as 01 30 00 Administrative Requirements. Anyone intimate with the execution of a revised change order over an extended period can attest to this work as exhaustive. This is a good reason why contractors should allocate all administrative man/hours for each respective change order, and bill that service separately.

01 31 19 Project Meetings

Project Meetings can be pre-quantified for resource and cost. CSI includes four-types of meetings, however, these are seldom enumerated separately by contractors. They are:

01 31 19.13 Preconstruction Meetings

01 31 19.16 Site Mobilization Meetings

01 31 19.23 Progress Meetings

01 31 19.33 Preinstallation Meetings

The missing link here is coordination meetings, for which CSI has no subheading. Coordination meetings will include MEP, core and shell, fit-out, and many others. These meetings eat up a substantial amount of resources, especially when there are changes in the work. 

Meeting frequency is generally planned, and can be quantified, however, as project needs dictate, they can become longer and more frequent. This is especially true with redesign and change order work, and when there are multiple revisions demanded by the design team. The cost of extra meetings should be allocated separately, however, that is impractical, as submittals, RFIs, and meetings of base contract and change order work consistently overlap.

The assignation of cost impact for additional meetings is hard to quantify. Reimbursement of cost of additional meetings will either be outright refused or the responsibility hotly contested. For example, a designer may blame a contractor for issuing defective shop drawings when he himself hasn’t adequately conveyed the intent of work. The same designer and contractor may be competing for added meeting costs when they are both entitled, or when neither are entitled.

RA: low to high. A contractor needs to draw the line when he is providing resources above his contract agreement. Additional meeting costs are seldom recoverable by a contractor.

01 31 23 Project Web Site

Many contractors maintain their own project digital infrastructure, and merely subscribe to a project website. In other cases, platforms like Procore can serve as an interface for project documentation, and ftp hub. Launching, uploading and downloading, and distributing documentation is a constant activity for administrative personnel, and is difficult to quantify. Both contractor and design teams prefer to maintain their own project websites.

RA: low. Not all project management platforms are efficient, and many are underused below their potential. Snafus in the process are generally expected, as no platform is flawless, and some exacerbate resource shortfalls. Personnel must be adequately trained under the project administration platform. Double entry, or dual platforms – contractor and design team have their own –  are always a recipe for disaster, as the two will seldom converge on the same data set. 

For example, a designer may assign earlier dates to his drawing issues on his own website than the contractor has recorded on his. This practice is a factor of multiple documentation management. Without a validation system – such as blockchain – RFI, submittal, review, and approval dates are open to several interpretations, depending on your liability.

Thus, a project website isn’t itself the problem, it is merely a function of creating problems in other administration: reissuances, redistribution, and other redundant efforts.

01 31 26 Electronic Communication Protocols

Electronic Communication Protocols are the basic processes and tools of facilitating those processes that a contractor will provide for analog and digital communication. The cost of installing and maintaining tel/data lines and other transmission equipment is not an Administrative cost, only a “Protocol.” Operating costs may be factored under overhead or general conditions.

As stated in Project Website, above, Electronic Communication Protocols are not infallible. Information can be fragmented, and hard to validate. Again, blockchain technology would correct the validation challenges of authentication that traditional technology does inefficiently.

RA: low

End Part I

Read on to Part II of the Series