Professional Construction Consultants.
The Owner's Duties in Construction:
The
Owner's Duties in Construction,
Continued
CASE STUDY:
26-story condominium
As
the condominium dragged to completion six months late, the contractor
was left with little choice but to file a claim for an extension of time
and the associated general conditions costs. The claim was based on the
owner's failure to perform his duties as stated in the contract, which
had often caused project delays. In fact, the owner had not even appointed
an authorized representative and had reserved all authority for project
decisions to himself. To make matters worse, the owner would sometimes
leave the country for six weeks at a time. Upon receipt of the constructor's
claim, the owner filed a counter claim for a million dollars in liquidated
damages for the late completion.
A distinguished panel of three arbitrators was appointed to decide the matter. After months of hearing testimony and reviewing documentation from both sides, the arbitrators not only denied the owner's claim, but they awarded the constructor six months of general conditions. The settlement covered home office overhead, cost of acceleration, interest, and lost profits totaling almost two million dollars; all directly resulting from the owner's failure to perform his duties during construction.
The three-legged
stool
A favorite
analogy that is often used to describe the parties involved in a construction
project is a "three legged milking stool". The three legs represent the
owner, the architect, and the constructor. Using this analogy, it is easy
to visualize what happens when any one of the legs fails to support their
share of the weight on the stool. It can not only be embarrassing, but
it can be painful. Unfortunately, only two of the legs in this case have
been trained to support the weight.
Our society has created institutions to educate, certify, license, and regulate both architects and constructors. However, no license or certification is required to be an owner. For this reason, the owner's leg of the stool is the one to be the most concerned about. The owner is responsible, by law, for certain duties to the architect, the constructor, and the public.
- To the architect, the owner must furnish the background information and services needed for the architect's work and must reasonably compensate the architect.
- To the constructor, the owner must provide sufficient information and services, in a continuous and timely manner, to enable the constructor to build the project, and must pay for the labor, materials, and equipment furnished by the constructor according to the construction contract.
- To the public, the owner must provide a building that is safe for its intended use, while complying with building codes and zoning laws.
The owner's responsibilities are wide-ranging and vary depending on the project phase. The balance of this article describes the owner's duties for the pre-design, design, construction, and post-construction phases of a project.
©2000 John A. Jones, PE, CBO
