Handling a project yourself can save money, but it can also add a range of headaches, as our Ask ACE columnist writes.
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Q: I’ve heard that I can save money if I act as my own general contractor, and that our construction will be completed more quickly if we do it on a design/build basis. Is this right?
ACE Advises: Everyone agreed the owner would be the general contractor. Everyone agreed it was a design/build project, with the building contractor acting as the designer. Everyone believed that this was the least expensive way to build the indoor rink. They signed contracts from another job, figuring they had worked before. The contracts did not identify the owner as the general contractor or define the term design/build.
When the ice wouldn’t freeze, everyone agreed that they had had a failure to communicate.
A traditional construction project has three key players. The owner tells the designer what the building needs to do. The designer develops plans and specifications meeting the owner’s needs. The contractor coordinates the work to erect the building according to the design documents.
You can depart from tradition provided someone always has responsibility for design and for proper prosecution of the work. Effective construction contracts avoid failed communications by reducing the agreed division of responsibility to writing.
Our owner thought being general contractor meant it would hold the trade subcontracts and avoid a general contractor’s mark-up. The trades thought the owner would coordinate the work. The result: work performed completely out of sequence.
Design/build might mean that the general contractor designs and builds the project. It might mean that some project elements are designed while others are constructed. Or both.
Our builder believed it was responsible for the structure’s design; the other trades would be responsible for their own. The owner handed the designs around as they were received and called it a day. The result: electrical systems installed before the mechanical design was complete, and unable to handle the mechanical loads.
Contracts for a construction project should ensure that someone is always responsible for the basics: design, coordination, and prosecution. When they don’t, the ice doesn’t freeze.
Carrie Green Yardley, an attorney and vice president of ACE, founded Yardley Esq. PLLC in 2015. Before that, she litigated construction claims for 17 years. The firm now works with small businesses and their owners on transactions from startup to exit. She can be reached at carrie@yardleyesq.com