Pre project management

Question 1

Identify project team

Answer 1

What disciplines are needed to accomplish the project? (e.g. architect, civil engineer, structural, mechanical, etc.)
Are these disciplines available within the design firm, or will outside consultants be needed? Will the landscape architect be an outside consultant?
How will the scope of work be established between these various parties?
How will information be disseminated within the project team?

Question 2

Basic team members: The owner

Answer 2

The Owner initiates a given project and will take title of or dominion over the project when it is completed.

Question 3

Basic team members: contractor/consultant

Answer 3

The contractor or consultant is hired directly by the owner to provide the labor and/or services necessary to complete a project. In such instances, the contractor may also be referred to as the “prime contractor” or “prime consultant.” Note that a consultant is defined as a party that evaluates the client’s needs and provides expert advice on how those needs should be met. In the context of landscape architecture, expert advice is typically delivered via design services. A contractor has a similar role, but instead of providing advice on how the client’s needs should be met, the contractor performs the (construction/built) work required to meet those needs.

Question 4

Basic team members: subcontractor/subconsultant

Answer 4

The Subcontractor is hired directly by a contractor (or another subcontractor) to provide the labor and/or services necessary to complete a project. Generally, subcontractors provide a specialized service to the contractor that the contractor does not have in-house but is needed to complete a given scope of work. For example, within the context of landscape architecture, design firms often hire an irrigation designer as a subconsultant to design irrigation systems for a project currently under contract. Most subcontractor contracts hold the subcontractor to the same terms and conditions that are established in the prime contractor’s contract with the other parties. However—from a contractual perspective—the subcontractor is considered an independent contractor, and this contractual association does not include the owner. Although the subcontractor has a direct responsibility to the general contractor and not to the owner, the work of the subcontractor must be approved by a representative of the owner. In effect, the subcontractor’s work is presented to the owner as if it were the work of the prime contractor. Note that the distinction between consultant (design services) and contractor (construction work) also applies to the difference between subconsultants and subcontractors

Question 5

Proprietorships

Answer 5

a business owned by an individual. The structure and purpose of the organization is whatever the owner wants it to be, and all earnings are taxed as income to the individual business owner. No formal documents are required to establish a business of this type, although proprietorships are often required to obtain licenses to conduct business within certain municipalities. Proprietorships can be discontinued at will at any time

Question 6

Partnerships

Answer 6

an association of two or more people to conduct business together as a single entity. Similar to a proprietorship, partnerships are NOT considered a separate legal entity from their owners. Partnerships are often formed to undertake projects of a larger scope and volume than an individual business might otherwise be able to realize on their own

Question 7

Partnerships: dissolved by

Answer 7

A deadline or duration established in the articles of partnership
The death of a partner
Bankruptcy
Fundamental changes to the partnership structure including mutual agreement among partners to terminate the partnership, unilateral action on behalf of a single partner, and expulsion of one partner for just cause

Question 8

Silent partner

Answer 8

A silent partner is a person who is a partner in a firm but remains unknown to the public. As such, the silent partner is not active in the regular business transactions and conduct of the company

Question 9

Limited partnership

Answer 9

a person generally contributes cash or property to the business (partnership) and shares in its profits and losses. Outside of supplying capital or other resources, a limited partner provides no services and has no vote (or voice) in matters of management and, as such, has limited liability. The limited partner’s liability for partnership debts is no greater than the amount of the investment made in the firm.

Question 10

Joint ventures

Answer 10

a temporary partnership between two or more firms for the express purpose of completing a project (most often a single project). Construction firms will engage in joint ventures when projects place unique constraints on them or when they need to take on larger or more complex scopes of work for a project.

Question 11

Corporations

Answer 11

a form of business that is considered to be—from both a legal and taxation perspective—distinct from their owners. Corporations may be owned by a single person, a group of individuals or stockholders, but these owners are not personally responsible for the legal or financial decisions of the corporation. Similar to an individual adult, corporations are permitted to conduct business, own property, enter into contracts and take on debt under their own corporate name.

Question 12

S corporation

Answer 12

(also known as an incorporated partnership) is a type of corporation. It differs from others types of corporations in that the S-Corporation does not pay taxes as a separate legal entity.

Question 13

Contract

Answer 13

the legal document that sets forth the obligations of each party to the contract … [and] specifies the duties and responsibilities of the entities that sign the contract”

Question 14

General contract method

Answer 14

a contract between the owner and a general contractor/consultant (sometimes referred to as the “prime contractor” or “prime consultant”). Under the general contract method, the general contractor/consultant may hire subcontractors/subconsultants, but (as described under Chapter 8.1.2 Basic Team Members) the work of the subcontractors/subconsultants will be presented to the owner as if it were the work of the general contractor/consultant.

Question 15

Design build method

Answer 15

In the Design-Build Contract Method, the owner hires a single firm to conduct both the design and construction of a project. The design-build firm may still hire subcontractors or subconsultants to complete the project and so the design-build contract differs from the general contract method primarily in that in the general contract method the design work and construction work are not performed by the same firm/business entity. Moreover, the design-build method often takes advantage of in-house construction expertise to limit the scope of changes required to make a design buildable and on-budget

Question 16

Separate contracts method

Answer 16

Also known as the “multiple prime contracts” method, the Separate Contracts Method involves the owner entering into contracts with multiple service providers across a variety of disciplines. This method essentially eliminates the general contractor/consultant as “middle man” and requires that the owner manage the project as well as the work of all disciplines. Under this framework, each contracted party will be in direct contact with the owner.

Question 17

Self performance method

Answer 17

Under the Self-Performance Method, the owner will conduct the entire scope of work in-house, without creating contracts with outside businesses or contractors/consultants. In other words, the owner’s employees are solely responsible for the entire project scope, including procurement of construction materials. This contract method is relatively rare and occurs in instances where a project is small in scale and simple in character.

Question 18

Agency agreement

Answer 18

An agency (or agency agreement) is a consensual agreement similar in intent to the contract frameworks described above. The agreement occurs between two parties: a principal and an agent, and the agreement allows the agent to act on behalf of the principal

Question 19

Agency agreement dissolved by

Answer 19

Death of the principal or agent
A deadline, duration or completion of purpose established in the agency agreement
The death of the principal or agent
Bankruptcy
Fundamental changes to the relationship including mutual agreement to terminate the agency agreement, unilateral action on behalf of the agent or principal, or destruction/termination of the subject matter (e.g. project) for which the agreement was formed

Question 20

Estoppel

Answer 20

a principle by which a contract becomes binding in spite of the fact that no formal agreement was made between the parties concerned. Estoppel results from a court action asserting that an agreement or contract exists, based largely on the behavior or actions of the parties involved indicating that there is an implied agreement

Question 21

Professional service Contract: Agreement

Answer 21

A professional services contract begins with the agreement, which provides basic information (name, address, etc.) of each of the contracting parties and establishes that the contract constitutes a mutual agreement between these parties.

Question 22

Professional service contract: Project Description

Answer 22

The project description identifies a project by name and location, and it will often go beyond merely giving an address of the project site to provide a more detailed description of the property (e.g. assessor parcel number/APN) to reduce any ambiguity over the size, character and location of the site in question

Question 23

Professional service contract: scope of work

Answer 23

The scope of work is a written description of the client’s anticipated or desired project, and it will often include information such as programmatic requirements, budget, code restrictions, and more detailed information such as the desired character or quality of construction

Question 24

Professional service contract: scope of services

Answer 24

The scope of services is a list of the actual tasks that will be carried out by the contracted party (e.g. landscape architect). This section of the contract is critical for financial success, as the design budget and anticipated workload of the project are based upon the scope of services. The scope of services may include language for work that is explicitly not included, and it may also stipulate services that can be included for an additional fee (called “additional services”). Excluded services and additional services reduce ambiguity and provide the client and the designer with a more accurate understanding of the services being agreed upon in the contract

Question 25

Professional service contract: responsibilities of the parties to the contract

Answer 25

This section of the contract outlines any responsibilities not covered in the scope of services, and these responsibilities extend to both parties (e.g. the owner and the landscape architect) in the contract. Examples of this would include a client-provided site survey, geotechnical report or other data critical to the completion of the proposed design. For the landscape architect, responsibilities would entail educating the owner of any potential risks, being fair and unbiased and giving full consideration to safety and public welfare and providing professional services at a level consistent with the standard of care practiced by other landscape architects.

Question 26

Professional service contract: fees

Answer 26

Fees for professional design services can be calculated including:

Fixed Fee/Lump Sum in which the scope of services is provided for a predetermined amount of money. This allows the client to control their design costs, and it also allows the landscape architect to maximize their profit if they can complete the scope of services in less time than was estimated. This is the most common fee structure used in the field of landscape architecture.
Hourly Fees are typically used in instances where the landscape architect cannot accurately estimate the amount of work required to produce a fixed fee proposal to the client. Oftentimes, a “not to exceed” amount will be placed on hourly contracts so that the client has some means of limiting the cost of hourly services.
Multiplier Fee Under this fee structure, the landscape architect estimates the number of hours required to complete the scope of services and multiplies that by the hourly pay rates of their staff working on this project. Once these total personnel costs are determined, the landscape architect will multiply this number by a figure that incorporates the firm’s overhead costs and add line items for profit and reimbursable expenses to determine a final fee.
Percentage of Construction Simply put, this fee structure takes the client’s construction budget and multiplies it by a percentage rate (typically between 6-12%) to determine their design fee.

Question 27

Professional service contract: terms and conditions

Answer 27

Terms and conditions establish the legal parameters of the contract, and this section often contains “boilerplate” language from well-vetted standard contracts to cover common content (e.g. liability, dispute resolution, payment terms, etc.). In addition to this, the terms and conditions may also cover client- or project-specific information, including which party retains ownership of the design drawings (note: in public works projects, the owner always owns the design drawings) or insurance coverage.

Question 28

Professional service contract: signature line

Answer 28

Every contract must include signature lines for the parties signing the contract, and these parties must have the authority and resources to carry out the terms of the contract.

Question 29

Contracts for design services: lump sum/ fixed fee

Answer 29

Lump sum contracts require the contractor to complete the scope of design services described in a contract for a mutually agreed upon and fixed sum of money.

Payment for design services is often based on the percentage of the job that is complete. For example, if the contract states that a 50% submittal is required, and the design firm makes this submittal according to the criteria defined in the contract, the firm can invoice the client. Because payment is based on clearly defined phases and deliverables, client invoices do not contain details related to how labor hours were spent or how material costs were incurred. The profitability of a lump sum contract is therefore determined by how efficiently the design firm completes the project (i.e., fewer hours spent on the project equals greater profit).

Lump-sum contracts are typically used when the design project is well-defined

Question 30

Contract for design services: time and materials

Answer 30

Time and materials is a fee structure in which the design firm is paid for time and materials spent on a design project (i.e., labor and its other direct costs such as printing). Hourly labor rates are negotiated and established in advance of performing the work. Unlike with lump sum contracts, it is not possible to improve a project’s percentage of profit with a T&M contract because the percent of profit is determined by the hourly rate being charged to the client.

T&M contracts are best used when it is difficult to anticipate the full scope of work required for a project. Note that they are more difficult for a design firm to administer than lump sum contracts because T&M invoices require detailed backup that show direct costs and how labor hours were spent.

A “Maximum-Not-To-Exceed” is often added to this contract type to ensure that the Owner is not billed past a maximum dollar amount unless there is a change of scope and a subsequent contract amendment.

Question 31

Contract for design services: cost plus fixed fee

Answer 31

Cost plus fixed fee contracts cover the costs, labor and materials of a design firm without accounting for profit. Profit is, rather, negotiated as a fixed fee that does not vary regardless of the actual costs incurred by the design firm. A design firm will typically estimate the amount of hours that a contract will take to complete, but if the firm exceeds the hours estimated to complete the project, their labor and costs will still be covered. Because of this, cost overruns are a consideration when using this contract type.

Note that a Cost Plus Fixed Fee with a Guaranteed Maximum Price (GMP) fee structure controls cost overruns by capping project billing at a guaranteed maximum price.

Question 32

The proposal process: RFI

Answer 32

An RFI—also a term used during construction administration—provides a general description of a project or service required by an owner and requests that interested design firms reply with a statement of interest

Question 33

The proposal process: statement of interest

Answer 33

An SOI is a brief overview of a design firm sent from that firm to an owner in response to an RFI. Submitting an SOI to an owner confirms that the landscape architect is interested in the proposed project. Typically, an owner does not use the SOI to screen potential service providers, instead replying to the SOI with a request for qualifications (to screen them) or sending them a request for proposal outright.

Question 34

The proposal process: request for qualifications

Answer 34

An RFQ can be considered a screening device used by the owner to determine which firms are the most qualified to take on their proposed project. Firms will reply to the RFQ with an SOQ (described below) with the goal of prequalifying for the proposal process or being shortlisted for interviews. In some instances, the RFQ process is used to provide the owner with a select list of design firms that can provide services to them as specific needs arise

Question 35

The proposal process: statement of qualifications

Answer 35

An SOQ is a response to an RFQ and is a more comprehensive submission to the owner than an SOI. The SOQ will include information about the design firm, resumes of key staff and descriptions of the firm’s capabilities and resources. Assembling an SOQ is a resource-intensive process for a design firm, and it is generally recommended that firms do not prepare SOQs for any and all RFQs that they encounter, only those that they have a reasonable chance of winning.

Question 36

The proposal process: request for proposal

Answer 36

An RFP is similar in scope to the RFQ, with the exception that it outlines a scope of work and scope of services to be provided by the landscape architect. RFPs require that the landscape architect prepare a proposal (described in more detail below) and take part in a series of owner-led interviews should they be shortlisted. A firm has an increased chance of success when the RFP corresponds to a specific strength present in the firm or when the firm has completed similar projects in the past. Should the firm be selected by the owner (thus “winning” the project), they would enter into contract negotiation with the owner to provide them with design services.

Question 37

A proposal will comprise of

Answer 37

Description of the scope of work for the proposed project
Description of the scope of services to be provided by the landscape architect
A statement of qualifications, including full resumes of key staff, relevant past project experience and information on subconsultants
Design fees to conduct the scope of services