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Dabdoub 415 > Subcontracting and purchasing > Flashcards

Subcontracting and purchasing Flashcards

1
Q
  1. Specialized labor for particular construction tasks
  2. Lower cost for subcontract work
  3. Reduced risk for the contractor
A

Subcontractors are used for the following reasons:

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2
Q

Types of risk that a general contractor tries to avoid by using subcontractors

A
  1. Labor productivity
  2. Productivity and/or cost control
  3. Lack of expertise in specialized areas
    Control of potential liquidated damages
  4. Cash flow
  5. Quality from lack of expertise or the right craftspeople
  6. Clean-up warranties, other general condition areas
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3
Q

Subcontract management

A

Extremely valuable in today’s legal climate

Relates directly to the profitability of the project

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4
Q

Activity of procuring material or equipment for a project.
Necessary for a profitable project
Do not contain jobsite labor (unlike subcontracts)

A

Purchasing control

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5
Q

Writing subcontracts
Writing material contracts
Writing purchase agreements

A

Essence of job purchasing:

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6
Q

Balancing scopes and comparing quote to quote.

Must be done by the contractor when selecting subcontractors.

A

Scope alignment

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7
Q
  1. The nature of their business
  2. Their scheduling demands
  3. The risks they face on the project
  4. Their equipment and safety concerns
A

Field personnel should understand the following things about each subcontractor:

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8
Q

The development of a working relationship between the general contractor’s staff and the subcontractor’s staff can often make accomplishing the goals of both companies easier. Their goal is…..

A

The goal for both companies is to make a profit, expand their businesses, move into a more profitable market, and hopefully enjoy the process

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9
Q
  1. May engage in a number of different types of businesses in their field
  2. Capital requirements for a subcontracting business can be fairly high
  3. Subcontractors are paid for their work considerably after the completion of their work
  4. Many subcontractors have additional subcontractors working for them
  5. Scheduling crews for the subcontractor often relates to fulfilling company-wide obligations, rather than project requirements
A

Attributes of subcontractors

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10
Q

Based on the construction documents prepared by the architect and engineer
An agreement for a specifically described portion of work

A

The subcontract agreement:

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11
Q

Normally based on a lump sum bid by the subcontractor to the contractor

A

Subcontract Agreement Amount

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12
Q

the practice where contractors supply bid amounts from subcontractors to other subcontractors

A

Bid shopping

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13
Q

Many firms use a standardized contract form for the subcontract agreement

A
  1. Associated General Contractors of America, Inc.
  2. American Subcontractors Association
  3. These standard contracts are “tried-and-true”
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14
Q

The subcontract agreement contains:

A
  1. Provisions from the contract between the contractor and owner
  2. Provisions for the relationships between the contractor and the subcontractor
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15
Q

The subcontract should contain the following the following articles or areas:

A
  1. Preamble and date/parties to the agreement.
  2. scope of work
  3. Payment provisions
  4. Insurance provisions
  5. Materials and workmanship
  6. Obligations of the contractor and subcontractor
  7. Labor Provisions
  8. Termination of the agreement
  9. Reference to the construction documents, applicable sections of the spec.
  10. Subcontract price
  11. Changes, claims, and delays
  12. Bonding provisions, if required
  13. time and schedule
  14. Contractual requirements, indemnification and recourse
  15. Remedy for solution of disputes
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16
Q

is one of the keys to successful subcontract management

A

Proper scope definition

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17
Q
  1. Description of the work relating to the construction documents
  2. Additional work to be performed by the subcontractor
  3. Exclusions from work described in the construction documents
  4. Any additional specific information relating to the project
  5. Description of included alternates and negotiated additions or deletions to the agreement
A

The scope of work description should include:

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18
Q

The subcontract agreement usually contains the following type of clauses to allow control to the subcontractor:

A
  1. Schedule requirements related to termination clauses if the subcontractor doesn’t meet schedule and manpower requirements
  2. Quality control, inspection, and repair of defective work, also related to termination clauses
  3. Clauses related to acceptability of subcontractor jobsite personnel and the right of the contractor to have that individual removed from the jobsite
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19
Q

are essential to any agreement

A

Termination of contract clauses

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20
Q

Specific clauses should be included in the subcontract agreement, stipulating:

A
  1. Occurrences that will cause termination of the agreement
  2. Notice necessary for termination
  3. Determination of costs of termination
  4. Remedies for termination or to oppose termination
21
Q

are normally held with all applicable subcontractors in attendance

A

Weekly coordination meetings

22
Q

Scheduling Subcontractors

A
  1. Jobsite personnel must understand subcontractors’ business motivations in order to manage subcontractors on the jobsite
  2. Subcontractors are involve din many projects simultaneously
23
Q

Prior to initial payment, the subcontractor must submit to the owner:

A
  1. Certificates of insurance
  2. Bonds
  3. Material samples/shop drawings/ product data
  4. Various certifications and affidavits
24
Q

During the project the subcontractor may be required to submit:

A
  1. Certified payrolls
  2. Partial lien releases
  3. Other miscellaneous documents
25
Q

Control of changes with subcontractors is critical in subcontractor management
As contracts become more complicated, the subcontract agreement may be explicit about the parties responsible for authorizing additional work

A

Changes to the Subcontract Agreement

26
Q

The contractor’s _________ need to be involved in day-to-day quality control with subcontractors and quality review at the end of the subcontract work or at the completion of the project

A

field personnel

27
Q

Most contractors are _____ to accept responsibility for approving work prior to approval by the owner.

A

reluctant

28
Q

Some guidelines for accepting subcontractor work:

A
  1. The contractor’s superintendent should be aware of the subcontractor’s progress and quality of work during the installation
  2. Inspection of the subcontractor’s work should be made prior to the subcontractor’s departure from the project
29
Q

When a subcontractor’s work is the substrate for another subcontractor’s work, the contractor should involve the other subcontractor before the _________________.

A

start of their installation

30
Q

Agreement on the _______ of the subcontractor’s work must be reached prior to the subcontractor’s departure from the project

A

protection

31
Q

Subcontractors’ requests for payment usually will include an amount for material stored on the site

A

material stored on site

32
Q

The subcontractor usually is concerned about the storage and handling of the material on the jobsite and is responsible for this until it is _____________.

A

incorporated in the work

33
Q
  1. Many contractors will back-charge a deduction from the amount owned to the subcontractor
  2. Costs that have been incurred by the contractor that should have been the subcontractor’s responsibility
A

Subcontract Back-charges

34
Q

Back-charges can include:

A
  1. Charges for equipment use
  2. Charges for material used by the subcontractor, furnished by the contractor
  3. Charges for labor furnished to the subcontractor for their contractual responsibilities
  4. Charges for clean-up of waste on the jobsite
  5. Charges for delays caused by the subcontractor
  6. Charges for repair of the subcontractor’s work by the contractor or other subcontractors
35
Q

Instances may arise when the contractor will withhold payments from the subcontractor, as a reserve to cover payment of obligation incurred by the subcontractor
The contractor and subcontractor normally agree in the __________ to an amount of retainage to be held

A

subcontract agreement

36
Q

The contractor needs to identify which subcontracts pace the project and facilitate their work by:

A
  1. Discussing the fastest course possible with the subcontractor
  2. Determine what needs to be done prior to the start of the subcontract
  3. Establish achievable start and finish dates for the activity
  4. Determine material delivery constraints
37
Q

The contractor needs to identify which subcontracts pace the project and facilitate their work by:

A
  1. Determine use of contractor’s lifting equipment
  2. Be prepared for the subcontract work
  3. Be flexible to changes and seek quick and efficient solutions to changes
38
Q

are responsible for providing specific work to the subcontractor

A

“Second-tier subcontracts”

39
Q

Subcontracting is only part of the purchasing process
When only _____ is being procured, short forms and different methods are used to timely obtain and properly deliver the needed material or equipment to the jobsite

A

material

40
Q
  1. Major purchases of bulk materials
  2. Materials and equipment to be furnished to others, or
  3. Equipment to be installed by the general contractor’s own forces.
A

Material contract is used for:

41
Q

control document used to define items to be ordered, the payment terms, the quoted price, how it may be shipped or delivered, the delivery time, and the cost account for the purchase

A

Purchase order

42
Q
  1. Actual purchase order number
  2. Link to the cost control system
  3. Indication of who made the purchase for which project
  4. Coordination of delivery slips, purchase orders, and invoices
A

Purchase order components

43
Q

Most contractors use a ____ of purchase orders that are serialized or numbered, as well as duplicates so loose purchase orders are not floating around

A

book

44
Q

Subcontractors are used extensively in construction projects primarily to:

A
  1. Enhance project quality
  2. Reduce cost through specialization
  3. Reduce risk for the contractor
45
Q

The subcontract agreement contains the following attributes:

A
  1. Based on the bid and subsequent negotiations with the subcontractor
  2. Standard forms are often used for the form
  3. Careful scope definition is necessary
  4. Remedies for problems are contained
46
Q

Subcontractor management by the contractor is necessary in the management of a successful project. Some areas of concern:

A 
1. Coordination meetings
Scheduling work activities
2. Submittal control
3. Administering changes in the work
4. Quality control
5. Payment control
6. Coordination of work activities among subcontractors
7. Safety and waste management
47
Q

is necessary in the purchase of material and equipment.

A

Control

48
Q

Purchase orders and material contracts are used to:

A

Control costs
Report costs
Control delivery

49
Q

The ______ of material and equipment is necessary in controlling purchases and rentals for the construction project.

A

tracking

Dabdoub 415 (5 decks)

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