Owners Rights Contractor Responsibilities

Speech by Terrence Knowles

As Diane said, my name is Terrence Knowles, Chairman of the Bahamian Contractors' Association. Before beginning, I ask your indulgence for a moment as I would like to give a brief outline of the structure of my presentation. First I would like to:

A) Give a brief description of the BCA and its role in the Construction Industry.

B) Outline some of the responsibilities of the Contractor during the construction process and the inherent rights of owners and developers thereof.

C) Provide some suggestions on how to manage your project in order to achieve a successful outcome and

D) Given the limited time we have this morning spend more time fielding questions during the Q & A session.

The BCA is comprised of some 75 contractors of various trades and can date itself back some 40 years. Although we barely represent 10% of the practicing contractors in the Bahamas, over the past 2-3 years we've been recognized by the government and developers alike as the voice of the industry. The BCA has defined its role as to:

A) Promote the interests of the broader construction industry to the central government. B) Create conditions in which the sector can prosper. C) Work together with Industry stakeholders for the common good. D) Communicate industry views to the general public via media public relations activities.

With that being said, the Bahamian Contractors' Association feels that it has a vital role to play in the development of the Construction Industry of the Bahamas especially when you consider that other than a basic plumbing and electrical license issued by the Ministry of Public Works, the Bahamas does not have a Comprehensive Construction Licensing Program. As a result, the Consumer needs to be cautious and practice good construction management principles.

In consideration thereof, please bear with me as I recite the story of an Owners Construction experience which we may all identifY as a frequent occurrence when building. "Recite the story of Michelle Sands"

In light of this very unfortunate incident, you as a consumer should be aware of some of the Contractors responsibilities in the building process and where possible ensure they're enforced.

I) The Contractor is responsible for supervising and directing the project works according to the project schedule and in accordance with design intent.

2) The Contractor is responsible for preparing periodic progress reports on the work as mutually agreed with the owner and/or owner's representative including information on the status of materials and equipment, subcontractor works, etc.

3) The Contractor is responsible for paying for all materials, equipment, labor and sub-contractors used in connection with the performance of the contract. The Contractor should provide satisfactory evidence when requested by the owner to verify compliance with the above requirements.

4) The Contractor should take necessary precautions to protect the property of the owner and ensure that construction is being done in accordance with all local ordinances and building codes.

5) The Contractor should deliver the project on time, on budget and in accordance with the design intent.

However, in order to ensure the best project results are achieved, there should exist a true relationship of absolute trust between the Owner and Contractor. This is because the Contractor must make sound objective decisions and act in the best interest of the Client at all times. In his context practices to encourage include.

I) Taking a quality based selection processes to enhance the Client/Contractor relationship from the beginning of the selection procedure.

2) Identify potential contractors with relevant experience and select the most appropriate firm on a quality basis.

3) Adopting an approach where the Owner and Contractor work together as a team. This can enhance the life value of the project by reducing total cost, improve quality and deliver a project for more effectively than in a traditional fragmented relationship that is often adversarial.

4) Ensure that the Contractor prepares a detailed scope of work at the time of tender which outlines the Contractors understanding of the construction documents including drawings and specifications.

5) Do not always accept the lowest bid. Ensure your selection is based in part on the credentials of the Contractors.

6) Pre-qualify the Contractors who will be tendering on your project. Require them to complete a pre-qualification application form and screen them accordingly. Get the names of all proposed sub-contractors as well.

7) If at all possible contract a qualified construction appraiser or quality surveyor with responsibility for quality assurance and certifying progress billings.

8) Plan, Plan, Plan. Many cost overruns are the result of poor planning at the design stage.

9) At project commencement hold a construction kick off meeting to review the projects scope, schedule and owners design intent. Get to meet all the contractors who will be working on the job especially the electrical, mechanical/plumbing and A/C contractors.

10) Hold frequent site meetings to discuss the projects progress, problems, delays, etc. Increase in frequency as the project nears completion. Ensure all trades are there; provide incentive for them to be there on the premise that's when they would receive their money.

11) From time to time demand that the Contractor demonstrate that his vendors, suppliers and sub-contractors are being paid. Failure to do so could result in delays with the project and potentially place the project at risk.

12) Ensure that the Contractor carries the following insurance coverages and demonstrate proof of the same from time to time.
A) Contractors All Risk
B) Public Liability Insurance
C) Employee Liability Insurance

13) Retain 10% of the Contractors pay applications up to 5% of the projects value. Release 2.5% of the same upon substantial completion. The balance within 6 months thereafter.

In summary to reach the goal of achieving best value in the procurement of construction services quality, and sustainable best practices must be integrated into each element of the construction project. This will contribute to the following over the course of the project:

1) Transparency in process and execution.

2) Achievement of an agreed outcome for a fair price.

3) Ensure a partnership approach is taken with the Contractor.

4) Fair monitoring/performance feedback system.

5) Evaluation based on clear client briefing and definition of scope of work.

Speech: Terrence Knowles, Chairman of the BCA