Jacqueline Greenberg Vogt and Boris Peyzner | Mandelbaum Barrett
Careful Contracting: The Foundation of Every Successful Construction Project
A successful construction project starts long before the first shovel hits the ground. It begins with the contract. As discussed in the Construction Law Forum hosted by Mandelbaum Barrett PC, a carefully crafted contract is essential to setting expectations, defining responsibilities, and allocating risk fairly among all parties.
The key elements of a strong contract include clear definitions of scope, timeline, and allocation of risk. The construction contract should detail payment procedures which include milestones and track the schedule of values. Proper risk allocation is crucial: those who control a risk should bear it, and if no party controls it, the owner should assume it as the ultimate project beneficiary.
Without a balanced contract, contractors may inflate costs to cover uncertainties, and disputes are more likely. Clauses addressing liquidated damages, retainage, and dispute resolution mechanisms can prevent small issues from escalating into litigation. In short, a well-drafted contract is the blueprint for success.
Why Independent Cost Estimates Are a Critical Step Before You Build
One of the most underestimated tools in planning a construction project is the independent cost estimate. Bringing in a third-party estimator can help verify whether contractor bids are realistic and whether materials can be sourced at quoted prices.
An independent estimate protects against lowball bids and act as a check on such errors to ensure that budgets are based on reliable data.
Establishing a Firm Budget—and Holding Everyone to It
A firm, realistic budget is non-negotiable for a successful construction project. Yet too often, design ambitions outpace financial constraints. Designers sometimes create plans that exceed the owner’s budget, leading to redesigns, delays, or failed projects.
Establishing a budget means setting financial boundaries early and ensuring the design team works within them. It also means having ongoing communication between the owner, designer, and contractor to avoid drifting from the original scope. This budget discipline must also extend to lenders, who may have strict funding limits.
With a firm budget in place, all project participants can align expectations and make strategic decisions that keep the project financially viable.
Add and Delete Alternatives: Flexibility Built Into the Plan
The use of “add and delete” alternatives allows owners to maintain flexibility without blowing the budget. These contract options give owners a base project scope with the ability to scale up or down depending on cost savings or unforeseen circumstances.
For example, a high-end fireplace might be an alternate that can be removed if framing issues or budget constraints arise. Deciding on such options in advance helps avoid costly disputes during construction. It also encourages transparency between contractors and owners, as pricing is agreed upon upfront.
This method creates a win-win: contractors know what may be added later, and owners keep control over budget and features.
Peer Review of Design: Getting a Second Set of Eyes
Designs are often created with ideal conditions in mind, but peer review ensures those designs are practical, code-compliant, and within budget. Peer review helps detect coordination issues, conflicts between disciplines, and missing details that could derail a build.
Having another design professional or experienced contractor review the plans helps refine them and ensures that what’s on paper is buildable in the real world.
Constructability Reviews: Designing with Reality in Mind
Constructability reviews go hand-in-hand with peer reviews but focus more on how the project will be built. Are the materials available? Can the design be executed with current labor and trade constraints? Will it fit the physical conditions on site?
Constructability reviews identify problems before they become field issues. Investing in this review means fewer RFIs and change orders during construction.
The Importance of a Realistic Schedule
Setting an achievable construction schedule is vital. Overly aggressive timelines force contractors to cut corners or accelerate work, increasing risk and reducing quality.
Schedules should include buffers for weather, permitting, and coordination delays. Contractors should be consulted to determine what’s realistic. For example, pouring concrete in winter can lead to long-term structural issues.
CPM (Critical Path Method) schedules, Gantt charts, and three-week lookaheads are tools that can help manage timelines. But even the best tools can’t fix a schedule that was flawed from the start. Reasonableness is key.
Submittals: The Backbone of Construction Communication
Submittals, including shop drawings, samples, and product data, are how a contractor translates the design into reality. Their role confirms that selected products meet the design intent and budget.
In one case, tile samples were approved, but when more tile was needed due to changes, the original material was unavailable. Because substitutions weren’t planned for, the team scrambled to find a match, delaying the job.
Submittals should be treated as a dialogue—a chance for contractors and designers to align on materials, methods, and expectations. A well-managed submittal process minimizes miscommunication and ensures quality.
Reviewing Construction Activities: Trust But Verify
Construction oversight is essential, especially for owners with little day-to-day involvement. Relying solely on the contractor’s updates is risky. Instead, regular site visits, meeting minutes, and third-party owner’s representatives provide much-needed oversight.
From checking workmanship to monitoring daily logs, reviews help catch problems early.
Ultimately, frequent, structured reviews help keep projects on schedule and within scope.
Periodic Audits of Contractor Billing: Protecting the Bottom Line
Billing errors, inflated charges, and double payments can sink a construction budget. That’s why periodic audits of contractor billing are essential.
Owners should require detailed payment applications and lien waivers before releasing funds. Auditing invoices against actual progress and materials ensures transparency and avoids payment for unperformed work.
The use of the AIA G703 form, along with backup documentation, is a best practice. Inconsistent or incomplete documentation is a red flag. Regular audits empower owners to maintain financial control and avoid costly disputes.
Each of these steps serves as a safeguard. Together, they form a comprehensive approach to managing risk, cost, and expectations in construction projects. Implementing these strategies early and consistently can make the difference between a successful build and a problematic one.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.