Hit the Ground Running: Setting Yourself up for Success at the Beginning of a Construction Program
Eric E. Muñoz, Shareholder
Congratulations on passing your bond. It’s time to get to work. Let’s, for just a few minutes, set aside the beautiful architectural renderings and the excitement of the benefits that your construction program will bring to you community, and talk about ways to minimize the risk inherent in such a large undertaking.
The Architect
Now is the time to lock down the contract with your Architect. Make sure you consider the following:
- Do not commit yourself to one large contract. The most common form of architect contract, the AIA B101, is built to be used on a project-by-project basis. Nonetheless, architects will often propose a single contract for your entire bond program. Consolidating an entire bond program into one contract poses several unnecessary and easily avoided risks. For example, what if the relationship sours, and the District decides it does not want to continue working with that particular architect? Depending on the status of various projects (and the reasonableness of the other side), it can become quite difficult to untangle and account for individual projects, as well as the architect’s remaining duties on any active projects. The better course is to simply have separate contracts for each project. Once you negotiate a contract, you can simply re-use that same form for subsequent projects whenever you’re ready to commence a project (with proper modification to account for Initial Information (see below), which is something you’d have to do anyway). For these reasons too, an Architect contract for a number of years (e.g., “Projects in the next five years”) is not recommended.
- Clearly identify Initial Information. The first part of the AIA B101 contains “Initial Information,” which can be generally described as project-specific information. This is the part of the contract where you tell the Architect (generally) what kind of facility you want, how much you want to pay for it, and how soon you want the facility completed.
One of the most important of these items is the budget. We often see proposed contracts that state, “TBD” in the budget line. While “TBD” may be appropriate for some items, we highly recommend that the budget line contain an actual number. This will help both the District and the Architect understand what each side expects of the other. As a practical matter, it should help lower the risk of the surprise that can come on bid day, when you find out that all the bids were significantly outside of your expectations.
Another important item is the section that allows the parties to the contract to specify milestone dates. Coming to an understanding prior to commencement of design as to when the Owner expects the project to be complete will, once again, force the parties to think through what a practical schedule will look like. If you need your facility in time for the fall semester, but that’s not a reasonable expectation, you’re better off knowing sooner rather than later.
- The LRP and Educational Specifications. Have you already prepared your Long-Range Plan and Educational Specifications? TEA regulations require a school district to prepare these documents for virtually all projects over $50,000. Your Long-Range Plan must consider input from teachers, students, parents, taxpayers, and other school district stakeholders. This document must be presented to the board of trustees and then made available to your prime design professional (i.e., your Architect). Educational Specifications also have to be approved by the board of trustees and must be completed prior to the planning/programming phase of a project, then delivered to your Architect.
The Contractor or Construction Manager
If your delivery method is Competitive Sealed Proposals, you won’t be hiring a contractor until the design work is complete. But, if your delivery method is Construction Manager—at Risk, you will want to hire your CMAR as soon as possible. Why? Because part of the value you get from a CMAR is their Pre-construction Services. During the “Pre-Con” phase, your CMAR will work with you and your Architect by providing feedback and recommendations on elements of the project. Critically, your CMAR will also provide cost estimates and scheduling estimates.
Since you’ll be hiring your CMAR well before your project is designed, your contract will, of course, not contain a price for the project. Instead, the contract will generally say that the District will, after execution of a Guaranteed Maximum Price (“GMP”) Amendment, reimburse the CMAR for approved costs and pay a percentage fee based on those approved costs. The contract will specify what sorts of costs will be eligible for reimbursement (this is known as the “Cost of the Work”).
An important note about hiring a CMAR: your focus should be on qualifications, not dollar figures. Why? Because, as stated above, at the time of hiring, you won’t know exactly what you’ll be building, or how long it will take. Often, a District will require as part of the RFQ/RFP process that respondents provide cost information for certain items (e.g., staffing costs, temporary offices, etc.). So, while there can be some utility at times to scoring CMARs based on their proposed costs, most of the time you’ll be doing yourself a disservice if you’re basing your selection on those proposed costs, because it is hard to really lock those in when your project is still not designed. So, keep the focus on qualifications and you’ll be on the right track.
Just like your Architect contract, you will want to make sure that your CMAR contract specifies the budget and the milestone date for proposing a Guaranteed Maximum Price Amendment, as well as a requirement that the CMAR afford you ample time to consider the proposed Amendment before it expires. Recently, we’ve started to see GMP Proposals that put the school district in a bind, by including a shortened timeframe for acceptance. The best course to avoid this situation is to demand current schedules during the Pre-Construction phase showing both the estimated date for completion of the project and the estimated date for submission of a GMP Proposal.
Congratulations on earning your community’s trust. We’re here to help answer any questions and provide guidance along the way.
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Construction Bootcamp: Rise of the Procurist
May 13, 2025
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October 28-29, 2025
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2025-26 Employee Contract Package
Investigation Manual: A Process for Conducting Non-Title IX Employee and Student Inquiries
Conducting Effective Title IX Sexual Harassment Investigations
School Construction Basics
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