Phasing Construction Projects

By:  Bobby Radcliff, PE

Property owners often face the prospect of unplanned-for major repairs without the money to pay for them. Sometimes they can be deferred until funds can be amassed, but more often than not, they can’t wait that long. Other strategies include funding through loan or (for community associations) special assessment.

When circumstances allow, the best solution may be to perform the needed work in phases over a multi-year period; however, there are multiple factors that need to be considered.

• The overall cost will almost certainly be higher. Material prices usually trend upwards and contractors increase their rates to accommodate employee pay raises and rising operating expenses. For some types of work, restaging and re-mobilization will be needed, with attendant cost.
• The potential for further damage is considerable.
• For certain items (such as exterior facing systems) appearance could be an issue. Manufactured materials can differ from batch-to-batch, especially when the batches are years apart and products can even be discontinued. As exterior elements age they become worn, discolored, and soiled.

There are five basic steps to implement an effective phasing plan, including project identification, prioritization, design development, bidding, and contract preparation.  Following are brief discussions of those steps.

Project Identification

The first step is to identify the elements in need of remediation (repair, rehabilitation or replacement). This normally entails a general condition assessment by a qualified consultant and meetings with management, owners, and maintenance personnel to discuss their concerns, maintenance history, and other items. A basic scope of work would be outlined identifying project parameters.

Prioritization of Work

Once the basic scope of work is established, the consultant would visit the property (on one or more occasions) to rate (classify) the work items based on such factors as life-safety concerns, potential for damage to other elements and severity of defects.

For certain problems it can be  helpful to survey occupants to identify patterns. For example, if window leaks are reported with greater frequency on a particular building elevation, it might be best to include that elevation in the initial phase.

Physical condition is only the first part of the prioritization equation.  Money is the second. In order for a phasing plan to work, available funds must be allocated judiciously and a solid plan for future funding must be established. This requires good collaboration among the consultant, management, owner and other interested parties. 

Design Development

After the phasing plan has been developed, the next step is to develop design documents.  Depending on the type of project, the design documents may be all-encompassing or multiple designs would be warranted (especially if different trades are involved or if multiple projects are needed).

The major components of the design documents are specifications, drawings, and bid forms.  The specifications and drawings describe project logistics and scope of work, materials to be utilized, and installation techniques.  The other key item in the design documents is the identification of the work areas/phases.  The bid form reflects these items and delineates the phasing plan.

Solicitation of Bids

Bids should only be requested of pre-qualified contractors who specialize in the types of work involved and the number invited should be limited. “Cattle-call” pre-bid meetings will discourage some contractors.

The bidders should be requested to bid all phases of the project(s). This will provide the owner with budgetary figures that will help inform the phasing plan, which may be altered (lengthened or shortened).  The bidders should also provide their pricing for performing all of the work in a single phase to show the owner what the cost savings would be to consolidate the project.  Sometimes, the cost savings to consolidate is substantial and the owner may elect to obtain a bank loan or special assessment to fund the project.

Based on our past experience, contractors have held their bid prices (guaranteed pricing) for up to three (3) years for long-term projects. Depending upon the nature of the work, escalator clauses could be requested to allow for sharp increases in the price of petroleum – (or other commodity) based materials.  Such clauses should be based on mutually acceptable, recognized, published indices.

Contract Preparation

A signed contractor proposal might constitute a binding legal agreement, but (not surprisingly) it will likely favor the contractor. A more equitable, formal contract should be prepared or adapted from published sources (such as the American Institute of Architects – AIA). The agreement can be crafted so that the second and following phases will only be awarded to the contractor upon successful completion and acceptance of prior phases.

For long-term projects, the owner should consider including contingencies for temporary repairs to areas not included in the current phase.  For example, if your property is comprised of several buildings in need of roof replacement, and the project includes one replacement per year, steps should be taken to render the latter roofs reasonably serviceable until they are replaced.  Occasional repairs should also be anticipated.