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The Buildout Book


By: XAVIER J. FERNANDEZ, ESQ. Copyright Š 1991- 2008 by Xavier J. Fernandez, Esq. A Xarelex book published in 1991 by Unimedia, Indian Rocks Beach, Florida. All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior permission of the publisher. Notwithstanding the foregoing, purchasers of this book from established retail businesses may reproduce any clause recommended in this book without charge for the limited purpose of use in their business. This book is designed to provide accurate and authoritative information with respect to the subject matter covered. It is sold with- the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of an attorney in your state should be sought. While every attempt is made to provide accurate information, the author or publisher cannot be held accountable for errors or omissions.

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2 ABOUT THE AUTHOR Xavier J. Fernandez received his B.S. degree, cum laude, in Economics from Siena College, an M.S. in Business Management from the State University of New York at Albany, and his Juris Doctorate from Stetson University College of Law. He was Director of Business Affairs with the State University of New York during years in which the university experienced rapid expansion of its facilities and enrollment, and Chief of Legal Affairs of a State Attorney's office during a period when its staff and offices grew over five times its original size, and established numerous new offices. He then turned to the general practice of law and management consulting. His law practice is devoted to trial litigation and to providing medical professionals with structures to protect assets from creditors. He is a Florida Supreme Court Certified Mediator who, either privately or by court appointment, resolves disputes as an alternative to litigation, specializing in mediation of disputes between medical professionals. He has lectured on the college and seminar level on personnel management, labor relations, lease and leasehold improvement contracts, financial planning, insurance, overhead control, and asset protection. He is also the author of Lease Negotiation Tactics for Small Business Tenants.

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2.10 CEILINGS 2.11


2.12 DOORS 2.13 WINDOWS 2.14 FURNITURE 2.15


























4 4.10














































EXHIBITS (Located at the end of this book.) A.




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1. INTRODUCTION The Buildout Book is designed as a self-help guidebook for you as a small business owner. It has been written in layman's language to assist in understanding the challenges you are likely to encounter in any buildout project. It will provide you with a summary of things that you can do to avoid costly mistakes and misunderstandings in dealing with your contractor. And it will help minimize the amount of time and attention you must devote to the activity. While the contracts, provisions, and procedures found in this book may apply to a broad range of construction projects, the focus here is on assisting in the buildout of a small store, business office, or professional office. There are numerous ways to go about the buildout process. Here you will be shown one way, in an effort to give you a specific roadmap to follow which will help in reaching favorable results economically, while providing fundamental legal protection. Four important phases will be covered in the text: planning and development of the specifications; getting estimates and financing; bidding, checking contractor's qualifications, and contracting; and supervision of the construction. You will be able to see through many of these phases yourself. But it is always wise to consult an appropriate professional, whether it is a designer, architect, attorney, or insurance advisor, anytime the negotiation, design or execution of any stage of the process bogs down, and certainly before signing a contract. Construction laws differ in various communities and states. It would be wise to follow the caveat found in the American Institute of Architect's standard form contract: "This document has important legal consequences; consultation with an attorney is encouraged." Attorneys and architects will usually charge you an hourly rate for their time. Make sure that you ascertain in advance what their hourly rates will be, whether they will bill for fractional parts of an hour, and approximately how much work will be required. By using this book, and doing the investigative, paper and footwork yourself, you will be able to significantly reduce the amount of time required of these professionals. As a new business owner, you will also have many other details on your mind, and may even want to consider delegating much of the buildout responsibility to a trusted associate or to your spouse if possible, saving final reviews and preparation of vital documents for the appropriate specialized advisors. Throughout this book we'll refer alternately to the buildout or to tenant improvements. They refer to the same thing, i.e. the additions or modifications made to a building for your purpose, whether you're the owner or a tenant. Special thanks to Debra Sullberg for her valuable advice on construction Š 2008

7 estimating and contracting, to Dr. Rory Pierce for his expert advice on office specifications, to Margaret Carney for her dedication and effort in preparing this manuscript, and to Marty Johnson for her professional editing and publishing assistance.

1.1 DO IT YOURSELF? While being the "owner-builder" can save you money on certain projects, be careful that you don't overestimate your skills or underestimate the time a project will take. As the owner-builder, you'll be responsible for scheduling work assignments and supervising construction time-consuming tasks that are sometimes better left to a professional. You, not the person you hire, assume responsibility for the overall job, which may include such things as state and federal taxes, worker's compensation, and other legal liabilities. Unless you are very experienced in construction, it is best to leave these matters to a licensed contractor. In most cases, the time you save by not doing this aspect of the work would be better spent developing your business or clientele. As an alternative, you can hire a construction manager at a set fee, plus a bonus if he brings the job in under estimate. But if you do that, you're technically the contractor and liable for all those insurance, compensation and license costs. You might be required to provide worker's compensation insurance. Find out by contacting your insurance agent or the State Compensation Insurance Fund, listed in the Yellow Pages of your directory under "Insurance." Should you be your own general contractor? Almost always the answer is no. In addition to the problems already mentioned, you'll spend so much time away from business that any anticipated savings will evaporate. Even with a small project, the demands on your time would be sizeable.



Should the landlord demand the right to control the selection of a tenant's contractor, it may create problems. While the landlord may properly insist that any contractor working in his building be familiar with the structure and be of recognized competence to assure the landlord against damages to the structure, the tenant should be cautious of the situation where he is limited by the landlord to designated contractors. These are often contractors who work for the landlord at bargain rates and look for their profit from the tenants by having a landlordimposed monopoly on tenant business. On the other hand, using the landlord's contractor may avoid an argument over Š 2008

8 who causes a delay in construction and your occupancy. You should be sure to include in the lease and construction contract, provisions delaying rent payments until occupancy is provided. In addition the tenant should make sure the landlord provides, at no expense to the tenant, heat, air conditioning, and electric power to trades engaged by the tenant and at work before the beginning of the lease. 2. DEVELOPING A CONSTRUCTION PLAN Office buildings were once erected and completed with floors divided into offices ready for use. A prospective tenant could lease space, virtually as is. The landlord would paint the space for an incoming tenant and might make some minor alterations for a tenant, particularly one taking a relatively large amount of space. Currently, many buildings are erected with open floors, which are shells. The interior is then virtually custom-built for a tenant who rents even part of a floor. In other cases, the tenant may contemplate a substantial renovation. Some preliminary investigation should be conducted to determine if there are special building code requirements for access, or facilities for handicapped persons, or fire marshal requirements, i.e. rear exits, hallway doors, fire suppression systems or emergency lighting. In the case of a buildout of an empty space, a condition or situation which is becoming more prevalent, particularly in the fast-growing areas of Florida and California, aside from the basic floor plan, there are specific requirements that should be addressed with respect to electrical and plumbing requirements. Whether access to these are in the front or the rear of the facility, will dictate your most economical layout. Design and layout should be finely attuned to the method and efficient flow of tenant's business operations. Considerations should include a layout that minimizes interior traveling, distance from toilets, supplies, photocopying machines, X-ray or therapy rooms, et cetera. The amount of illumination is, or should be, scientifically gauged to the type of work - whether for general office, waiting, rest, or therapy areas. Air conditioning allows little variation before its effect on bodily comfort and on efficiency are noticeable. You can get a good idea of what you'd like by making your own rough sketches, which will be used to simplify preparation of the final plans. Are you the owner or tenant? An important consideration when deciding on the quality of your specifications is whether you're the owner who anticipates using the store or office over many years, or whether you're a tenant whose lease runs only for a few years. Once you've built out your store or office, the improvements will become part of the real property. If you're the owner, you've invested in your own property, but if you're a tenant, you have improved someone else's property. When you leave at the end of your lease, you leave the improvements and your investment in the improvements behind. While not suggesting a reduction in the level of quality or appearance of your Š 2008

9 improvements, the fact that the cost of the buildout is not recoverable should be a consideration for short-term tenants. One way to maximize the return on your buildout investment is to negotiate a longer initial term on your lease, with options to renew or extend your lease to obtain a longer period over which to amortize or spread your investment return. This section will discuss various options you have, and decisions you'll make in specifying the various components of the project. 2.1 FLOOR PLANS Most municipalities will require you to prepare final plans and will also require that the plans be certified by a licensed contractor, designer or architect. The floor plan or working drawings shows the location of partitions and doors and the direction of door swings. The working drawings for a construction may be complex. Drawings show what is involved, where it is located, and what the physical dimensions are. To do so clearly, the drawings must be well conceived, well coordinated, accurate and adequately dimensioned. Drawings are for the contractor's use in preparing estimates and quantity surveys for bid preparation, as well as providing adequate guidance for construction of the work. The drawings should be reasonably complete, including appropriate sections and details, and drawn to such scale that the contractor is reasonably informed of-the intended result. The drawings do not typically contain explicit information on every detail of the construction. Structural, mechanical and electrical work is usually shown on separate drawings with special attention to the more complicated or critical details. The need for careful coordination of all aspects of the design exists whether single or multiple drawings are used. Elevations show its outward appearance on all sides. Sections show how the foundation is to be built and how various areas relate to those above and below them. Details illustrate how decorative items are to be built. Besides preparing the finished drawings, a draftsperson or building designer also may apply for building permits and zoning variances for you; or an architect can take over the entire project, including the work, for you. It is very important that the contractors who are asked to bid on the job are made aware of the location of existing services, i.e. plumbing, electricity, sewer, heating, ventilation and air conditioning (R.V.A.C.) units. The more information you have, the more comprehensive and accurate the bid will be. 2.2 SPECIFICATIONS Accompanying the working drawings should be a series of specifications. The specs set the performance standards for the work in terms of administration, time, construction, adequacy, and general working conditions. The specs should specify a deadline for submitting the bid, what levels of insurance coverage the builder is expected to have, and other general requirements. Their purpose is to explain those details that are not apparent from the drawings alone. Š 2008

10 Some practices concerning specifications need special mention. The use of the phrase "or approved equal" without prior determination of what materials or products qualify, frequently results in differences of opinion. It should only be used with care and caution. Alternatives to the use of "or approved equal" include: 1.

Closed specifications, which list only one trade name for each material or piece of equipment and permit no substitution. These should be used when there is only one product that will properly serve, but it should be recognized that unnecessarily narrowing the choices may increase the cost.


Contractor's option specifications, which list the trade names of all acceptable products.


Product approval specifications, which list one or more trade names for each product. The bidders may then request approval of substitutions proposed, in writing, a specified time before bids are due. If a proposal is approved by addendum, the bidders may use the approved substitute in their bids.


Substitute bid specifications, which list one or more trade names for each product and restrict the contractor to use only the specified products in the base bid. However, the contractor may attach a proposal for a substitution to the bid, showing the amount to be added to or deducted from the base bid if the proposed substitute is approved.

Your architect or draftsman will prepare several sets of plans and specifications to be picked up by the contractors you've selected. If you are not using an architect or designer to develop your specifications, you may want to consider developing your own. This is discussed in more detail in section 3.1 on Estimating. You can start with a sample specification as illustrated in Exhibit E. It might also be wise to make notes of a less expensive alternative to each item specified, should you decide to cut costs at the last minute. By doing this, you're developing your own specifications and establishing the quality level of your construction. Once you've prepared your list, you may want to make a note by each item coding or classifying it according to the four types of specifications mentioned earlier, i.e. closed contractor's option, product approval, or substitute bid. 2.3 WALLS AND PARTITIONS Your principal concern about partitions should be they look good, that they can be maintained easily, and, acoustics are a concern, that they block sound transmission. Interior walls in your office, will probably be built by erecting wood studs or metal uprights and attaching gypsum wallboard. These are the most economical and meet the one and two-hour fire ratings, which may be required. When using Š 2008

11 sheetrock partitions you may want to consider adding sound retardant. Other materials can be used, such as masonry block covered with plaster, or plastic panels. Pre-finished wood panels are easy to install, but stick to the better grades only. These usually have a tough finish that can be maintained with little effort. Where baseboard is to be installed, it can be straight, coved, wood, marble, et cetera. Samples of specifications you may use to establish standards are: 1.

Gypsum block, concrete block, or cinder block from floor to ceiling


Sheetrock, to ceiling, with or without sound retardant


All-metal movable partition


All-glass movable partition


Wood or metal and glass, movable partition


Low rail (3" - 6" high) of any material

One can add shelves to a sheetrock wall and fill them with books, but books, shelves and walls may all collapse if there are no wood grounds (1" x 4") for support. Wood grounds are also necessary to support drapery and any other heavy object intended to be hung from a wall. 2.4 ELECTRICAL A proposal or contract may speak of "sufficient" or "adequate" lighting and air conditioning. There is no such specification as inadequate or "adequate." The landlord may say adequate lighting is 40-foot candlepower at desk level. Some people prefer more, and certain types of work require more. The electrical plan will specify details of the electrical service, its metering, and safety features. Location and height (although standard heights may be satisfactory) of all duplex wall outlets should be shown, as well as the location of all fixtures and the switches that control them. Rooms requiring many motors, appliances, or other devices should have additional outlets. Clock, refrigeration and drinking fountain outlets should be on separate circuits, or they will go off whenever lights are turned off. Outlet allowances should be provided for both light and low-voltage equipment, with special outlets for special communication equipment, telephone switchboard, Š 2008

12 intercoms, X-ray equipment, et cetera. Under floor ducts or conduits for telephones, computers, and other lines should be provided. If they are not already in the building, this could be very expensive. In these cases, you may want to take this into consideration when designing the floor plan. For example, a room requiring special plumbing may be located closer to the source of the piping. The fixture allowance should be spelled out, e.g., 2' x 4' four-light, 40-watt fluorescent lamps per 80 square feet of rentable space. This gives 65 to 70 foot candles, more or less, depending on height from floor and the reflectance of surrounding colors. Additional dollar allowances should be provided for any special electrical work or purchase of special fixtures. In the final plans or specifications, a schedule of lighting fixtures accompanying the electrical plan should show catalog number and manufacturer plus the type and quantity of lights that are to be used. The electrical plan should not be considered final until all decisions are made about furniture and built-ins that might influence outlet location and lighting. This includes the grades of materials, how they are to be installed, and the quality of workmanship expected. The specs should include any special installation requirements set by your equipment supplier. 2.5 HEATING, VENTILATING AND AIR-CONDITIONING The heating, ventilating, and air-conditioning, often referred to as H.V.A.C., for your building will also be worked out by the architect, engineer or a qualified air conditioning sales company. Be sure to make your ideas known about the kind of temperature control you need. The selection of fuel and heating equipment is critical to the efficient and profitable operation of your store or office. But do not let an urge to save money on energy cause you to skimp on heating or cooling equipment. If you do, you'll constantly be irritated by uncomfortable temperatures in your own office. A person can be exposed to a blinding July sun, return to a dark interior, and quickly adjust to the change. But a change in temperature of just a few degrees affects one's work efficiency immensely. As a practical matter, the differences in human metabolism are such that two people, one portly and one thin, in one small office, might never both be satisfied. It's better to save on fuel by installing the proper insulation, weather stripping, and storm windows. In some cases, heat pumps and solar-energy devices may be helpful. The 1974 Handbook of the American Society of Heating, Refrigerating and Air Conditioning Engineers recommends 75 degrees Fahrenheit, dry bulb with 50 percent RH (relative humidity) for winter and summer. Generally, people are most Š 2008

13 comfortable at 72 to 75 degrees F., dry bulb, with 50 percent relative humidity. This standard may be used as a minimum standard for the equipment selected. While some "ballpark" formulas are used in different parts of the country, you should have reliable and experienced air conditioning companies give you an evaluation to determine how large an air conditioning unit to install. An evaluation will be made considering the type of walls, floors, ceilings, size and type of windows, type and amount of insulation, and cubic feet of space. Individual exhaust systems should be provided for toilets. Auxiliary airconditioning systems may be necessary for extra-load areas, e.g., computer rooms, meeting rooms, smoking lounges, kitchens, etc. This may require additional plumbing lines. 2.6 LIGHTING The kind of lighting you use and its intensity will have an effect on everyone in your office. The more detailed a task, the more illumination is needed. A waiting room, where customers or patients glance through magazines, doesn't need as much brightness as your secretary's desk. As we get older, we need more light to maintain the same level of vision. A 50-year old secretary needs brighter desk lighting than does a 25-year old. Ambient lighting, the general light level in a room, should not be markedly less than the task lighting, the illumination of the work surface. The task-brightness to ambient-brightness ratio should probably not be greater than five to one, and some authorities suggest three to one as the limit. If there is a marked contrast between the two, fatigue and strain usually result. Experts concerned with eye comfort offer the following principles for lighting the office: □

Shiny, highly-polished desk surfaces reflect light as glare, causing discomfort and reducing efficiency.

Light-colored walls and floor coverings can increase room brightness by 35 percent or more, reducing the need for artificial lighting.

Ceiling fixtures over a desk or other work surface should be placed so that the shadow of the person working there will not be cast on the work.

Indirect lighting, which means light from a hidden source, is useful for hallways and other places where soft lighting is needed. It is not adequate for most tasks.

You will get approximately four times as much light from fluorescent lamps as from incandescent lamps.

Fluorescent lamps require less frequent replacement.

In places where you must use incandescent lighting, consider installing © 2008

14 solid-state dimmer switches for energy savings and brightness control. □

Fluorescent tubes that imitate natural light emit only about 70 percent as much light as a cool-white fluorescent lamp of similar wattage.

Where a fixture allowance is provided, it should be spelled out, e.g., 2' x 4' fourlight, 40-watt fluorescent lamp per 80 square feet of rentable space. This results in 67 to 70 foot candles, more or less, depending on the height from the floor and the reflection of surrounding colors. You may need to provide for the following: □

Outlet allowances for both light and low voltage equipment

Special outlets for special communication equipment, such as Telex, TWX, PBX, telephone switchboard, intercoms, music, etc.

Under floor ducts or conduits for telephone and other lines

Clock and drinking fountain outlets. (These should be on separate circuits or they will go off whenever lights are turned off.)

Water cooler

Alarm system

Capacity of electrical panels (Allow ten percent for future growth.)

Dimmer switches for certain areas, (i.e., therapy or X-ray areas)

2.7 EXTERIOR LIGHTING Again, there are numerous fine points, which can make your project safer and more comfortable. Some you may consider and provide for are: □

Good lighting reduces night-time burglaries.

Customers and staff feel safer in a well lit parking area.

Illumination of walks, ramps, and curbs reduces chances of falls on slippery wet surfaces.

Properly placed exterior lighting can help to enhance the beauty of your building.

Exterior lighting generally should be well diffused, so that it doesn't shine uncomfortably in the eyes of persons walking or driving near your building.

All doorways should be brightly lit for security and for ease in locking and unlocking the door.

It's desirable that outside lights be switched on and off automatically by a timer switch or by a photoelectric switch if you want these lights on all night. © 2008

15 â–Ą

You may want to specify interior light fixtures of different quality for lobby, hallways, and common storage and utility areas.

Another, often overlooked item is the source of power for a sign located away from, but not attached to the building. If the outlet is not inside the sign or at the sign location, and a line has to be run from the circuit breaker or power source, it may be very expensive. While this would be a major consideration in the lease negotiation, if that has already been accomplished, it may be sufficiently expensive to merit review of your need for a lighted sign. 2.8 FLOORING You should decide at an early stage what type of floor coverings you intend to use, because your choice will determine how the underlying floor is to be prepared. Vinyl or tile requires a smooth, flat under floor, whereas the padding under a carpet will compensate for most floors' irregularities. The local health or building departments may also dictate the type of flooring used in certain areas. Flooring may be of the following types: cork, wood, marble, slate, ceramic, terrazzo, or carpeting, etc. There is a variety of carpeting available, and unless you plan to replace it often for aesthetic reasons, you should go to an established and reliable carpet sales company, which is hopefully large enough to have a commercial carpet department to have them review with you the use to be made of your store, office, or areas within it. Some of the variables that must be considered are traffic patterns, maintenance requirements, desired appearance, whether computers will be used in the area, and whether a sanitized carpet would be preferred. Generally offices or stores will require what is known as commercial or contract carpeting, and not the type used in residential carpeting. Acoustic engineers evaluate the sound-absorbing quality of a substance in terms of its noise reduction coefficient (NRC). The higher the NRC, to a theoretical maximum of l.00, the more it deadens sound. The sound-absorbing property of carpeting is second only to that of acoustic ceiling materials. The NRC for carpeting ranges up to 0.55, regardless of the material used. It can be in the upper range if a heavier-weight pile or a higher pile is used. The sound-absorbing property can be increased up to 0.65 to 0.70 by the use of padding under the carpet. In contrast, sheet vinyl, vinyl asbestos tile, or other resilient floor coverings have an NRC of only about 0.05. Thus, it makes sense from the standpoint of acoustics to carpet most of the floors. Ceramic tile is approximately three times more expensive than sheet vinyl or other types of resilient flooring. There are many types of resilient flooring. You Š 2008

16 may anticipate an additional charge for setting tile or other patterned material. Rubber or metal saddles are to be installed where materials change. Baseboard is to be installed. It can be straight, coved, wood, marble, etc. A frequent practice is to provide an allowance in the contract for floor covering. The allowance will usually pay for a low grade of the item, and the builder will provide it if you wish. If you obtain a better grade yourself, you'll pay for it directly and deduct the allowance from the amount owed to the builder. This approach is to your advantage, since it makes the contractor responsible for the installation of the item no matter who provides it. In addition, if you are not on the ground floor, you should check the floor's weight capacity if you are planning to use any extremely heavy equipment that could require reinforcement of the floor. An example is a filing system in which several shelf files are grouped on tracks and rolled apart for access to each set of shelves. 2.9 PLUMBING The landlord should be able to provide you a base building plumbing plan to give you a starting point for your plans. The plumbing plan, where used, is a copy of the floor plan with all sinks, toilets, and other plumbing items. The approximate location of the pipes going to equipment will be shown, but the exact arrangement of pipes will be set in the final drawings. The contractor, architect or designer should specify the sizes of water supply and waste lines for your facility if not already installed or specified by the building's architect. In developing your floor plan you should consider rough plumbing or the condition, capacity and location of existing plumbing, and connection of basins, toilet fixtures, drinking fountains, and X-ray processing equipment. The shorter the distance from the source to the fixture, the less expensive, particularly if you have to place the lines under an existing slab or inside existing walls. Most buildings are supplied with a central hot-water heater, but in some buildings, each store or office provides its own hot water. If you are to supply your own, be sure the size is adequate for your intended uses. These may include hand washing, instrument scrubbing, maintenance of X-ray developer temperature, and showers. A 1O-gallon tank would probably be ample. The insulation around the pipes should have arrows showing the direction of the water flow. If you need hot water only at one or two sinks, and the building does not supply it, consider using an "instant" hot water appliance. This will avoid the need for the heater and some pipes. The operating cost of the heater may also be controlled by an inexpensive, timecontrol device. Š 2008

17 The three materials you are most likely to consider for sinks are stainless steel, vitreous china, and porcelain (actually cast iron or steel with heavy porcelain baked on). Consider using vitreous china or porcelain for all public sinks. Despite its name, stainless steel is anything but stainless when used for a sink. It shows dried watermarks, which are unsightly and a nuisance to remove. In a workroom such as a lab, darkroom, or sterilizing alcove, however, stainless steel is desirable. China or porcelain can chip if an instrument is dropped on it, but stainless steel won't be affected, and the watermarks won't be seen by the public. Standard sink depths are six or seven and one-half inches, but you may find 1Oinch or even 12-inch depths more practical. Again, weigh the extra cost against the added utility. Lavatory sinks can be the wall-hung and made of vitreous-china, but there are several attractive alternatives. One is a combined sink and counter made of a synthetic marble, with a cabinet underneath. The cabinet hides the pipes and makes a convenient storage place. As you may purchase these combination units separate from the plumbing contract, be sure that the construction contract calls for the plumber to install all sinks, including these sinks as well as any that he supplies. Toilets can range from the simplest type required by your plumbing code to elaborate models. The type that is hung on the wall, while quite expensive, makes cleaning easier in the lavatory. In some areas, special designs for handicapped persons are required. Check the governmental office that issues building permits to ascertain its requirements. Silent water closets, urinals and basins may be preferable, but may be more expensive. The location of the toilet, and the adjacent area should be considered. Have you included accessories, i.e., soap dispensers, towel dispensers, waste receptacles, coat hooks, mirrors, and partition material? Where special work is needed to support a plumbing fixture, it should be indicated. For example, if you select a toilet that will hang on the wall (rather than stand on the floor), that wall will need reinforcement. In the final plans, a schedule of plumbing fixtures to be supplied by the builder, including type, manufacturer, and size, should be available with the plumbing plan. 2.10 CEILINGS Ceilings may consist of acoustical tile, plaster or metal pan. They may be of ordinary height or suspended. Their surface appearance may be of exposed or concealed spline. The ceiling you'll probably use will be made up of panels of a material suspended Š 2008

18 by a metal framework from the ceiling, or the floor above. The least expensive type is the lay-in ceiling. A grid of metal supports is hung, and ceiling panels that fit the square or rectangular openings are dropped in to rest on the exposed grid. More expensive is the recessed grid in which the panels are suspended below the framework by about three-quarters of an inch. A spline or concealedsuspension ceiling is still more attractive and more costly. Here the suspension system is completely hidden by the panels. In addition to cost, your ceilings may be chosen on the basis of your need for access to the space above, fire code requirements, appearance, or on your acoustic needs. The panels come in many different sizes and patterns. Where sound control is a factor, you should be aware that certain materials have differing sound absorption qualities. These materials include soft substances, such as carpeting, drapes, fibrous insulation, acoustic ceiling panels, and rigid plastic foams. The acoustic panels forming a dropped ceiling are made of a porous mineral substance that usually has a high noise reduction coefficient (NRC) - at least 0.75. This means that your ceiling would absorb 75 percent of the sound striking it if the ceiling contained only the acoustic material. It doesn't. It also usually contains light fixtures, air-conditioning registers, loudspeaker baffles, and so forth. In addition, air gaps at corners, near walls, and between the acoustic ceiling panels can transmit sound unless they're plugged with caulking or the top of the dropped ceiling is covered by more sound absorbing material, such as blown-in or rolled insulation. Sound transmission from room to room through ventilating ducts above the ceiling can be reduced by having the interior of the ducts insulated. This is often desirable for energy conservation and to avoid condensation as well. Bends or baffles in the ducts also help cut down sound passage. The necessity for fireproofing is to be considered. Sprinklers and the necessary piping may, except for sprinkler heads, be recessed or suspended. Clothes closets should have a chrome hanging rod, and one or two shelves, preferably wood, to accommodate hats. 2.11 PAINTING AND WALL COVERING A provision should be made for preparation of walls to receive vinyl, flexwood, wallpaper, paneling, et cetera. If you have a choice, have the contractor provide you with a "smooth finished" wall rather than a textured finish. This should assure a better taping job, create a more professional finish, and you'll have a finish that can accept wallpaper, now or in the future. You may want to use colors other than the usual "standard colors" - beige, blue or green, but try to stick with colors available in a can from a leading paint company. The landlord's, or contractor's, possible discount on buying the same color for the entire building should not compel a tenant to accept the colors of an institution. An office may be more attractive with one wall painted in an accent color. This involves a color break, but will add to your cost because the first color must dry Š 2008

19 before the second is applied. On a new surface, a sealer and two coats of paint should be applied, with two coats of paint on old walls. Door bucks should be painted with red lead before the first coat of paint, to prevent "bleeding," i.e., future rust stains. Additional paint jobs should be done every three years, with allowance for additional colors and color break. You may want to request this in your lease. If the landlord is doing the construction, and if vinyl wall covering options are given, the tenant should instead ask for a monetary allowance in preference to the choice of specific samples. Infinite types of color and texture will then be available to the tenant rather than the landlord's narrow range. 2.12 DOORS Doors may be full or regular height, sliding, flush metal, wood for painting, or wood veneer. With hinged doors, the swing of the door opens in to the room - or worse, out into a hallway. In a small room, this may consume space critically needed for equipment or for the room's occupants. On the other hand, it may open into a walkway becoming a danger or impediment. To avoid this, you may have to consider more expensive sliding doors. These are attached to a track above the doorframe and slide out of sight into a recess in the frame. The principal problem with them is their tendency to bind unless top-quality track hardware is used and the frame is carefully made. Do not skimp in this part of your construction. Hollow-core doors are made of two thin sheets of plywood glued to wooden spacers around the perimeter. Solid-core doors made of wood all the way through are preferable. They cost more but they cut sound transmission much more, especially if well fitted. They also retard fire better than hollow doors. Use louvered doors on coat closets. They permit air circulation, which dries wet garments and avoids odors. Door hardware consists of lock or latch sets, closets with hold-open device, door bumpers, kick plates, and decorative hardware. If you expect to lock a door, a lockset should be specified, or you may be charged for an extra. 2.13 WINDOWS Windows enhance the attractiveness of a structure but can mean significant increases in energy costs for heating and air conditioning if they are of poor quality or poorly installed. 'Windows also mean an additional expense for drapes or blinds and increased maintenance. Š 2008

20 Depending on the material used for the frame, the number of glass panels in each sash, the style of window (casement, double-hung, awning, for example), and the overall quality, a window may cost more than twice as much as the area of blank wall that it replaces. In addition, some management specialists have suggested that windows, although preferred by employees, may lead to distraction and daydreaming. Their location and height may minimize these possible problems. You must weigh carefully these opposing concerns. You will have to select windows that provide light but that, especially on the ground floor, are placed to allow privacy and security. 2.14 FURNITURE A separate plan may be drawn up by the architect or interior designer, showing the furniture and built-ins. This mayor may not be included with the working drawings, depending on whether the builder or an outside contractor is to supply the built-ins. Using the copy of the floor plan insures that the furniture will fit. An effective and inexpensive way to create the proper desk and drawer space for an office is to rely on ready made metal drawer and file cabinet pedestals, and custom made countertops. Metal desk pedestals come in many different colors, drawer or cabinet combinations, and sizes. A cabinetmaker can build the countertops to your design, supply the pedestals and assemble them later in your office. If you adopt this approach, be careful about the front-to- back depth of such a desk. If the depth is too shallow (less than 20 inches), there may not be adequate space for working. If it is much more than 26 inches combined with a counter in front of the desk, your employees may have an uncomfortably long reach to hand another person a document or accept a payment. Consider the same approach for planning counter space for photocopying, for typing, and for workstations for other clerical personnel. These desk and counter dimensions work well in actual use: Desk Tops Appointments Bookkeeper Countertops Typewriter Copy Machine Reception Appointments Cashier

29 1/2" H x 64" W x 22" D 29 1/2" H x 71" W x 31" D 26 1/2" H x 28 1/4" W x 20" D 26 1/2" H x 58" W x 17 1/2" D 44" H x 75" W x 9 1/2" D

The chairs and desks you provide for your secretarial and business staff should be based on function. You want maximum efficiency combined with comfort. Š 2008


2.15 NOISE CONTROL The control of sound involves the elimination or muffling of unwanted noises and the protection of the confidentiality of conversations with customers, clients, or others. Distance is most practical for the muting of sounds in a fairly large space, but even in a small space, proper planning will help. One means of reducing sound transmission across hallways, for example, is to stagger the placement of the doors so that no doorway is directly opposite that of the room across the hall. Staggering of the doorways may not be the best idea, however, if the traffic flow between rooms is important. Sound is transmitted freely through the air, but to a lesser extent through solid materials. The denser and thicker .the material, the more sound transmission is blocked. A cinderblock wall allows less sound to pass through than does ordinary plasterboard. A solid-core door is superior to one with a hollow core, since a hollow core door may resonate sound. For a more complete blockage of sounds, it may be necessary to install weather stripping around the edges of the door to prevent as much air passage as possible. You may consider a double-door arrangement. A second door is installed a few feet behind the first, and both doors are weather-stripped. To reduce sound transmission through the windows, insulated (two-layer) glass is helpful. Sometimes, a third sheet of glass is installed inside the window frame. If the noise level is too high, you may have to hang heavy drapes over the windows. Additional sound control ideas are discussed in Section 2.8, Flooring and Section 2.10, Ceilings. You may want to mask sound by using "acoustical perfume," the use of pleasant sounds to hide unpleasant ones. Its most frequent application is by using background music. The simplest and least expensive music source is radio. You may also use cassette tapes, compact discs, or a piped-in system. There are services that provide fresh selections of music on a regular basis. A good location for the equipment is a closet or cabinet at or near your office. You'll need an electric outlet inside the closet or cabinet for your power supply. In addition, you should have some means of providing at least minimal circulation in the enclosure to prevent heat buildup. Heat shortens the life of some electronic components. Install the volume controls at a location easily accessible to you. Š 2008

22 If you have no more than four or five rooms with speakers, you can use ordinary hi-fi equipment. However, if your business space is large, with many speakers, you may find a reduced level of volume at the more distant speakers, or a change in volume at some speakers as others are turned up or down. The solution is to use a public-address amplifier, so that all speakers receive identical power and the volume can be altered on one without affecting the others. To use this system, each room needs a matching transformer, costing about $10.00 to $15.00 each. The PA amplifier may cost $125.00 or more. These figures are in addition to the costs of tuner or tape player, volume controls, speakers, and labor. An added benefit of the amplifier is that in a large office, you can connect a microphone to it and use it for paging. The usual place for the speakers is above the acoustic ceiling, with a grille plate covering the opening cut in the acoustic panel. To have the effect of music coming from nowhere, you may consider first drilling a pattern of holes in a piece of pegboard, then using it as a template for drilling the ceiling panels to support the speakers. Each speaker is then screwed to the top surface of its panel above the holes. The effect is that of music coming from nowhere. 3. FINANCING AND PERMITTING THE PROJECT 3.1 ESTIMATING Before you try to get financing you should have a good idea of how much to ask for. If this is your first contact with the bank, you may be making your "first impression." Very often your banker will have made many buildout or construction loans and have a good idea of what your buildout should cost. For this reason it would be wise to approach him or her in a businesslike manner, having done your homework. It would be unwise to inflate your loan request to obtain extra money out of the loan. In many cities, real estate and builders’ organizations compile rough figures on the cost of rehabilitation per square foot, i.e. you can buildout an office for $15 per square foot. You should check with them to get a ballpark figure. You can do your own estimate however. One way is to follow a procedure using this book. You should: □

Get an idea of the floor plan and your electrical and plumbing needs.

Re-read sections 2.2 to 2.15 to determine your options.

Go to your local builders supply house and ask to have someone go over your building materials options, showing you the actual materials and providing you the costs. Work your way through sections 2.2 to 2.15.

Decide on what you'd like and on the next more economic option should you have to economize at a later time. © 2008


Either calculate your total costs, or have the store do it, if that service is available. If you have to pay a small fee for this service it will be worth it since you'll no longer be operating blindly with contractors.

As you go through your options, either make notes of your selection with a description of your choices, or get descriptive literature to refer to later when writing your specifications.

You are now ready to develop your specification sheets, and have an idea of what the materials will cost. You can then use a copy of the Fixed Price Breakdown found on the last page of the Solicitation for Construction in Exhibit B to summarize these costs, other costs and plug in a reasonable contractor's profit, to get your estimated cost figure. Use as a contractor's profit ten to fifteen percent of the materials cost. This figure may vary in practice depending on where you live, economic conditions, or the contractor's motivation. You should be aware that the contractor might be able to obtain a further "contractor's discount" on the materials purchased, thereby increasing his profit. Should you require bank financing, you now know how much money you'll need, and are prepared to answer any questions on how the money will be spent. 3.2 GETTING A LOAN If you are like most persons, you will need some financing help to cover the cost of your office construction project. There are many types of financing available, and you should explore each one that is available to you to make sure that you are able to obtain a loan at the lowest possible cost and on a payment schedule that is well within your budget. Several good sources from which you might obtain financing are your landlord, your contractor, banks, saving and loan associations, mortgage companies, and credit unions. You might also wish to consider borrowing against your life insurance or from friends or relatives. The first step should be to call several banks in your area. You might consider going to a local banker who has known you. Often you are able to get a very favorable rate as a result of your association with your bank. The same is applicable to a savings and loan institution. If you have life insurance in force, you may be surprised to find that you may borrow against it at a very low interest rate. You should go to more than one bank and to more than one type of loan company to determine the most favorable cost for you in both interest rates and the time of payment. Once you have an idea of the terms available, you can plan your approach. Often, the banks that give your landlord the loan to build the building will have approved some money for the buildout. This is quite often the case in an office building, and less likely in a retail or store facility. This is the first source to check. © 2008

24 Similarly, the banker who approved your landlord's construction loan, or who is holding the mortgage on the building may be more likely to approve your buildout loan to help the project become a successful facility. Aside from any loan, the banker wants your day-to-day business. If you have been a regular customer for many years, this may help. Surprisingly, though, you can sometimes negotiate a better loan with a bank with which you have not previously done business. A new banker may look forward to obtaining all your business. You should let a new banker know that if you receive favorable terms on this loan, he can expect your other business. The banker's concerned with the safety of his loan. The more you can prove to him that you are secure financially, the greater likelihood he will be to grant the loan. You may consider pledging some form of existing collateral, having a cosigner, or the assigning of future accounts receivable. The landlord may also be able to help you secure a loan, or they may have knowledge of lenders who specialize in the building improvement field. They should be among the persons you contact to assist you in obtaining financing, particularly if you do not have a good credit history. Your landlord usually will have a long and good credit record - usually having been in business for a period of time and having negotiated and repaid numerous loans. If the construction loan is taken out him, using his credit, you can substantially reduce the size of your working capital loan and thereby increase the likelihood of obtaining the loan from the bank. It would not be unreasonable if the landlord would like to be repaid with some profit for assisting you in obtaining credit. Often an additional amount if negotiated on top of the amount of the loan. You can point out to the landlord that should he obtain the loan, any possible loss would be minimized by having the proceeds invested in improvements to his building. With those things in mind, make a list of all your strong points. These should include your personal assets, your present income, and your projected future income; the amounts you're likely to be able to deposit in the bank now and in the future; your status in the community as a leader in civic, social, and religious organizations; and any other positive information about yourself and your project. Include this information in a cover letter when you submit your loan application and personal financial statement. You should approach this loan request the same as if you were requesting any other business loan. Unless you're certain that one particular lender is offering you the best possible terms, you should shop at two or three banks for your loan. A saving of one percent on a building improvement loan of, for instance, $20,000 over a five-year period is approximately $120 per year or $600 over the term of the loan. Therefore, it is worth your while to shop. You can compare different lenders' costs by looking at their annual percentage rate (APR) and finance charge. The APR states the cost of your loan per year, expressed as a percentage. It Š 2008

25 includes interest and can include certain other charges, such as loan fees or insurance. Find out what's included in the APR you're quoted. The finance charge is the total dollar amount you pay for the loan. It includes interest and also may include other charges such as a loan fee. When deciding among the various possible sources to obtain your loan, you should also ask about possible prepayment penalties. In some improvement loans, the prepayment penalty can be very high, and this should be a consideration. The bottom line is which loan costs you the least. 3.3 GOVERNMENT REQUIREMENTS AND OBTAINING PERMITS Your city or county departments of planning and building inspection can tell you what building permits you will need for your project. You can also find out whether you'll need a zoning-variance permission for a project that ordinarily would not be allowed. The contract should make the contractor or landlord responsible for governmental approval of the plans. There are matters within his knowledge and responsibility that enable him to get approval in minimum time, whereas the tenant would encounter difficulty. Moreover, plans for alterations or additions in an existing building may activate legal requirements that are dormant until changes are made. A relatively minor alteration may trigger a requirement for fire retarding, sign reinforcement, handicap access modifications, and compartmentalization of space. The landmark 1990 Americans With Disabilities Act provides comprehensive civil rights protections to individuals with disabilities in the areas of employment, public accommodations, state and local governmental services, and telecommunications. This legislation, effective January 1992, covers most businesses. The Justice Department has drafted regulations interpreting the Act. Various municipal building officials may require them. Here are a few of the many points that could directly affect you: □

Both landlords and tenants are responsible for making public space accessible to people with disabilities. For instance, if a building contains a lawyer's office (or other service professional) the attorney might be required to provide auxiliary aids (Braille notices, etc.) within the office.

For existing facilities, businesses will be required to remove barriers where such removal is "readily achievable."

Strict standards will apply to new construction to make future facilities fully accessible.

Generally, remodeling of one portion of a facility (such as an © 2008

26 employee work area) will require making it and the "path of travel" to the remodeled area accessible (including restrooms, telephone and drinking fountains servicing the altered area). □

The regulations suggest the following typical steps be taken in existing facilities: •

install ramps

make curb cuts in sidewalks and entrances

lower shelves

rearrange tables, chairs, vending machines, display racks, and other furniture

lower telephones

add raised letter markings on control buttons in elevators

install flashing alarm lights

widen doors

remove high-pile, low density carpeting

create designated accessible parking spaces

remodel bathrooms

Other recent legislation allows the deduction of up to $15,000 per year for expenses in removing qualified architectural or transportation "barriers." Qualified small businesses can also receive a tax credit for certain costs of compliance. THE CONTRACT 4. THE CONTRACT Rather than having to use the contractor's contract it is better to have your own, and to provide it as part of the bid package. You can prepare your own contract or use a frequently used contract. In this chapter we'll discuss provisions that should be covered in any contract. The contract spells out the rights and obligations that you, as well as the contractor, have undertaken. It should include everything you agree upon and the extent of the work to be done. The contract should clearly state your final agreement. It is the glue that binds all the pieces together. 4.1 HAVE IT IN WRITING If there is one message you get from this book, it is: © 2008

27 "PUT IT IN WRITING!" California, as well as other states, provide that certain contracts are invalid and unenforceable unless they are in writing and signed. This requirement of a writing, is found in a doctrine called the Statute of Frauds. Not only should you put the basic contract in writing, but all promises, assurances, amendments and changes should be also. 4.2 DON'T SIGN WITHOUT MONEY You may find yourself in a situation of negotiating your construction contract for the construction before you have obtained a loan commitment for the construction from a bank. Or, you may already be in business and contemplating a move. If you must get a loan to finance the buildout of a new facility, it would be foolish to enter into a buildout contract requiring payments to begin without having a commitment from a lender assuring that you will have the money to make the payments. If you are in this position, you may want to consider a written agreement that your construction contract is not effective until you secure financing money. 4.3 CANCELLATION PERIOD The law in your area may require a contractor to give you written notice of your right to cancel a contract within days of signing it. This is often called a rescission period. Check for the availability of such a law. During this period, if something bothers you, don't be afraid to cancel the contract. If you do cancel, call the contractor and then make sure your cancellation is in writing. Sending the cancellation to the contractor by registered mail will give you a record of its mailing date and of its receipt by the contractor. Afterward, you can work out the problem with your contractor and sign a new contract, or you can get a different contractor if you prefer. If you have any concerns, see an attorney right away. Make sure all the contract terms are in writing and that you understand and agree to everything in the contract. 4.4 SCHEDULE OF PAYMENTS Don't pay anything in advance. Payments in most commercial construction are made as the work progresses. In some states, laws limit the amount a contractor may accept as a down payment. For example, in California, the law specifies that a down payment may not exceed $1,000 or ten percent, whichever is greater. Another alternative is to tie the first payment to a delivery of materials, or the first Š 2008

28 day of work. Never let your payments get ahead of the contractor's work. A suggested "schedule of payments," often referred to as "progress payments" and draw schedule for the buildout of a vacant space follows: Percent of Total Contract

Stage of Construction


Issuance of Permit


Frame Inspection


Approved inspection of electrical, plumbing and sheetrock


Final Inspection


Retention for completion of "punch list" and final unconditional lien releases

____ 100% The final contract should show the actual payment that will be paid at each stage and not the percent. You will notice that the last ten percent was held back for retention and refers to a "punch list." The usual method is a partial payment based on the amount of work completed. This "retention" is to assure that the work is completed properly. The retention is not paid until the job has reached what is known as "substantial completion," or upon satisfactory completion of your "punch list." The "punch list" is your list of incomplete items or flaws that should be completed by your contractor. Be reasonable at this stage, however. Your contractor is not required to provide a "perfect" job. "Substantial completion" is when the work or a specific part of it is sufficiently complete so the owner can occupy it for its intended use. Additional work may be required after substantial completion to bring the project to final completion. An alternative is to hire a licensed funding control company to handle the payments. You or the lender give the money to the funding control company, which in turn pays the contractor, subcontractor, and material suppliers upon receipt of proper invoices and unconditional lien releases. Before you make any agreements with a funding control company, be sure your bank approves of the company. Look for a funding control company, specializing in construction that will determine whether the estimate is realistic and will inspect the work as it progresses. Funding control companies usually charge a small percentage of the contract price for their services. Ask your lender for names of approved funding control companies in your area. Š 2008

29 Where a bank has approved a construction loan and is issuing checks to the contractor at certain stages of completion, the bank may have its own inspector review the work. In this case, the bank will become responsible for the release of funds. 4.5 COMPLETION DATES AND PENALTY CLAUSES The AlA (American Institute of Architects) Construction Contract and others, state that time is of the essence of the contract. This means that if the project is not complete on time, the contractor may be liable to the owner for damages. What those damages might be in monetary terms is often very hard to assess. They are even more difficult to determine at the start of construction. While the contractor and the tenant will work out an anticipated completion date, the contractor is at the mercy of strikes, late deliveries, and assorted work stoppages. The idea of exacting a penalty from the contractor for every day the job is delayed past the agreed-upon completion time seems attractive at first glance, but penalty clauses are very difficult to enforce, and often lead to uneconomical delays and litigation. If you insist on one, the contractor may defer his completion date to one he knows he can fulfill, or he'll find loopholes in the contract to avoid the penalty, or he’ll insist on a bonus for each day he finishes ahead of schedule. Furthermore, if you have a penalty clause and the work exceeds the completion date by many days, the total dollar amount of the penalty can be higher than the builder's profit. He may then just abandon the job unless you agree to drop the penalty. The old adage, "You'll catch more flies with honey than with vinegar," applies here. If you must get your office finished by a certain date, consider offering a bonus. If it's at all possible for the contractor to meet that deadline, the added incentive will probably do the trick; if the delay is beyond his control, no penalty, however severe, will work. One alternative is to use the AlA Construction Contract (available online at, which describes reasonable conditions or excuses for the contractor's inability to perform. After consultation with an attorney, an owner may decide to include in the bidding documents a reasonable statement of damages that might be incurred in the event of delay. This amount is called liquidated damages, and if it is desired, the owner's attorney must write such a clause. 4.6 BONDS You may, on occasion, consider asking your contractor to obtain payment and completion bonds; your lender may require it, especially for a costly project. The bond protects you from the contractor's failure to pay suppliers or subcontractors or to complete the work. Usually, the contractor buys the bond, which typically covers the full amount of the contract, and adds the bonding fee to the price of Š 2008

30 the job.

4.7 TENANT'S PARTICIPATION You may want to include a provision in your contract allowing you to do work, simultaneously with that of the contractor. This would allow you a better chance of completing all the work on schedule or in a minimum of time. However, it is reasonable for the landlord to demand overall control and timing of any simultaneous work. The landlord may also impose on tenant the ordinary risks to tenant's work during this period. This risk should be covered by appropriate insurance, by policies which provide for automatic extension of their coverage to all tenant's work as it is completed and to all tenant's materials on hand. 4.8 NON-ASSIGNMENT CLAUSE You may want to include a "non-assignment" clause, which prevents the contractor from giving the contract to someone else to complete, unless you both agree in writing to the substitution beforehand. You should not prohibit the contractor from subcontracting the work, as long as he remains in charge of your project. 4.9 WARRANTIES You should require the contractor to guarantee with all warranties and guarantees for materials, and equipment installed for at least one year. 4.10 CONTRACTOR'S INSURANCE The contract should also require the contractor to carry liability insurance and workers compensation insurance. A certificate of insurance should be a prerequisite for the first payment. 4.11 THE AlA CONTRACT Available online at is an AIA Agreement between Owner and Contractor for Construction Projects of Limited Scope, where the basis of payment is a stipulated sum. The standard AIA agreement forms have been developed through more than 75 years of experience and have been tested repeatedly in the courts. For most office or retail store buildouts, this widely used contract covers most essential contract requirements and provisions. Š 2008

31 This agreement and many others published by the American Institute of Architects is available from the general administrative offices of the AlA at 1735 New York Avenue, N.W., Washington, D.C. 20006 for a moderate price. There are many other offices and sources of AIA documents throughout the country. A list of AIA's other publications and their prices is found as Exhibit F, and AIA's full service distributors list as Exhibit G. By using an AIA contract as the basic document to define the various parts of your agreement, you can be relatively sure you're covering most critical points such as the parties, the description of the work, beginning and finishing dates, the contract sum, the schedule of payments, pertinent documents and the general conditions. A quick reading will reveal that it may contain provisions, which might not apply to you. These can be deleted by striking out the word, phrase or paragraph or article neatly and having both parties initial the modifications. Where special or additional points have been agreed to or you want to have them included, you need only add a contract amendment form similar to Exhibit C. If there is no architect on the job and you will use the AIA Contract, you should include in the amendment form (Exhibit C) or in paragraph 21 of the AIA contract, ("Other Conditions or Provisions") a paragraph saying: "It is understood by Owner and Contractor that (there will not be an architect administering the project); (that the drawings and specifications were not prepared by an architect) and provisions 10.1 through 10.7, 14.2 and 14.3 do not apply. Further, that owner is responsible for the plans and specifications." If a combination of AIA documents and non-AIA documents is to be used, particular care must be taken to achieve consistency of language and intent. You may use other contract forms, or amendments to the AIA contract which you prepare. Such forms should be carefully compared to the standard AIA forms for which they are being substituted before execution of an agreement. If there are any significant omissions, additions or variances from the terms of the related standard AIA forms, both legal and insurance counsel should be consulted. You will note that the AIA document appears to be between the owner and the contractor. If you are not the owner, and are a tenant, occupant, or option holder, you may want to describe your right to occupancy in the amendment form by including a statement such as, "the owner in this agreement is (your name) who holds an interest in the facility by virtue of his/her (lease) (agreement) (option) or with (the true owner's name or management company who is leasing the property)." You will notice that this AIA document states in bold print on the first page "THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION." This word of caution should be followed in all cases. To accomplish this step of the process more effectively and economically, you may put the contract together yourself for the most part, and bring it to the attorney Š 2008

32 within a sufficient time before signing to have him review it. This will save you legal fees. In selecting an attorney you may seek out one who specializes in construction real estate law. This will provide you with an attorney who is more familiar with the protection you need. 5. GETTING BIDS A bid is an offer by the contractor to do work, specifically, to provide labor, service, materials, and equipment for the construction of your project. It is advisable to get at least three written bids, using identical plans and specifications so you can compare prices and contractors. The owner or tenant develops a package of information and drawings that describe the project and the terms and conditions under which it is to be built. These documents provide sufficient information for bidders to make an accurate, knowledgeable bid. Generally, they cover legal, procedural and technical requirements. The content or format of the bid package and drawings should clearly state what is required for the specific project. The contractors who consider bidding on a project will first assess whether they can prepare a bid in the manner and by the time requested; whether they can meet the technical requirements, the financial responsibility, the staff requirements to properly perform and coordinate all phases of the work. On this basis, contractors can submit a bid with confidence in their ability to fulfill their obligations. 5.1 THE BID PACKAGE The bid package recommended in this book consists of the Solicitation, Offer and Acceptance Form (Exhibit B), the Instructions to Bidders (Exhibit A), The AIA Contract A107 (available online at, Contractors Qualification Form (Exhibit D), and Floor Plans and Specifications. The Solicitation, Offer and Acceptance Form spells out certain terms of the bid and dictates the manner in which the contractor must submit his bid. The Instructions to Bidders supplements the Solicitation Form and spells out the procedure the bidders must follow. The package covers all of the bidding documents and all of the contract documents, either by physically including them or by reference. Throughout this book the word "agreement" is used synonymously to mean the "contract." The Agreement and Conditions. The contract is usually divided into two parts: (1) the agreement form, which deals with specific project items (such as price, timing and payment provisions) and (2) the general conditions of the contract for construction. The agreement and the general conditions define the rights and responsibilities of both the owner and the contractor. The owner should be aware that strikes, "acts of God," and other situations Š 2008

33 beyond the control of the contractor may extend the time of completion and that the contractor cannot be held responsible for such delay. Insurance and Bonds. The "General Conditions" typically provide for the basic insurance requirements of a project. The coverage and limits desired should be established by you and your legal and insurance counsel. You should carefully study the insurance provisions to be assured that your interests are adequately protected. You may wish to require surety bonds for performance of the work. These bonds are often incorrectly thought of as insurance. A surety bond is a three-party instrument in which the surety guarantees that the contractor will fulfill contractual obligations to the owner and will pay for all labor and materials according to those obligations. Another surety bond is a bid bond, used to induce the bidder who is awarded the contract to meet the established requirements and sign the agreement within the time stipulated. Failure to do so would result in forfeiture of the penal amount of the bond. Since both of the bonds require the contractor to expend his funds to have a bonding company provide you this assurance, you can be sure that the cost will be passed on to you, directly or indirectly. For these reasons they are not used very often in smaller construction jobs. On the other hand, it may "flag" a problem with the contractor's past performance. The Drawings. As we discussed in Section 2 dealing with floor plans, the drawings communicate information concerning sizes, locations, relationships, configurations, quantities and other similar items. Specifications. As discussed earlier, the specifications complement the drawings and address requirements best expressed in words: the quality of materials and equipment, the installation methods and techniques, and the results to be achieved. 5.2 THE BID PROCESS It is desirable to establish a list of contractors to be invited to bid. Each contractor under consideration should be evaluated for financial capacity and integrity, and for the ability to construct a project of the size, scope, character and complexity required. Those invited to bid should be fully licensed contractors who maintain sufficient qualified supervisory personnel to properly perform and coordinate all phases of the work. The number of contractors invited to bid on a project should be limited to the number required to insure adequate price competition. Often purchasing agents try to obtain three bids. In Section 6, a more thorough investigation of the contractor is suggested. This should occur after the bids are in and you are deciding among the two or three bids. At the bidding stage, you are screening the contractors for general suitability, later you’ll check them out carefully. Š 2008

34 Each contractor invited to bid should be furnished, free of charge, drawings and a bid package covering work to be included in the bid. When portions of the work are to be performed by the owner or separate contractors, it is important that the bidding documents clearly identify the separate work and indicate the party responsible for coordinating the work of the contractors and/or that of the owner. A blank form, similar to the one in Exhibit A is usually prepared specifically for the project. Copies should be furnished to each bidder with the bidding documents, for use in preparing and submitting a bid. The owner should determine and allocate sufficient time for bidders to prepare their proposals, since this is essential to effective price competition. If the best interests of the project require the original amount of time to be extended, bidders should be notified at least three working days prior to the original date for receipt of bids. A pre-bid conference is recommended to resolve questions bidders may have and should be held in advance of the bid date to allow clarification by addenda of questions raised. Bids should be delivered at a designated place, not later than a specified time, preferably after noon any day except weekends, Monday, a legal holiday or the day after a legal holiday. It is recommended that bids be opened in the presence of all bidders. If bids are not opened in the presence of bidders, a tabulation of all bids should be furnished to each bidder within ten days from bid date, if requested. As the bids come in, you'll find out how good you or your advisors were at estimating costs. Typically, most reputable contractors submit bids that are fairly close (within 10 percent or so) to one another. If one bid is substantially higher than the rest, it could be because the contractor isn't interested in getting the contract or he doesn't understand what is involved. The contract should usually be awarded to the lowest responsible bidder. If, after bids are opened, the low bidder claims a substantial error in the preparation of the bid and can support the claim, the owner should consider whether or not to permit the bid to be withdrawn. Legal considerations must be discussed with the owner's attorney, both as to the withdrawal of the bid and any conditions that may be attached. Often, mathematical errors or errors of judgment as to the cost or quantity of labor or materials will usually not justify withdrawal. Under no circumstances should a bidder be permitted to alter a bid after all bids have been opened, unless it is the apparent low bid and the owner desires to negotiate minor changes. If major changes are necessary, the original bids should normally be rejected and new bids secured from the original list of bidders, based on revised contract documents. An exceptionally low bid must be looked at carefully. It may mean that this contractor is desperate for the job or that -he has overlooked something important in the plans or specs. If he has overlooked an important item, he may come to you or to your architect when the job is half finished with a tale of woe about his error, suggesting that he can't keep working at a loss. In either case, he's likely to cut corners in labor or materials to come out of the project with a profit. Š 2008

35 What will you do then? One choice will be to insist on his honoring the contract to the letter. This could force him into an insolvent position. He might walk off the job to cut his losses and cause you a substantial delay and additional cost of a new contractor to finish the job. Threats to sue may be fruitless, since he may be incorporated with few assets to lose, and a lawsuit will take several years. Some of these problems may be avoided by using a bid form similar to the Fixed Price Breakdown form, which is a part of Exhibit B. In that form, which breaks down the pricing into components, you may, by comparing the various bids, identify where the lowest bidder has made a mistake in his bid. While you might possibly take advantage of his error, you will probably be asking for a worse problem in the future when he discovers the error. In this case, you may want to be prepared to renegotiate that part of the bid, should the contractor raise the issue at a later time. One alternative - possibly the best one - would be to call it to his attention and allow him to modify his bid for the work he overlooked. This may bring his bid close to, or even higher than, those of other bidders. The process just described is known as lump-sum or fixed-price contracting. It's probably the best kind of arrangement for you, since you know in advance what you’ll be called on to pay. NOTE: Information in the foregoing section on bidding procedures has been derived from the "Recommended Guide for Competitive Bidding Procedures and Contract Awards for Building Construction," published by the American Institute of Architects and The Associated General Contractors of America. 5.3 THE COST PLUS CONTRACT Another type of agreement, which you may hear about or have suggested to you, is known as a time-and-materials or "cost-plus contract." This may take two forms: one with a maximum price specified, and another with no maximum price specified. Contractors often propose the "cost-plus contract," in which the tenant pays the contractor a specified percent in excess of the costs incurred by the contractor, but the tenant doesn't have to accept it. If he does, he can insist that each cost item be negotiated. As the work goes on, the costs can keep rising. Each new base means a larger base on which to figure the contractor's percent "plus," i.e. ten or fifteen percent. In one case, a doctor felt that he couldn't complain about higher costs for repair essential to complete his office rehabilitation. The high total depended partly on debatable billings. For example, he discovered that the contractor had assigned salaries of $500 a week to himself and $100 a week to his secretary as costs, to be reimbursed at cost plus 15 percent. Another contractor listed workers' compensation insurance as costs for himself and all the subcontractors. Some employers pay workers' comp as part of their Š 2008

36 overhead. If the contractor had hired subcontractors who already had the insurance, it would not have been a cost to the tenant, but the contractor signed on some old buddies who did not routinely pay for compensation insurance. The costs of all permits, licenses and insurance turned up on the bill too. These all might be considered legitimate costs, but each should have been spelled out beforehand in the contract, with an estimate for each. Another case came closer to outright rip-off. For materials he already owned, the contractor tried to bill at his estimate of their fair market value rather than at actual cost. Worst of all, he diverted some of these materials from the tenant's building to other jobs. The other form with a maximum price specified works this way: You select a reputable contractor who proposes a maximum price for the job. He then does the work and charges labor and materials costs, plus an agreed-upon additional percentage for his overhead and profit. If the final figure is below the price, you benefit from the savings (or you and the contractor share the savings). If the costs go over the price, he pays the excess amount. If you do use a cost-plus contract, you may want to include an anti-kickback clause similar to the one shown at Exhibit J and the AIA Contract A117, which can be purchased from a vendor shown in Exhibit G. Avoid cost-plus contracts if you can. It usually costs more than a fixed-price arrangement. Sometimes, however, the uncertainties inherent in a job, such as the renovation of an old building, make such a contract the only kind a builder will accept. 5.4 REVIEWING THE BIDS The owner typically retains the right to reject any and all bids, particularly if provided in the instructions to bidders, invitation, or advertisement to bid. However, rejection should not be used as a subterfuge to obtain an estimate of the cost of the work, and then proceed to award the bid in a separate contract to a bidder selected in advance. The owner typically reserves the right to waive or excuse irregularities in the bids in the selection of a contractor. This should be done after careful study and in all good faith. MAKE SURE EVERYTHING IS IN WRITING. ASSUME NOTHING. Any bid you sign may become the contract. Do not sign anything until you completely understand what you are signing and agree to all the terms. Be sure to ask questions until you fully understand the contract and what the work will look like. Before signing anything, you may wish to investigate the contractor further, and discuss the proposed contract, plans and specifications with an attorney.

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6. SELECTING A CONTRACTOR AND AWARDING THE CONTRACT 6.1 CONTRACTOR LICENSING In almost all jurisdictions, any contractor performing a job in which the total cost of the project, including labor and materials, is more than a small amount must be licensed by a state or local license board. A license number appearing on a bid or contract does not necessarily mean the license is valid. Before you sign anything, call the Contractor's License Board office in your area to make sure the contractor is properly licensed and the license is in good standing. Although an unlicensed contractor may give you a lower bid, because of the, severe financial legal consequences you may face, it simply is not worth the risk. An unlicensed contractor could expose you to significant financial harm in the event of injury or property damage and usually would not have adequate bonding or insurance. 6.2 THE SELECTION PROCESS There are many types of contractors. For example, if you want only roofing, electrical, plumbing or painting work, you will need a contractor licensed in each particular specialty. If the work you want done requires three or more types of work, then the work should be done by a licensed general building contractor. One of the best ways to select a contractor is to seek out personal recommendations from friends, relatives, or other professionals who recently obtained work of the type you want. Other excellent sources for finding contractors to bid on your project are your own architect, other doctors, and other tenants who recently built out their space in the same building or in other buildings in the neighborhood. Wherever the recommendation comes from, do some further checking on your own. If you included a contractor's qualifications form similar to the one shown as Exhibit D, you will have a good starting point for your investigation. In general, you should also: □

Call your local or state Contractor's License Board office to ask if the contractor is properly licensed and the license is in good standing.

Ask the contractor for a list of jobs he has recently completed in the © 2008

38 area. □

Talk to the contractor's customers. Ask such questions as: •

Did the contractor keep to the schedule?

Were you pleased with the work and the way it was done?

Did the contractor listen to you when you had a problem and seem concerned about resolving it?

How did the contractor respond to your complaints?

Did the contractor make any necessary corrections willingly?

Were the repairs made well?

Did the problems recur?

Would you have this contractor work for you again?

See the work yourself whenever possible.

Obtain references from material suppliers, subcontractors, and financial institutions if possible, to determine whether the contractor is financially responsible.

Ask the contractor for the address of his business location and business telephone number, and verify them.

Contact the Better Business Bureau or Chamber of Commerce.

Ask him to provide you with copies of his contractor's general liability and worker’s compensation insurance policies.

You may also wish to check the contractor out with your local building department, trade association, or union, consumer protection agencies, and the Better Business Bureau. While these inquiries are going on, have the builder's credit checked. You can get a report from the local credit bureau on his company. Make a credit check even if the job is relatively small. An insolvent builder can cause considerable delay and expense if he goes bankrupt in the middle of your job and you suddenly have to find a new one. You should be interested in how long this company has been in existence (a recently-formed company could mean that his previous corporation went bankrupt), whether any lawsuits are pending against the company and by whom, and whether there are any outstanding judgments or liens. 6.3 CONDITIONING Watch out for "conditioning." That's the term used by architects, builders, and contractors when they talk about getting a owner or tenant accustomed to the © 2008

39 idea of taking on a big financial responsibility - often one higher than he expected or can really afford. They start by giving you preliminary estimates that are well within your budget. Then, as you commit yourself more and more, the budget keeps rising as "necessary" features are added and more realistic costs are calculated. Often, by the time the full cost and responsibility of the project becomes clear to the tenant, he's so emotionally involved that, instead of cutting his losses, he goes ahead with construction despite his better judgment. On the other hand, don't cut corners on materials and fixtures. In an effort to bring in a low bid on a project, a contractor will sometimes shave specifications in places you're not likely to notice. Keep in mind that you will be spending every day working in the building. Little things like not having enough electrical outlets in each room, or installing hollow-core doors that aren't really soundproof, can cut hundreds of dollars from the original cost - but they may give you many headaches and expenses in the future. "If you must cut costs," says a consultant, "do it by using standard units instead of custom-built items, not by sacrificing quality." 6.4 SIGNING THE CONTRACT You have now done the majority of the time-consuming work, which you might have had to pay an attorney for, and are ready for your attorney to review the bids, check the procedure, contract for last minute requirements, and review the final contract. While this book includes many practical ideas, there may be unique state or local laws, ordinances, or regulations, which you should be aware of or provide for ... Your attorney will be aware of these. At this point you are ready to sign the contract.

7. DURING CONSTRUCTION 7. 1 KEEPING A JOB FILE You should keep a file of all papers relating to your project. It should include: □ The contract and any change orders □ Plans and specifications . □ Bills and invoices □ Cancelled checks □ Lien releases from subcontractors and material suppliers © 2008

40 ▥ Letters, notes and correspondence with your contractor. If you are acting as your own contractor, it is also a good idea to keep a record of each subcontractor who works on your project, what part of the work he did, and how long, or the last date, he was on the job. When material suppliers make a delivery, write down the name of the company, the date, and a general description of what they delivered. When you receive lien releases from subcontractors or material suppliers, check them against your list. That way, you will have a record of who has and has not been paid. 7.2 INSURANCE An important consideration in the process of any construction project is provision for insurance coverage, in particular, liability, fire and casualty, and worker's compensation. The liability will generally fall on the party who has possession of the facility and is responsible for the buildout. If you are the owner you should protect yourself with the recommended coverage. If you are a tenant, your landlord is responsible for the buildout, and you do not have possession of the facility until the construction is complete, the landlord should provide all of the necessary insurance. If you have signed the lease, accepted the keys and can occupy the premises, you are responsible even though the landlord is doing the buildout. In either case where the landlord is doing the buildout, you should require him to provide the insurance, and in addition, have you named as an "additional insured." As an additional insured, your interest is protected should liability arise or the construction be damaged. If you are having your own contractor do the buildout, you must require the contractor to provide the coverage. If he balks, it may be a sign of a problem. For a reputable licensed contractor, this will be done routinely. In addition, you should require the contractor to have his insurance company issue a binder including as "additional insureds," you, and your landlord. At some date in the future, regardless of who is doing the construction, you will take over occupancy of the facility. At this point, you should have your insurance coverage arranged for and in place, avoiding any gaps between policies. This can be accomplished weeks in advance by giving your insurance agent the details and establishing a follow-up procedure to avoid any gaps in coverage. Most standard property and casualty or fire and casualty policies, as they are often called, have limits on the value paid for tenant improvements. You should ascertain whether you need to purchase a rider or endorsement giving you additional protection. Make sure you provide for this protection and require the Š 2008

41 landlord or contractor to provide you with a copy of their policy. You may want to have concurrent coverage with your own policy.

7.3 CHANGE ORDERS As a general rule, changes during a job should be avoided since they are often the source of controversy. However, you may decide to make changes, substitutions of materials or equipment, or changes in the completion date. Any changes to the plans or specs that take place after the construction contract is signed may be expensive if not properly handled. The worst thing you can do when you think a change or addition is needed is to walk up to the workman or subcontractor on the job and tell him to do it. You'll then have to pay whatever the builder later decides to charge you, exorbitant or not. Verbal agreements or changes can lead to misunderstandings. To avoid this, deal only with the contractor, and have all substitutions, additions or subtractions to the original contract in writing. Make sure that these changes are clearly described in the Change Order. The Change Order should be dated and signed by both parties. A Change Order form is found in Exhibit H. Once the Change Order is negotiated and in writing, there will be no future arguments about the agreement, or price of an extra. 7.4 POSTING THE PERMIT The permit for your job and possibly the project plans and specifications, must be posted on the job prior to the beginning of work. Check to make sure that they are. The act of posting, thereby giving the public notice of the activity, is required by law in most states, and failure to post the permit can lead to unwanted problems. 7.5 FRAMING CHECK Once the foundation is laid, and the building's frame - its skeleton - is erected, partitions, pipes, wires and ducts are installed. Even conscientious workmen may misread the plans showing the placement of interior partitions. The result can be a wall in the wrong place, a room the wrong size, or a doorway or window opening in the wrong location. Go in on a weekend or some other time when the workmen aren't there and measure the room sizes, door openings, and other dimensions. If you find what seems to be an error, call the contractor and instruct him to check it. This is a much better approach than to interrupt or interfere with the workmen yourself. A correction now will usually be simple. If your equipment supplier is on the job, he should use an equipment template to Š 2008

42 mark on the studs or on the sub-floor the exact locations where the framing, plumbing, or electrical lines must come through for later hook-up to your equipment. (The job drawings will show which utilities are needed in each room, but not the precise location.) Try to be present when the final spotting of the equipment locations is done for the tradesmen to be sure they are where you want them to be. 7.6 PRELIMINARY LIEN NOTICES After work begins on the project, you might receive preliminary lien notices, or what is often called "Notice to Owner or Owners," from the subcontractors and material suppliers. These notices do not indicate that a lien has been filed against the property, but they do alert you to the fact that the subcontractors or suppliers may have lien rights if they're not paid. It is simply a requirement they must comply with in order to make a claim of a lien in the future. Your only concern at this point is that they get paid. 7.7 MECHANIC'S LIENS The law in most jurisdictions provides that anyone who furnishes labor or materials to your facility can record a "Claim of Lien" or "Mechanic's Lien" against the property if they are not paid. Even if you have paid your general contractor in accordance with the contract, if the contractor fails to pay any subcontractor or materials supplier who performed work or supplied materials in connection with your project, you still run the risk of having a Mechanic's Lien filed against the property and the property being foreclosed. This could result in your paying a bill twice or being dispossessed. That risk is greatly reduced by protecting yourself with a payment and completion bond and/or use of a funding control company, but it is never entirely eliminated. It is therefore good practice to require your contractor to furnish you with an unconditional lien release from any person or firm that sends you a preliminary notice. This release is a formal document acknowledging that the subcontractor or supplier has been paid and the mechanic's lien rights waived. Exhibit I is a sample release of lien form. While in most cases this release will protect you, make sure you document that the supplier or subcontractor actually was paid. Should a Mechanic's Lien be filed against your property, be sure to consult an attorney. 7.8 INSPECTION As your job progresses, your local building department will make inspections to insure that the completed work meets building codes. These inspections are not made to determine good work quality. If you are your own contractor, you should, if at all possible, be present when inspections are made, ask questions, and make frequent inspections yourself. When a project is completed, the building department will make a final inspection. Make sure that you also make a final Š 2008

43 inspection, or walkthrough, with your contractor, to be certain there is nothing you or the contractor have overlooked.

7.9 SUBSTANTIAL COMPLETION The contract may state that the contractor's obligation is completed when the contractor's work is "substantially" done. When this occurs, the tenant can occupy the premises for its use, although not every nail is driven and not every detail finished. This sounds reasonable. But note that one English court said that "substantially" is the equivalent of "considerably." It is a relative term and must be examined in its context to gauge its meaning. A building may be "considerably" or "substantially" finished if all it needs is a roof. A tenant can operate in his premises if both plastering and painting are unfinished. But, should a tenant be expected to start business unless the electricity, plumbing, heating, lighting and air conditioning systems are completely installed and in operation? Must tenant install carpets, rugs, etc., and then be interrupted by a hobnail painter or plasterer? Today most tenants cannot operate unless telephones are installed and operating, although few contractors will agree that this be a condition of substantial completion. Some contracts do not include a definition of "substantial completion," an omission almost certain to breed dispute. Some contracts include a definition, but generally one not satisfactory to tenants or owners. The following is a definition that should be satisfactory to a tenant in most cases: The premises shall not be deemed substantially complete, nor shall rent begin to accrue under said lease, until: □

All walls and partitions have been erected, with doors and hardware installed, and have received final painting or wall covering;

All flooring has been installed, cleaned and buffed;

The telephone company shall have completed its installation of lines to wall outlets;

Debris caused by landlord's and tenant's trades, telephone company and others, has been removed, and the demised premises have been cleaned and are in unblemished condition; and

The expiration of 30 days' prior notice to tenant that the foregoing has been completed.

7.10 THE "PUNCH LIST" As mentioned earlier in connection with the schedule of payments and © 2008

44 "retention" for the completion of finishing touches, you should make an inspection near the end of the job with the purpose of developing the "punch list." All of your requests or complaints should be listed. The punch list should reflect the date the list was provided to the contractor and request that the work be completed by a certain specified date, which is reasonable for the accomplishment of the list. 7.11 TAKING POSSESSION In some cases, the tenant may have to use the office while construction is still in progress. Inconveniences could occur that tenant should be aware of ahead of time. Walls might be taken down, water and/or power shut off, or bathroom facilities temporarily disconnected. Dust and debris might also damage your equipment or other office property. Before work begins, ask your contractor what inconveniences might occur, then, plan for them. That way, both you and your contractor can avoid conflicts when inconveniences do occur. The tenant's taking possession may be a logistical project, particularly if the facility is not on the ground floor with direct access from the exterior of the building. During ordinary hours, elevators are in general use. If moving trucks, with drivers and helpers full of tenant's goods, have to wait for available elevators, the time cost piles up. The landlord and your contractor should agree to make a specified number of elevators available for your exclusive use when moving time arrives. It may be well for elevators to be available at night or over a weekend, without charge, until tenant's installation can be completed. Provision for the temporary storage of equipment, supplies or inventory should also be made. Again, make sure you have the proper property and casualty insurance coverage during this transitional period. If a tenant has heavy equipment and the building is in the course of construction, it may be wise for tenant to reserve use of exterior construction hoists before these are disassembled, for bringing in your equipment. 8. PROBLEM RESOLUTION In spite of all the precautions you have taken, problems will sometimes occur with the work that has been done on your office. If problems do occur, either during construction or after it has been completed, contact your contractor. Usually he will make corrections willingly. If this is not successful, you may want to consider arbitration of the dispute as an alternative to threats, lawyer’s fees and the inconvenience of court processes. Here each party selects an arbitrator, and the two selected then select a third, and the three hear your position and your landlord's, and reach a decision. By prior agreement, the decision can be made binding. Š 2008

45 You may consider using an Arbitration Clause similar to the one shown in Exhibit K. It is already included in the recommended AIA contract if you use it. Arbitration provides a quicker, generally more economical way to resolve disputes. It also allows you to have construction specialists hear your case rather than the courts. The provision shown as Exhibit K describes how arbitration works. If you anticipate or become aware of a potential problem where the contractor might not pay a subcontractor for work performed you may consider paying for the work with a "joint check." This is a check, which is made out to both parties (the contractor, and sub-contractor) as payee, which would require both to endorse it prior to cashing it. With both having a desire to get paid they may be more cooperative with each other.

9. FILING A COMPLAINT As a last resort, should the contractor refuse to make corrections, you can file a complaint in writing with your local or state Contractors License Board office, your local Building Department, and if necessary, consult an attorney. These agencies will also assist with and investigate all valid complaints a consumer may have against a contractor. Among complaints these agencies often consider involve failure of a licensed contractor to fulfill the terms of an agreement. That can include poor workmanship, abandoning a project, failure to pay his subcontractors, material suppliers or employees, building code violations, lack of reasonable diligence in executing a construction project, use of false and misleading or deceptive advertising. 10. 40 PRACTICAL POINTS - A SUMMARY To summarize some points made previously: 1.

Plan your project carefully.


Develop a ballpark estimate. Consider the expense of the buildout against the length of the lease.


Make sure the floor plans reflect exactly what you want, to avoid subsequent changes.


Determine if the electrical or plumbing outlets are where you want them.


Make sure your specifications reflect a level of quality you desire.


Before you ask for a loan, have a good idea how the money will be spent.


Check with your local building department to see if there are any minimal or unusual requirements you'll have to comply with. Š 2008

46 8.

Consult with more than one lending institution regarding what type of loan to obtain.


Provide contractors from whom you request bids with accurate plans or drawings that will enable them to determine the scope of the work and the costs before they are incurred.


Shop around before hiring a contractor.


Get at least three written bids on your project.


Check with the State Contractor's License Board to see if a contractor is properly licensed.


Look at work the contractor has completed.


Check out contractors with your local building department, trade association or union, consumer protection agency, and the Better Business Bureau.


Make sure you have received proof of your contractor's insurance on the job and that you are a "loss payee."


The name, address and license number of the contractor, and the name and registration number of any salesperson who solicited or negotiated the contract.


The approximate dates (not number of working days) when the work will begin and when it will be substantially completed


A description of the work to be done, a description of the materials and equipment to be used or installed, and the price for the work.


A schedule of payments showing the amount of each payment in dollars and cents.


Make sure your contract provides for a "retention."


A description of what constitutes substantial completion of work.


A provision that, if the contractor has failed without lawful excuse to substantially commence work within 20 days from the approximate date specified in the contract when work is to begin, you can cancel the contract.


Ask your contractor about inconveniences that may occur and plan for them.


Make sure everything you and your contractor have agreed to is included in your contract.


Keep a job file.


Make sure you receive lien releases from subcontractors and material Š 2008

47 suppliers. 27.

Make frequent inspections of the work, with a final "walk-through."


Consult an attorney if a mechanic's lien is filed against your property.


Try first to negotiate with the contractor if problems or disagreements occur.


Include an arbitration clause to cover situations where disputes are not resolved amicably.


Hire an unlicensed contractor.


Hire a contractor without first shopping around.


Act as an "owner/builder" unless you are very experienced in construction.


Sign anything until you completely understand what you are signing and agree to the terms.


Make agreements with subcontractors or workers without consulting the prime contractor;


Pay cash without proper receipt


Make a down payment without checking with your lender or the State Contractor's License Board to make sure it doesn't exceed the legal limit.


Hesitate to ask questions of the contractor.


Let your payments get ahead of the contractor's completed work


Make final payment until you are satisfied with the job.

Š 2008



(Exhibit A) INSTRUCTIONS TO BIDDERS DEFINITIONS The Bidding Documents include: 1.

Solicitation for Construction


AIA Documents List


AIA Distributors List


Contractor's Qualification Form


Change Order

Definitions set forth in the General Conditions of the Contract for Construction, or in other contract documents, are applicable to the Bidding Documents. A Bid is a completed and signed proposal to do the work for the amounts specified, and submitted with the Bidding Documents. The Bid is the amount specified in the Bid for which the Bidder offers to perform the work described in the Bidding Documents. A Unit Price is an amount stated in the Bid as a price per unit of measurement for materials, equipment or services or a portion of the Work. An Owner is the owner, tenant, lessee or any other person who has the authority or right to construct improvements in the designated facility. BIDDER'S REPRESENTATIONS The Bidder by making a Bid represents that: The Bidder has read and understands the Bidding Documents or Contract Documents. The Bidder has visited the site, become familiar with local conditions under which the Work is to be performed and has correlated the observations with the requirements of the proposed Bid Documents. The Bid is based upon the labor, materials and equipment required by the Bidding Documents without exception. Š 2008

49 BIDDING DOCUMENTS The Owner assumes no responsibility for errors or misinterpretations resulting from the use of incomplete sets of Bidding Documents. The Bidder shall carefully study and compare the Bidding Documents with each other, shall examine the site and local conditions, and shall at once report to the Owner any errors, inconsistencies or ambiguities discovered. Bidders who require clarification or interpretation of the Bidding Documents shall make a written request, which shall reach the Owner at least seven days prior to the date for receipt of Bids. Interpretations, corrections and changes of the Bidding Documents will be made by Amendment. Interpretations, corrections and changes of the Bidding Documents made in any other manner will not be binding, and Bidders shall not rely upon them. No substitution will be considered prior to receipt of Bids unless written request for approval has been received by the Owner at least ten days prior to the date for receipt of Bids. The Owner's decision of approval or disapproval of a proposed substitution shall be final. If the Owner approves a proposed substitution prior to receipt of Bids, the approval will be set forth in an Amendment. Bidders will not rely upon approvals made in any other manner. BIDDING PROCEDURES Bids shall be submitted on the Solicitation, Offer and Acceptance Form and included with the Bidding Documents. All blanks on the bid form shall be filled in. Interlineations, alterations and erasures must be initialed by the signer of the Bid. The Bid shall include the legal name of the Bidder and a statement that the Bidder is a sole proprietor, partnership, corporation, or other legal entity. Each copy shall be signed by the person or persons legally authorized to bind the Bidder to a contract. Bid submitted by an agent shall have a current Power of Attorney attached, certifying the agent's authority to bind the Bidder. All copies of the Bid and other documents required to be submitted with the Bid, shall be enclosed in a sealed envelope. The envelope shall identify the name and address of the Bidder. If the Bid is sent by mail, a sealed envelope shall be enclosed in a separate mailing envelope, with the notation, "Sealed Bid Enclosed," on the face thereof. Bids received after the time and date for receipt of Bids will be returned unopened. The Bidder shall assume full responsibility for timely delivery at the location designated for receipt of Bids. Oral, FAX, telephonic or telegraphic Bids will not receive consideration. A Bid may not be modified, withdrawn or canceled by the Bidder during the stipulated time period following the time and date designated for the receipt of Bids, and each Bidder so agrees in submitting a Bid. Š 2008


CONSIDERATION OF BIDS Unless stated otherwise in the Invitation to Bid, the Bids will be opened privately. The Owner shall have the right to reject any or all Bids, for any reason, at the Owner's complete discretion. It is the intent of the Owner to award a Contract to the lowest responsible Bidder, provided the Bid does not exceed the funds available. The Owner shall have the right to waive informalities or irregularities in a Bid received and to accept the Bid, which in the Owner's judgment, is in the Owner's own best interests. CONTRACTOR'S QUALIFICATION STATEMENT Bidders under consideration for the award of a Contract shall submit to the Owner a properly executed Contractor's Qualification Statement. FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR The Contract will be provided as part of the Bid Package.

Š 2008


(Exhibit B) SOLICITATION, OFFER AND ACCEPTANCE FOR CONSTRUCTION SOLICITATION FOR CONSTRUCTION DATE ISSUED: ISSUED BY (OWNER): FOR INFORMATION CALL: ADDRESS OFFER TO: TELEPHONE NUMBER: ADDITIONAL SOLICITATION REQUIREMENTS: Sealed offers to perform the work required are due at the place specified by _____ p.m. local time, on _________________, 20___. Sealed envelopes containing offers shall be marked to show the offerer's name and address. TERMS AND CONDITIONS OF OFFER AND ACCEPTANCE: This Offer and Acceptance incorporates all terms and conditions found in the following bid documents: Instruction to Bidders AIA Contract, Document, A107 AIA General Conditions of the Contract, A201 Contractor's Qualification Form Floor Plans Specifications Other Documents: 1. _________________ 2. _________________ 3. _________________ COMMENCEMENT, PROSECUTION, AND COMPLETION OF WORK: The Contractor shall be required to (a) commence work under this contract within five (5) calendar days after the date the Contractor receives the notice to proceed, (b) prosecute the work diligently, and (c) complete the entire work ready for use not later than ____ days after receipt of notice to proceed. The time stated for completion shall include final cleanup of the premises. CONSIDERATION AND PAYMENT The total firm fixed price shall include all measuring fees and site visits associated with performing the statement of work. Š 2008

52 Payment of an invoice shall be made within ten (10) days of receipt, subject to any amounts of retention provided in the contract. ______________________________________________________________________ INVOICES AND PROGRESS PAYMENTS: An invoice is a written request for payment under the contract, supplies delivered or for services rendered. In order to be proper, an invoice must include the following: 1) 2) 3) 4) 5)

Invoice date; Name of Contractor; Description of supplies or services, or stage of completion, and extended total; Name and address to which payment is to be sent; Any other information or documentation required by other provisions of the contract.

___________________________________________________________________ PROGRESS PAYMENT SCHEDULE: Percent of Total Contract 10% 40% 30% 10% 10%

Stage of Construction Issuance of Permit Frame Inspection Approved Inspection of Electrical, Plumbing & Sheetrock Final Inspection Retention for Completion of “Punch List” & Final Unconditional Lien Releases

____ 100%

© 2008

53 TO BE COMPLETED BY CONTRACTOR: OFFER Name of Bidder: ___________________________________________________ Street Address: ____________________________________________________ City/State/Zip: _____________________________________________________ (Area Code) Phone: ________________________________________________ The Bidder agrees to perform the work at the price specified below in strict accordance with the terms of this solicitation and your offer, if this offer is accepted in writing within _____ calendar days after the date offers are due. BID AMOUNT: $ ______________ (further described on fixed price breakdown) LEGAL NAME: __________________________________ (NOTE: State whether you are an individual, partnership, or corporation.)




Authorized Signature



______________________________________________________________________ TO BE COMPLETED BY OWNER/TENANT: ACCEPTANCE AWARD: Your offer on this solicitation is hereby accepted as to the items listed. This award consummates the contract, consists of (a) the solicitation and your offer, and (b) this contract award. No further contractual document is necessary. LEGAL NAME: __________________________________________________________ ___________________________________


Authorized Signature


______________ Date

(NOTE: Do not sign this section unless you intend to accept the offer.) FIXED PRICE BREAKDOWN Š 2008

54 Architectural Plans & Specifications Engineering Preliminary Survey Wrecking Legal Building Permit Water Tap Street Deposit Construction Water Concrete & Masonry Walls, etc. ____ cu.ft.@ $ ___ Walks, etc. ____ sq.ft.@ $ ___ Floors ____ sq.ft.@ $ ___ Steps ____ lin.ft.@ $ ___ Misc. Lumber Rough ____ M @ $ ___ Finish ____ M @ $ ___ Sanitation Plumbing Sewer Metal Work Structural Steel Sheet Metal Ornamental Iron Steel Sash Lath & Plastering Exterior ____ yds. @ $ ___ Interior ____ yds. @ $ ___ Staff Work Misc. Hardware Rough Finish Misc. Electrical Wiring Fixtures Heating Gas Misc. Carpentry Rough Finish Extras _____________________ ___________________________ ___________________________ LABOR

$ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______ $ ______

Mill Work Mill Work $ ______ Frames $ ______ Interior Finish $ ______ Sash $ ______ Door $ ______ Screens $ ______ Cabinets $ ______ Stair Work $ ______ Misc. $ ______ Glazing Misc. Glass $ ______ Plate Glass $ ______ Mirrors $ ______ Corner Beads $ ______ Weather Strips $ ______ Tile Tile Work $ ______ Mantels $ ______ Misc. $ ______ Painting and Decorating Paint Material $ ______ Paint Labor $ ______ Wall Paper & Labor $ ______ Special Decorating $ ______ Waterproofing $ ______ Floors Hardwood ____ yds. @ $ ___ $ ______ Linoleum ____ yds. @ $ ___ $ ______ Carpeting ____ yds. @ $ ___ $ ______ Miscellaneous Window Shades $ ______ Curtain Rods $ ______ Awnings $ ______ Refrigeration $ ______ Insulation/Deadening $ ______ Window Cleaning, Etc. $ ______ Removing Debris $ ______ Landscaping Lawn $ ______ Shrubbery $ ______ Sprinkler System $ ______ Fence $ ______ Drainage $ ______ Insurance Compensation $ ______ Liability $ ______ Fire $ ______ Bond $ ______ TOTAL BID $ __________________

(Exhibit C) Š 2008

55 CONTRACT AMENDMENT THIS IS AN AMENDMENT TO A CONTRACT between ___________________________, Owner/Tenant, and _____________________________________, Contractor. If there is a conflict between the terms found in this Amendment and those in the Contract, the terms in the Amendment will control. The contract is amended as follows: 1. 2. 3. 4. 5. IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Contract on the dates set forth below. Owner/Tenant: ________________________________ Date: ______________________

By: _____________________________ Contractor: ________________________________

Date: ______________________

By: _____________________________

Š 2008

56 (Exhibit D) CONTRACTOR’S QUALIFICATION FORM SUBMITTED BY: ____________________________________________________ NAME: ____________________________________________________________ ADDRESS: ____________________________________________________________ How many years has your organization been in the contracting business? ___________ How many years has your organization been in business under its present name? _____ Under what other or former names, if any, has your organization operated? ______________________________________________________________________ Which of the following describes your organization? Corporation ( ) Partnership

( )


( )

Joint Venture ( ) If your organization is a Corporation: What was the date of incorporation? ________________ The State of incorporation? _______________________ President's name? ______________________________ Vice-President’s Name? __________________________ Secretary’s Name? _____________________________ Treasurer’s Name? _____________________________ If your organization is a Partnership: When was it organized? _________________________ Type of Partnership? ____________________________ Names of General Partners? ______________________ ______________________________________________ If your organization is Individually Owned: When was it organized? __________________________ Name of Owner? ________________________________ Have you complied with fictitious or assumed name laws? ___________ Date of recording of fictitious or assumed name? __________________ In what jurisdictions and trade categories is your organization legally qualified to do business? (Please indicate registration or license numbers, if applicable.) ________________________ __________________________________________________________________________ __________________________________________________________________________ In what jurisdictions is your organization's partnership or trade name filed? ____________ © 2008

57 ________________________________________________________________________ What categories of work does your organization usually perform with its own work force? ________________________________________________________________________ Has your organization ever failed to complete any work? ___________________________ Are there any judgments, claims, arbitration proceedings, or any other litigation pending or outstanding against your organization or its officers? (If the answer is yes, please attach details.) _________________________________________________________________________ Has your organization requested arbitration or filed any lawsuits regarding construction contracts within the last five years? (If the answer is yes, please attach details.) __________________________________________________________________________ Has any officer or principal of your organization ever been an officer or a principal of any other organization that failed to complete a construction contract within the last five years? (If the answer is yes, please attach details.) ____________________________________________ On a separate sheet, please list major construction projects your organization has in progress, including: Name and Address of Project; Name and Address of Owner. On a separate sheet, please list major projects your organization has completed in the past five years, including: Name and Address of Project; Name and Address of Owner. Trade References: ______________________________________________________ _____________________________________________________________________ _____________________________________________________________________ Bank References: ________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Name of Bonding Company: _______________________________________________ Name and Address of Agent: ______________________________________________ ______________________________________________________________________ The undersigned certifies under oath that the information provided herein is true and correct and sufficiently complete that it is not misleading. Witness: ___________________________

Signed: ____________________________

Notary Public: ___________________________ My Commission Expires: __________________ (Exhibit E) SAMPLE SPECIFICATIONS Š 2008

58 Partition Framing 2” x 4”, 16 O.C. 2” x 4” studs, #2 or better, 16” O.C. Plates, double top, single bottom Cross bracing, let-in, 1” x 6” Drywall & Thincoat Walls 1/2" Sheetrock, Taped & Finished Drywall, 1/2" thick, standard Finish, taped & finished joints Corners, taped & finished, 32 L.F. per 12' x 12' room Paint, primer & 2 coats, Trim, baseboard, painted Suspended Ceilings 2' x 2" Grid, Film Faced Fiberglass, 5/8" Thick Suspension system, 2' x 2' grid, T bar Ceiling board, film faced fiberglass, 5/8" thick Carrier channels, 1-1/2" x 3/4" Hangers, #12 wire Interior Doors Lauan, Flush Door, Hollow Core Door, flush, lauan, hollow core, 2'8" wide x 6’8" high Frame, pine, 4-5/8" jamb Trim, casing, painted Butt hinges, chrome, 3-1/2" x 3-1/2" Lockset, passage Paint, door & frame, primer & 2 coats Closet Doors Bi-Fold, Pine, Paneled, 3'-0" x 6'8" Door, pine, paneled, 3'0" x 6'8" opening Frame, pine, 4-5/8" jamb Trim, both sides, casing, painted Paint, door & frame, primer & 2 coats Two Fixture Lavatory Lavatory Installed with Vanity, Plumbing in 1 Wall Water closet, floor mounted, 2 piece, close coupled, white Rough-in supply, waste and vent for water closet Lavatory, 20" x 18" P.E. cast iron, white Rough-in supply, waste and vent for lavatory Piping, supply, 1/2" copper Waste, 4" cast iron, no-hub Vent, 2" cast iron Vanity base cabinet, 2 door, 30” wide Vanity top, plastic & laminated, square edges © 2008

59 Electric Service 100 AMP Service Weather cap Service entrance cable Meter socket Ground rod with clamp Ground cable Panel board, 12 circuit Wiring Devices Use non-metallic sheathed cable for the following: • Air Conditioning Receptacles • Dryer Circuit • Duplex Receptacles • Exhaust Fan Wiring • Heater Circuits • Lighting Wiring • Switches, Single Pole • Switches, 3-way • Water Heater Other: • Fluorescent Strip 2 lights, average • Fluorescent Strip Recessed, 4' x 1', 2 lamps, Deluxe Carpets Carpet, direct glue-down, nylon, level loop, 40 oz. Other Specifications NOTE: This is a sample only. This illustration may be subtracted from or added to.

Exhibit (F) AIA DOCUMENTS LIST AIA Contract Documents: Suggested Retail Price List Please visit the AlA (American Institute of Architects) Contract Documents on Demand eShop (available online at TO OBTAIN THE MOST RECENT DOCUMENTS INFORMATION All products may be purchased from your local AIA Contract Documents Distributor or by calling 800-365-2724. Visit for further information. © 2008


Note: This website only has the 2007 list…perhaps they update it in 2009

Exhibit (G) AIA DISTRIBUTORS LIST Please visit the AlA (American Institute of Architects) Contract Documents on Demand eShop (available online at there is no distributors list found on the website…

© 2008

61 AIA Contract Documents: Full Service Distributors Listing 6/14/2007 1 ALABAMA AIA Birmingham 107 S 21st St. Birmingham AL 35233 Phone: 205-322-4386 Fax: 205-322-4347 Contact: Rhea Williams ALASKA AIA Alaska PO Box 103563 Anchorage, AK 99510 Contact: Angie Monteleone Executive Director Phone: (907) 276-2834 ARIZONA AIA Arizona 30 North 3rd Avenue, Suite 200 Phoenix, AZ 85003 Phone: 602-252-4200 Fax: 602-273-6814 Contact: Charnissa Moore CALIFORNIA AIA Central Valley 616 Alhambra Blvd. Suite 1 Sacramento CA 95816-3806 Phone: 916-444-3658 Fax: 916-444-3005 Contact: Phyllis Newton, Esq. AIA East Bay 1405 Clay Street Oakland CA 94612-1401 Phone: 510-464-3600 Fax: 510-464-3616 Contact: Sidney Sweeney

AIA Inland California 300 E. State St. Suite 620 Redlands CA 92373 Phone: 909-792-8464 Fax: 909-792-9474 Contact: Florence A. Hagstrom AIA Los Angeles 3780 Wilshire Blvd., Suite 800 Los Angeles CA 90010 Phone: 213-639-0777 Fax: 213-639-0767 Contact: Maria O’Malley

AIA Orange County 3000 Newport Blvd. Newport Beach, CA 92663 Phone: 949-675-8273 Fax: 949-675-8256 Contact: Cheryl Steele AIA San Diego 233 A Street, Suite 200 San Diego CA 92101-4092 Phone: 619-232-0109 Fax: 619-232-4542 Contact: Andi Boulange AIA San Francisco 130 Sutter Street, Suite 600 San Francisco, CA 94104-4021 Phone: 415-362-7397 Fax: 415-874-2648 Contact: Margie O’Driscoll, Director AIA Santa Clara Valley 325 South First Street, Ste 100 San Jose CA 95113-2406 Phone: 408-298-0611 Fax: 408-298-0619 Contact: R. Kent Mather, AIA COLORADO AIA Colorado One Park Central 1515 Arapahoe St. 110 Denver CO 80202 Phone: 303-446-2266 Fax: 303-446-0066 Contact: Receptionist CONNECTICUT AIA Connecticut 87 Willow St. New Haven CT 06511-2627 Phone: 203-865-2195 Fax: 203-562-5378 Contact: Dianne Harp Jones DISTRICT OF COLUMBIA The AIA Bookstore 1735 New York Ave. NW Washington DC 20006 Phone: 202-626-7541 Fax: 202-626-7519 Contact: Laura Fischer DELAWARE AIA Delaware #5 Vandever Avenue

Wilmington, DE l9801-1113 Phone: (302) 654-9817 Fax: (302) 654-7687 Contact: Ann Stacy, Hon. AIA FLORIDA AIA Florida 104 East Jefferson St. Tallahassee FL 32301 Phone: 850-222-7590, x10 Fax: 850-224-8048 Contact: Erinn Streeter

AIA Miami 275 University Drive Coral Gables, FL 33134 Phone: 305-448-7488 Fax: 305-448-0136 Contact: Mike Brazlavsky AIA Orlando 930 Woodcock Road, #226 Orlando, FL 32803 Phone: 407-898-7006 Fax: 407-898-3399 E-mail: Web: AIA Tampa Bay 200 N. Tampa St., Suite 100 Tampa FL 33602 Phone: 813-229-3411 Fax: 813-229-1762 Contact: Dawn Mages GEORGIA AIA Georgia/AIA Atlanta 113 Peachtree Street, NE Atlanta GA 30303 Phone: 404-222-0099 Fax: 404-222-9916 Contact: Susan Ellis HAWAII AIA Honolulu 119 Merchant St., St. 402 Honolulu HI 96813 Phone: 808-545-4242 Fax: 808-545-4243 Contact: Bonnie McIntyre IDAHO AIA Idaho 270 N. 27th St., Suite B Boise ID 83702 Phone: 208-388-8536 © 2008

62 Fax: 208-343-8046 Contact: Connie Searles (Suzie)

AIA New Orleans 841 Carondelet Street New Orleans, LA 70130 Phone: 504-525-8320 Fax: 504-525-2122

ILLINOIS AIA Chicago 35 E. Wacker Dr. Ste. 250 Chicago IL 60601-2116 Phone: 312-670-7770 Fax: 312-670-2422 Contact: Linda Freeman

AIA Contract Documents: Full Service Distributors Listing 6/14/2007 2 Contact: Melissa Urchan

INDIANA AIA Indiana Architectural Book Center 47 South Pennsylvania St. Indianapolis IN 46204 Phone: 317-634-3871 Fax: 317-266-0515 Contact: Nancy Grounds IOWA AIA Iowa 1000 Walnut St., #101 Des Moines, IA 50309 Phone: 515-244-7502 Fax: 515-244-5347 Contact: Pamela French

MARYLAND AIA Baltimore 11 1/2 W Chase St. Baltimore MD 21201 Phone: 410-625-2585 Fax: 410-727-4620 Contact:Karen Lewand, Hon AIA AIA Potomac Valley UMCP/Anacostia Building 3907 Metzerott Road College Park, MD 20740 Phone 301-935-5544 Fax: 240-465-0253 Contact: Lloyd Unsell Jr., Hon. AIA

KANSAS AIA Kansas 700 Jackson St. Suite 503 Topeka, KS 66603-3731 Phone: 785-357-5308 Fax: 785-357-6450 Contact: Carol Maxim

MASSACHUSETTS AIA Massachusetts Boston Society of Architects 52 Broad St. Boston MA 02109 Phone: 617-951-1433 x242 Fax: 617-951-0845 Contact: Andrew Baldwin

KENTUCKY AIA Kentucky P.O. Box 911128 Lexington, KY 40591-1128 Phone: 859-223-8201 Fax: 859-223-8202 Contact: Janet Pike, Hon. AIA

MICHIGAN AIA Michigan 553 East Jefferson St. Detroit MI 48226 Phone: 313-965-4100 Fax: 313-965-1501 Contact: Rae Dumke, Hon. AIA

LOUISIANA AIA Louisiana 521 America Street Baton Rouge LA 70802 Phone: 225-387-5579 Fax: 225-387-2743 Contact: Kathy Lachney

MINNESOTA AIA Minnesota 275 Market St. Suite 54 Minneapolis MN 55405 Phone: 612-338-6763 Fax: 612-338-7981 Contact: Micki Kastel

MISSISSIPPI AIA Mississippi 509 East Capitol Street Jackson, MS 39201 Phone: 601-360-0082 Fax: 601-354-6481 Contact: Donna Murray

MISSOURI AIA Kansas City 104 West 9th St. Kansas City, MO 64105 Phone: 816-221-3485 Fax: 816-221-5653 Contact: Kristen Fisher AIA St. Louis 911 Washington St., #225 St. Louis, MO 63101-1203 Phone: 314-621-3484 Fax: 314-621-3489 Contact: Michelle Swatek AIA Springfield c/o Drury University 900 North Benton Springfield, MO 65802 Phone: 417-866-2211 Fax: 417-873-7446 Contact: Bruce E. Moore, AIA MONTANA AIA Montana P.O.Box 20996 Billings, MT 59104 Phone: 406-259-7300 Fax: 406-259-4211 Contact: Connie Dempster NEBRASKA AIA Nebraska P.O. Box 80045 Lincoln NE 68501-0045 Phone: 402-472-1456 Fax: 402-472-1654 Contact: Sara Kay NEVADA AIA Nevada/AIA Las Vegas Paul B. Sogg Arch. Building 4505 South Maryland Parkway UNLV Box 454018 Las Vegas, NV 89154 Phone: 702-895-0936 Fax: 702-895-4417 Contact: Randy Lavigne Š 2008

63 AIA Northern Nevada 5250 Neil Road, Suite 301G Reno, NV 89502 Phone: 775-827-6600 Fax: 775-827-9988 Contact: Joan T. Jeffers NEW HAMPSHIRE AIA New Hampshire 310 Marlboro St, 2nd Floor Keene, NH 03431 Phone: 603-357-2863 Fax: 603-357-0835 Contact: Carolyn Isaak NEW MEXICO AIA Albuquerque 202 Central Avenue, SE Suite 103 Albuquerque, NM 87102 Phone: 505-242-9800 Fax: 505-242-9801 Contact: Cecilia Portal NEW YORK AIA Brooklyn 110 York Street, 5th Floor Brooklyn, NY 11201 Phone: 718-222-9863 Fax: 718-539-6578 Contact: John Gallagher, AIA AIA Long Island 499 Jericho Turnpike #101 Mineola NY 11501 Phone: 516-294-0971 Fax: 516-294-0973 Contact: Ann LoMonte AIA New York Chapter Center for Architecture 536 LaGuardia Place New York, NY 10012 Phone: 212-358-6113 Fax: 212-696-5022 Contact: Tara Pyle AIA Rochester 205 St. Paul Street, 1st Floor Rochester NY 14604 Phone: 585-232-7650 Fax: 585-262-2525 Contact: Linda Hewitt NORTH CAROLINA

AIA Charlotte 1930 Camden Road , Suite 1020 Charlotte, NC 28203 Phone: 704-369-2302 Fax: 704-369-2306 Contact: Erica C. Rohrbacher AIA North Carolina 115 West Morgan St. Raleigh NC 27601 Phone: 919-833-6656 Fax: 919-833-2015 Contact: Kathie Rainey OHIO AIA Cincinnati Longworth Hall Design Center 700 West Pete Rose Way Cincinnati OH 45203 Phone: 513-421-4661 Fax: 513-421-4665 Contact: Pat Daugherty AIA Cleveland 1001 Huron Road, #101 Cleveland OH 44115 Phone: 216-575-1242 Fax: 216-575-1244 Contact: Helen Miles AIA Columbus 21 West Broad St., #200 Columbus OH 43215-4100 Phone: 614-469-1973 Fax: 614-469-1976 Contact: Diane Deane AIA Dayton PO Box 2324 Dayton OH 45401 Phone: 937-291-1913 Fax: 937-698-6153 Contact: Jane Treiber OKLAHOMA AIA Central Oklahoma 3535 N. Classen Oklahoma City OK 73118 Phone: 405-948-7174 Fax: 405-948-7397 Contact: Melissa Hunt AIA Eastern Oklahoma 2210-R South Main Street Tulsa, OK 74114-1153 Phone: 918-583-0013

Fax: 918-583-0026 Contact: Stacey Bayles OREGON AIA Oregon/AIA Portland 315 SW Fourth Avenue Portland OR 97204 Phone: 503-223-8757 Fax: 503-220-0254 Contact: Saundra Stevens, Hon. AIA

PENNSYLVANIA AIA Pennsylvania/AIA Central Pennsylvania 1405 North Front Street Harrisburg PA 17102 Phone: 717-236-4055 Fax: 717-236-5407 Contact: Rebekah Waddell

AIA Philadelphia AIA Bookstore 117 South 17th Street Philadelphia, PA 19103 Phone: 215-569-3188 Fax: 215-569-9226 Contact: Leslie Oshana

AIA Pittsburgh The Bruno Building, Loft #3 945 Liberty Avenue Pittsburgh PA 15222 Phone: 412-471-9548 Fax: 412-471-9501 Contact: Anne Swager, Hon.AIA

SOUTH CAROLINA AIA South Carolina 1522 Richland St. Columbia SC 29201 Phone: 803-252-6050 Fax: 803-256-0546 Contact: Tracey Waltz TENNESSEE AIA Chattanooga P.O. Box 9261 Chattanooga, TN 37412 Phone: 423-867-0444 Fax: 423-867-0444 Contact: Kathy Broome Š 2008

64 AIA Memphis 8 South Third Suite 100 Memphis, TN 38103 Phone: (901) 525-3818 Fax: (901) 527-7566 Contact: Heather Baugus AIA Middle Tennessee 209 10th Avenue South #415 Nashville, TN 37203 Phone: 615-259-9664 Fax: 615-742-0954 Contact: Carol Pedigo AIA Tennessee P.O. Box 60128 Nashville TN 37206 Phone: 615-255-3860 Fax: 615-254-1186 Contact: Sheila Leggett TEXAS AIA Austin 503 W. 38th Street Austin TX 78705 Phone: 512-452-4332 Fax: 512-452-2284 Contact: Sally Ann Fly, Hon. AIA, Hon. TSA AIA Dallas 1444 Oaklawn Ave., Ste 600 Dallas TX 75207 AIA Spokane 335 W Sprague Avenue Spokane WA 99201-3710 Phone: 509-747-5498 Fax: 509-747-3688 Contact: Linda Hooten

Phone: 214-742-3242 Fax: 214-742-3253 Contact: Paula Clements, CAE AIA Fort Worth 1425 8th Avenue Suite 100 Ft. Worth TX 76104 Phone: 817-927-2411 Fax: 817-927-2444 Contact: Suzie Adams, Hon. AIA AIA Houston 315 Capitol Street Suite 120 Houston TX 77002 Phone: 713-520-0155 Fax: 713-520-5134 Contact: Barrie Scardino AIA Lower Rio Grande Valley 1300 N 10th Street Suite 330-N McAllen, TX 78501 Phone: 956-994-0939 Fax: 956-994-8827 Contact: Carmen Pérez-García, Hon. TSA AIA San Antonio 816 Camaron, Suite 211 San Antonio TX 78212 Phone: 210-226-4979 Fax: 210-226-3062 Contact: Torrey Stanley Carleton, Hon. TSA

UTAH AIA Utah 329 Pierpont Ave., #100 Salt Lake City, UT 84101-1743 Phone: 801-532-1727 Fax: 801-532-4576 Contact: Elizabeth Mitchell

VIRGINIA Virginia Society of the AIA The Virginia Center for Architecture 2501 Monument Avenue Richmond VA 23220 Phone: 804-644-3041ext.200 Fax: 804-643-4607 Contact: Kenna R. Payne, CPA

WASHINGTON AIA Seattle 1911 First Avenue Seattle WA 98101 Phone: 206-448-4938 Fax: 206-448-2562 Contact: Douglas March AIA Southwest Washington 1201 Pacific Avenue. Suite C-4 Tacoma, WA 98402 Phone: 253-627-4006 Fax: 253-572-2634 Contact: Cheryl Zoltak

WEST VIRGINIA West Virginia Society of Architects/AIA P.O. Box 813 Charleston WV 25323 Phone: 304-344-9872 Fax: 304-343-0205 Contact: Roberta J. Guffey, Hon. AIA WISCONSIN AIA Wisconsin 321 South Hamilton Street Madison WI 53703-4000 © 2008

65 Phone: 608-257-8477 Fax: 608-257-0242 Contact: Mary Orella

Š 2008


Exhibit (H) CHANGE ORDER FOR PLANS AND SPECIFICATIONS Date __________________________ THE UNDERSIGNED HEREBY AUTHORIZE _______________________________ _________________________________________________________________________ to make the following change(s) from the work as originally set forth in the plans and specifications for that construction contract dated ____________________________. The changes are: ________________________________________________________ ____________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ Payment will be made as follows: The additional work described above is to be performed under the same conditions as specified in the original contract, unless otherwise stipulated, for which an addition (deduction) of $__________________________________ is made from (to) the contract price. (Signed) _______________________________________

Š 2008

67 Exhibit (I) RELEASE (Mechanic’s Lien, Stop Notice, Equitable Lien and Labor and Material Bond Release) FROM: ____________________________ PROJECT: _______________________________ ____________________________ (Name & Tract No.) ____________________________ _________________________________ ____________________________ (Address of Project) _______________________________ (City, State, Zip) __________________________________ (Lots or Building #) TO: _______________________________ _______________________________ _______________________________ _______________________________ _______________________________

CONDITIONAL RELEASE The undersigned does hereby release all mechanic's lien, stop notice, equitable lien and labor and material bond rights against the above described project for all materials, supplies, labor, services, etc., purchased, acquired or furnished by or for us and used on above premises up to and including (Date) ___________. This release is for the benefit of, and may be relied upon by, the owner, the prime contractor, the construction lender, and the principal and surety on any labor and material bond. This release is CONDITIONAL, and shall be effective only upon payment to the undersigned in the sum of $ ______________________ . If payment is by check, this release is effective only when the check is paid by the bank upon which it is drawn. FIRM NAME:_________________________________________________________________ (Firm furnishing labor, etc.)

By: _______________________________________

DATE: _____________________

(Signature of Owner or Authorized Agent)

Š 2008


FULL RELEASE The undersigned has been paid in FULL for all labor, subcontract work, equipment and materials supplied to the above described project and hereby releases all mechanic's lien, stop notice, equitable lien and labor and material bond rights on the project for all materials, supplies, labor, services, etc. purchased acquired or furnished by or for us and used on above premises, up to and including (Date) ______________. This release is for the benefit of, and may be relied upon by the owner, the prime contractor, the construction lender, and the principal and surety on any labor and material bond posted for the project. FIRM NAME:________________________________ (Firm furnishing labor, etc.)

By: _______________________________________

DATE: ___________________

(Signature of Owner or Authorized Agent)

__________________________________________________________________________________ NOTARY CERTIFICATION (For Full Release)

Š 2008


Exhibit (J) ANTI-KICKBACK PROVISION Contractor and any contractor or subcontractor employees, in the course of performing under this contract or subcontract, are prohibited from soliciting, accepting, or attempting to accept any kickback from any person. (1) The owner may offset the amount of the kickback against any monies owed by the owner under this contract, and/or (2) Direct that the Contractor withhold from sums owed the subcontractor, the amount of the kickback. Definitions: "Kickback," as used in this clause, means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind, which is provided, directly or indirectly, to a contractor, contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a contract or in connection with a subcontract. "Person," as used in this clause, means a corporation, partnership, business association of any kind, trust, joint-stock company, or individual. "Contract," as used in this clause, means a contact or contractual action entered into for the purpose of obtaining supplies, materials, equipment, or services of any kind. "Contractor employee" or "subcontractor employee," as used in this clause, means any officer, partner, employee, or agent of a Contractor or subcontractor. "Contract" and "Subcontract," as used in this clause, means a contract or contractual action entered into by a Contractor for the purpose of obtaining supplies, materials, equipment, or services of any kind under a contract or subcontract. "Subcontractor," as used in this clause, (1) means any person, other than the Contractor, who offers to furnish or furnishes any supplies, materials, equipment, or services of any kind under a contract and (2) including any person who offers to furnish of furnishes general supplies to the Contractor.

Š 2008

70 Exhibit (K) ARBITRATION In the event a dispute arises in the interpretation, performance, or execution of this contract by either party, it would be in the best interests of the parties that the dispute be settled by arbitration, and not by resort to the Courts of this State. Upon demand by either party, the following procedure shall be followed: 1.

Each party shall have three (3) days, after written demand for arbitration has been made, to designate an arbitrator;


Within two (2) days thereafter, said arbitrators so designated shall select another arbitrator and these individuals shall constitute the Board of Arbitration;


If the two party appointed arbitrators cannot agree on a Board within 5 days, a third arbitrator will be selected by the American Arbitration Association.


Arbitration will be held within 10 days of the demand for arbitration unless scheduled for a later date by the majority of the arbitrators.


The rules of the American Arbitration Association shall govern the arbitration proceedings.


Within five (5) days after said arbitrators have heard each party's contentions, the Board of Arbitration shall conduct a hearing and render its decision on the matter presented to it, and such decision shall be final, binding and conclusive.

The parties may resort to the courts for enforcement of a final Board of Arbitration order. Saturdays, Sundays, or holidays will not be included in meeting the above time limitations.

Š 2008


BuildOut book


BuildOut book