Missing In The Quotation, How To Do With That?

I have no answer for you other than to say that this is the kind of thing that Lawyers usually deal with. If the company has a legal department ( And I'll bet THEY have nice walls :D ) you should probably bring it to their attention.

I would however request that IF the office starts being used before this issue is resolved , please set up a web cam and post a link to the live stream for our entertainment.

Maybe...

The owner chose him already and the quotation had been double checked by the owner and the consultant. It still missed and the owner approved the quotation for the contractor to start his work.

How to force him to build that wall free-of-charge? Ok, he can take it as an education cost. But he said look at my quotation, where is the wall?

The owner is correct with his design but the contractor is correct with his quotation.

It seems like the real question revolves around what the actual contract documents consisted of. If the contract documents included the designs and specifications as part of the contract, the contrctor could be held liable for the cost of the installation if the language in the contract documents included the cost for the wall built into a cost line item or explicitly. However, even if the contract docuemnts included the wall, the owner may still have to pay just to keep things on schedule of depending on the cost to keep the contractor on the job. There are cases where a missed item by a contractor is so significant in cost that it is cheaper to walk off the job and take the hit, letting the owner sue them for damages and submit for bids again. The best solution is usually to negotiate the cost to something acceptable to both parties, though private owners frequently have more negootiating power in these situations than public agencies.

In most of the jobs I've worked on, the quotation is not the final document agreed on. Often, the contractor does not even furnish a detailed quotation (he does quote a price), but the quotation is based on drawings and specifications furnished by the owner's engineer.

In that case, if the contractor has missed something, it is his problem. (In this case, he must pay for the wall.)

Agreed. This is especially troublesome if other contractors lost the job, based on price, because they included the wall in their quote.

My gut is telling me that the contractor screwed up on his bid, he doesn't want to build a free wall, and he's looking for an out.

Of course, I don't have the slightest idea how this stuff works in Vietnam, so this may all be moot.

If I were the contractor, I'd just go to the owner and say, " A guy named lyn from the US said you must pay", and be done with it.

Your humanity overwhelms me.

A very common practice in competitive bidding is to under bid the actual calculated costs, with the idea that there will be modifications to the contract during construction which can be billed at exorbitant rates not subject to competitive pressures. Unscrupulous contractors use this technique all the time- which is why, when I used to submit RFQ's for competitive bidding, I always reserved the right to reject low bidder- and usually rejected low bidder, without having to go through all sorts of technical justification.

Meanwhile, if the wall was included in the design submitted for the bid, the contractor is responsible. As advised, this is a matter for the legal department...

We don't yet really know whether this was a "bid to spec" job versus "design/build" offer(s) from one or more contractors. There should be one set of controlling documents. If there seem to be more than one, then just who signed just what?

The parties could consider arbitration, but I don't know if this is common or recognized in Viet Nam.

This is a question in contract law and varies due to local laws. The wall was on the drawings and the contractor quoted to the drawings without specifying any exception so the contractor must complete the work to the drawings. If the contractor defaults, then his completion bond will pay for the work. If the contract was written well, any changes in the work requested by the owner shall be quoted at the same rates as similar work in the original job and cannot be refused by the contractor.

I hope the contract was well written in the first place or the contractor will find a lawyer to break it and leave the owner with a mess.

In the agreement between the contractor and owner if the drawing and specifications are referred and if it mentioned that in case of dispute the details given on the drawings and specification are to be followed then contractor has to build the wall. Also there may be a provision of contingency amount. Check the feasibility of executing the work within this amount.

Normally there should be a Bill of quantities(BOQ) for any tender or job.Is this wall included in BOQ?>

Well, they just want to close the door and discuss in peace. The quotation which the contractor submitted is exactly the BOQ (or material and labor breakdown). The way they did is that after the design finished by the designer. The owner will check and approve it. Then owner, by themselves, invited severals contractors to bid. The contractors received only engineering drawings and nothing else. Perhaps, the specification was detailed in the drawing also. So, this project does not include with separated specifications which created this issue.

We have legal departments, off course. But who want to go there because of the small omitted wall?

I agreed with Kramarat solution that the owner should pay for the materials and the contractor pays for the labor. Since the both sides have the same mistake.

Kramarat: Thank you for your suggestion and the link. For me, it is not the right time to be a volunteer for that project. Maybe I am too selfish. Let's see how things go in the future and I will update you if I join that team.

The party which prepared the BOQ should be held responsibility.

Because decision should be fair for everyone. So someone who checked and approved the BOQ should also take half of responsibility. This is a win-win agreement.

If it was in the drawings, and the RFP or RFQ referenced the drawings, the contractor performs the work, or defaults. It happens every day. If it was not in the drawings, but in the specs, the RFQ almost always says the specs rule, and the work shall be performed to the specs. Again, the GC pays. If it was not in either, it's an add. and the owner pays. Fair is not relevant except that all competitive bidders must play by the same rules, or it is not fair.

BTW, almost all adds are subject to 15% markup rules, and most architects have clauses that force them to assume some responsibility for failing to represent the owners wishes in the bid documents.,

Between a RFP and a RFQ. The RFQ is the most accurate and detailed.

I know this, but let's think a bit about this scenario.

In a project which the owner request the general contractor to construct the building. This main contractor has several subcontractors... for ME and HVAC...

The specification of this project and drawing... are included.

The subcontractors submit the quotations with this material and labors.... but due to some reasons, the subcontractor omitted something and the main contractor does so.

For the owner and consultant, they also omitted that thing... and approve the quotation of the main contractor (the main contractor in this case just receive the management cost... I guess).

So, who is the one responsible for all of the arising cost for that omitted thing? Is that the main playground here is about the main contractor and the owner/consultant, isn't it?

In general, in terms of law:

A. if you hire and incompetent to perform a task or service, the Law says it's on you for hiring a 'fool'.

B. In the practical sense: if that 'thing' was in the specification, there is a cost to provide it.

C. If that thing is omitted by the hired party - see A

If the omission of that thing, was not detected by the people that should have, including the owner, then it falls under A + B

If the owner has selected the suppliers on the basis of price - "assuming" competence and "diligence" by all employed - including his direct adviser/consultant - see A.

Bottom line is; the owner would have had to pay for it anyway (B) - so will have to - even if it was in, or not in, the original spec. (see A)

"Resolution" is therefore based in how 'guilty' of incompetence all failing parties feel.

Such leverage as 'reputation' may be a bargaining chip.

But equally, some 'owners' deliberately play this "hidden detail" game.

If I understand your scenario correctly, the owner and his (the) consultant omitted that thing.

Therefore, neither the general contractor nor his subcontractors had any obligation (or any practical means) to bidon that thing--what would they do--read the owner's mind?

Therefore, in this scenario, the cost to add this missing thing is totally on the owner. The owner's consultant or engineer might have some liability to the owner if it is something that the owner asked the engineer or consultant to provide, but the engineer or consultant failed to include it. This would depend on the contract(s) between the owner and the engineer and the owner and the consultant (if they are two different entities).

There might be a few scenarios where the general contractor has more of an obligation, but I'm having trouble thinking of a good example. And maybe I shouldn't muddy the waters by trying to think of one. I'm thinking of situations where the general contractor took on a more open ended contract, with design responsibilities included.

What is the problem with design-build contract?

Re: What is the problem with design-build contract?

I hesistate to answer your question when phrased that way and sort of out-of-context. A design-build contract can be a fine thing.

In the context I was trying to address, the general contractor could have more liability for omissions if he also had all or some of the design responsibility.

Only thing if you get a design-build structure, get a longer than 1 year warranty, as many more hidden defects in construction tend to be found later, since design will work at the behest of the contractor and not the owner (potentially reducing quality control to favor contractor profitability and transfer more risk to the owner). Essentially when problems develop wher the owner's interests (or even good engineering practice) are in conflict with the builders interest, the designer works for the builder and represents his interests. When separate, the designers represent their own best engineering judgment, independent of the builders profitability interests, and the owners interests. On the otherhand design-build can save some money and time.

Everything stated inthe post are on track.

Everything said here is speculation, including my own responses.

With that said and without really seeing the RFQ and Scope as well as any information submitted to the contractors for quoting as well as what the contractors supplied in return such as the actual quote.

I have always experience, that in all disputes, the truth lie in the middle.

But you pointed something out. they also omitted that thing

The subcontractors submit the quotations with this material and labors.... but due to some reasons, the contractors omitted something and the main contractor does so.

and

For the owner and consultant, they also omitted that thing...

The contractors did not omit nothing, they cannot supply something that is not there.

This may also be reasons why it is difficult to keep contractors. The project manager may need to be replaced. This may be part of the mitigation of, when you give something (the PM) you get something.

of course this is also speculative

It's always good to keep lawyers out of the equation if possible. They are in the business of making money....................for themselves.

I didn't read through the link that closely. I thought it was a job that paid.

I'm sure it will all work out with the wall.......................it always does, one way or another.

I'm a licensed contractor. This is an easy one. The owner at some point put this job "out to bid". Meaning he supplied a set of plans for what he wanted to be built. If this wall (or anything else) wasn't on that set of plans he isn't responsible for it. The only case where the building owner would have a legal challenge would be if he asked and paid for a "change order" in a timely fashion to add the additional wall.

So either the wall was never on the plans or the person who submitted the plans failed to notice the lack of the wall that the owner wanted. Look at those plans, if the wall isn't there the owner needs to talk to the architect that drew them up!

Fredski:

This is an renovation project which there are several facilities need to be demolished and other facilities to be built.

The wall, of course, is in the original design and the owner wants to build that wall not just because it separate from engineering and administration or it is a beautiful wall. There are several other rooms to be located such as laboratory...

As a contractor in a project which every bolt counts, if you missed something in the quotation and the owner approved it. Later, someone found out you missed that thing, will you be willing to do that free-of-charge?

Keeping engineers separated from admin is a no brainer...................all they ever do is try to moderate us and make us behave.

(Just a little joke hien.)

Good joke especially in Sunday evening. If we add up these with beers, things will explode.

"Free of charge"..what's that mean?

Sorry if I confused you, "free of charge" means I will do if for someone (e.g you) without any fee.

At this case, sometimes, you will not be able to complain me if the thing I do for you is good or bad.

If the contractor missed it, the contractor eats it. If it wasn't specified, it's a change-order.

I have OVER 35 years of experience on BOTH sides of this issue. As an employee of a company , my job discription often included contacting outside contractors , getting estimates and bids on work , and approving and finalizing all contracted work.

As a current owner of a construction company, I often DO estimates and bids.

AND ...after ALL this discussion, and after many well thought out and very logical analysis of what the situation SHOULD be, and how it should be resolved , I am STILL left with the feeling that the OWNER should check with his legal staff to determine where he stands from a legal perspective before he talks with the contractor.

The reason I say this is because *I* do NOT know what the laws and common practices of THAT country are.

The USUAL PRACTICE is that the SIGNED DOCUMENTS control the obligations of BOTH parties. Being nice to each other really has nothing to do with it from a business or legal standpoint. ( It would be AWESOME if being nice to each other was a valid business plan , but unfortunately it is not.)

From the CONTRACTORS perspective, he SHOULD ( from a business relationship standpoint ) TRY to keep the customer happy. AS a contractor, I ALWAYS try to exceed the customers expectations, and to do a few little extra things around the job site to make life easier for my customers, and will often have my workers do a FULL job site clean up to remove messes left behind by other contractors. It is important to realize though that I am constrained by the fact that I HAVE to make my expenses, and meet my profit margin, or I couldn't stay in business for long.

From a Business owners perspective, I would hire an outside contractor specifically to get a certain job done. I would specify the location and scope of work expected, and any time constraints the contractor was expected to meet. I would then accept bids based on my requirements, REVIEW those bids, and select a contractor to preform the work BASED on those bids. I would then meet with the contractor , and we would SIGN A CONTRACT specifiying what is expected on both sides. If I didn't specify a job site cleanup in the contract , I wouldn't expect the contractor to DO one. IF he DID I would remember that , and be much more likely to prefer that contractor for future work , but the fact remains I wouldn't expect it from them.

THAT all said and done ... If both the owner and the contractor CAN sit down and discuss this in a civil manner and come to an agreement that makes BOTH of them happy , then they SHOULD do that. BUT BOTH should KNOW their LEGAL STANDING before they sit down at a negotiateing table , IF ONLY to be sure that neither party is breaking the contract with something SAID dureing those talks.

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I STILL hope he sets up a web cam if the wall don't get built ... Watching the Engineers OWN the managerial staff is ALWAYS fun !

If the owner and the contractor cannot come to a mutually acceptable agreement and resort to lawyers it will cost both parties MUCH MORE than the cost of the wall!!!!!

First of all you have to see the document - "Contract Agreement" signed by the owner and the contractor. Normally Contract Agreement comprises of many sections like General Condition of the Contract, Particular Condition of the Contract, Scope of Work, Construction Specification, Drawings and most importantly Bill of Quantities by which payment to contractor is made. I do not know how the Contract Agreement was drafted. If it was a kind of contract which enlist drawings, scope of work and the price has been asked in Lump Sum, I am afraid contractor would have to build without asking for extra money. If the Contract Agreement of a proper kind, the work has been mentioned every where and missed in the Item of Bill of Quantities, Contractor has right to ask for extra money. Not necessarily building is built according to drawing. Some time the owner does not want to build as the designer has designed and eliminates non essential parts of bulding which has not been inculeded in design calculation. This is why there exist a paragraph in the Contract Agreement to define the importance or priority of the document where Bill of Quantity comes first and most effective and the drawing comes last. Suggest seek layer to know the kind of Contract Agreement and deal accordingly.

AbdulWasay:

My question could go out of stream. Because you mentioned of Lump Sum, it means that the contractor shall cover all the things of project. But if there is a change in term of design, or a need to change. The contractor could have an extra charge or he still need to cover that?

Of course change in design will generate "Change Order" - a document issued by the Engineer or the Owner would cause to bring extra money without bringing change in legal status of the Contract Agreement. When change order is issued to the Contractor to do work not mentioned in Scope of Work, Drawing of Bill of Quantity it brings opportunity to negotiate new rates of payment for Work to be done.

I thought Lump Sum means that the contractor will have to cover all the changes?

Re: I thought Lump Sum means that the contractor will have to cover all the changes?

A simple answer is no.

Depending on how the contract is written, some things that the contractor might consider changes must be covered by the contractor (e.g., things that are not really changes, but things that he overlooked in his bid, or perhaps (unusual) the contract makes him responsible for dealing with some unknowns (like soil conditions)).

Usually, things that the owner changes, and are not in the original contract, are changes to the contract. (Things can get confusing (disputes can arise) when the contractor is responsible for the design.)

The contractor in a lump sum contract is responsible for providing the contracted scope of work at a fixed fee, "lump sum", they have no responsibility for changes in that scope of work and their fee can not be expected to reflect that. Lump sum just means the contractor will change you a fixed fee to provide the services and products in conformance with the information and requirements provided in the contract.

Some conditions may vary, but the general conditions such as geotechnical investigation reports findings must be disclosed for them to be within the scope of service. The contractor is only responsible for the work for which information was disclosed in the contract. If you do not disclose the potential for variability, and just provide plans that show one type of soil condition, he might consider any different soil condition a changed condition if he is seeking a change order. Contractors are notorious about underbidding and then seeking loopholes in the contract to seek highly profitable change orders. When you preapre contracts, including plans and specifications, you have to provide sufficient information about the known conditions and likely variability, as well as any expectation about potential changed conditions that the contractor should cover for free during the course of work if encountered as part of the contract.

Quite a few opinions here.

In the price offer (the quotation), was the phrase "Per Plans and Specifications" used, or is the price offer a list of work to be accomplished for a set fee?

If per plans and specs, the contractor is in error and should accomplish at no additional cost to the owner. As you have said, it is an opportunity for education.

If a shopping list of tasks, then the wall was not on the shopping list. Extra charge.

some good replies. My suggestions is see if the two party's can mitigate it and don't take a standoffish position.

As an owner take stock of what you know:

- If the contractor was the lowest bid, by how much.

- if it was in the scope, but was missing in the quote of the contractors, that is the contractors fault.

- If it wasn't in the scope, that is your fault.

Depending on who's fault it is, that is where you begin negotiating.

If the contractor takes the quality from another area to make up for the loss, that area may be compromised.

Keep in mind, this is not done yet, if you give the contractor some lead way other items what the owner/stakeholder forgot or would like to change, this contractor will be more willing to work with you.

As project manager, if you give a concession, try to get something in return.

phoenix911:

You pointed out some very good points.

Don't take a standoffish position and give the contractors some lead way... These seem to be simple but in reality it is very difficult.

When one must do to guarantee the quality of project, try not not make the contractors frustrated... deal with the owner... This is the art of management and I am still very far to that.

But one thing I would like to ask, for a project manager, what is the most important thing?

the most important thing as a project manager. COMMUNICATION. There seems to have been a break-down of that, so goes the misunderstandings which needs to be mitigated.

But as a project manager, for every dollar spent, you get a dollar's worth of deliverables. not $0.80, not $1.20.

And there are tools for that, such as Earn Value Management (EVM). This would set off triggers on deliverables so corrective actions can be taken before it even becomes an issue. But EVM was too late for this. It sounds like this was a problem from the beginning.

When a contractor under bids, and by quite a bit, does not mean its a good deal. That in itself is a red flag, and needed to be looked into.

Being a PM is not easy and never is. And by no means an 8 hour day.

It sounds like its still up in the air and is being addressed.

I first would have a face to face with both the owner and contractor, and both being prepared,( not I'll get back to you on this). See what went wrong, and press for accountablity. Fair but firm.

Once it is pointed out, it is easier to work with. Remember, fair but firm. Even in the right, a concession may have to be made, do the concessions, but when you give, try to get something for it.

phoenix911:

One more, how the PM can keep the subcontractors willing to work for him?

There seems to be more underlying issues here.

Culture, work climate, ethics, bad management, corruption, unreputable firms....

just goes on, first of all. I do not know what your payment schedule is. It may be a good idea, to look into that.

fixed price with incentives may be good, but not really knowing the intricacies of the project as well as the local culture, I am just throwing it out there.

Key ingredients for building and keeping teams:

-Straight forward, clearly defined and mutually agreed upon expectations

-Timely feedback

-Appropiate flexibility (a little give and take goes a long way)

-COMMUNICATION

-A sincere thank you for effort as well as results

-Fairness