Page 253 - Sustainable On-Site CHP Systems Design, Construction, and Operations

226 C o ns truction

The sooner a guaranteed maximum price (GPM) has been negotiated with the
prime contractor the terms of their agreement follow AIA A195 and A295 procedures.
During the detailed design phase the architect/engineer team members are encour-
aged to meet frequently with the CHP owner-operator and prime contractor to review
developing design documents and revisit project budgetary constraints and goals.
Meanwhile the architect must remain responsible for the integration and coordination
of updated MEP, structural and constructibility information provided by the contrac-
tors and subcontractors.
Provision must always be made for adequate time to obtain owner-operator’s
written approval for all major decisions regarding the project program, schedule, con-
struction cost and quality issues, in direct consultation with prime consultant (desig-
nated architect or engineer) and prime contractor.
Unfortunately no insurance product currently exists to efficiently manage loss for
the company or the parties when the AIA C195, Standard Form Single Purpose Entity
for IPD, is agreed on. Accordingly each party must be responsible for obtaining the
standard insurance packages required in most other delivery methods. However,
should each company member agree in advance to waive claims against all other team
members, and a design defect or omission is discovered near construction completion
but before the company is dissolved, difficult questions arise as to who is financially
responsible and/or whose insurance will cover the loss if incentive compensation is
judged to be insufficient?
Additional uncertainties also can exist after company dissolution such as “Which
insurance coverage is then expected to be responsible for design choices made by con-
sensus?” The matter of constructibility risk management and owner-operator satisfac-
tion, etc. still remain unresolved as no insurance coverage is yet ready for CHP project
teams electing to select this construction delivery method, particularly if they have not
worked together in this manner before.

Identify the Appropriate Construction Delivery Method
A common oversight by an owner is to inadequately describe the contract delivery
method that will be used on the project. For example, if the contractor will be acting as
a design-builder, care must be taken to fully describe the design functions the con-
tractor will be undertaking. Owners who fail to specify this in the contract may face an
argument during construction that the contractor’s design responsibilities were more
limited, perhaps, for example, simply to reviewing the owner’s performance require-
ments, than the owner originally intended. The owner should also specify what obliga-
tions the contractor will have for start-up, testing, commissioning, and operation and
maintenance (as applicable) on the project.
Either the contractor, the owner-operator, or developer assumes responsibilities for
arranging and purchasing insurance during the contract phase. Among the insurance
contracts that are arranged during this phase are

1. Construction all risks insurance. Covers physical loss of or damage to the
construction works or other property while at the site or during inland transit.
2. Delay in start-up insurance. Covers the financial consequences of delay in
commencement of commercial operations caused by physical loss or damage to
the works.