What You Will Learn
1. Key Construction Terms
- the “owner” defined
- the contractor’s monthly “payment application” defined
-  the Schedule of Values defined

2.  Design: The Architect’s Role and the Architect Agreement 
- the design planning process: CDs, SDs and DDs
- main components of an architectural agreement
- contract administration services
- reasonable compensation/reimbursable expenses for the architect
- contract exhibits: hourly rate schedule,  project team list, interior design  and other
services
- design risk and the “fast-track” process
- value engineering defined and when VE begins
- auditing the architect’s monthly invoice 

3. Construction Contract Documents
- understanding key terms and conditions in the construction agreement
- specifications: quantity and quality of materials
- key terms and conditions in the General, Supplementary or Special Conditions  agreements
- the project manual
- exhibits to the agreements, including hourly labor rates and unit prices

4.  Types of Construction Contracts and Associated Risks
- how the owner and the contractor negotiate construction cost risk 
- lump sum (or fixed cost) defined; associated risks for the owner and  contractor
- guaranteed maximum price defined; associated risks for the owner and  contractor
-  time and material defined; associated risks for the owner and contractor
- cost-plus defined; associated risks for the owner and contractor
- unit price defined;  associated risks for the owner and contractor 
- design/build defined; associated risks for the owner and contractor
- boilerplate contract documents available from the American Institute of  Architects and other  organizations
- advantages of boilerplate contracts vis-à-vis “in-house” contracts
- “fast-track” construction and associated cost risks
-  improving  the business terms and conditions of contract documents 

5.   The Bidding and Award Process
- request for proposal v. negotiated or sole sourced contracts
- bid analysis and lowest bid syndrome  
- taking alternates and allowances into consideration 
- bid rigging and what to look for

6.  Controlling the Construction Process
- typical construction organization charts
- the estimating “takeoff”  
- scheduling/key milestones and final completion
- detailed v. high level monthly reporting 
- key components of a superior monthly financial report
- key indicators that may signify potential field issues or cost overruns
- other field reports and CIP accounting reports
- owner construction policies and procedures
- Request for Information (RFI) Log and the Architect’s responsiveness 
- maintaining a backcharge log and backcharging the appropriate party
- owner furnished item (OFI) log and avoiding construction delays
- equipment rental log and proper pricing 
- value engineering log:  a sure way to document cost control
- the allowance log and how to account for the owner’s acceptance or not 
- the alternate log and whether the owner accepts or declines
- authorized use of contingency dollars and how to report usage

7.  Change Management
- change order defined
- why change orders occur and why they are risky business
- change order acronyms
- change order reporting and how to ensure that management knows what’s going on
- controlling and testing change orders
- change order risk thresholds and when auditors should take note
- other contract changes: addendums, modifications, amendments and work 
authorizations

8.  The Payment Process
- reviewing the contractors’ monthly payment application
- retention, percentage of completion and lien releases
- schedule of values and the 17 CSI divisions
- checking for mathematical accuracy

9.  Other Construction Risks
- market risks
- insurance risks
- surety and bond risks
- financial risks

10.  The Closeout Process
- punch list
- warranties/guarantees
- final lien releases
- the need for as built drawings
- a closeout checklist

11.  Claims
- types of contractor claims 
- types of owner claims

12.  Types of Construction Audits
- when to kick start an audit 
- control and financial reviews
- change management (change order) reviews
- forensic reviews other audits

13. Investing in and Designing a High-Payback Audit  for Your Organization
- reviewing the job cost ledger of the contractor and/or subcontractor(s) 
- eight common objections by the contractor when auditing the job cost ledger  and how to overcome them
- cost savings rule of thumb: 1-3% reduction of the project cost
- cost recovery, avoidance, reduction, and cost-savings defined and examples
- seven variations in the audit rights clause
- reasons to audit a lump sum contract