Contract documents — Part 1

I routinely hear consulting firms complaining about being asked to do much more than their consulting fees will cover. This past December, Engineered Systems featured “HVAC infrastructure opportunities — An Integrated Project Delivery (IPD) niche business profit center,” and I suggested how to consolidate and minimize the number of project contract drawings needed to build the job. So, in sync with my December column, I will expand on this in a two-part discussion emphasizing that consulting engineers rethink what contract document “deliverables” should be provided when contracted to work with the mechanical contractor on an integrated project delivery method job. Remember, “time is money,” and every additional contract drawing produced takes time and money, and, with IPD, the design engineer can actually reduce his or her effort without reducing the design fee.

Since I began designing HVAC systems and producing contract documents that consist of construction drawings and specifications, there have been industry standards to producing these documents for a building program. Below are a few examples.

HVAC contract documents
Back when we had 16-division contract specification, there would be the following typical contract drawing list:

• Title sheet, including a building site plan and general notes (sheet 1)
• Architectural floors plan with sheet metal distribution and pipe distribution shown.
  Note: If the distributions were very complicated, the design engineer would separate the sheet metal systems and piping systems by creating two floor plans instead of one per floor level (sheets 2 and 3)
• Equipment room drawing and cross-sections drawn through the equipment room (sheet 4)
• Possibly an additional HVAC drawing showing additional sections through the building (sheet 5)
• Equipment schedules (sheet 6)
• Standard detail drawing (sheet 7)

Comment: For this 20^th century, one-story building example, this equated to a minimum of seven contract drawings along with a 16-division contract specification. Today’s 21^st century equivalent would probably have the following contract drawing list for the same type of building.

• Title sheet, including a building site plan and general notes (sheet 1)
• Architectural floors plan with sheet metal distribution with a second architectural plan showing the pipe system distribution (sheets 2 and 3)
• Equipment room drawing designates as lower level and upper level and cross-section drawn through the equipment room (sheets 4 and 5)
• Possibly an additional HVAC drawing showing additional sections through the building (sheet 6)
• Equipment schedules that are often a minimum of two drawings (sheets 7 and 8)
• Standard detail drawings, which, as a rule, include a minimum of two drawings, if not more (sheets 9 and 10)
• A minimum of two automatic temperature control (ATC) system flow diagrams with their associated sequences of operation (sheets 11 and 12)

Comment: For the 21^st century, one-story building example, this equated to a minimum of 12 drawings versus the previous seven drawings. The larger the project means more equipment schedule sheets, detail drawings, and ATC system drawings.

Recap: Using my rule-of-thumb, the average cost to produce a contract drawing is 100 hours per drawings (includes time for computer-aided drawing [CAD] set up, design layout, final drafting, and in-house reviews). Multiply 100 hours by an average $70 per hour results in a budget fee of $7,000 for each drawing produced for the project. One can change the hourly rate and use the number of hours they believe it takes to produce an average HVAC contract drawing. But, for my example, seven drawings ($49,000) versus 12 drawings ($84,000) equates to a $35,000 premium to produce the added drawings when compared to the 20^th century approach.

This is a relatively simple example to demonstrate the design engineer’s need to assess how many drawings he or she will produce in sync with the budget cost to the available design fee. This evaluation should be done at the start of the project design phase. Analogous to buying a car, the potential buyer will have a budget to spend, aka engineer design fee, and determine the number of drawings to complete the job, producing a quality product. This can be done but, if the design firm needs to request a higher fee to produce the required number of drawings and make a profit, then that is what will be required.

When I worked for a mechanical contractor, I realized contractors seldom do any additional work without a change order. As I was told back then, “There is not carrot at the end of the stick.” Design firms are more optimistic than that. If they do engineering beyond their scope of work/fee, they anticipate that more work will come in time — just like that carrot at the end of the stick. Managing a design fee begins with determining, at a minimum, how the work is going to be completed within budget before the design begins.

Unfortunately, this budget drawings suggestion is seldom done. The design team simply starts producing drawings. If this same budgeted fee of $49,000 is to be spent on an automobile, an individual should assess how to purchase the car he or she wants — identifying the desired features and looking at cars that offer them based on the budget while knowing the car manufacturer produced the vehicles following quality control procedures. The same can be achieved when producing quality contract drawings too.

More on managing the project fee in sync with the contract documents next month when I address the contract specification.