By: Kevin Duffy
Since the financial crisis of 2008, many building owners have become increasingly budget conscious, and are looking for creative ways to ensure that projects come in on time and under budget. To achieve this goal, some building owners retain another firm to conduct a peer review, while others hire a specialized firm to act as an owner’s representative. Although it seems counterintuitive to hire an additional company as a way to cut costs and ensure scheduled project completion dates are met, this is not always the case.
Firms specializing in owner representation are often hired if the building owner has limited experience in the construction industry, or if his time is better spent handling other company business. Owner’s reps usually monitor design to ensure that the owneras vision is achieved. They may create or review the project budget, including soft costs such as engineering and permitting fees. They monitor construction related activities to ensure that the contractor is being paid based on the amount of work that has been performed to date.
More recently, owner’s reps have been asked to perform additional services such as: assisting with the due diligence process or negotiating construction contracts rather than merely enforcing them. Poor owneras representation can lead to conflict within the project team or a project that is not performed to the owner’s standards. According to an article from Engineer News Record (ENR), Owners also are leaning heavily on ORs to act as corporate watchdogs for compliance and even ethics. This means that an owneras representative is responsible for all communication between the design team and the construction team, and must mediate any issues that arise. Therefore, it’s imperative that owner’s reps exemplify professionalism and integrity in everything they do.
Building owners sometimes choose to have a third party perform a peer review to help ensure their project’s success. While an owner’s representative is typically knowledgeable of the construction industry as a whole, a firm performing a peer review specializes in a specific aspect of design. Additionally, the reviewer must not be involved in any of the design or feasibility studies being performed for the owner. According to the American Council of Engineering Companies (ACEC), the peer review should help minimize future exposure that could result in claims, which means the review should point out potential future change orders during the construction process, along with potential life cycle maintenance issues. The ACEC also recommends that the peer review be well documented in the form of checklists that indicate exactly what was reviewed and the reviewer’s findings.
If an Owner’s representative and/or peer review firm is retained, it is critical that all scope of services be reviewed and discussed by the Owner with the full team to ensure that all parties are on the same page. Furthermore, direct communication between the entities should be allowed/required to prevent delays and misinterpretations. Lastly the Owner’s rep or peer review firm must take great care to avoid interfering with the Architect or Engineer’s ability to provide their services.