Client demands for speed in the design and construction of projects usually are paramount in times of high market demand, elevated interest rates, or significant inflation. The desire of clients to expedite project completion will result in the overlap of design services and construction. Clients often initiate the fast-track process with the intention of creating a shortened process, without being aware of the risks resulting from fast-tracking a project.
Fast-track projects are more likely to require clarifications and modifications to the contract documents signed by the contractor. Because the traditional sequences of completing the project are blended, it is essential to have a system of communication and a willingness by all parties to accommodate change. The fast-track method also involves a higher risk factor for the client than any of the more conventional methods of contracting.
Since construction costs will change as the documents are refined, the responsibilities for cost estimating and making changes to the design must be coordinated. If the documents are insufficiently coordinated or incomplete, subsequent work may require significant correction and additional costs.
Because this process departs from the customary sequential phasing of projects, the contractor must also acknowledge that it will not receive a full set of plans and specifications and bid on the contract accordingly. Without such acknowledgement, the unfortunate result is usually a claim, with both the client and contractor taking a position based on projects that are more conventional and both blaming the design firm for errors.
The fast-track contract should include the following:
- construction contract administration services that begin before the completion of construction documents.
- compensation for corrections or adjustments to the drawings and specifications.
- coordination of the schedules for professional services and construction.
Fast-track projects contain inherent pressures that increase the likelihood of claims. There is a chance for costly litigation when determining whether completed drawings represent a change in scope from the original preliminary drawings or simply represent completion of the original drawings. As the design firm completes or revises the plans and specifications, there is a greater likelihood of scheduling problems and an increased chance of claims for damages from delays. Furthermore, a subcontractor or prime contractor may perform work not specifically provided for in the plans but believed to be inherent when fulfilling the contract. This can lead to disputes about whether authorization was necessary and whether the client expressly or implicitly authorized the extra work.
Another related consequence is the increased possibility of a waiver of the change order procedure. With an increased volume of change orders resulting from incomplete plans and specifications, there may be a temptation to shortcut the procedures set forth in the contract and handle change orders informally to avoid delays and paperwork inherent in the change process.
Most fast-track clients understand that there will be additional design and construction costs stemming from design changes and change orders necessary to address coordination issues. Fast-track projects cost more to create, and the knowledgeable client weighs the increased design and construction costs against the profitability of putting the capital asset in place more quickly. The intermittent delays for redesigning or modifying work are already in place and the additional costs involved are intrinsic to the process. Fast-track projects are inherently more expensive for all parties involved and present risks not easily managed.
Every party involved on a fast-track project should know the inherent risks. The contract documents should specify the extent to which the design is complete and encourage the flow of information from the client and design team to the contractor and vice versa. Contract mechanisms should quickly carry the discovery of interference and design problems to the attention of those responsible. The contract should also establish mechanisms to communicate the solution to those who will incorporate it into the work.
The management flexibility necessary to complete successfully a fast-track project should not depend upon the parties' bargaining strength or sophistication. Fast-track construction, by its very nature, is an evolving, cooperative process. It is necessary to memorialize this cooperation in the language of the professional services agreement. Good lines of communication and reasonable expectations are necessary to meet the challenges of fast-track projects. The client’s understanding of the characteristics of the process should lead to an increased level of compensation for increased services and a limitation of the design firm’s risks.