and subcontractors, and materials and equipment vendors, use construction documents for their bids. When a contractor and its subcontractors are awarded the construction contract, the documents instruct the laborers and tradespeople.
So that all these functions can be performed successfully, construction documents must be complete, thorough, coordinated, and accurate. The quality of these documents directly affects the number and cost of change orders submitted during construction. Change orders add cost to a base construction contract. In addition, if "low-bid" awards are mandated by the funding authority, only items detailed in these documents will be built, and they will be constructed only as detailed. Money spent to verify their completeness and accuracy is well repaid through reduction of change orders. Means of verifying the accuracy and completeness of documents are discussed in Chapter 2.
To keep the design within budget, design architects and engineers request materials and equipment costs from vendors and subcontractors. They continually evaluate cost-effective systems and methods of construction that meet the client's quality and performance requirements.
To confirm that the project remains within the construction budget, detailed estimates or updates of estimates are recommended during the construction document phase. The estimates completed during this phase are typically based on documents that are 50 to 75 percent complete. If there is reason to believe that there is "creep" in the scope of the project during this phase, the client may require additional updated estimates based on construction documents that are 75 to 90 percent complete. Following the completion of each of these estimates, the client may require the design group to conduct formal cost reduction exercises, as mentioned above. In addition, the design group may include "add and deduct alternatives" within the construction documents to respond to an uncertain bidding climate. "Add" alternatives provide additional or improved quality and additional materials and equipment to the project; ''deduct" alternatives reduce quality and scope. If the selected contractor's price comes in lower than the budget, the client can decide to select one or more of the add alternatives that meets the budget. Conversely, should the bids exceed the budget, the project scope or quality, or both, may require reduction.
The client continues to develop and refine the list of and cost for the non-construction components (itemized in "Project Cost Components" below in this chapter) that, along with the basic construction cost, constitute the project cost.
Bid and Negotiation Activities. This phase establishes the contract price for construction, the details of which are discussed in the "Construction Phase" section of Chapter 2. Unless previously established, a construction contingency must be determined that represents client funds available above and beyond the accepted construction price, which is based on a bid, or a guaranteed maximum