operations department procedure manual indexec.randoco.com/documents/operationsmanual.pdf · 2017....

Revision Date: 9/26/2007 Operations - 1 of 60

OPERATIONS DEPARTMENT PROCEDURE MANUAL

INDEX

1 BEFORE THE PROJECT STARTS 1-1 Leadership and Coordination of Project 1-2 Subcontractor Buyouts 1-3 Selections of “Lowest Apparent” Qualified Bidder 1-4 Contingency Policy for All Projects 1-5 Subcontractor Interviews 1-6 Owner Contracts

2 PROJECT START

2-1 Notice of Commencement 2-2 Permits and Fees 2-3 State Requirements 2-4 Letters of Intent 2-5 Subcontract Agreements 2-6 Setting Up the Job Site and Trailer

3 PRE-CONSTRUCTION MEETINGS

3-1 Internal Pre-Construction Meeting 3-2 External Pre-Construction Meeting

4 SUBMITTALS AND SHOP DRAWINGS

4-1 Initial Requests 4-2 Initial Submittal Setup 4-3 Submittal Tracking 4-4 Submittal Processing and Subcontractor Payment

5 JOB PROGRESS TRACKING

5-1 Job Cost Budgets 5-2 Job Schedules 5-3 Manpower Reports 5-4 Monthly Project Manager Meeting

6 PROJECT DOCUMENTATION

6-1 Daily Reports 6-2 Pictures 6-3 Weekly Jobsite Meetings


7 EMPLOYEES ISSUES AND TEMP LABOR 7-1 Time Cards 7-2 Field Employee Hiring and Termination Procedures 7-3 Performance Evaluations 7-4 Temp Labor 7-5 Overhead Reduction

8 SAFETY

8-1 General Job Site Safety – Zero Tolerance for Accidents 8-2 Management Responsibilities 8-3 Accident Reporting 8-4 Subcontractors

9 JOB SIGNAGE

9-1 R& O General Signage Policy 9-2 Proper Signage Procedures 9-3 Safety Signage 9-4 Ordering Signs

10 SUBCONTRACTOR PROBLEMS AND NON-PERFORMANCE

10-1 Performance Notifications and Documentation 10-2 Notice to Perform or Terminate 10-3 Termination and/or Supplementation

11 CONTRACT ADDITIONS AND DEDUCTIONS

11-1 Owner Generated Change Orders 11-2 Field Generated Change Orders 11-3 Back Charges

12 CODING INVOICES

12-1 Timing 12-2 Steps for Coding

13 OWNER DRAW REQUESTS

13-1 Important Due Dates 13-2 Proper Forms 13-3 Cost Reports 13-4 Schedule of Values (Owner’s Invoice) 13-5 Preparing Monthly Billings 13-6 Final Processing and Delivery 13-7 Non-Performing Subcontractors or Suppliers

14 LIEN WAIVERS

14-1 General Rule 14-2 Types of Lien Waivers 14-3 Mechanics Lien Issues


15 SUBCONTRACTOR PAYMENTS 15-1 Prior to Receipt of Owner’s Check 15-2 Processing Subcontractor Checks

16 FORECAST REPORTS

16-1 Monthly Forecast Reports 16-2 Procedure

17 QUALITY CONTROL AND WARRANTY

17-1 Quality in Fact 17-2 Quality in Perception 17-3 Warranty Program

18 TOOL WATCH

18-1 “Tool Watch” Program 18-2 Miscellaneous “Tool Watch” Rules

19 PROJECT CLOSEOUT

19-1 Project Closeout Checklist 19-2 Closeout Meeting


1 BEFORE THE PROJECT STARTS

1-1 Leadership and Coordination of Project

A. Divisional managers evaluate and assign project manager (PM), superintendent (super), and other required personnel for the project.

B. The PM becomes the team leader once the project has been transferred from estimating or

marketing. C. The PM should meet with the estimator and/or marketer, immediately, upon award. The

estimator will get the plans to the PM and he will distribute them to the subcontractors/suppliers. The PM will read the specifications shortly after the award of the project and become familiar with the plans.

D. The PM will get the project number from accounting.

1-2 Subcontractor Buyouts

A. See Estimating Section 6 and 8-4 for additional details. B. Project management personnel will participate in buyouts when asked and work together

with project team to determine and meet job requirements. C. Buyout should be 100% complete soon after the job is awarded.

1. Large jobs with many trades or with a complicated buyout may take up to four weeks; 2. Medium jobs within two weeks; 3. Simple jobs, fast starting jobs, remodels, and short duration jobs should be done quickly

as job demands, handling the most important trades first; D. Buyout exceptions may be:

1. Self-performed work; 2. Trades where it will be better to negotiate closer to the time they are needed; and 3. Common items such as roof hatches, fire extinguishers, and access doors where the plans

are vague or a budget number was used. E. Items not bought out at the pre-construction meeting – Estimator and PM will agree on who

is going to finish buying those items out.

1-3 Selections of “Lowest Apparent” Qualified Bidder

A. PM, estimator, and super should meet, review, analyze and agree on proposed subcontractors and not, necessarily, award to the lowest responsible bidder.

1. PM should obtain copies of low bid proposals to review and compare the scope and

pricing.


B. The decision of “lowest apparent bidder” should be based on;

1. Ability of subcontractor to do the work; 2. Ethical and long term ramifications of not using low sub; 3. Cost differences between subs; 4. Whether they failed or were termed from a previous job.

C. On negotiated jobs the team should solicit bids only from proven subcontractors and attempt

to weed out non-performing subs. D. Points to remember if subs want bid results before the interview meetings:

1. The low number sub is only the “apparent low bidder”; 2. Be careful discussing bid results with subs and withhold final information when there is a

large gap between bids or the low bid is questionable; 3. The best time to negotiate favorable deals is before the subs know they are low bid and

by how much.

E. Subcontractor relations – We depend on subs to help us be low bid on projects.

1. Always treat subcontractors the way you would want to be treated. 2. Be as ethical and diplomatic as possible and do not take your frustrations out on a sub. 3. NEVER tell a sub that he can’t bid with R & O or that he’ll never do work for the

company, again. Discuss any problems with the chief estimator or the divisional manager.

1-4 Contingency Policy for All Projects

A. After the project is bid and awarded - The team will complete all buyout of contracts and

evaluate risk on each subcontractor. B. After buyout is complete - The team will hold an in-house pre-construction meeting within

30 days of award of project (Section 3-1). The questions to be answered prior to the internal pre-construction meeting are as follows:

1. Costs calculations – The actual cost of the assigned super and, if applicable, assistant

super shall be calculated and the cost estimate adjusted to the correct dollar amount. General Conditions (GC’s) must be covered but need to be managed. Remove excess contingency from GC’s or add money to budgets that are too low.


2. Risk evaluation of subcontractors – Any contingency carried at bid time by the team for a specific subcontractor will be reviewed. Contingency for justified risk will be placed in separate phase codes within the applicable division of work. Contingencies need to be released as risk is minimized and/or sub completes his scope of work.

• For example: Steel Erector (X) bid = $90K; Steel Erector (Z) bid - $120K, team

carried $105K at bid time. After interview of Erector (X), team decides to use Erector (X) and carries the $15K in contingency or separate phase code called Erector Contingency. After sub is complete, PM releases $15K to the bottom line.

• Any contingency carried will need to be explained. Contingency amount, if any, will depend on type of project, risk, complications, and experience.

3. Any buyout money left after this process will be put in phase #19-002 for the initial

submission to accounting in order to force the “original estimated” gross profit to be equal to the bid day profit. After the original estimated gross profit is established for the accounting reports, the contingency left in 19-002 will be released as profit.

4. The original estimated gross profit shown on accounting reports should be the lower of

bid day profit or buyout profit. 5. Line items left to be bought out will be identified and assigned. The responsible

individual will be held accountable to ensure buyout is complete by the completion date (the date set in the pre-construction meeting when everything is to be bought out).

1-5 Subcontractor Interviews

A. A team consisting of the estimator, PM, superintendent, and risk manager will jointly

determine risky or questionable subcontractors that need interviews. Divisional managers are invited to be a part of the decision (also see Estimating, Section 7-2).

B. Interviews will be conducted by at least three team members. The PM, estimator, and

superintendent should be there if at all possible.

• Interviews will always be recorded.

C. After the interviews, decisions on subcontractors will be made by consensus of the team members. Our objective is to eliminate as much risk as feasible.

D. Options for high-risk subs are:

1. Bond the subcontractor, even if R & O must pay the full cost of the bond as a last resort; 2. Negotiate with the next bidder for the best price; 3. Obtain more sub bids, if needed.

E. Complete the “Project Buyout Meeting & Sub Interview” form (located on Employee Central/Employee Toolbox/Superintendents) within 7 days of notice of award. Copies go to subcontractor risk manager, divisional manager, and controller.

F. The PM, estimator, and superintendent (if available) need to meet and review all subs to be

used on the project, PRIOR to awarding any letters of intent, and/or subcontracts.


1-6 Owner Contracts

A. Letters of Intent (LOI) – A copy of any LOI from an owner MUST be copied to and reviewed by the division manager and chief estimator prior to any LOI’s being sent out to subcontractors. The items that need to be carefully reviewed in each owner LOI are:

1. Does the LOI give R & O authorization to proceed with only shop drawings and

submittals? 2. Does the LOI authorize R & O to issue subcontracts? 3. Does the LOI limit what work can start (limited notice to proceed)?

• Do not assume the LOI allows us to proceed with all items.

4. Is the wording adequate to protect R & O, or do we need to respond in writing to clarify the intent of the document (for example: start date, duration, contract amount, etc.)?

5. Who provides the Builders Risk (BR), R & O or the owner?

• If it is the owner, make sure we obtain the BR certificate from the owner.

6. What are the liquidated damages (LD’s), if any, in the contract?

B. R & O generated prime contracts - The estimator should write the contract with input from

the PM. The unsigned original is sent to the owner and a copy to the PM. The PM and estimator will both track the return of the signed contract. Include in all owner contracts:

1. Commencement date, duration and end date; 2. Permits and fees, mark-up on CO’s, billing requirements, Notice of Delay requirements,

liquidated damages amounts per day; 3. Finance verification (with a written document, signed and dated, stating that all finances

are approved and in place before any work will begin). This verification is the responsibility of marketing and estimating;

4. Assumptions, exclusions, and clarifications.

C. Owner generated prime contracts – Chief estimator and estimator reviews contract to:

1. Verify start dates, subject to finance verification as in prior section; 2. Verify schedule dates; 3. Verify completion dates; 4. Verify penalty and/or bonus clauses; 5. Check or review change order or markup clauses (check contract documents, i.e., plan

sheets, soil reports, specs, etc.); 6. Verify whether interest is allowed or required;


7. Verify retention amount (see “State Lien Law Reference”, located on Employee Central/Employee Toolbox/Project Management);

8. Verify whether there are any LD’s provided for. 9. Report any abnormalities to the division manager. If there are changes, the estimator

renegotiates and makes corrections Once this review is done the contract is signed, sent to the owner, with a copy to the PM.

10. Assign one primary person to be responsible for tracking the contract return or everyone

assumes the other is doing it. However, estimator should be responsible for tracking and return of the contract, with PM to make sure it gets done to prevent a chance of the contract falling through the cracks.

D. Obtain a copy of the owner’s contract from the estimator and maintain a copy in the project

files. E. Notices of Delay – Confirm at the beginning of the project the contractual procedure for

sending Notices of Delay (owner or R & O generated contracts) to the owner in the event of a legitimate delay.

1. Do not delay sending the notice within the contractual time frame.


2 PROJECT START

2-1 Notice of Commencement

A. Check the “State Lien Law Reference” form located on Employee Central/Employee Toolbox/Project Management to determine whether the state the job is located in requires the filing of a Notice of Commencement.

1. In Utah, the Utah Construction Registry facilitates the filing of the Notice of

Commencement. We must ensure that a “Notice of Commencement” is filed on this website, www.constructionregistry.utah.gov, (or go to the State Lien Law Reference form) within either 15 days of issuance of the building permit or starting of ANY work on the job.

• When you fill out the “Notice of Commencement” information you will need to

provide 3 e-mail addresses, including [email protected], your own e-mail, and your PM’s e-mail.

• You will be issued an SCR # upon filing, which should be distributed (or the building permit #) to the subcontractors on the project as soon as possible via the Letter of Intent, the contract, or a mass faxing.

• Periodically do a search by project name or address to find out if anyone else has filed a notice of commencement on this project. If so, contact the state registry at the “Contact Us” link and have the notices linked to the one R & O filed, so we can eliminate the possibility of missing preliminary notices we have no knowledge of or have not received.

2-2 Permits and Fees

A. Once the Notice to Proceed (NTP) is in your hands, PM reviews it with the divisional

manager and chief estimator in order to verify and obtain any permits, as well as review for the following items before sending the Letter of Intent (LOI) to the subcontractors:

• Does the NTP give R & O authorization to proceed with only shop drawings and

submittals; • does the NTP authorize R & O to issue subcontracts; • does the NTP limit what work can start (limited notice to proceed); • Is the wording adequate to protect R & O or do we need to respond in writing to

clarify the intent of the document (example: start date, duration, contract amount, etc.)

2-3 State Requirements

A. Permits for job trailer & signs (all states) – You may need a permit from the city before

setting up job trailer. Verify this prior to setting up a trailer or a job sign on site. B. Nevada

1. Notice to Owner of Lien Rights - Send the signed notice (signed by the person who signs

the owner’s contract) to the owner with the prime contract. A copy of the signed notice should be attached to every subcontract agreement that goes out on the job


2. Subcontractors’ bid limits and license numbers - It is the responsibility of the estimator

and estimating assistant to ensure that all licenses are valid. On Nevada jobs, a copy of the subcontractors’ bid limits and license information must be printed out from the Nevada State Contractor’s Board website within 7 days of receiving a Notice to Proceed on the project. A copy of this information must be given to the PM/PA to keep in their file. If you don’t have this information, confirm proper licensing and bid limits for subcontractors on all NV jobs before sending out Letters of Intent or subcontract agreements. (See Estimating, Section 6-5 for license estimating verification duties)

3. Nevada Power – If necessary, add any personnel to the list of authorized callers. (Select a

PIN #, then use the PIN when calling in) 4. Inspection Requests for Las Vegas, North Las Vegas, Henderson, and Clark County, NV -

All of these entities have their own website, and inspection requests can be done via the Internet website. Just research the site address, follow the prompts and make your request for inspection. Such requests will require the permit number to schedule the inspection.

C. New Mexico

1. New Mexico Gross Receipts Tax –

• PA must send out coupons to the job subcontractors, suppliers, and vendors. • PMs must add the gross receipts tax to all change orders. R & O is responsible to pay

this based on the total contract amount of the project, otherwise it will come out of your job.

D. Arizona

1. Preliminary Notice – In Arizona, the GC must file a Preliminary Notice with the owner (a copy is located in the Project Asst. folder under “Preliminary Notices”).

2. Bonded jobs – The performance and payment bonds must be recorded in compliance with

ARS Section 33-1003 in order to prevent any liens being filed against the bonded project.

Requirements: • Record the bond and a copy of the owner’s contract (with legal description) in the

county where the land is located. • Within ten (10) days of our receipt of a preliminary notice from the subcontractors

or suppliers on this project, send a copy of the payment bond, including the name and address of the surety company and bonding agent, to the person who supplied the preliminary twenty day notice.

3. Arizona Privilege Tax – The requirements are the same as for the New Mexico Gross

Receipts Tax

E. Wyoming

1. Wyoming Use Tax - PA must register with the state and file a tax revenue bond with the Department of Revenue, within 15 days of project award notification.


• Send the state a list of subcontractors, then the subcontractors should respond to the state. (The packet is located on the V drive in the Project Assistant folder).

• Upon job completion we must have a certificate of release in order to obtain our retention.

• You do not add this tax to change orders.

F. Washington

1. Washington Retaining Tax - PA needs to send out coupons to the job subcontractors, suppliers, and vendors.

2. Post notice in trailer – For any construction project more than five thousand dollars the

GC shall post a notice (as per RCW 60.04.230) containing the following:

• Legal description, or tax parcel number, and address or identification of the job site; and

• Property owner’s name, address, and phone number; and • GC’s business name, address, phone number, current state contractor registration

number; and • Either (i) the name, address, and phone number of the lender; or (ii) the name and

address of the firm issuing a payment bond, if any, for an amount over 50% of the project cost.

• In the alternative: Building permit applications require this same information, and if the project requires a building permit, posting of this permit will constitute compliance with this posting requirement.

G. Colorado

1. Colorado Use Tax - All jobs in Colorado have a use tax that must be paid by all subs.

We must pay the Use Tax on all materials purchased outside of Colorado.

2-4 Letters of Intent

A. Letters of Intent (LOI’s) - Think of this as the subcontractor’s “Notice to Proceed with Submittals”. LOI’s cannot be sent to subcontractors until the Notice to Proceed or signed contract has been received from the owner. This same rule applies to subcontract agreements.

B. Use the form letter (located on the “V” drive, Project Assistant folder, and “Notice of

Intent” file). Note: Include the building permit number, if available, on the LOI.

1. New subcontractors that do not already exist in Timberline (or haven’t worked with R & O, before, will need to have a W-9 form sent to them with the LOI.

• This form must be filled out and returned to accounting prior to any payments being

processed.

C. If you receive notices from subcontractors alerting you to a future price increase or lead time issue, please forward this information to your PM and/or division manager and to all team members.


1. Include the “lock in material costs” phrase in the LOI’s. 2. You may need to look at specific language to add to the subcontract agreement stating

they will guarantee the pricing for the duration of the project. On long term projects this is a critical detail.

3. Important Note: PM’s and supers, never allow a subcontractor to come on to the site or

start work without a signed indemnification agreement and proper general liability and workers compensation insurance certificates in place. This rule applies to subs coming on the site for a small, one-day or less job. They can create as much liability as our main subcontractors.

• If time is an issue, use the one page indemnification agreement located on the

Intranet, under the “Operations Forms” section. • If you are using a Purchase Order, make sure it contains an indemnification section or

attach the one page indemnification agreement.

D. Shop drawings/submittals – After a subcontractor/supplier has been awarded the job, they are required to submit literature and samples on their scope of work required by their specification section. More specifically:

1. Submittals are samples and literature of the product the subcontractor will be using on the

project. 2. Shop drawings are from suppliers or subcontractors showing the sizes and dimensions of

materials and equipment to be used on the projects. 3. Approval of all submittals must be made by the owner/architect, PM, and Superintendent.

(More details in Section 2-5 and Section 4)

2-5 Subcontract Agreements

A. Preparation – Ideally, the estimator and PM compose the subcontract scope of work together and if this can’t happen, the estimator composes the scope. The estimator should have the rough draft ready within 5 working days of receipt of the LOI or Notice to Proceed from the owner.

B. Contract packages - PA prepares subcontract agreement, including all attachments (located

on “V” drive, in Project Assistant folder, then under Contracts). The contract you choose depends on; (i) the state where the project is located; (ii) whether to choose the regular, small (only if sub refused the regular), or material supplier contract (only if sub is just supplying the material, not labor), and; (iii) whether we have a stock contract for a specific subcontractor we use over and over. Items to be included in the subcontract agreement:

1. Scope of work – The PM should carefully review the scope of work to ensure all required

scope items are listed. The scope of work should include a detailed description of work, specification section(s), exclusions, and any items discussed in the sub interview!

• Note to PM’s: Review subcontract agreements involving subs doing trenching or

excavation and ensure all scopes include a provision requiring the sub to contact the


appropriate parties to have utility lines marked. DO NOT ever direct earthwork subs where to dig.

2. All basic information listed on first page, including required number of submittals from

subcontractor 3. Contract amount 4. Start and finish dates 5. Phase code and permit number, if available 6. Addenda – Only if project has been issued the addenda 7. Value engineering (if any) and amounts of each change itemized 8. Attachment A – specification sections 9. Attachment A-1 – insurance requirements 10. Attachment B – Statement of Competent Person and Employee Training form. 11. List any alternates, if they have been accepted. 12. Cover letter – Explanation and instructions for processing the enclosed documents, along

with a checklist of necessary items to process the sub’s payments.

C. Final Review - PM and estimator will review and make any necessary final changes. Carefully review for out-of-state requirements, contract stipulations by the owner (i.e. sales tax, retention, gross receipts tax, etc.)

D. Distribution and Tracking – This process is very important as it will affect the accounting on the project, as well as affect future dealing with the subcontractor and suppliers.

1. Once the contract package is complete, the PM and PA are responsible to have the

contracts mailed, via UPS ground, for tracking purposes.

E. Processing - PA will create and regularly update a tracking log to check for:

1. Timely receipt of both copies of the signed contract. All subcontracts need to be signed and returned with all insurances before the subcontractors start working on the project. If that is not possible with the first subs to come on site, make sure you have a signed indemnification agreement in place, as well as valid insurance certificates (which must be tracked and communicated to the superintendent, weekly).

2. Completed affidavit – It does not need to be notarized and must be returned to received

any payments. 3. Resolution of any subcontract changes - If there are changes to the scope, check with

estimator for approval. Any other changes, submit to in-house legal for review. If changes are negotiated with the subcontractor, make sure any change is identified by using italics, bold writing, or strike-outs. All changes must be agreed upon and initialed by both parties. There must be a meeting of the minds on all contract provisions.


• Special Note: R & O will NOT sign any factoring letters or Notice of Assignments. Our subcontract agreement strictly prohibits assignment or subletting without prior written consent from R & O. Submit any factoring letters or notice of assignments to the legal department, immediately.

4. Signatures by PM to both copies of the contract, then return to PA. 5. The PA files one (1) copy, mails one (1) copy to the subcontractor, and forwards one (1)

copy to the super.

F. Insurance Requirements – Check insurance certificate records in Timberline for all subcontractors on the project. If necessary, request certificates for the files.

1. General Liability (GL)

• Verify proper “additional insured” endorsements are in place • Obtain the “completed operations” endorsement, especially for those higher risk

subcontractors like steel erection, framing, excavation, fire suppression, electrical, plumbing, HVAC, etc.

• For any questions or for deviations from these requirements, contact the legal department and/or the divisional manager, and the decision will be on a case by case basis depending on risk factors.

2. Workers Compensation (WC) - Confirm that all subcontractors have WC certificates in

place prior to stepping on site for any reason. 3. Suppliers

• When in doubt, obtain GL and WC certificates. • If a supplier balks at providing these certificates, the general rule is if the supplier is

actually delivering to the jobsite, they must have GL and WC certificates in place, but if they are using a common carrier to bring the material to the site, they may not need to provide us with GL and WC certs, exceptions to be determined on a case by case basis.

4. Builder’s Risk (BR) – If R & O is to provide the BR for the project, the PA will need to

request a BR certificate for the owner, with a copy or an e-mail to the insurance risk department, requesting this job be put on the report. Check that the job contract amount matches the BR limits for that type of construction. Based on the certificate or e-mail, the job will be put on the BR report and only then is the job covered.

G. Coordination with Accounting – Once the subcontracts have been distributed, processed, and

the affidavit has been received, the following paperwork needs to be prepared and turned in to the accounting department for payment and contract purposes. NOTE: Do not wait for all insurance certificates to be in prior to turning the contract into accounting, but still track the insurance (no payment will be made to the subcontractor until the insurance requirements are in to R & O):

1. Take the blank contract cover sheet out of the file. 2. Make a copy of the affidavit for your project files, then attach the copy of the affidavit to

the signed contract cover sheet.


3. Verify the phase code and that the contract amount doesn’t exceed the original estimate

for that phase code. 4. Turn this paperwork into the accounting department, where they will enter the contract

amount into Timberline.

• This will help the PM code the invoices and make sure the subcontractor is not exceeding the contract amount

• This will allow a subcontractor/supplier to be paid for the monthly draw if the invoice was in the office in time for the draw procedure. PA needs to re-verify that the proper insurance is in place before the first draw is paid

• No subcontractor or supplier can be paid until the above information has been received and turned into accounting

2-6 Setting Up the Job Site and Trailer

A. Computer setup – PA and/or superintendent checks for DSL service to site, and if not,

arranges for a wireless card or dial up access for the computer. B. Phones, fax, and camera – PA and/or superintendent arrange for phone hookup and obtain

fax and digital camera from the IT Department. Job may require copier and/or scanner and this is obtained from the warehouse expeditor.

C. Utilities – PA and superintendent work together to arrange for:

1. Utility hookup to the trailer, and for generator use if there is a delay in obtaining utilities.

• Note: When setting up utilities for the job site, make sure one person from accounting

is added as one of the authorized users, as they may need to handle disconnect notices or late payments.

• Take every possible precaution to secure a generator from theft (removing trailer hitch, removing wheels, whatever it takes).

2. Dumpster(s)

3. Temporary toilets 4. A drinking water source for subcontractors 5. When in NV and CA provide a job site heat relief source for summer work.

D. City requirements

1. The PM, PA, and super need to determine city and contractual job site security needs and

make appropriate arrangements. This might include fencing, cameras, lights, security services, etc. for the trailer, site, and/or building.

2. The super should meet with the city to understand the types of inspections needed for the

job.

E. Job Setup Form – Complete this form (located on the Intranet under Employee Toolbox/Project Manger Forms) and submit to accounting.


3 Pre-Construction Meetings

3-1 Internal Pre-Construction Meeting

A. Scheduling meeting – (See Estimating, Section 7)

1. Schedule prior to project start 2. Invite the President, chief estimator, estimator, operations manager, divisional manager,

marketing, job cost accountant (JCA), PM, super, and PA. 3. Estimator conducts the meeting 4. PM is responsible to have the reports printed and notify attendees of the meeting. 5. PA prepares the agenda based on the Pre-construction Meeting form (located in the

“Project Assistant’s” folder on the “V” drive) 6. Review R & O’s change order policy, “we do not proceed with any changes unless we

have pre-approval in writing (or e-mail) from the owner or owner’s representative”.

B. Paperwork requirements – See Pre-construction Meeting form for all requirements

1. The PM is responsible for opening and closing accounts, obtaining bonds (performance and payment, subcontractor bonds, if needed, state tax bonds, etc.), filing the Notice of Commencement (see section 2-1), checking insurance certificates (subcontractors’ and owner’s), and receiving owner’s contract from estimator.

2. Complete and track all owner contract requirements prior to meeting (see Section 1-6).

C. Job site start-up – See Section 2-6 for start-up requirements, which must be completed prior

to meeting.

1. Make provisions as to how vehicular and pedestrian traffic will be managed (i.e., signs, barricades, flashers, walkways, flagmen, detours, etc.,) where the contract limit fence will be routed, and if there will be need for a security watchman.

• Make sure these details are coordinated in the subcontractor pre-construction meeting

with the subs responsible for that scope or work.

D. Project schedule – Obtain the overall schedule from the superintendent and the PM within a week after the start of the project.

E. Job budget/cash flow – Estimator creates a schedule of values for monthly billings and JCA

enters the schedule into Timberline. F. Job budgets

1. PM should be familiar with the estimates, and will need to be prepared to ask any

questions regarding the project.

• Estimator must make copies of the subcontractors’ proposals for the PM.


2. PM must receive all take-off sheets for materials and labor

G. Travel time and mileage - PM will set up super’s travel time, out of town costs, truck allowance, and per diem. The GENERAL RULE: All field employees are expected to drive the first 30 miles and the first 45 minutes to and from their job sites prior to receiving reimbursement for any mileage or travel time. The following are further clarifications to this general rule:

1. Mileage will be paid to employees traveling to an out of town job the first time down to

the project and the last time back. (This is intended to reimburse them for the travel necessary to relocate their vehicle and belongings).

2. Mileage will be paid if the employee is pulling a trailer for R & O to transport R & O

tools or equipment to or from the office. 3. R & O will pay mileage to supers working away from their “home” town while traveling

to and from the airport in the state they are working in. However, the first 30 miles each way are non-reimbursable.

4. Travel time and mileage will NOT be paid to supers working away from their “home”

state while traveling from their apartment to and from their job site. Field personnel are expected to find a place to live within a 30 mile range of the job site. If this cannot be done, prior approval needs to be obtained from the divisional manager.

5. The cost of travel time and mileage equivalent to the cost of an airline ticket purchased at

least two weeks prior to the flight will be reimbursed to employees who opt to drive home on their designated weekends rather than flying. Any mileage or travel time in excess of the cost of an airline ticket will not be reimbursed.

6. For supers working away from their home state, rental cars, rented while at home will be

reimbursed in an amount equal to the weekend rate of a mid-size car. Any costs in excess of this will be at the expense of the employee.

7. R & O does not pay travel time while traveling home on airplanes, wait time at airports,

etc. Travel time is only paid when traveling in a vehicle for over 45 minutes each way to and from the job site. Any travel time to be charged to a specific job should be reviewed and determined in the pre-job meeting.

8. R & O will pay the airport parking fees. Long term parking is expected to be used and

any excessive cost for using short term parking will be at the expense of the employee. 9. Supers are expected to be on the job at the start of the work day on Monday and until the

end of the work day on Friday.

H. Out of town job arrangements – PM and PA arrange living accommodations, airline or driving allowances and times, rental cars and any other required out of town costs.

I. Meeting minutes and follow-up

1. PA’s send copies of the meeting minutes to all persons listed on the pre-job conference

report.


2. NOTE: PA’s identify very clearly on the report what trades are left to buy out and whose responsibility it is to buy them out. List this information in the “Phases Open to Buy” section located on the last page of the report

3-2 External Pre-Construction Meeting

A. Scheduling meeting - The PM will schedule and conduct the meeting at the job site or at a

pre-arranged conference room.

1. Make reservations for the location of the meeting and request drinks and a small snack. 2. An invitation should be sent out at least 10 days prior to the meeting to all owners,

architects, city officials, subcontractors, suppliers, etc. On the day before the meeting, a follow-up call should be made to remind and confirm who will be attending the meeting.

B. Meeting Management

1. All attendees must fill out all the information requested on the sign-in sheet (found on the

“V” drive, in the “Project Assistant” folder, in the “forms” sub-folder). 2. The standard agenda is prepared by the PA and adapted to the project (found on the “V”

drive with the sign-in sheet), where you will find a basic agenda or agendas for owners with specific needs.

• The goal for this meeting is to cover all information pertinent to all parties. • Give the owner, architect, and super a chance to speak, but let them know ahead of

time that they speak after the super. • Have a session in the meeting for any questions concerning the project. • Safety director will talk about safety.

3. Start the meeting on time, introduce all personnel, and address all items on the agenda 4. After the meeting starts, distribute and review the preliminary overall schedule, review all

dates that need to be met, and make sure it includes the paragraph on the bottom of the schedule that allows R & O leeway in making schedule changes.

5. Review all rules and regulations, R & O’s rules as well as any other rules that may apply.


4 SUBMITTALS AND SHOP DRAWINGS

4-1 Initial Requests

A. See Section 2-1and D. Note: Even though some projects might not contractually require submittals, R & O Construction projects always require submittals from the subcontractors/suppliers.

4-2 Initial Submittal Setup

A. Specification review - The PM must go completely through the spec book, find all the

required submittals, and enter them into Expedition and/or PJ. B. Create a submittal log - Send a copy to the owner, architect (if there is one) and super (if

specifically requested).

1. ALL required submittals must be entered at the start of the project in order to track those which haven’t been received yet.

C. Submittal return - All submittals need to be received within 30 days from receipt of the

Notice to Proceed.

1. The subcontractor(s)/supplier(s) must supply you with a minimum of 7 copies of each submittal unless otherwise noted. Make sure you keep one copy for our files and one copy at the jobsite trailer.

• Do not assume the subcontractor/supplier is submitting on the specified items and

forward them on without review. • The manufacturer(s), model #s, etc. need to be checked by the PM and sent back if

they are incorrect or noted as an alternate submittal if allowed by the spec. • If you have a question or concern, contact your divisional manager

2. The PA must make sure to send the correct number of copies out in the package.

D. Initial submittal review – The PM must review the submittals and make sure they match the

specification book, unless otherwise noted. If they are correct, stamp them, if they are incorrect; send them back to the subcontractor for correction.

1. The PM forwards the reviewed and stamped submittals and shop drawings to the

architect/owner for approval. 2. Upon approval, the submittals are returned to the PM. He/she will review for any

changes; then if acceptable, distribute them back to the subcontractor and super. 3. The super must use the submittals throughout the construction of the project.


4-3 Submittal Tracking

A. PM reviews the submittals received from the subcontractor, then enters them into Expedition and/or PJ.

1. Enter the date you received the submittals. The submittals should be date stamped on the

transmittal. 2. Enter the date you are sending them to the owner/architect. 3. Send one copy of the shop drawing to the super to review.

B. Generate transmittal to go with the submittal once the submittal is entered, via Expedition

and/or PJ.

1. Include remarks on the transmittal if needed, notifying the architect of critical items, etc.

C. Owner/architect approval - The owner/architect will send the submittal back with a stamp either approved or rejected. Enter this into Expedition and/or PJ.

1. Enter the date we received the submittal back from the owner/architect. 2. Enter the status of the submittal (approved or rejected). 3. Enter the date you are sending them to the subcontractor/supplier. 4. Enter any color selections, including manufacturer, type, etc. in the remarks field.

D. Copies of submittals - Once the submittals are logged and the transmittals created, edit the

transmittal to show how many copies the subcontractor/supplier will receive.

1. Keep one copy for the office files and one copy for the superintendent. The rest of the copies go to the subcontractor/supplier, making sure the subcontractor gets at least one copy if there are not enough to go around.

E. Rejection - If the submittal is rejected, repeat the process until approved.

4-4 Submittal Processing and Subcontractor Payment

A. No payments will be processed for the subcontractor/supplier without the correct paperwork

in place (submittals, contracts, insurances, etc.)


5 JOB PROGRESS TRACKING

5-1 Job Cost Budgets

A. At the job start – The PM will do an initial review of the job cost budgets (costs anticipated on a line by line basis) before they are turned into accounting and decide with the estimator if any of the budgets need to be adjusted. Points to consider:

1. We want the most realistic budgets that we can get. 2. If there happens to be extra money found during the buyout process, then the estimator

and PM will jointly decide where to show this money.

• If both team members are confident the budgets are adequate; then show the buyout money as profit.

• If some of the budgets are weak, you may decide to bolster some numbers or show a line item for contingency, depending on the situation

B. As the job progresses – PM will review “Job Cost Reports” (printed after every pay period)

on a monthly basis, with the super.

1. Review percent complete vs. percent of cost on each line item. Keep a copy of the standard phase code list.

2. Double check to make sure costs are coded and charged to the right phase codes. 3. Job cost adjustments can only be made with divisional manager approval or at the in-

house pre-construction meeting.

C. Forecast reports – These are the projected estimated job profit and loss reports (what is budgeted, what has been spent, and the cost to finish out) printed on the 1st of every month and due back in to the JCA by, approximately, the 3rd Monday of the month to give the JCA time to review and turn in numbers to the controller by the 3rd Wednesday of the month.

1. The JCA prepares the forecast reports for the PM. Make the reports as accurate as

possible, but be on the conservative side. 2. PM reviews the report for accuracy then forwards it to accounting for preparation of

financials.

5-2 Job Schedules

A. Before the job starts – The super prepares and the PM reviews the initial overall job schedule.

B. During the job – The super updates the overall schedule on a weekly basis and from that

updated schedule he creates a three (3) week rolling (look ahead) schedule. The PM always reviews both the overall and the rolling schedules to make sure they are tracking properly.

1. The super gives a copy of the updated long term and the three week rolling schedule to

the PM on the day of the weekly jobsite meeting.


2. If the job is behind, the super prepares a recovery schedule to get the job back on track.

C. Notice to subcontractors – Super should give subcontractors three (3) weeks notice of the start of their scope of work, so they can start attending the weekly meetings and prepare to start their work.

1. Always make sure that all subcontractors sign in at the weekly meetings.

5-3 Manpower Reports

A. Give weekly updates on each project regarding schedule, status of job, R & O employees on

each job, problem subcontractors, etc. B. Jobs completed – Update status on projects completed but not closed out. C. New jobs will report weekly on status of submittals received and give weekly updates of

needed submittals. It should take 30 days to receive all submittals. D. Preparation – Supers must call the PM one day prior to the Thursday manpower day, with the

necessary manpower for the following week. The manpower coordinator will then schedule the manpower for the following week.

1. NOTE: PMs are the only people who can move manpower 2. Manpower allocation is based on project needs, pending layoffs, skill levels needed and

available, and seasonal considerations. 3. Manpower reports will be distributed to all PM’s, supers, division managers, and other

appropriate persons.

5-4 Monthly Project Manager Meeting

A. PM’s and division managers will meet monthly to discuss:

1. Ongoing training and new training needs 2. Accounting issues, outstanding invoices, etc. 3. Manpower needs 4. Potential or ongoing problems 5. Customer service 6. Safety, contractual and any other pertinent issues


6 PROJECT DOCUMENTATION

6-1 Daily Reports

A. Mandatory on all projects – The super prepares the daily reports in Expedition and/or PJ and should detail who, what, when, where, and why for each subcontractor and person on site for each specific day. The PM is responsible to check that the reports are being done on a daily basis.

1. The basic function of the reports is to detail the daily construction activity for the entire

project.

• They should tell a story in enough detail for you to answer what was done on your project a year or two years from the project completion.

• Do not use sarcastic comments, swear words, disparaging comments about individuals, or inaccurate reports.

2. Super makes comments and notes on new and ongoing issues/problems. 3. Super details important conversations/correspondence between players.

B. Report contents - DO NOT use the “Generate” key in Expedition to make the day’s report

from the prior day, unless you have verified that the report will be accurate.

1. Verify the manpower, visitors, rentals, any accidents, incidents, meetings, etc. for each day.

• For example: If a subcontractor is listed as behind on Monday and is still behind on

Tuesday, then it is fine to correct, but if he mans up on Wednesday and this comment continues for the next 3 weeks, this is inaccurate and will hurt us in the event of a lawsuit.

2. Document project delays and start tracking delays 3. List accurate weather conditions and information 4. List R & O materials, temp labor, and equipment cost coded in appropriate area. 5. Make scheduling notes, i.e., when subs were scheduled and if they are late, now shows,

or delinquent.

C. Problems with daily reports –

1. NOT ENOUGH DETAIL!!! 2. No notes/comments/correspondence written by super 3. Weather logged is inconsistent with weather stations and historical reports 4. The manpower count for subs and basic sub information is not accurate or detailed

enough. We must know their manpower on a daily basis. 5. No R & O manpower, equipment, materials, temp labor listed or cost coded.


6-2 Pictures

A. Types of pictures required –

1. General project progress 2. Subcontractor progress 3. Damages on jobsite – used for backcharges 4. Garbage and cleanup 5. Backup: RFI’s, change orders, backcharges, daily reports, etc. 6. Weather conditions 7. Accidents – Even if the accident doesn’t appear to be related to our project, take a

picture, anyway.

B. Guidelines for pictures

1. Take pictures every day. On large projects you may average 5 to 10 pictures per day; more as the job progresses.

• For quality control documentation, take pictures before you close walls or at

construction locations subject to construction defect problems

2. Take multiple shots from different angles of important issues 3. Use a tape measure to show size and depth 4. Try to include backgrounds that will help support the location of the picture 5. Digital pictures should be properly renamed and transferred to the office within 24 hours

of taking

C. Common problems with pictures

1. No pictures or not enough pictures 2. Not the right angle or not enough angles 3. Bad quality – take more to get it right 4. Date on the picture does not support the paperwork. Check to make sure the date and

time on your digital camera is correct


6-3 Weekly Job Site Meetings

A. Attendance

1. PM’s must attend as many weekly meetings as possible.

• For out-of-town projects, the PM must attend the 2nd or 3rd meeting every month, but may need to attend more, depending on job status, schedule, and other special project needs.

2. Subcontractors on site must be in attendance at the weekly meeting. Subs not yet on site

must start coming to the meetings at least three weeks prior to being on site. 3. Invite the owners and architect, where necessary or appropriate. 4. Subcontractors not in attendance must have a copy of the schedule, agenda, and meeting

minutes faxed to their attention with a note reminding them of the non-attendance of their company.

B. Leadership

1. Super must conduct the meeting with the PM overseeing 2. Start the meeting on time. Tape recording is encouraged, but meeting minutes are

mandatory. 3. All parties attending the meeting must turn off all phones and pagers, although owners

may be an exception to this rule.

C. Meeting Information

1. A sign-in sheet, agenda, weekly schedule from Suretrak, and meeting minutes from Expedition and/or PJ must be at all meetings.

• Make sure ALL attendees sign in.

2. Make the meeting brief and to the point and resolve any questions. 3. Discussions on safety issues, staging areas, scheduling, and all necessary coordination of

the project must occur.

• Solutions to problems with subs behind schedule or other project concerns are proposed and tracked.

• Make sure the meeting minutes are tracking who is responsible for each item. Assign a start and completion date for each item.


4. Review the status of submittals at each meeting. Focus on submittals not turned in or held by architect too long.

5. Review all open RFIs. All RFIs are to be in writing and in Expedition and/or PJ. A log

can be reviewed at each meeting.

D. Customer service – Supers may hold the meeting with owner, architect, and subcontractors or have them separately, according to the PM’s and/or owner’s discretion, or the size of the job.


7 EMPLOYEE ISSUES & TEMP LABOR

7-1 Time Cards

A. Review and approval

1. PM must review all field employee and PA time cards 2. PM must make sure the super has coded the time cards according to the “Summarized

Cost to Date Report” (with proper phase code and category)

• Make sure the job number is on timesheet • Make sure employee number is on timesheet

3. PM must initial each time card in red ink when approved

B. Due date

1. Time sheets must be complete and turned in to payroll each Monday of payroll week by

12:00 p.m. (noon), unless otherwise notified.

• If timesheets cannot be in to payroll by 12:00 pm., you must notify payroll when to expect them.

• Any timesheets not in by Tuesday at 5:00 p.m., may not be processed until the next pay cycle.

C. Additional expenses and approvals

1. Note on the super’s time card when truck allowance is not applicable. 2. All reimbursement sheets must be coded, initialed, and signed off with receipts attached.

All payroll forms are located on the Intranet under Employee Toolbox/Payroll Forms. 3. Review mileage and initial. 4. Make sure you coordinate with payroll on travel time for all field employees.

D. Superintendent paperwork requirements

1. The super must turn in a time card for each R & O employee on his job.

• Enter the employee name, start and stop time, travel time, and lunch time taken. • Make sure employee signs their timecard.

2. The super should write in on each applicable employee time card, “employee went to

____(job name)___”, when an employee leaves their job midweek.

7-2 Field Employee Hiring and Termination Procedures

A. All employee hiring for field positions, by PM’s or supers, must go through and be approved by the Human Resources (HR) department. See on Intranet under Your Choice Information/Supervisor Resources.


B. Any layoffs or terminations, by PM’s or supers, must be discussed with and approved by the HR department before any action is taken. See forms located on Intranet as listed in prior paragraph.

7-3 Performance Evaluations

A. Field reviews - Field personnel will participate in performance evaluations at least once per

year.

1. Superintendent evaluations – Conducted by the PM and divisional manager who has supervised them for the majority of the past year, and selected members of the executive committee.

• Print copies of random daily reports, RFI’s, meeting notes, etc., out of Expedition or

PJ, in order to determine in the evaluation what they are and are not doing correctly. DO NOT GUESS, or they will never improve.

• Obtain copies of the safety director’s monthly “safety review summaries” for every super, in order to evaluate their safety meetings, safety knowledge and precautions, etc.

2. Field employee evaluations – Conducted by the super who has supervised them for the

most time during the previous year. 3. Evaluation forms are located on Intranet under Your Choice Information/Supervisor

Resources/Performance Evaluations..

B. Office reviews -

1. PM reviews will be conducted by their divisional manager, the VP of Operations, and selected members of the executive committee

2. PAs will be reviewed by their PM .

7-4 Temp Labor

A. As of January 1, 2006, the labor rates that R & O Construction charges our customers are as

follows:

1. Laborer - $30.00 per hour 2. Carpenter - $45.00 per hour 3. Foreman - $50.00 to $55.00 per hour 4. Superintendent - $75.00 to $85.00 per hour 5. Warranty Work - $90.00 per hour (includes truck & tools) 6. Expeditor - $90.00 per hour (includes truck & tools) 7. Project Manager - 2x your rate plus burden (approximately $92.50 8. Project engineer - $65.00 per hour


7-5 Overhead Reduction

A. Divisional managers

1. Check and monitor credit card purchases. Insist on receipts. 2. Monitor travel costs. Approve frequency and expense of all out of town trips (both field

and office). 3. Approve the amount of project manager time coded to overhead. 4. Review the list of wireless internet connections to be sent out and determine necessity. 5. Approve all new cell phones.


8 SAFETY

8-1 General Job Site Safety – “Zero tolerance” for accidents by making safety a VALUE on our projects.

A. FOR DETAILED REFERENCE: see R & O Construction Safety & Health Manual and

Superintendent Safety and Accident Forms Manual

1. This safety and health manual and safety forms manual must be kept on all job sites for ready reference and for the operation of a safe, accident-free, and healthy work environment for everyone.

• Obtain the manuals from the safety director/safety coordinator and keep for use with

every project.

8-2 Management Responsibilities

A. PM responsibilities and duties -

1. Conduct weekly safety observations of all their job sites, using the Safety Management by Walking Around (SMBWA) form (located on the Intranet under the Safety section).

• Discuss findings with the super. • If repeated violations occur, determine what disciplinary action is necessary. Issue an

observation report (located in the Superintendent manual) to the safety director, the super, and the project safety file.

2. Reassure local property owners about efforts to keep inconvenience, dust, noise,

vibrations, etc., at a minimum. Provide local authorities with information about detours, speed limits, etc., around the project.

3. Ensure that safety policies of the company are reviewed with each subcontractor before

they perform any task on site.

• Double check that each subcontractor has current and proper amounts of worker’s compensation (WC) and general liability (GL) insurance before the subcontractor mobilizes to the job site.

4. Review accident reports for detailed investigations and for corrective actions taken to

prevent recurrence. Deliver incident/accident reports to the safety director. 5. Ensure that all OSHA and safety posters and signs are posted and rotated on a regular

basis. 6. Make plans, along with the super, for any disaster, natural or otherwise, that might occur

(i.e., high winds, floods, earthquake, fire, dust, landslides, major accident or incident, etc.). Refer to the “Emergency Action Plan” and the “Emergency Procedures & Phone List” (located in the Superintendent manual).

7. Coordinate and plan with super for pre-mobilization of all projects.


B. Superintendent duties and responsibilities

1. Walk the job site on a daily basis, to discover and eliminate all safety and health hazards. Immediately, act on any possible safety violation or hazard. Record any hazards and corrections on the “Safety Meeting Weekly Review” form, (located in the Superintendent manual) and in the super’s daily log.

• If a subcontractor repeatedly violates safety standards or required compliance is not

accomplished within a reasonable period of time, a stop work action may be invoked by the super or safety director until violations are corrected. Report chronic violators to estimating and operations.

2. Determine all job site safety expectations and regulations at the beginning of the project.

• Make sure every subcontractor has received a copy of R & O’s “Safety Policy and

Requirements” and “Safety Requirements Packet” (located in the Superintendent’s forms manual) and that they pass the requirements and instructions on to their crews.

• Maintain subcontractor records of all safety meetings, MSDS sheets, accidents, and other necessary safety precautions requested or needed.

• Maintain a supply of all personal protective equipment, first aid supplies, fire extinguishers, etc., on the job site, for use by R & O Construction employees.

3. Obtain the appropriate subcontractor “Scaffolding Fall Protection Plan” and “Steel

Erection Plan” (located in Superintendent manual) and verify OSHA compliance. Re-verify on a regular basis that the plans are being kept OSHA compliant.

4. Always complete regular R & O rented equipment inspections (forms located in

Superintendent manual) and keep records in the job files. 5. Conduct a weekly safety meeting with all subcontractor foremen and all R & O

employees on the project.

• Review any unsafe conditions and necessary corrections, near misses, injuries, and how to avoid injuries and still perform a job function.

• Safety meeting topics are located on the Intranet. • Keep a record of the safety meeting minutes, attendees, and give a copy to the safety

director.

6. ALWAYS require the subcontractors to complete, on a daily basis, the “Pre-Task Planning Work Sheet” (located in Superintendent manual).

• This is excellent documentation of the sub’s daily activities and safety precautions on

the job site. It helps prove that R & O is doing, or did, everything possible to ensure a safe job site in the event of any legal action.

7. Post all required safety, R & O, OSHA, and legal signs in the required locations. 8. When a state OSHA compliance officer visits the project, be cooperative and courteous.

Notify the safety director, and, if at all possible, have the safety director present for the inspection.

• Make the officer aware of company safety procedures and programs.


• Keep a record of the compliance officer’s name, comments made, photos taken, sub’s contacts, corrections to make, and any other items dealing with the visit. Send a copy to the safety director.

9. Be in compliance with the Hazard Communication Program by having upon request the

following items:

• R & O’s written HazCom program; • A list of chemicals on the job site; • Copies of Material Safety Data Sheets (MSDS) for any hazardous materials on your

job site; • Documented training for each employee.

8-3 Accident Reporting

A. R & O employee accidents

1. Report any injury to the PM and safety director, immediately, for directions on how to

proceed and where to send the injured employee. If it is an emergency situation, handle the situation before reporting the injury. Any accidents or incidents involving R & O employees will require testing to determine the presence of controlled substances.

2. Fill out the “Injury/Accident Forms” (located in Superintendent manual):

• First Report of Injury • Co-Worker Incident report (injured employee or subcontractor employee fills out. • Authorization for Release of Medical Information • Physician’s Statement (if appropriate) • Post Incident Evaluation • Witness statement (if appropriate)

3. Forward a copy of the completed forms to the safety director or legal department, within

24 hours, for filing the WC claim with the insurance carrier. 4. The safety director must follow any serious injury with a verbal report to OSHA within

eight hours of occurrence.

B. Subcontractor accidents or incidents

1. Always investigate and take pictures of any accident/incidents involving a subcontractor, no matter how small or who may be considered at fault.

• During remodels, this rule applies to any accident/incident involving a store employee

or customer. • Take statements from the injured person (if possible) and statements from any

witnesses. • NOTE: The more serious the accident/incident, the more detailed the investigation

needs to be. Use your good judgment.

2. Fill out the “Subcontractor First Report of Injury” form (located in the Superintendent manual)


3. Forward a copy to the safety director or legal department and keep a copy in the job files.

Make a note of the incident and pertinent details in the daily report for that day.

8-4 Subcontractors

A. R & O rented equipment

1. R & O does not rent boom lifts, scissor lifts, or forklifts of any type for subcontractors or allow them to borrow any equipment rented in our name. We could be liable in the event of an accident.

2. R & O does not lend safety equipment out to any subcontractors on site, i.e. safety

glasses, hard hats, fall protection, etc.). If it fails or they are injured using it, we could be liable.

• If it is absolutely necessary to do this, and only as a last resort, have the subcontractor

sign an indemnification releasing R & O from responsibility due to any accidents, injuries, or claims while using company loaned items.

3. Require a copy of their current certification from any operators and make sure current GL

and WC certificates are on file.

B. Safety issues

1. R & O should not tell any subcontractor how to specifically comply with a safety issue. Our responsibility is to tell them they need to comply with OSHA requirements, but not how to comply.

2. All subcontractors and their employees are required to comply with R & O

Construction’s health and safety policies, and all the OSHA construction standards, along with other state and local safety requirements while working on R & O’s projects. R & O must ensure full compliance with this mandate (for specific details, see the R & O Safety & Health Manual)

C. Employee protection and job site safety measures

1. See that a Ground-Fault Circuit Interrupter test is completed for all outlets and extension

cords at least quarterly. Repair or discard circuits or extension cords proven to be faulty. 2. Insist on good housekeeping by R & O employees and all subcontractors’ employees. 3. Ensure adequate ventilation and lighting in all work areas. 4. Ensure fresh drinking water is available for the site. 5. Maintain adequate toilet facilities for the number of employees on the project and

schedule weekly cleaning and stocking. 6. Ensure that no minor under the age of (18) eighteen is employed by R & O Construction.


9 JOB SIGNAGE

9-1 R & O signage policy applies to all job sites. - Signage is very important not only to locate an R & O site, but is one of the best tools for promoting our company.

A. The PM should be contacted for any signage problems.

9-2 Proper Signage Procedures

A. There should be at least three signs on every job site

1. R & O sign on the trailer 2. R & O project sign (at least 4 x 8 ft. in size). 3. Safety information signs. (See safety section 9-3)

B. Project signs will be standard R & O job site logo signs

1. Utah sign company: Ken Jones, Sign Seekers (801) 731-3288 2. Las Vegas and California signs: Brandon, Patrick Signs (702) 873-4463,

[email protected]. 3. California signs: Keith Pfifer, Vital Signs (661) 325-1987, fax (661) 325-1990, 4000

Easton Drive, #16, Bakersfield, CA. E-mail: [email protected].

C. Information on the signs shall include:

1. Utah and all other states except Nevada and California - R & O logo, Ogden phone number with area code, and web site address as www.randoco.com

2. Nevada – R & O logo, Nevada office phone number, Nev. License #0034039 and our

web site address as www.randoco.com. 3. California – R & O logo, DBA ROCON CO., Lic #00604354 (no phone # or web site. 4. Some states require the contractor’s license number. Include it on the sign if required by

that state.

D. Sign appearance

1. Project sign should be painted white on the sides and back and the poles should be painted white.

2. The sign should have navy background – color is 220-397. 3. Inside lines of logo are aqua 220-170 4. Edge of logo is teal 220-96. 5. Signs should be reinforced to prevent bowing.


E. Timetable and rules for sign erection and maintenance

1. Erect signs as soon as trailer is on the site or as soon as the project starts.

• It is the job of the PM and/or super to be aware of permit requirements/restrictions for signage in the job’s geographic area.

2. The sign should be anticipated prior to the start of construction, ordered and budgeted for.

The accurate cost of a least one job sign should be included in the job cost.

• NOTE: More signs should be budgeted for a larger site, particularly when the site is very visible and/or has street side access on more than one side.

• The size of the site should determine the number and size of the signs.

3. A banner appropriately placed on the job trailer should be temporary and not be a replacement for the job site sign.

• Banners have their place on some projects, i.e. renovations, etc., but must be

approved R & O’s marketing department. In that case, they can be used on a perimeter fence, crane, or tall structure, especially with constrained sites that don’t allow for other signage.

4. A vinyl banner is not acceptable signage for the perimeter signage unless it is stretched

tautly across a piece of 4 x 8 plywood. The back of the sign must be painted white. 5. Appropriate perimeter signs are:

• 1 - 4 x 8 horizontal sign. • 2 – 4 x 8 signs that form a “V” (horizontal or vertical). • 1 – 4 x 8 vertical sign.

6. The signs should always look new and be clean. 7. Maintenance of the sign is the responsibility of the on site personnel.

• If the sign must be moved during construction, it must be erected properly at another

location on the site. • At all times the sign should be cleaned off, straightened and the plastic stretched

tightly over the sign.

F. Job costing for signs

1. The cost of the project signs should be factored into the job cost by the estimator or PM, unless marketing requests additional signage, at which time the cost will be shared.

2. If marketing determines that a separate R & O job sign should be installed by the

construction crew on the site, the sign will be charged to marketing. 3. If the client requires a certain project sign, the cost should be included in the general

conditions of the job, but must still meet R & O’s sign specifications.


G. Job completion

1. All signs should be removed from the poles, cleaned and returned to the R & O yard. These signs can be used for signs on the trailers.

2. If you maintain your signs in good condition, you can move them to your next project

and avoid being recharged, but the signs must be in GOOD condition.

9-3 Safety Signage (signage can be ordered through the R & O Intranet)

A. Safety on R & O jobsites is our Top Commitment and it starts at the entrance to each of our jobsites. We must convey the importance of safety on the jobsite, but not scare the public away. The following are minimum signage requirements for each and every R & O project:

1. Sign #1: Welcome to the R & O Jobsite: - Post sign at the entrance(s) of the jobsite.

• Post only on the trailer if there is no formal entrance or you are on a multiple

contractor site. Use your best judgment (NOTE: the smaller jobs may use Sign #5 in lieu of this sign)

2. Sign #2: Keep Out: – Post sign around the perimeter of the jobsite

• This sign should also be used on remodels to identify the areas under construction. • Install one sign on each side of the job to warn the public. You may need more signs

on larger projects. • Post signs on perimeter fence if there is one.

3. Sign #3: Hard Hats Required:

• Use your best judgment on the location(s)

4. Sign #4: Construction Entrance: OPTIONAL

• This sign can be used on larger projects as necessary.

5. Sign #5: Authorized Personnel Only/Be Safe:

• This sign can be posted on large jobsite trailers and on small jobsite entries or trailers. • Note: Posting this sign and Sign #1 at the same jobsite entrance is not necessary.

9-4 Ordering Signs

A. PM’s will coordinate all new job signage at the beginning of the project and order signs from

the warehouse expediter.

1. The expediter can arrange to get a job site sign to the project, unless the sign is a special sign requested by the owner or marketing. In that case, contact the marketing director.

B. Give advance written notice on what you need.

1. Review the sign regulations and make sure you have the correct signage on your current

projects.


10 SUBCONTRACTOR PROBLEMS & NON-PERFORMANCE

10-1 Performance Notifications and Documentation

A. Recognize early problems

1. Do not procrastinate on closely working with, monitoring, and tracking a subcontractor when problems start to arise.

• Immediately start written documentation of any notifications to the subcontractor on

attempts to correct problems. • Document all verbal or written warnings for: No shows, poor work quality, lack of

paperwork, lack of manpower, failure to keep to contractor’s schedule, etc., with photographs and/or reports, or notes in the daily reports.

B. Superintendent initial notifications of problems or concerns – The “Non-Performing

subcontractor Checklist” (located on the Intranet under Employee Toolbox/Project Managers Forms) is to be used as a guideline.

1. Super will call and/or notify subcontractor’s foreman or supervisor of the problem

• All verbal notifications should be documented in the files (date, circumstances, etc.)

2. Super will make a second call concerning the problem 3. Super will call the principal of subcontractor’s company and send all correspondence to

their attention.

• Send to the principal a follow up written memo, containing all the particulars of the telephone conversation as backup documentation, including pictures if applicable.

• Deal fairly, treat with respect, but recognize when a subcontractor/supplier is costing us time and money.

4. Keep in mind that if time is short, these steps can be condensed into a short period of

time, if necessary.

C. If problems persist

1. PM will telephone the subcontractor’s principal/owner, then if necessary, will send a letter detailing the performance problems and requesting immediate correction of any non-performance issues.

2. PM notifies estimator, chief estimator, and divisional manager of problem and sends

them copies of all subcontractor performance letters. 3. Estimator, divisional manager, and chief estimator contacts principal with reference to

the problem. 4. The “Three Day Notice to Terminate” letter can only be sent if:

• the problem has not been corrected satisfactorily, and;


• the estimator and divisional manager meet with PM for a chance to resolve the problem and compel the subcontractor to perform.

10-2 Notice to Perform or Terminate

A. “Three Day Notice to Terminate” letter – If all the above steps have been taken and

subcontractor still continues to non-perform, it is time for immediate issuance of the “Three Day Notice to Terminate” letter as per the subcontract agreement (use this phrase).

1. Detail the steps needed to take in the letter as to exactly what needs to be done to correct

the problem, and give the exact time period within which these steps need to be taken. 2. Be very clear that if the subcontractor does not take the steps to correct the problem in the

allotted time, R & O will “supplement the crew or terminate completely, as per the subcontract agreement provisions”.

3. Remember, do not shortchange the three day period. Make sure they are allowed three

full business days to perform in order to prevent that challenge from defeating us (weekends will not be counted if it goes to court).

4. Important: Notify and attach a copy of the letter to the estimator, chief estimator,

divisional manager, risk manager, and legal department.

• If a subcontractor is going to be supplemented or terminated we do not want to be requesting bids from them or awarding them jobs on other R & O projects, unless the problems are resolved by the company.

B. Important considerations

1. The cost of replacing a non-performing subcontractor/supplier should always be weighed

against the benefits and advantages of keeping them on the job.

• The subcontractor you bring in to supplement will, in almost all cases, be more costly.

• Supplementing, very often, results in a potential lawsuit.

10-3 Termination and/or Supplementation

A. Prior to sending out the “Notice to Terminate” letter, members of the Executive Committee (or as many as possible) will meet to determine whether to actually terminate completely or to supplement and how it should be best accomplished.

B. If the decision is to terminate or supplement subcontractor’s contract, PM, superintendent,

estimator and divisional manager prepare a game plan for supplementation or pricing. Make sure everyone involved knows all the details and exactly how to handle replacing the subcontractor or how to deal with the terminated subcontractor.

1. Important note: Be very careful if you should decide to terminate a subcontractor’s

contract. R & O must be completely without fault in the problem or we could be considered to be in breach of contract, ourselves, to terminate the sub’s contract. Factors a court might consider are:


• How much of the work the subcontractor has already performed. The more work he has performed, the more the court will consider we might be in material breach of contract to terminate a contract that is almost complete.

• The severity of the problems caused by the subcontractor’s “non-performance”. Smaller problems may warrant supplementation not termination.

• Make sure the subcontractor is in “material breach” of his contract by his actions

C. If the decision is to continue working with the subcontractor, document in detail with daily reports, photographs, etc. on the number of men, materials installed, etc. in relation to what was required by the performance letter they received.


11 CONTRACT ADDITIONS OR DEDUCTIONS

11-1 Owner Generated Change Orders

A. R & O philosophy and general rule – R & O Construction does not proceed with any changes unless we have pre-approval in writing (or e-mail) from the Owner or Owner’s rep. *Review this policy at every in house pre-construction meeting.

B. Responsibility

1. It is the PM’s job to compile and process CO’s, although the super must be part of the

team with assistance from the estimator with pricing.

C. Processing CO’s

1. Process CO requests at least once per month, if not more often. Problems that arise from waiting too long are:

• Confusion and forgotten details • Costs that are not able to be recovered • Lost opportunities for gain • Owners get angry • CO’s get turned down after too long

2. Employ good verbal and written communication so owners know a CO is coming, such

as:

• Proper explanation of why CO is being requested • Where CO originated • Reasons why it costs more money • Items of work affected by the CO • Trades and construction processes that are required

3. Bill for CO’s promptly (monthly) once they have been approved in writing.

D. After CO approval

1. The JCA will prepare the Budget Modification Logs (B-mod log), with the aid of the PM

on questionable items. 2. JCA will enter all B-mod log’s and Subcontract Change Logs in to the system. If using

the PJ system, the logs, automatically, go to accounting if the “approved box” is checked. 3. If an item cannot be entered because of a subcontract not being received, the PA and JCA

can work jointly on getting the subcontract back.

E. Identification and pricing

1. Include all direct job costs plus related job overhead. 2. Include any work item outside the scope of the plans and specifications.


3. Check and include the percentage mark-up for change order profit and overhead as per specifications and/or the owner contract.

4. The amount of back-up (invoices, etc.) varies with each owner, so learn what is required

and provide it up front. The more itemization you have the better.

F. Albertson’s change order procedure

1. The CCD clause in our contract with Albertsons requires that the work start immediately, while waiting for approval of costs. If at all possible, make every effort to classify the work under “change order” status, which means that prior to starting work they must be pre-approved, properly signed and executed as to price by Albertson’s construction manager, architect, and project manager. If this is not possible, process the paper work for the CCD as quickly as possible.

11-2 Field Generated Change Orders

A. General rule - If the CO is being requested by R & O and not by the owner or architect, the

bigger the dollar amount of the request, the more written description is necessary. Short, one sentence CO requests usually won’t work.

B. Review contract requirements - The contract documents must be reviewed, thoroughly, for an

understanding on how field changes should be handled on each project. C. Request for Information (RFI)

1. When the plans are vague or there is a question on the constructability of some part of the

project, a Request for Information (form located on the Intranet under Employee Toolbox/Superintendent Forms) is sent to the owner/architect requesting additional information on what is needed or what the owner expects.

2. RFI’s may or may not increase the cost of the contract. If there is an increase in cost, get

approval from the owner or architect before authorizing the subcontractor to do the work.

D. Work Orders (WO)

1. Field generated change orders must be accompanied by a Work Order (form located on Intranet under Employee Toolbox/Superintendents), issued by the super.

2. Remember, once a super signs a work order, it becomes like a contract (especially in

Nevada). This means, work to be done must be listed and priced before signing OR the WO must say, “Superintendent’s signature authorizes work to be performed, but not the price”.

11-3 Back Charges

A. General operating policy – If at all possible, when a subcontractor is back charging another

subcontractor, have them deal with each other and exclude R & O from being the middleman.


B. Supporting documentation

1. All back charges (BC’s) must be accompanied by pictures and properly itemized WO’s. 2. Supers must maintain a record of any BC’s issued so the PM has supporting

documentation for the BC. 3. PM’s shall require supers to have all BC’s signed by subcontractor or their agent in the

field. Use the “Back Charge Notification” form (located on the Intranet under Employee Toolbox/Superintendent’s Forms).

• This form can be used to notify subcontractor of performance issues or problems (use

drop-down tab in title to designate) which may not arise to the level of a BC to their contract.

C. Timeliness

1. BC’s must be up-to-date on a monthly basis. 2. Do not wait until the end of the project to complete all BC’s

D. Processing

1. A copy of the BC form must be turned in to accounting (JCA prepares in conjunction

with the PM and PA), along with appropriate documentation. A deductive CO is issued to the subcontractor’s contract and applied to committed costs


12 CODING INVOICES

12-1 Timing

A. Subcontractor Invoices

1. These invoices must be coded by the 11th of the month to avoid negative impacts on the financial statements.

B. Material and supplier (non-contract) invoices

1. These overhead and supplier invoices should be coded weekly so they can be paid in the

15th and end of the month check runs.

12-2 Steps for Coding

A. JCA pre-codes all PM’s invoices in router

1. Make sure subcontract is set up and that invoice amount will not go over the contract.

• Get with PM to correct the problem before coding. • If the problem is with the insurance cert, let the PA know for resolution.

2. Make sure the invoice references the project, job number, and/or purchase order number. 3. While pre-coding invoices, the JCA will start to prepare the billing worksheet from the

amounts billed by subcontractors.

• This will aid in the pay application preparation process and keeps track of those subcontractors billing for that month.

4. Code phases from the summarized cost to date report on each project, followed by one of

these categories:

• 2 – R & O labor only ! ! ! (No invoices will be coded to this category. • 3 – Non-contract services: services provided by those who are not subcontractors and

do not have a signed subcontract agreement. (i.e., temporary labor, pump truck, dumpsters, toilets, etc.)

• 4 – Rentals: Job trailers, any rented items from rental yards, etc. • 5 – Material suppliers: Materials supplied to job site by either a contracted or non-

contracted party. Includes structural steel, doors & hardware, lumber, joist & deck. Etc.

• 6 – Subcontractor payments: Payments to subcontractors. Use this category if they are doing subcontractor work. They do not have to have a subcontract with R & O to be coded here. (Examples: saw cutting, concrete sub, field welder, etc.)

• 7 – Other: Temporary items including phones, power, water, permits, bonds, job signs, attorney fees, etc.

5. If there is no phase code set up for a particular item, set up a new code for tracking

purposes.


6. Code the costs to the proper category even if the costs exceed the budget.

• If the invoice is for concrete, dumpsters, or anything that has quantities that need to be tracked, enter the quantities.

B. PM approves pre-coded invoices

1. All invoices must be approved by the 11th of the month.

• It is important to code and approve CO invoices, timely, as this makes accurate

financials and gets subcontractors paid, timely, and makes them happier throughout the job.

C. JCA reviews invoices during the month to make sure they have been entered where they

should be for accurate information for forecasting.


13 OWNER DRAW REQUESTS

A draw request, or pay application, is the monthly billing on your project. Listed below are steps to follow when doing the draw requests.

13-1 Important Due Dates

A. R & O’s standard policy is that the subcontractors need to have invoices to R & O by the 25th

of each month (as reflected in our subcontract agreement) with work estimated through the end of the month.

B. R & O will bill the owner by the 1st of the month or as per the owner’s specifications and

guidelines.

13-2 Proper Forms

A. Verify the owner’s forms to be used on each project or verify the AIA form to be used.

13-3 Cost Reports

A. “Summarized Cost to Date Report” – JCA prints this report from Timberline to show what costs have hit the job and at what percentage each phase is at.

B. “Committed Cost Report” – JCA prints this report from Timberline to show all the costs

currently coded to each subcontractor’s contract, by phase code. C. Other invoices – The JCA also searches the invoice router for invoices that pertain to that

period, which the owner is being billed for.

13-4 Schedule of Values (owner’s invoice)

A. Fill out the blank “Schedule of Values” form and cover sheet. B. Send a copy of the final Schedule of Values to the owner/architect for approval (hopefully,

the approval is received before the first pay app needs to be prepared). C. Redline a copy of R & O’s “Summarized Cost To Date Report” according to the creation of

the schedule of values and file in the pay application book for future reference. D. The detailed back-up showing how you created the “Schedule of Values” must also be

retained in the pay app book.


13-5 Preparing Monthly Billings

A. Percentage complete

1. Before draw requests are finalized, the PM (with super’s help if needed) will review the percentages of each subcontractors’ and/or suppliers’ completed scopes of work and the percentage to be billed.

• The PM must understand the subcontractors’ and/or suppliers’ scopes of work and

dollar amounts they are billing for.

2. Subcontractors/suppliers should not be paid more than the percentage of work completed.

• Watch for over billing and notify the subcontractor that you will be deducting an amount from the payment request to reflect the correct percentage actually completed.

• Overpayment to subcontractors can adversely affect us in subsequent lawsuits and affects R & O’s gross revenue.

B. Billing worksheet – At billing time, JCA will get with PM and fill in the additional amounts

needed to complete the billing worksheet. C. Preparing the billing

1. JCA will prepare the billing, either in Excel on a special form or in Timberline.

• If the billing has been prepared outside of Timberline, the JCA will enter the billing

into the Timberline system.

2. The JCA will make sure that the documents are prepared that are needed to complete the billing and will work with the PA to make sure the required lien waivers are ready to go and attached to the billing. (See Lien Waiver section for additional detail)

• Make sure copies are maintained of subcontractor/supplier lien waivers. • On certain projects, a separate invoice may need to be attached to the pay app for

approval from the owner.

3. IMPORTANT! ! ! Pay apps must be into accounting by the 1st of each month, otherwise, R & O is not able to recognize that revenue as work completed for the prior month. This has a HUGE negative impact on our financial statements.

D. Pre-construction expenses

1. On any billing (excluding AIA pay apps), money advanced for permits, fees, bond, etc.

shall be invoiced separately to the owner. 2. Interest will be charged on those invoices and must be billed immediately.

E. PM review and approval

1. After the pay app has been prepared, the PM will need to double-check the figures to

make sure it matches the contract amount and amounts to be billed are correct. 2. PM must sign and date the pay app and have it notarized.


F. Copies

1. Send the original and two (2) copies to the owner/architect (or as the specifications

govern). 2. Send one (1) copy to the accounting department for filing in the accounting job file. 3. PA will file one (1) copy in the project books.

13-6 Final Processing and Delivery

A. Transmittal – The PA will create a transmittal for the pay app in Expedition and/or PJ. B. Delivery – Place the completed pay app with all attachments in an envelope and determine

the method of delivery (regular mail, UPS, hand delivery, etc.) that will enable the pay app to be tracked.

13-7 Non-Performing Subcontractors or Suppliers

A. If a subcontractor’s/supplier’s quality of work is in question, hold additional monies monthly

to cover the cost of any necessary repair work. (Most states allow a general contractor to withhold 150% of the amount in dispute)

1. Notify subcontractors in writing when you hold money. 2. Make sure the steps on non-performance of a subcontractor are being followed and any

problems properly documented.


14 LIEN WAIVERS

14-1 General Rule

A. Lien waivers are very critical when it comes to documenting subcontractor payments. B. Most owners on construction projects require the general contractor to supply lien waivers

from the subcontractors and/or suppliers as well as from themselves in order for a draw request to the owner to be approved.

C. R & O will not release a check to a subcontractor or a supplier without a lien waiver,

regardless of whether an owner requires it or R & O requires it.

14-2 Types of Lien Waivers

A. Subcontractor Conditional Lien Waiver:

1. Definition: Once the subcontractor receives the monies owed, this will release all rights to lien the project for work completed to that point.

2. This is a waiver that must be collected from all subcontractors on that particular pay app

before it can be submitted to the owner. 3. This waiver should be for the net amount (due to retention) which is being drawn on that

line item of the pay app.

• For example: On a 10% retention job, if you get a bill from an electrician for $1,000 and R & O performs $500 of work on that same line item, it will require two different conditional waivers. One will be from the electrician for $900 and one from R & O for $450, making the total being drawn of $1,350 ($150 will be held in retention).

B. Subcontractor Unconditional Lien Waiver:

1. Definition: The subcontractor releases all rights to lien the project for that dollar amount

which is being paid. 2. R & O always requires this waiver whether or not the owner requires it.

• The new Utah lien laws do not require subcontractors to provide the Unconditional

Lien Waiver, only the Conditional Lien Waiver (see Section 15 on Processing Checks and Lien Releases).

3. This waiver must be collected from your subcontractors before submitting your next pay

application. 4. These waivers must be turned in to our office before the next payment can be made to

that subcontractor, even if they are not required to be turned in with your pay applications to the owner.


C. General contractor’s lien waivers

1. An unconditional waiver from the previous payment and a conditional waiver for the current draw (except in Utah) will go with every pay application in order for the owner to process the pay app.

2. The PM must sign this waiver and have it notarized.

D. Subcontractor’s final lien waiver

1. Signing this waiver signifies that the subcontractor’s contract and any approved change

orders have been paid in full and releases all rights to lien the project. 2. Subcontractors must sign the waiver before receiving monies.

• They can come in directly and sign the waiver or you can fax them a copy of the

check and waiver and have them fax it back to you. • Only after you have the signed release can you give them the check or mail it to them.

E. Important reminders

1. The PM must approve the checks before anyone creates a lien waiver and distributes the

money. 2. Make sure all interim lien waivers match your draw request if they are required. 3. Lien waivers must be handled expeditiously to prevent any payment delays.

• Most states have strict “Prompt Payment” statues which must be followed carefully.

Make sure you know the requirements for each state you are working in.

4. If you have a lien filed on your project, notify your divisional manager, immediately. 5. If you are close to closing out a project and there may be a lien on the project or it is an

out-of-town project, have a preliminary title search done or verify there are no liens before finalizing with the subcontractors or suppliers.

6. If there are any quality control issues with a subcontractor, notify the divisional manager

as to the funds being held.

14-3 Mechanics Lien Issues

A. Liens filed by subcontractors or suppliers

1. IMPORTANT: If there is a threat to file a lien against your project or the potential for a lien to be filed, the PM must not ignore this, and should work toward resolution before the lien is filed.

2. If you receive notice that a lien has been filed against the project, immediately, report this

to your divisional manager and the legal department for prompt resolution.


B. Bonding around liens

1. All liens must be reviewed by the divisional manager and the legal department before we consider bonding around the lien.

• NV and CO require court action for a lien bond to be effective.

2. Once the decision is made that we might need a lien bonded around, the next step is for

our bonding agent to review the bond request for any other issues.


15 SUBCONTRACTOR PAYMENTS

15-1 Prior to Receipt of Owner’s Check

A. Subcontractor’s Affidavit – At the beginning of the project, each subcontractor must fill out an affidavit listing all suppliers and second-tier subs they anticipate using for amounts over $5,000. No draw requests will be processed without this.

1. If there is a supplier listed on the affidavit that the subcontractor ends up not using, the

PA must request a letter from the subcontractor explaining that the supplier was not used. 2. If a subcontractor cannot get a lien waiver from his supplier because he buys in bulk, then

the PA should also get a letter from the subcontractor to that effect.

B. Preliminary Notices – These notices sent in by suppliers or second-tier subs will be entered into Timberline by accounting.

1. Suppliers/second-tier subs that have sent in a pre-lien notice are shown on the “Lien

Waiver Tracking Report” and on the “Invoices by Job Report”, which shows all approved invoices in Timberline (both reports are printed from Info Assistant).

C. Job invoices

1. All job invoices must be coded by the JCA prior to the 11th of the month, in anticipation

of the subcontractors’ payments. 2. Invoices which are contested are put into “Under Inquiry” in the invoice router and

invoices being worked on should be put into “Work in Progress” in the router. 3. All subcontractor draw requests must be in by the 25th of each month (as per their

subcontract agreements), or be processed during the next month’s billing.

D. Lien waivers

1. Prior to receipt of the draw, the PA requests, directly from the subcontractor, lien waivers for all suppliers.

• The subcontractor should have received a copy of R & O’s “Draw and Payment

Policy” with their subcontract package (for the appropriate state) explaining this procedure.

2. A conditional lien waiver is required, for the current draw (however, an unconditional

will be accepted), from (a) all suppliers, sub-tier subcontractors listed on the Subcontractor Affidavit, (b) from each supplier or sub-tier subcontractor who has filed a preliminary lien notice or completed a joint check agreement, and (c) from R & O (in UTAH).

3. Unconditional lien waivers are required in the amount of the prior conditional release.

• Any supplier conditional release waiver over $10,000 will result in issuance of a joint

check.


• In UTAH, a supplier will be considered paid only if a check number is provided on the supplier’s waiver. If no check number is present, we will consider it “conditional” and a joint check will be issued for releases in the amount of $10,000 or more, or those with a joint check agreement.

4. The PM and PA will have leeway to make exceptions to the lien waiver general rules.

• If no materials have been delivered to the project or to the subcontractor’s warehouse,

and it is early in the job, conditional lien waivers are not necessary from that supplier. • Alternately, if we are having problems with the subcontractor or we know he is not

paying his bills, then joint checks or unconditional lien waivers will be required for all of his suppliers.

15-2 Processing Subcontractor Checks

A. “Invoices By Job Report” and “Lien Waiver Tracking Report”

1. After approval from the PM, the PA will turn into accounting a package containing:

• the “Invoices By Job Report” (select “open invoices only”) highlighting open

invoices to be paid (this should be done prior to receiving payment to expedite cutting the checks) and will list the joint checks that will be required, and,

• the “Lien Waiver Tracking Report”, and • all lien waivers received from suppliers (unconditional for prior draws and

conditional for the current draw). NOTE: If at all possible, group them per job and per subcontractor and turn into accounting a few days prior to check processing time.

B. Joint checks

1. The PA will check all pre-lien notices sent in and make sure joint checks are issued or

unconditional lien waivers are received from those subcontractors for amounts in excess of $10,000.

2. Joint checks shall be issued for amounts less than $10,000 if we think there could be a

problem with the subcontractor or if there is a Joint Check Agreement in place. (see Section 15-1,D,3 for Utah rule)

C. Accounting will double check the pre-liens and unconditional lien waivers against the

“Invoices By Job Report” before cutting checks. It is important to also check for new pre-lien notices that may have come in later in the month.

D. Prior to mailing the checks

1. Accounting will give the checks to the PA to triple check. 2. The PM must approve the checks before they go out if he hasn’t already approved the

“Invoices To Be Paid Report”. 3. PA must verify that the subcontractor’s insurance is current.


16 FORECAST REPORTS

16-1 Monthly Forecast Reports

A. In general - Forecast reports notify accounting how the projected profit on a job changes from month to month. For example:

1. New owner changes and new estimated contract 2. Revised estimated costs and profit 3. Profit swings from month to month

B. Forecast reports are the main component for R & O financial statements

16-2 Procedure

A. PM and JCA prepare, review, and distribute

1. The PM/JCA team will work out between them the best procedure they would like to use

for preparation of the forecast, but it is the PM’s responsibility to complete.

• PM should copy the estimator on the monthly forecast reports, and incorporate the estimator’s and super’s comments/calculations into the report (see Estimating, Section 8-2).

2. If there is more than a 10% swing from the last month’s profit, the PM should notify the

divisional manager and make a short comment on the report as to what caused the swing.

• General condition calculations should include comments on how calculations are made (number of weeks, weekly rate, etc.)

• Other line items shall have comments if exceeding or saving on line item is substantial.

3. When the forecast is complete, the JCA will review the forecast and turn in the forecasted

profits to the controller.

• This must be in by the 3rd Wednesday of each month. • Obtain all required signatures on the reports and file with a copy of the forecast.

4. The controller will transfer the forecasted profits to the monthly financial statements.


17 QUALITY CONTROL & WARRANTY

17-1 Quality in Fact

A. Superintendent’s review – Supers, on a daily basis, should review all subcontract work and self-performed work to ensure minimum quality work standards as set by the plans and specifications.

1. Pictures are very important documentation of the stages of a project and the work in

progress.

• Take pictures when you close in a wall, the roof, the ceiling, etc., especially when there might be an exposure to water or mold claims.

2. Zero punchlist as a goal on all projects.

B. PM monitoring – PMs should monitor visual quality of the project on a regular basis as well

as the constructability and maintenance of quality levels. C. Goal – PM’s and supers strive to exceed minimum plans and specification’s quality without

absorbing additional costs or causing delay to the schedule.

17-2 Quality in Perception

A. Monitor owner’s perception of the customer service and satisfaction being provided.

1. Send daily pictures to the owner of work progress. 2. Involvement of the owner in meetings. 3. Issuing prompt notification to owner of problems and effecting timely resolution. 4. R & O foresight of possible issues and owner involvement before they become bigger

problems.

B. Monitor subcontractors’ and suppliers’ perceptions of R & O’s leadership, communication, and coordination levels.

C. Monitor other external parties’ perception of quality, including architects, engineers, and

inspectors. D. Marketing surveys will help us measure customer satisfaction.

17-3 Warranty Program

A. The warranty process is designed to ensure that all project warranty issues are satisfactorily

resolved and completed in a timely manner.

1. Warranty telephone line is (801) 337-6328 2. Warranty e-mail: [email protected]


3. “Warranty Request Form” – (located on the Intranet under Employee Toolbox/Superintendent Forms).

B. Procedure – When the warranty call comes in:

1. Redirect the call to the warranty telephone line, or 2. Take down the information on the “Warranty Request Form” and forward it to the

warranty e-mail. The warranty division will take it from there by coordinating the work and completing the issue.

C. Result – R & O will be able to track the number of warranty issues coming in and the amount

of time and money it takes to finish the requested work.


18 TOOL WATCH

18-1 “Tool Watch” Program

A. Tool tracking - All tools in the company are tracked by computer through this program. B. Tool movement – Any tool movement must go through the warehouse expeditor (expeditor).

He must be notified in order to be able to track:

1. all new tool purchases;

• The expeditor or VP of operations must be notified to add all new jobs at the start of each job. Do this when you receive the job number.

• If a tool is checked out in your name and is not returned, it will be your responsibility.

2. all tool transfers from job to job;

• If you transfer or return any tool without notifying the expeditor, you will still be held responsible for the possession of that tool until it is actually processed through the “tool watch” system.

3. all tools returned to the warehouse

18-2 Miscellaneous “Tool Watch” Rules

A. Tool pickup - You must call ahead and make arrangements with the expeditor when you need

to pick up a tool. He will make arrangements for LV tool pick ups.

1. Tools can be picked up during normal business hours Monday through Friday, 8 am – 5 pm in Ogden and 7:30 am – 4:30 pm in LV. Exceptions will be made for EMERGENCY’S ONLY!

B. Returning tools - You must get a signed receipt from the expeditor when returning tools.

1. DO NOT return any tool without the expeditor or assistant in Ogden or LV being present

so the tool can be checked out of your name in “tool watch”.

C. Transfer from job to job - If you are taking tools with you from one job to another, report this to the expeditor so the tools can be transferred in “tool watch”.

D. Stolen or broken tools - Must be reported to the expeditor, immediately. E. Required for closeout meeting - PA’s must get a Transfer Report from the expeditor and

bring this to the closeout meeting showing that all tools have been accounted for and either returned or transferred into the super’s name.


18-3 Coding Tools to Jobs vs. Coding to Overhead

A. Tools less than $100.00 per item – These purchases are job costs and must be coded to your job. DO NOT route them to the divisional manger or VP of operations to code to overhead.

B. Tools which exceed $100.00 per item – If they have been purchased without prior approval

from the expeditor, THEY WILL BE CODED TO YOUR JOB.


19 PROJECT CLOSEOUT

19-1 Project Closeout Checklist

A. Certificate of Occupancy (C of O)

1. This is an important part of every closeout document book. 2. PM will get a copy of the C of O (including temporary C of O).

• One copy goes to R & O’s file and one copy goes to the owner.

B. Notice of Completion

1. All Nevada Jobs – All Nevada projects must have a Notice of Completion filed within 15

days of completion, by the owner or by R & O.

• Send a copy of the Notice of Completion by certified mail to all subcontractors, second-tier subcontractors, or suppliers who have filed a preliminary notice.

• Note: This shortens the length of time they have to file a lien from 90 days to 45 days.

2. All other states – Check the “State Lien Law Reference” (located on the Intranet, under

Employee Toolbox/Project Manager’s Forms) for Notice of Completion requirements. Not all states require them.

C. Final billings

1. Complete any CO’s and budget modifications. 2. Final bill 3. Complete any BC’s

• BC’s should have been kept up with throughout the job.

4. Finalize all payments with subcontractors and suppliers

• The PA should keep a log and copies of all final waivers

D. Close all accounts

1. At the end of “out of town” jobs, notify certain accounts, such as lumber, temp help,

rentals, etc., that we are finished with a project and will no longer be using their services.

• This will prevent terminated employees or subcontractors, etc., from using our accounts without authorization.

• Request final billings and a confirmation that the account is closed. Check the Job Cost History to check for vendors we used.


E. Warehouse check-in

1. Close “Tool Watch” for the job (with the warehouse expeditor), showing all tools are properly returned or transferred. Verify this at the closeout meeting.

2. As built drawings should be copied to CD’s (3).

• Label drawings with job #, name, address, PM, and grand opening/completion date. • Give set to warehouse expeditor, along with one CD and obtain the executed “As-

Built & CD Sign-Off” sheet • Give one CD to the person responsible for CD storage, along with the sign off sheet,

for filing and storage in the metal storage container at R & O.

F. Post job accounting

1. The JCA will complete the 60 day post job review, in order to enable the team to review what items need to be completed prior to job close out.

• The JCA and PA will aid the PM in completing all items. • The JCA aids the PM with reconciliation of subcontract issues, takes calls about

money issues, and helps in any way possible.

2. After receipt of all monies, the JCA will make sure all payables have been paid, receivables are at -0- and the Committed Cost Report is -0-.

• When this is done, the final closeout will be prepared, a final forecast report

completed and the JCA will close the job in timberline.

G. Schedule closeout meeting

1. Schedule this meeting within 60 days of completion. 2. R & O policy is to close out all jobs within 60 days. 3. If a job has delaying issues, put it on the “Jobs Closed But Pending Other Issues” list on

the Manpower Report. Keep the divisional managers aware of any issues.

H. Job file storage

1. After the project is completely closed out, make sure all the project records and any additional documentation are filed, boxed, and stored, nearby for easy access as needed (the warehouse expeditor will track the storage locations of the files).

• Remove files from binders or lateral files and prepare for storage as PM requests in

file boxes.

2. After one year, move the documents to outside storage, as arranged by the warehouse expeditor.


19-2 Closeout Meeting

A. Preparation

1. PA schedules meeting with project team, within 60 days of project completion, and reserves conference room.

2. PA will send a memo or e-mail to all parties on location and time

• Refer to Post-job Review form for attendees (located in the Proj Asst. folder/ “pre &

post jobs”).

B. Required documentation

1. Reports - Summarized Cost to Date, Job Cost History, discounts (if any), and final Accounts Receivable reports are needed at the meeting.

2. Post Job Agenda form – Bring this to the meeting, pre-filled out with known information

(including all start and finish dates). 3. Sign off sheets – Bring or confirm possession of all required final sign off sheets. 4. Bring a copy of the final C of O, the close out book (if needed), and all data pertaining to

the project.

C. Final payments

1. Make sure all bills are paid prior to the closeout meeting.

D. Meeting duties

1. The PA will schedule the meeting and do the meeting minutes. 2. The JCA will: (i) facilitate the closeout meeting as the representative from accounting;

(ii) do all mathematical calculations; (iii) keep the meeting on time; and (iv) review general conditions and costs.

3. The PM will present the closeout meeting information.

E. Post meeting duties

1. PM and JCA will review the closeout notes. 2. PA types the meeting minutes, has PM and JCA review, and makes any corrections. 3. PA saves the minutes on the “V” drive (in the Forecast folder, Post-job “60 day” folder),

then e-mails the minutes to all parties.

operations department procedure manual indexec.randoco.com/documents/operationsmanual.pdf · 2017....

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