Chapter 6: Building a Facility

The information provided below is designed to assist your Tribe, tribal organization, or department in designing, managing, and completing the process of constructing or renovating a child care center.  (Please note that, for the purposes of this chapter, renovation is the same as construction.)  The lead agency’s tasks for managing the complete construction process can be divided into four major categories:

1. Selecting and Working with an Architect
2. Designing and Planning the Facility
3. Hiring a Contractor
4. Overseeing the Project

I. Selecting and Working with an Architect

First and foremost, the architect should be licensed in the state where the project is located. A licensed architect provides not only a professional service, but a legal protection for the Tribe in the event of any disputes over applicable codes and regulations, misinterpretations by the contractor of the plans and specifications, and any errors and omissions in professional services delivery.

You should select the architect based on professional knowledge, experience, and understanding of the specifics of the project. An architect is selected by proposal, not by bid. In selecting an architect, the Tribe may apply a weighted evaluation criteria for minority architectural firms. However, the primary criteria in selecting an architect is professional knowledge, experience in working with similar projects, and understanding the cultural, social, and special concerns of the Tribe. The American Institute of Architects (AIA) or local or state chapters can provide information to the Tribe concerning architects in your area who are qualified to design child care facilities.

The use of a licensed engineer, in some instances, is acceptable. However, engineers are trained in more technical aspects of a project and may not have the creative problem-solving skills and training needed for many child care center designs. Architect/Engineer (A/E) fees for child care projects are normally between 6 and 15 percent. Most architectural fees will not exceed 10 percent of the total project cost and this normally includes project management.

The American Institute of Architects (AIA) sells a variety of contract documents that can be used as the basis for agreements between the Tribe and the selected architect (and other project professionals). To accommodate any specific contractual needs or stipulations of the Tribe, these documents may be modified, by mutual agreement. All contracts should be reviewed by the Tribe’s attorney and an insurance professional prior to signing. AIA contract documents can be ordered from local AIA chapters or by calling (800) 365-2724.

For more information about finding and selecting an architect, negotiating a contract, and other aspects of the owner-architect relationship, visit the “What an Architect Can Do For You” section of the AIA Web site at http://www.aia.org/about_doforyou.  Please note that the goal of AIA is to promote the interests and services of architects.

II. Designing and Planning the Facility

The scope of the architect’s work includes:

• A design plan that targets and schedules different dates for accomplishing various design phases (i.e., schematic, preliminary, final, etc.).
• A scope of work that clearly states the most cost-effective design and energy conserving systems.
• Cost estimates for each phase of design that allows the Tribe to make knowledgeable and informed decisions.  As the design changes, based on input from the Tribe, the costs will also change until a final design is agreed upon and budgeted.
• A set of final plans and specifications, approved by the Tribe.  Depending on the funding agency, the plans and specifications may have to be reviewed and approved by one or more state or federal agencies (e.g., State Fire Marshall’s Office, Office of the Building Code, Army Corp. of Engineers).
• Construction bid documents that are prepared once the final plans are approved by appropriate agencies and entities.  An estimate of construction costs should be part of the bid documents.
• Scheduling, planning, and presiding over a pre-bid conference, and once a construction contract has been awarded, the pre-construction conference.
• Management and oversight of the day-to-day progress and work. The Tribe could hire a third party for project management, or this could be part of the architect's contract.

A primary part of the architect's contractual responsibility to the Tribe is to ensure that all aspects of the project comply with the appropriate legal and federal requirements.  These requirements include, but are not limited to:

• Environmental Impact: National Environmental Policy Act of 1969 (NEPA), Public Law (PL. 91-190). NEPA sets national policy goals and procedures for protecting and enhancing the environment.  The Tribe must conduct an environmental assessment in accordance with guidance provided in ACYF-PI-CC-04-01.  Chapter 5 of this Guide provides additional guidance on the environmental assessment process.
• Floodplain Management: Executive Order 11988. The order requires agencies to avoid, where possible, constructing facilities within the confines of floodplains.  If this can not be avoided, specific insurance restrictions are applied to protect federal interest.  See Chapter 5, Section I for more information.
• Code Requirements: The most recent edition of the National Fire Protection Association (NFPA) publication no. 101, the Life Safety Code®, contains minimum life safety standards.
• Accessibility: National and local requirements for accessibility are intended to help insure the rights of all individuals, including the disabled.  The best known and most often used requirements are those based upon the American National Standards Institute (ANSI).  Accessibility standards for the disabled are also included in the uniform Federal Accessibility Standards, Title II and III of the Americans with Disabilities Act (ADA).
• National Historic Preservation Act of 1966: Section 106 requires consideration of the effects construction may have on a site listed on the National Register of Historic Places.
• Earthquake Provisions-Occupational Safety and Health Act and Public Law 95-124: Legislation concerned with earthquake resistance of structures.
• Relocation Assistance-Uniform Relocation Assistance and Real Property Acquisition Policies Act, PL. 91-646: Requires both services and payments be provided to persons and businesses displaced by a federally assisted project.
• Potable Water-Occupational Safety & Health Act: Requires that potable water be provided to federally assisted construction projects.
• Equal Employment-Executive Order 11246: For any contract or sub-contract that exceeds $10,000, no federally funded contractor can discriminate against any employee or applicant for employment because of race, color, religion, or sex.
• Federal Wage Rate-Davis Bacon and Related Acts: Requires certain contracts to pay federal wage rates.  This Act does not apply to projects solely funded by CCDF.

The project shall also be developed according to applicable program or Tribal standards and other codes and ordinances, including environmental and zoning requirements.  The Uniform Building Code shall be used as a minimum standard in the absence of a local or Tribal building code.

III. Hiring a Contractor

Prior to hiring a contractor, the architect must prepare a bidding package and develop a bidding process. The minimum package and process requirements include:

A. Boiler Plate Specifications (standard items included before technical specifications)

1. Advertisement for Bid Form (or the Tribe may elect to solicit selected contractors, using pre-qualification criteria)
2. Bid Forms
3. Instructions to Bidders Form, including the method for award of contract (e.g., to the lowest bid or the lowest base bid in combination with alternates)       
4. Bid Bond Form (5 percent bid security)
5. Contract Form
6. Performance and Payment Bond Form (100 percent)
7. Contractor’s Application for Payment
8. Construction Contract General Conditions (AIA form 201) and Supplementary Conditions (AIA form 201SC-1999)
9. Equal Employment Opportunity (construction contracts exceeding $10,000)
10. Bonding and Insurance Requirements
11. Construction Contract Completion Time and Closeout Documents necessary for Substantial Completion

B. Cost Estimates

The estimate of construction costs will be developed based on the final working drawings and specifications.  The estimate shall not be divulged to outsiders for any reason.

C. Final Working Drawings

Final working drawings will be 100 percent complete and adequate for bidding, contracting, and construction purposes.  Drawings will be prepared for the architectural, civil, structural, mechanical, electrical, and other work.  The architect may hire an engineering consultant for support as necessary during the design process.

D. Final Technical Specifications

Final technical specifications supplement the final working drawings to fully describe types, sizes, capacities, and other characteristics of all materials, equipment, and installation techniques.  It is recommended that the technical specifications format be based on the most current version of MasterFormat, the standards produced by the Construction Specifications Institute (CSI).

Specifications will include:

• Details of materials;
• Reference standards;
• Shop drawings;
• Sample submissions;
• Certifications; and
• Performance concepts.

Specifications are developed to insure competitive bidding without proprietary sole-source restrictions.  When identifying materials or equipment by manufacturer's name, trade name, or catalog number, include the words, "or equal to…".  This method of developing specifications is not designed to give preference to any one manufacturer but is merely to show a standard.  Under the conditions of the contract, the contractor shall be allowed to furnish materials or equipment of manufacturers other than those identified by name that the project architect/engineer accepts as comparable to that specified in the bid documents.¹
                       
The substitution clause may include the following language:

When a material, article, or piece of equipment is identified on the drawings or in the specifications by reference to manufacturer's or vendor's name, trade name, catalog number, or the like, it is only identified to establish a standard.  Any material, article, or piece of equipment of other manufacturers or vendors that will perform equally or better the duties imposed by the general design will be considered equally acceptable provided the proposed items are, in the opinion of the architect, of equal substance, appearance, and function.  These items shall not be purchased or installed by the contractor without the architect's written approval.

E. Equal Employment Requirements for Construction Contracts

(1) Federal Executive Order 11246, effective October 24, 1965.

This executive order requires an equal employment clause in all federally assisted construction contracts.  In signing a government contract or subcontract of more than $10,000, the contractor agrees not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin and agrees to take affirmative action to insure that applicants are employed, and employees are treated fairly during employment, without regard to these factors.  If the contractor fails to comply with the nondiscriminatory clauses of the contract, or with the regulations of the Secretary of Labor, the contract may be canceled, terminated, or suspended in whole or in part and the contractor declared ineligible for further government contracts.

(2) The Office for Federal Contract Compliance Programs (OFCCP), Employment Standards Administration, U.S. Department of Labor.

This office has federal responsibility for overseeing the implementation of Executive Order 11246 by the various federal departments and agencies.  OFCC often prescribes written compliance requirements for construction contractors in designated geographical areas.  In addition, it is OFCC policy that the approval of an area-wide agreement or the issuance of a hometown plan may include a state or local government’s appending additional equal employment opportunity (EEO) requirements to federally assisted construction contracts and subcontracts where state and local funds are also involved in the construction.

F. Procurement Requirements (45 CFR Part 92.36)

Facility construction transactions funded by CCDF must comply with the procurement procedures in 45 CFR Part 92.36 and be conducted in a manner that provides, to the maximum extent possible, open and free competition.

Under 45 CFR Part 92.36, the sealed bid method is the preferred method for procuring construction, when feasible.  An invitation for bids by contractors involves the following steps, if the sealed bid method is used:

• Preparing an invitation for bids, describing the building(s) design and specifications clearly, accurately, and completely by avoiding unclearly restrictive specifications or requirements.
• Publicizing the invitation for bids in newspapers of general circulation or other means as appropriate to insure distribution to prospective bidders in sufficient time to enable them to prepare and submit bids.
• Pre-bid conference (if applicable), called by the architect and including representatives of the Tribe, during which any prospective contractor may attend (in some instances, attendance is mandatory in order for the contractor to submit a bid), review the details of the project, question and clarify any construction issues, and obtain a general understanding of the job.
• Conducting a public bid opening, including adequate documentation of the proceedings (i.e., certified bid tabulation by the architect, minutes of the opening).
• Preparing to award the contract after sealed bids are publicly opened to the responsible bidder whose bid contains the lowest price offer and conforms to the requirements of the invitation for bids and all prescribed documents, bonds, and assurances.  After the lowest bidder is publicly announced (which does not constitute an award or an intended contract), the architect or the Tribe ensures that the low bidder is not excluded from federal procurement or non-procurement programs (that the bidder is not on the so-called “Debarred List”) by checking the Excluded Parties List System (EPLS) database maintained by the U.S. General Services Administration.  This database is accessible online at http://epls.gov/.
• The Construction Contract is signed (after a review of the bids, a recommendation from the architect and/or the program, and approval by the Tribal Council or the authorized Tribal representative or entity to award the construction contract).
• Notice to Proceed can then be written and issued by the Tribe to the contractor indicating the day construction may commence.

The following documents constitute a complete contract or contract file:

• An original executed copy of the construction contract.
• A completed certified set of contract drawings and specifications with all addenda(s).
• 100 percent executed performance and payment bond(s) provided by an approved surety.
• Certificate(s) of Insurance.
• Notice to Proceed.

G. Liquidated Damage Requirements

The contract document must state the specified time for completion of the contract.  Time will be specified in calendar days or by a definite calendar date.  A specific dollar amount of daily damages may be included as a condition for assessments against the contractor for not completing the contract on time.  The assessment must be specific for each calendar day that contract work exceeds the stipulated contract completion date without an accepted and signed (time extension) Change Order.  The daily assessment, known as liquidated damages, will be reasonable and adequate to cover appropriate fair damage costs to the Tribe and the program that result from delays in occupancy or other real and tangible costs, including additional rent or lease costs, fee and fines, and legal costs.  A single source of responsibility, such as the general contractor, shall be held liable for the entire amount of liquidated damages to the Tribe.

When liquidated damages are to be specified, the following clause is recommended for inclusion in the construction contract:

The Tribe or owner will suffer financial loss if the project is not substantially complete and ready for beneficial occupancy on the date stated in the contract documents. The contractor shall be liable for and shall apply to the Tribe or owner the sum hereinafter stipulated as fixed, agreed and liquidated damages for each calendar day of delay beyond those specified in the specifications until the work is substantially complete and ready for beneficial occupancy.

H. Bonds Requirements

The contractor should provide to the Tribe the following recommended minimum coverage for bid bonds and performance and payment bonds:

1. A bid guarantee from each bidder equivalent to 5 percent of the bid price.  The bid guarantee shall include a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying the bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified.  The Tribe will keep the bid securities of at least the three lowest bidders until award of the construction contract is complete.
2. A Performance and Payment Bond is provided to the Tribe by the contractor from a surety company guaranteeing the performance of the work in accordance with the contract documents.  The bond is 100 percent of the contract sum and covers labor, materials, and performance.

I. Contractor's Liability Insurance

Contractor's Liability Insurance is a requirement of the contractor to protect the Tribe from claims arising out of, or as a result of, the contractor's operations under the contract.  Samples of claims include:

• Workmen’s compensation, disability benefits, and other similar employee benefits;
• Bodily injury, occupational sickness or disease, or death of an employee on the job or any person other than an employee while on the job site;
• Damages insured by usual personal injury liability coverage sustained by any person because of an offense directly or indirectly related to the employment of such person by the contractor or by any other person;
• Injury to, or destruction of, tangible property, including loss of use; and
• Adequate protection against special hazards.

Other recommended minimum insurance coverage for the Tribe to be provided by the contractor includes Contractors Comprehensive General Liability Insurance; Property Damage Liability Insurance; and Automobile Liability Insurance.  Subcontractors insurance coverage requirements include Subcontractors Comprehensive General Liability, Automobile Liability, and Property Insurance of the type and in the same amount specified for the general contractor.  Specific dollar amounts for all types of contractor-provided coverage should be established by the Tribe in consultation with qualified attorneys and insurance professionals.

Certificate of Insurance documents should be required by the Tribe from the contractor(s) before the start of work.  These certificates must contain a provision that coverage afforded under the policies will not be canceled without a minimum number of days prior written notice to the Tribe.  The certificates of insurance should also list the Tribe as an “additional insured” for each appropriate policy.  The Tribe’s specific requirements for the certificates should be determined by the Tribe’s attorneys and insurance professionals and should be included in the bid package.

Owners Liability Insurance is a responsibility of the Tribe.  The purchase and maintenance of liability insurance during construction protects the Tribe against claims that may arise from operations under the contract.

Property Insurance, unless otherwise provided, is a responsibility of the Tribe.  The purchase and maintenance of property insurance covers all work at the site to the full insurable value. The insurance is protection against fire, extended coverage, vandalism, and malicious mischief and includes the interest of the Tribe, the contractor, and subcontractors involved in the work.

IV. Overseeing the Project

It is the responsibility of the Tribe to provide for construction inspections and supervision, adequate to assure the project is being constructed according to contract documents in order to allow for payment to the authorized contractor.  In general, the architect/engineer or project manager who designed the project will play a key role in supervising construction, as s/he will be the most familiar with the project and is legally responsible for the design.  The separate fee for supervision is generally negotiated at the beginning of the project; alternately, this fee may be included in the overall architectural contract.  It is beneficial to hire an architect or project manager who is experienced in the design and construction of similar projects.

There are many software programs available that are specifically designed to facilitate the scheduling of construction projects.  Many of these programs use widely accepted scheduling processes/models, such as the critical path method (CPM) or program evaluation and review technique (PERT), to estimate the time needed to complete all tasks in a project.  However, unless the project is a large scale one, it may not be necessary to use one of these programs.  For smaller projects, more readily available basic office software programs, or even bar charts, will be sufficient to monitor the progress of the project on a monthly basis.

After contract award and execution, Notice to Proceed, and contractor mobilization and set up is complete, there will be regular construction meetings.  These will probably be held at least monthly and may be held more often if the project is large or particularly complex.  A construction meeting, called by the architect, should be attended by a representative of each subcontractor, the principle owner and on-site supervisor of the contractor, any suppliers, and tribal and program representatives.  The meeting is designed to update all parties on work progress, delays, explanations, problems, and change orders, and to allow for general discussion on meeting all contract requirements.

All payment requests, Certificates for Payment, invoices, and contract billings will be received and processed by the architect or project manager.  Certified payroll reports are checked and approved, and any financial reports are received and processed.  No payment to a contractor or subcontractor is made without approval from the architect or project manager and the Tribe or program.

Close-Out

The close-out is a process involving the architect or project manager, the contractor and all subcontractors, the Tribe, any licensing agencies, and any federal or state agency involved with code or operations.  The architect or project manager coordinates on behalf of the Tribe any licensing requirements and represents the Tribe to insure all licensing and code requirements are followed.

One set of complete contract documents, including specifications, will be provided to the Tribe after the project is accepted and during project closeout.  Operations manuals, training of maintenance personnel on building equipment and subsystems (as necessary), and warranties should be part of a project closeout and acceptances as noted in the specifications.  Outstanding construction items (noted as “punch list items”) will be listed on a Certificate of Substantial Completion form signed by the Tribe, architect, and contractor at the end of the job.  This certificate allows the Tribe to safely and effectively utilize the structure.  This phase of construction is known as beneficial occupancy.

The architect or project manager calls and conducts a final punch-list or walk-through to identify and determine any items needing work in order for the job to be accepted.  Normally the final punch-list does not delay occupancy.  Once the final punch-list has been satisfied, the licensing and code requirements have been met, and all financial obligations have been satisfied, the contract is closed except for warranty.

The warranty period provided by the contractor and subcontractor is normally for a minimum of one year.  Extended warranty periods may be provided by manufacturers for certain items and may last, for example, up to 20 years for roofs and five years for parts and labor on equipment.  Once the warranty period for a contractor and subcontractor is over, the architect or project manager notifies the Tribe to release the 10 percent retainage that had been withheld from the contractor's Certificate for Payment and held in escrow.

¹Contract Conditions, Substitution of Materials and Equipment, AIA Document A201/SC; Supplementary Conditions of the Contract for Construction. Back

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