The Architect isn’t always the most popular guy on the jobsite. I know, because I am one. And I know it often looks like I’m just being difficult and fussy, which I sometimes am. But often I’m trying to figure out how much of the work of the Contract has been done, so I can tell the Owner how much money to release down the payment waterfall. In other words, I’m trying to get you paid.
Architect roles on a construction job
During the life of a project, the role of the Architect changes. It’s actually three different jobs.
In the beginning, I’m a Designer, helping the Owner make thousands of decisions about the building’s form, purpose, structure, materials, systems, compliance with codes, etc.
But once all of these decisions have been made, the Architect becomes a Technician, preparing the many detailed drawings and pages of specifications needed to make up the Contract Documents. These are essentially an enormous set of assembly instructions for building something that’s never before been built.
And once the building has been designed and all the drawings and specs have been prepared, the Architect becomes a third thing – the Owner’s Representative.
The Architect as the Owner’s Representative
As the Owner’s Representative during construction, I have a two-fold mission.
First, I observe the work to help make sure the building is built as agreed in the Contract, which basically says this: The builder is legally bound to complete the project as shown in the plans and specs for an agreed upon amount of money and within an agreed upon amount of time.
This is why the plans and specs are collectively known as the Contract Documents as they are the basis for – and part of – the legal Contract for Construction. My main job here is to make sure the Contractor is fulfilling his part of that bargain.
The second part of the Architect’s role as Owner’s Representative is to control the money that flows from the Owner to the General Contractor, who then sends it down to the subcontractors, workers, and suppliers in the payment waterfall.
How the Architect controls the payment waterfall
To control the payment waterfall, I review Applications for Payment submitted by the General Contractor that reflect all the progress of the work to date. These Applications are typically submitted monthly, and my task is to verify their accuracy and recommend to the Owner how much of it – all or part – to pay.
The concept is simple. I’m to use my expertise and observation to make sure the Owner doesn’t pay too much of the contract cost up front. This isn’t to punish the Contractor, it’s to protect the Owner.
For example, suppose I’ve approved payments that total 75% of the Contract amount when only 55% of the work has actually been completed. Now, if the Contractor for any reason can’t finish the work (which happens all the time) the Owner doesn’t have enough money left to complete it with a new builder. There’s a 20% shortfall, because that’s how much we overpaid the first guy.
This would be a disaster for the Owner, possibly bankrupting him. And the Architect would probably have to move to another country to find work. So, the whole idea is to pay for exactly the amount of work that’s been done and withhold exactly the amount needed to complete the job.
How the Architect determines payment
To do this, the Architect relies on a couple of things. First, there’s the Schedule of Values. This is a spreadsheet prepared by the Contractor at the beginning of the job that shows the dollar value of each portion of the work.
This schedule is required by the Contract and can typically only be revised to reflect Change Orders submitted by the Contractor and approved by the Architect and the Owner.
The Contractor’s Application for Payment shows how much of the work has been completed to date, listed as a percentage of that work’s total cost shown on the Schedule of Values.
For example, let’s say on a $2M project, the drywall work is scheduled to cost $175,000.00. If this month’s Application for Payment shows that the drywall work is 25% complete, the Architect is being asked to approve 25% of the scheduled $175,000.00 for payment. But, of course, the Architect has to verify that the 25% is accurate.
The Architect typically makes weekly visits to observe the progress of the work. There’s a meeting with the GC and probably some subs, a schedule update, and some observations made to verify that the work is being done according to the Contract.
But a big part of that visit is to see how much of every trade’s work has been completed at that moment, including materials stored on site, submittals, and any required mock-ups that have been done. And if there have been any approved Change Orders, we’ll look for the work included in them as well.
This is why you see me on site, looking over your shoulder and jotting down notes. I do this to verify your work, because I want to pay you.
Contrary to popular belief, the Architect has no motivation to withhold more of the payment than is required. In fact, it’s in my best interest to pay it all out quickly.
For one thing, the cash flow means that the project is progressing toward completion, which is my ultimate goal.
For another – it isn’t my money. The funds I’m releasing are the Owner’s funds, set aside for just this purpose, waiting on the Contractor to spend them and the Architect to approve them.
Even the Owners are usually eager to spend the money so they can get the building put into service. In fact, if the building is a money-maker, like a hotel or a hospital, delays in completion can cost the Owner thousands of dollars in lost revenue. So while we don’t want to be ahead on payments, we also don’t want to be behind.
Architect’s Role: Getting you paid
Lastly, I want to pay you because I have the same interest you do – my own bottom line. Architects are typically paid a percentage of the contract price, not hourly. The longer a project goes on – and the more hours I have to spend on it – the less money I make.
So, like everyone involved, it is absolutely in the Architect’s best interest to keep the work going and the money flowing in order to get the building standing and ready to be occupied.
The next time you see the Architect on site, remember to make sure that the work you’ve done is documented and that the documentation is sent up the waterfall, so that the money can flow back down to you.