CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Memorial Hermann Healthcare System
Capital Construction
Standards of Practice Manual
The purpose of this Manual is to provide individuals employed by Memorial
Hermann as well as those individuals/organizations that are directly or indirectly
contracted to Memorial Hermann, guidelines to standards of practice established
by the Construction, Real Estate and Support Services (CRESS) Department, to
ensure that capital construction projects are carried out in an effective and
consistent manner across the Organization.
The use of this manual is restricted to use for users employed by Memorial
Hermann Hospital System and individuals/organizations directly or indirectly
contracted to Memorial Hermann Hospital System.
Any distribution, reproduction or other use of this manual unrelated to its stated
purpose and user is strictly forbidden without written consent from the CRESS
Director of Architecture and Construction.
Memorial Hermann Healthcare System
Capital Construction Standards of Practice Manual
1
PROJECT ADMINISTRATION
1.1 Introduction to CRESS and Project Manager Glossary
-Introduction to CRESS
-Other Project-Related Definitions
1.3 Construction Delivery
-General Contracting
-Construction Management
-Design Build
1.4 CRESS and Project Management Organization/Responsibilities
-Organizational Chart
-Responsibilities
1.5 Internal Project Teams
-Internal Team Membership
1.6 Reports and Communication Process Overview
-Pre-construction Conference
-Pre-installation Conference
-Construction/Project Weekly Meetings
-Design Meeting
-Owner’s Weekly Meeting
-Monthly Project Status Report
-Construction Reports
-Web-based Project Management
1.7 Permitting Process
-External Permitting Requirements
-Internal Permitting Requirements
1.8 Project Document Controls
DOCUMENTATION LOGS
-Requests for Information (RFI)
-Submittal Log
-Hot Issues Log
-Change Management Log
-Document Log
-Rolling Deficiency/Non-conformance Log
-Punchlist
-Closeout Log
TABLE OF CONTENTS
1.2 Capital Expenditure Definition
-Definition of Capital Expenditure
-Distribution of Capital Expenditure Workload
Memorial Hermann Healthcare System
Capital Construction Standards of Practice Manual
PROJECT CONTROL MONITORING REQUREMENTS
-Construction Performance Measurement, Reporting and Submittals
-Project Control Inputs and Outputs
-Electronic Document Control
PROJECT RECORD DOCUMENTS
1.9 Schedule Development and Management Procedures
-Critical Path Method (CPM) Schedule
-Update and Modifications to the Construction Schedule
-Key Administrative Milestone Dates
2
PROJECT APPROVAL
Project Request Form (PRF)/Capital Construction Request (CCR) Process
2.1 Form Definitions and Appropriate Usage
2.2 Project Initiation Process with Checklist
2.3 Project Request Process
2.4 Project Approval Process
3
BUDGET DEVELOPMENT AND REPORTING
3.1 Budget Variance Analysis
3.2 Revisions and Approval Process
3.3 Potential Costs
4
PROJECT ACCOUNTING
4.1 Purchase Order Process
-Administrative Details
-Purchase Order Initiation
-Purchase Order Approval
-Respect for CRESS Distribution of Duties/Paperwork Process
-Purchase Order Activation
-Purchase Order Cancellation/Reduction
-Purchase Order Tracking
4.2 Invoice Approval Process
-Administrative Details
-Invoice Payment Initiation
-Respect for CRESS Distribution of Duties/Paperwork Process
-Handling of Freight Purchase Order/Invoice Differentiation
-Invoices for Reimbursables, PSSAs and Additional Services
-Invoice Payment
-Invoice Payment Tracking
4.3 Purchase Requisition and Invoice Inquiry Process
4.4 Vendor Categorization
4.5 Construction Change Order Process
Memorial Hermann Healthcare System
Capital Construction Standards of Practice Manual
4.6
4.7
4.8
4.9
-Change Order Overview
-Construction Change Directive
-Change Order Discipline
-Change Order Log
Project Budget Change Process – HCCO and SCO
-Administrative Details
-Hidden Condition Change Order (HCCO) Approval
-Scope Change Order (SCO) Approval
Reconciliation Process
-Responsiblities of Project Manager in Reconciliation
-Responsibilties of CRESS Accounting in Reconciliation
Audit Process
-Construction Contract Audits
-Capital Construction Project Audits
Project Closure Process
5
TEAM PROCUREMENT PROCESSES
5.1 External Project Team Procurement Process
5.1.1 External Team
- Architect / Professional Services
- Project Manager
- General Contractor
- Subcontractors
- Miscellaneous Third Party
5.1.2 Request for Proposals
5.1.3 Request for Qualifications
5.1.4 Evaluation Criteria / Forms
5.1.5 Services Checklist
5.1.6 Contract Award/Negotiation
- Letter of Intent
- Notices to Proceed
- Standard Rejection Letter
6
CONTRACT DEVELOPMENT PROCESS
6.1 Contract Types
6.2 Construction Contract Approval
6.3 Insurance and Bonding Requirements
6.4 Role of Risk Management
6.5 Contractor Application for Payment
-Schedule of Values
-Payment for Materials Stored Off-Site
-Waivers of Lien
Memorial Hermann Healthcare System
Capital Construction Standards of Practice Manual
7
SAFETY
7.1 Safety Procedure
7.2 Inspections
8
DESIGN AND PLANNING BEST PRACTICES
Department and Room Design
8.1 Existing Rooms
8.2 In Design
8.3 New
8.4 Intensive Care Units
8.5 Nursing Care
8.6 Operating Rooms
8.7 Imaging
8.8 Cath Labs
9
PROJECT CLOSEOUT PROCESS
9.1 Construction Closeout Process
- Closeout Process Defined
- Closeout Process Overview
- Project Closeout Documentation Checklist
- 9 Steps to an Effective Closeout
- Closeout Requirements for Consultants/Contractors
- Move Planning
- System Demonstration and Start-Up
- Demonstration Instructions
9.2 Closeout Log
- Warranty/Guarantee Matrix
- Release of Liens
- Releases from Surety
- Operations & Maintenance Manual
- Final Payment Requests
- Final Executed Change Orders
- Permit Release / Sign-Offs
- Training Materials
9.3 Lien Release Procedures
- Interim/Final Lien Releases for Standard Construction Contracts
- Interim/Final Lien Releases for Projects NOT Using Standard Construction Contracts
- Lien Releases with Pay Applications
Memorial Hermann Healthcare System
Capital Construction Standards of Practice Manual
GUIDE TO APPENDICES
Appendix
Policy Name
Project Purchase Requisition Table
Managerial Project Budget Summary Worksheet
Initial Vendor Correspondence
PO Cancellation Request
4.1a
4.1b
4.1c
4.1d
Initial Vendor Correspondence
Invoice Table
Form Letter of Invoice Recognition
Managerial Project Budget Summary Worksheet
4.3a
4.3b
4.3c
4.3d
Change Proposal Format
Change Order Documentation
4.5a
4.5b
Hidden Condition Change Order Form
Scope Change Order Form
4.6a
4.6b
Letter to Vendor Notifying of Project Closure Date
Project Closure Form
4.9a
4.9b
Construction Protection Requirements
6.4a
Computer Room Protection Requirements
6.4b
Project Closeout Checklist
9.1a
Letter to Vendor Notifying of Project Closure Date
9.1b
Project Closure Form
9.1c
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.1
Policy Title: Introduction to CRESS and Project Manager Glossary
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to explain what the CRESS
Department within Memorial Hermann is, its role within the organization and
definitions/explanations of commonly used terminology within CRESS.
Policy Statement:
A. Introduction to CRESS
1.) Definition of CRESS (Construction, Real Estate, and Support Services):
The CRESS department is comprised of individuals with a specialized
background in architecture and construction.
2.) Purpose of CRESS: ALL Capital Projects are to be coordinated through
the CRESS Department before work begins if costs are expected to exceed
$500,000; if less than $500,000 the on-site facility manager will
coordinate.
a. The CRESS department develops and maintains:
i. Existing vendor relationships
ii. Economies of scale due to the volume and quantity of
projects it oversees
iii. Current knowledge on all OSHA, ADA, and other state and
local regulations and is
1.1 CRESS Intro & PM Glossary
Page 1 of 16
iv. Familiar with System Best Practices (see Section 8-Design
and Planning Best Practices)
b. MHHCS Corporate Policy Number (FIN – 00009)
B. Other Project-Related Definitions*
AIA Documents - AIA Contract Documents comprise over 80 forms and
contracts that define relationships and terms involved in design and construction
projects. Memorial Hermann utilizes several of those documents among its
Projects. See Policy 6.1.
AIA A101 – Standard Form of Agreement Between Owner and Contractor
(where the basis of payment is a STIPULATED SUM). This contract form
requires the A201 General Conditions form (see below). See Policy 6.1.
AIA A107 – Abbreviated Standard Form of Agreement Between Owner and
Contractor for Construction Projects of Limited Scope (where the basis of
payment is a STIPULATED SUM). See Policy 6.1.
AIA A111 – Standard Form of Agreement Between Owner and Contractor
(where the basis of payment is the COST OF THE WORK PLUS A FEE with a
negotiated GMP). This contract form requires the A201 General Conditions form
(see below). See Policy 6.1.
AIA A121 (with Amendment #1) – Standard Form of Agreement Between
Owner and Construction Manager (where the CM is also the Constructor). This
contract form requires the A201 General Conditions form (see below). See Policy
6.1.
AIA A201– General Conditions of the Contract for Construction. The A201
General Conditions contract form is for use with the A101, A111 and A121
contract forms. See Policy 6.1.
AIA B141 (Part 1&2) – Standard Form of Agreement Between Owner and
Architect (with Standard Form of Architect’s Services). See Policy 6.1.
AIA B171 – Standard Form of Agreement Between Owner and Architect for
Architectural Interior Design Services. See Policy 6.1.
AIA G702 “Application for Payment” – The G702 document requires the
contractor to show the status of the contract sum to date, including the total
1.1 CRESS Intro & PM Glossary
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dollar amount of the work completed and stored to date, the amount of
retainage (if any), the total of previous payments, a summary of change orders
and the amount of current payment requested. See Policy 6.3.
AIA G703 “Continuation Sheet” – The G703 application for the G702 form
breaks the contract sum into portions of the work in accordance with the
Schedule of Values required by the general conditions. It serves as both the
contractor's application and the architect's certification, and its use can expedite
payment and reduce the possibility of error. If the G703 application is properly
completed and acceptable to the architect, the architect's signature certifies to
the owner that a payment in the amount indicated is due to the contractor. The
form also allows the architect to certify an amount different than the amount
applied for when explanation is provided by the architect. See Policy 6.3.
AIA G707 “Consent of Surety to Final Payment” – The G707 is a standard
form for recording the date of substantial completion of the work or a designated
portion thereof. The contractor prepares a list of items to be completed or
corrected, and the architect verifies and amends this list. If the architect finds
that the work is substantially complete, the form is prepared for acceptance by
the contractor and owner. Appended thereto is the list of items to be completed
or corrected. The form provides for agreement as to the time allowed for
completion or correction of the items, the date when the owner will occupy the
work or designated portion thereof, and a description of responsibilities for
maintenance, heat, utilities and insurance. With the G707, the owner may
preserve its rights under bonds by obtaining the surety's approval of final
payment to the contractor and its agreement that final payment will not relieve
the surety of any of its obligations.
Acceptance - The act of taking custody based on satisfactory verification. See
Policy 9.1.
Acceptance Criteria - Performance requirements and essential conditions that
have to be achieved before project deliverables are accepted. See Policy 9.1.
Acceptance Test - A predefined test to prove equipment will perform the
allotted task. See Policy 9.1.
Account (General Ledger) Number – Identifying number that indicates
where incurred project expenses should be recorded. See Policy 4.1, 4.2.
Action Plan / Responsibility Matrix - A description of what needs to be
done, when and by whom. See Policy 1.6.
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Activity - A task or set of tasks that are carried out in order to create a
deliverable. It should be noted that the term "activity" is used as a collection of
tasks, synonymous with task or as a subset of a task. It is recommended that a
"task" should be thought of as a subset of "activity".
Activity Number – An identifying Project Number. See Policy 4.1, 4.2.
Actual Cost of Work Performed ("ACWP") - Total costs incurred (direct and
indirect) in accomplishing work during a given time period. ACWP is used in the
earned value method of progress measurement.
Actual Direct Costs - Those costs specifically identified with a contract or
project, based upon the contractor's cost identification and accumulation system.
Actual Finish Date - The calendar date that work actually ended on an activity.
It must be prior to or equal to the data date. The remaining duration of this
activity is zero.
Actual Start Date -The calendar date work actually began on an activity. It
must be prior to or equal to the data date.
Acquisition Process - The process of acquiring personnel/goods/services for
new or existing work within the general definitions of contracts requiring an offer
and acceptance, consideration, lawful subject matter and competent parties.
Policy 1.5 and 5.1.
Agenda - A list of things to be done or discussed, typically at a meeting. No
project meeting should be convened without the prior circulation of an Agenda.
This enables attendees to prepare and ensure a productive and time-effective
meeting. Policy 1.6.
Anticipated Award Cost - The most probable contract price at time of tender
and award. It forms part of the forecast to complete.
Approve - To accept as satisfactory. Approval implies that the item approved
has the endorsement of the approving party, however, the approval may still
require confirmation by somebody else. In management use, the important
distinction is between approve and authorize. Persons who approve something
are willing to accept it as satisfactory for their purposes, but this decision is not
final. Approval may be by several persons. The person who authorizes has final
organization authority. This authorization is final approval. See Policy 9.1.
Approved Bidders List - A list of contractors that have been pre-qualified for
purposes of submitting competitive bids.
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As-built Design - The documentation that describes the ultimate "As-built"
configuration to provide for future replication. It includes design changes
implemented for manufacturing improvements and integration and verification
corrective actions. The "As-built" baseline becomes the "Build-to" baseline for
new builds. In construction, "As-built" drawings are referred to as the "record"
drawings.
As-built Documentation - Drawings and diagrams that provide an accurate
representation of how the product or facility is actually built.
Authorize - To give final approval. A person who can authorize something is
vested with authority to give final endorsement which requires no further
approval.
Backward Pass - Calculation of the latest finish times by working from finish to
start for the uncompleted portion of a network of activities.
Best Practices - Techniques that agencies may use to help detect problems in
the acquisition, management, and administration of service contracts. Best
practices are practical techniques gained from experience that have been shown
to produce best results. See Section 8.
Bid - An offer to perform the work described in a set of bid documents at a
specified cost.
Bid Documents - A set of documents issued for purposes of soliciting bids in
the course of the acquisition process.
Budget Summary Worksheet – Worksheet given to Project Manager by
CRESS Accounting Office to track budgeted costs, revised budgeted costs due to
change orders and committed costs to date. See Policy 4.1 and 4.2.
Capital Equipment Request (“CER”) - Form to be completed by the Project
Manager for equipment (except personal computer’s or personal computer
software or network printers) associated with capital projects which individually
or grouped cost $1,000 or more, having an estimated useful life of two years or
more. This is the only instance where assets may be grouped to reach the
capitalization requirements. The Purchasing Department will be the central
clearing point for the actual procurement of all capital equipment and a CER
must be completed. Policy 1.2, 2.1
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Capital Construction Request (“CCR”) - Form to be completed by the
Project Manager for new projects (or projects that are ready to proceed) with a
budget approved in routine quarterly capital budget review. Policy 1.2, 2.1
Certification - A written testimony to certain facts. Used to satisfy regulatory
bodies or customers that a person's or thing's capability, qualities, performance,
etc. are up to specified standards.
Change Order - Written order directing the contractor to make changes
according to the provisions of the contract. Policy 4.5
Change Request - A request needed to obtain formal approval for changes to
the scope, design, methods, costs or planned aspects of a project. Change
requests may arise through changes in the business or issues in the project.
Change requests should be logged, assessed and agreed on before a change to
the project can be made. Policy 4.5
Claim - The assertion of one of the contracting parties against the other seeking
financial adjustment or interpretation with financial implications of an existing
contract, subject to the terms of the contract's dispute clause.
Closeout - The completion of all work on a project. See Policy 9.1.
Closeout Log – A tool a Project Manager uses to ensure that all items of a
closeout have been completed prior to occupancy and commissioning. See Policy
9.2.
Commissioning - Advancement of an installation from the stage of static
completion to full working order and achievement of the specified operational
requirements. See Policy 9.1.
Committed Costs - Costs that are legally committed even if delivery has not
taken place with invoices neither raised nor paid.
Completion Date - The calculated date for completion derived from estimating,
planning and risk evaluation taking into account contingencies for identified risks.
Concept Phase - The first phase of a project in which the need is examined,
alternatives are assessed, the goals and objectives of the project are established
and a sponsor is identified.
Construction Cost - Any of the cost types (appropriations, commitment,
expenditure or estimate to complete) associated with the scope of the
construction work.
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Construction Management/Manager ("CM") - The process by which a
potential owner of a capital facility engages a professional agent, referred to as a
construction manager, to coordinate, communicate and direct the entire process
of construction from the project planning stage through design, procurement,
construction and startup, in terms of scope, quality, time and cost.
Contingencies - Specific provision(s) to mitigate random or unknown project
risks from causing project failure or frequent baseline changes. See Policy 4.6.
Contingency Allowance - Specific provision to cover variations which may
occur in the expected values of elements of cost or schedule, but not scope or
quality. See Policy 4.6.
Contract - A binding agreement to acquire goods and/or services in support of a
project. See Section 6.
Contract Closeout - Activities which assure that the contractor has fulfilled all
contractual obligations and has released all claims and liens in connection with
work performed. See Policy 9.1.
Contractor - A person, company or firm who holds a contract for carrying out
the works and/or the supply of goods in connection with the Project.
Corporate Accounting Construction in Progress (CIP) Report - Corporate
Accounting produces a monthly report called the Construction in Progress (CIP)
report. This report is produced from data from the Lawson general ledger
system. .See Policy 1.6.
Cost - Cost can be divided into internal and external expenses. External costs
can be controlled by contracts and budgets for each phase of a project and for
each deliverable or work product. Internal cost is the cost of project resources.
Cost Types - Four different cost types are typically associated with the scope of
work in a cost class. They reflect whether a cost is authorized, contractually
committed, spent or forecast for spending. These types are:
1.
2.
3.
4.
Authorized Appropriation
Committed Cost
Expenditure (or Actual)
Estimate To Complete, or Forecast to Complete, or Uncommitted.
Types 1 and 4 contain contingencies. The sum of type 2 and type 4 is the
estimated cost at completion. Before any commitments are made within a
cost class, the type 4 cost contains a component called the anticipated
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award cost, which in turn may contain an allowance for escalation. Type 3
costs are further sub-divided into payments and retentions (holdbacks).
Cost Variance ("CV") - The difference between the budgeted and actual cost
of work performed.
CRESS Report - A report that is produced from a database maintained by
CRESS and it lists all of the active capital construction projects. See Policy 1.6.
Critical Activity - Any activity on a critical path. Any activity viewed as
requiring special attention, i.e. particularly effective or efficient execution
because of high risk to scope, cost or time, should be included on the "critical"
list for the project to be successful.
Critical Path - The series of tasks that must finish on time for the entire project
to finish on schedule. Each task on the critical path is a critical task. See Section
1.9.
Critical Path Method ("CPM") - A technique used to predict project duration
by analyzing which sequence of activities has the least amount of scheduling
flexibility. Early dates are figured by a forward pass using a specific start date
and late dates are figured by using a backward pass starting from a completion
date. See Section 1.9.
Critical Task - A task that must finish on time for the entire project to finish on
time. If a critical task is delayed, the project completion date is also delayed. A
critical task has zero slack time. A series of critical tasks make up the projectÍs
critical path.
Data Date - The calendar date that separates actual (historical) data from
scheduled data.
Design - The process of developing and documenting a solution to a problem
using technology experts and tools.
Design & Development Phase (“DD”) - The second phase in the generic
project life cycle encompasses detailed technical, commercial and organizational
decisions. There is often substantial opportunity to optimize these decisions
without the expenditure of significant resources. Modeling, prototyping and
testing may thus be effort well spent.
Design Build - Combining design and construction in a single contract with one
contractor. See Policy 1.3.
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Endorsement - Written Approval. Endorsement signifies personal understanding
and acceptance of the thing endorsed, and recommends further endorsement by
higher levels of authority if necessary. Endorsement of commitment by a person
invested with appropriate authority signifies authorization.
Escalation - An anticipated rise in uncommitted costs of resources (labor,
material, equipment) over time, due to reduced purchasing power of money. A
component of a cost type. The allowance for escalation is a component within
the anticipated award cost of a cost class.
Estimated Cost at Completion - Actual Direct Costs, plus all related indirect
costs, plus the estimate of costs, both direct and indirect for all the work
remaining. See also Forecast Final Cost.
Financial Closeout - Accounting analysis of how funds were spent on the
project. Signifies a point in time when no further charges should be made
"against" the project. See Policy 4.9.
Forecast Final Cost - The sum of committed cost and estimated to complete.
Forward Pass - Calculating the earliest start dates moving from left to right
along a network.
General Consultant Agreement – Standard contract utilized by a Project
Manager for miscellaneous consultants on a Project.
Guaranteed Maximum Price (“GMP”) – See Policy 1.3.
Hand-Over Phase - The fourth phase in the generic project life cycle covers
completion of the project to the satisfaction of the sponsor. It includes
management of the introduction of the product or service being delivered by the
project. During Hand-Over, project records together with an audit trail
documentation are completed and delivered to the Owner/Project Manager. This
documentation will be required at the post-project evaluation review. All
documentation should include any operations and maintenance plans. If not to
be conducted in a post-project evaluation review, there should also be a review
of the original business case, i.e. a Benefits Assessment. See Policy 9.1.
Hidden Condition Change Order (“HCCO”) - The occurrence of a hidden
condition such as asbestos, which could not have been anticipated prior to the
start of the Project. This cost should be paid from the project contingency
budget. Policy 4.6.
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HCCO Form – Form to be completed by the Project Manager when a hidden condition
is discovered. Policy 4.6
Indirect Costs - The costs for common or joint objectives that cannot be
specifically identified with a particular project or activity; however, they may be
allocated to projects on a prorated basis. Also known as Overhead.
In-House - Within the organization. Typically refers to work undertaken by the
employees of the organization rather than by outside contract.
Initial Vendor Correspondence - See Policy 4.1, 4.2.
Inspection - Activities such as measuring, examining, testing, gauging one or
more characteristics of a product or service and comparing these with specified
requirements to determine conformity. See Policy 9.1.
Insurance - A contract by which a person or company can, upon payment
of a premium, be indemnified against loss due to specified risks. See Policy
6.3.
Invoice - A contractor’s bill or written request for payment under the contract
for supplies delivered or services performed. See Policy 4.2.
Invoice Rejection Letter - A letter sent to a Vendor by the Project Manager
when there is a discrepancy over an invoice requesting that the vendor provide a
full credit and rebill the good/service on a new invoice. See Policy 4.2.
Invoice Table - After receipt of an Invoice, the Project Manager should log
invoices into the Invoice Table. See Policy 4.2.
Kick-Off Meeting - Ideally, a workshop type meeting in which the principle
stakeholders and participants in the project are briefed on the goals and
objectives of the project, how it will be organized, etc. and who are then able to
contribute to its planning, assignment of responsibilities, target dates, etc.
Late Dates - Calculated in the backward pass of time analysis, late dates are
the latest dates on which an activity can start and finish.
Latest Finish - The latest day a work item can finish without affecting the
project duration assuming that all subsequent work items start as soon as they
are able and are completed in their expected times.
Lawson – Accounting system utilized by Memorial Hermann Hospital System.
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Letter of Intent - A type of letter sometimes issued to a contractor to confirm
the award of a contract and pending the signing of formal contract documents. It
is a commitment document. It allows the contractor to prepare for mobilization.
Permitting work to start on site before the contract is signed is not recommended
as the Owner is without full protection at that point until the construction
contract is signed.
Lien - A claim to some property that a lender attaches to a borrower. See Policy
9.3.
Lien Releases – Contractor’s Waiver and Release of Lien. See Policy 9.3.
Master Project Schedule - The highest level summary schedule for a project,
depicting overall project phasing and all major interfaces, contractual milestones,
and project elements.
Method - A reasonably complete set of rules and criteria that establishes a
precise and repeatable way of performing a task and arriving at a desired result.
Milestone - A point in time representing a key or important intermediate event
in the life of a project. A milestone should be capable of validation by meeting all
of the items prescribed in a defining checklist as agreed with the
stakeholders.
Monthly Financial Capital Report Notice to Proceed - Formal notification to the supplier, requesting the start of
the work.
Offer - A response to a solicitation that, if accepted, would bind the offeror to
perform the resultant contract. A response to an invitation for bids or a request
for proposals is an offer. A response to a request for quotations is a quote not an
offer.
Operations and Maintenance ("O&M") - Usually covers field operations,
training, repair, logistics support, upgrades, and related items. See Policy 9.1.
Operations and Maintenance Manual - A document that describes the
required operations and maintenance procedures for an entity or a system. See
Policy 9.1.
Phase - A major period in the life of a project culminating in a major milestone.
A Phase may encompass several Stages.
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Pink copy Post Project Review - A formal review of the project that examines the
lessons that may be learned and used for the benefit of future projects.
Progress Payment - Interim payment for delivered work in accordance with
contract terms generally tied to meeting specified performance milestones. See
Policy 6.5.
Project - A novel undertaking or systematic process to create a new product or
service the delivery of which signals completion. Projects involve risk and are
typically constrained by limited resources.
Project Duration - The elapsed time from project start date through to project
finish date.
Project Life Cycle - The four sequential major time periods through which any
project passes, namely:
1.
2.
3.
4.
Concept
Definition
Execution (implementation or development)
Finishing (commissioning or close out).
Each period may be identified as a Phase and further broken down into
stages that typically reflect the area of project management application
and the size and complexity of the specific project.
Project Request Form (“PRF”) - Form to be completed by the Project
Manager for investigational fees to assess the feasibility of a new project that
does not have a budget approved by the President’s Council during the routine
quarterly budget review. See Policy 2.1.
Project - A novel undertaking or systematic process to create a new product or
service the delivery of which signals completion. Projects involve risk and are
typically constrained by limited resources.
Project Budget - The amount and distribution of money allocated to a project.
Project Closeout - The full completion of a project signed off by all responsible
parties and the finalization of all paperwork. Contractually concluded by a
consultant's total performance Certificate. See Section 9.1.
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Project Closeout Checklist – As the project draws near to completion, the
Project Manager should utilize a Project Checklist to ensure that every close out
activity has been completed. See Section 9.1.
Project Closure Form - If in the Project Manager’s opinion, all conditions of the
Contract have been satisfied, the Project Manager will complete and sign the
Project Closure form and obtain the signature of the director of the user group
for whom the project was completed. See Section 9.1.
Project Cost - The actual costs of the entire project.
Project Management ("PM") - The art and science of managing a project
from inception to closure as evidenced by successful product delivery and
transfer.
Project Manager - The person who heads up the project team and is assigned
the authority and responsibility for conducting the project and meeting project
objectives through project management.
Project Number – An identifying number of the Project.
Project Risk Management - The process of identification, assessment,
allocation, and management of all project risks. Project risk management
recognizes a formal approach to the process as opposed to an intuitive approach.
Risks are present in all projects, whatever their size or complexity and whatever
industry or business sector. See Policy 6.4.
Project Scope - A concise and accurate description of the end products or
deliverables to be expected from the project and that meet specified
requirements as agreed between the Project’s Stakeholders.
Project Startup - The complex sequence of activities that are required to start
the project, mobilize the team, initiate the project definition process, obtain
agreement to the project's objectives and plan to deliver them.
Project Team - The central management group headed by a project manager
and responsible for the management and successful outcome of the project.
Purchase Order - A standard document used to obtain supplies and nonpersonnel services when the total amount is relatively small. The issue of a
Purchase Order creates a contractual commitment. See Policy 4.1.
Purchase Order Cancellation Request - A Project Manager should complete
this when a purchase order should be cancelled or reduced. This form requests
1.1 CRESS Intro & PM Glossary
Page 13 of 16
written acknowledgement from the vendor whereby they agree that they will
cease billing invoices under a certain purchase order number. See Policy 4.1.
Purchase Requisition (“PR”) – A form the Project Manager should fill out in
order to initiate a purchase order. See Policy 4.1.
Purchase Requisition Table – After completion of the purchase requisition
form, the Project Manager should record the purchase requisition into their
Project Budget Worksheet’s Purchase Requisition Table. See Policy 4.1.
Record Drawings - Drawings submitted by a contractor or subcontractor to
show the construction of a particular structure or work as actually completed.
Releases from Surety Request for Information (“RFI”) - A formal inquiry in the market place for
information, typically concerning "Expressions of Interest", capacity, capability
and availability of contractors to undertake and bid on work described in the
solicitation.
Request for Proposal - A formal invitation containing a scope of work which
seeks a formal response (proposal) describing both methodology and
compensation to form the basis of a contract.
Risk Management - An organized assessment and control of project risks. See
Policy 6.4.
Sequence - The order in which activities will occur with respect to one another.
This establishes the priority and dependencies between activities. Successor and
predecessor relationships are developed in a network format. This allows those
involved in the project to visualize the work flow.
Schedule - A time sequence of activities and events that represent an operating
timetable. The schedule specifies the relative beginning and ending times of
activities and the occurrence times of events. A schedule may be presented on a
calendar framework or on an elapsed time scale.
Schedule of Values – Each Contractor should submit a Schedule of Values for
their entire contract to the Owner and/or Project Manager for approval as that will
be the basis of payment to the Contractor.
Scope Change Order (“SCO”) - A Project scope change that will require an
adjustment in funding (an increase or decrease in budget). Policy 4.6
1.1 CRESS Intro & PM Glossary
Page 14 of 16
SCO Form – Form to be completed by the Project Manager when a scope change will
result in a budget adjustment. Policy 4.6
Slack Time - The amount of time a task can slip before it affects another task’s
dates or the project finish date.
Standard - A specific statement of the rules and constraints governing the
naming, contents, and operations of deliverables. The rules and constraints are
designed to support specific objectives.
Subcontractor - Any supplier, distributor, vendor, or firm that furnishes
supplies or services to or for a prime contractor or another subcontractor.
Subledger (category) Number – An identifying project number.
Task - A cohesive, individual unit of work that is part of the total work needed to
accomplish a project.
Transfer of Care, Custody and Control ("TCCC") - The transfer of a
project's completed deliverable into the hands of the user together with
responsibility for its care, usage and maintenance.
Variance Analysis - The analysis of the following:
•
•
•
•
•
•
•
•
Cost Variance = BCWP - ACWP
% Over/Under = 100 x (ACWP - BCWP) / BCWP
Unit Variance Analysis
Labor Rate
Labor Hours/Units of Work Accomplished
Material Rate
Material Usage
Schedule Variance = BCWP - BCWS
Vendor Categories – The Project Manager should properly classify vendors into
the proper category for purchase order and invoice purposes. See Policy 4.4.
Vendor Letter (Closure Date) – A letter sent to the Vendor by the Project
Manager notifying that the Project will be closed as of a certain date and after
that, no further expenses will be charged to that Project. See Policy 9.1.
Warranties/Guarantee Matrix – A Project Manager should log all of the
warranties/guarantees associated with a Project into this Matrix. See Policy 9.2.
1.1 CRESS Intro & PM Glossary
Page 15 of 16
* Many definitions came from Wideman’s Comparative Glossary of Common Project Management Terms v3.1.
The Glossary is copyright by R. Max Wideman, March 2002, with the permission given for copying due to a nonprofit use.
APPROVED:
DATE:
1.1 CRESS Intro & PM Glossary
Page 16 of 16
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.2
Policy Title: Capital Expenditure Definition
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to define what a capital
expenditure is and depending on the expenditure amount, whether the
coordination of the expenditure will be handled in-house or within the CRESS
Department.
Policy Statement:
A.) Definition of Capital Expenditure
1.) All equipment (except personal computer’s or personal computer software
or network printers) associated with capital projects which individually or
grouped cost $1,000 or more, having an estimated useful life of two years
or more. This is the only instance where assets may be grouped to reach
the capitalization requirements.
2.) Capital projects including space changes or major building repair (those
which extend the life of the building) with costs in excess of $5,000 (not
including equipment costs) and a useful life of two years or more.
3.) Information Systems projects with costs in excess of $5,000 (not including
equipment/software costs) and a useful life of two years or more
B.) Distribution of Capital Expenditure Workload
1.) Generally, if a capital project is less than $500,000 in scope, it will be
handled in-house by the Facility Manager within the Facility that the
Project is to take place.
1.2 Capital Expenditure Definition
Page 1 of 2
2.) If a capital project is greater than $500,000 in scope, the project will be
carried out by a Project Manager within the CRESS department.
APPROVED:
DATE:
1.2 Capital Expenditure Definition
Page 2 of 2
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.3
Policy Title: Construction Delivery
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to describe the various contract
delivery methods and the preferred delivery method(s) within CRESS.
Policy Statement:
Capital projects can be managed in a variety of ways but the basic contract
methods are Construction Management, General Contracting, and Design Build.
While each method has advantages and disadvantages that are reviewed below,
Memorial Hermann primarily uses General Contracting as its contract method. It
is, however, important to look at the anticipated capital project to determine if a
rare circumstance (a critical schedule, a small project or emergency/disaster)
dictates another method to be utilized. In those instances, the Project Manager
should seek written, CRESS approval if conditions warrant an alternative delivery
method.
In this section, each delivery method is described and decision tools are
included. Please refer to Section 6.1 “Contract Types” for the contracts utilized
within CRESS.
A. General Contracting
The General Contracting Method is also known as the design-bid-build method.
The general contractor does not have any contractual obligation to work with the
Owner in managing the project. The contract types used by the General
Contractor are as follows:
Lump Sum Contracts
1.3 Construction Delivery Methods
Page 1 of 6
The lump-sum or fixed price construction contract is the most common of the
formats and is one of the most commonly used within Memorial Hermann.
Generally, a competitively bid project is set up on a lump-sum basis. At least in
theory, this competitive bidding process should result in an economy to Memorial
Hermann due to the competition involved. In addition, this format most clearly
fixes the responsibilities of the parties and the limits of each party's liability.
However, certain practical problems with this theory must be reviewed for an
accurate picture of the risks that each of the parties assumes in this format.
The lowest bidder may not be the best overall choice for Memorial Hermann, for
a number of reasons. For example, the lowest bidder has every incentive to use
the least expensive materials and methods allowed under the contract. The
lowest bidder may not always provide the best long-term value, especially if their
bid is substantially lower than other bidders.
Although the lump-sum contract gives the benefit of a certain price, that price
may be higher than necessary. A lump-sum bidder is will include a contingency
amount or cushion in its bid to allow for uncertainties which may or may not
materialize. If these feared events do not occur, the lump-sum Owner has paid
unnecessarily for contingencies that did not happen.
Cost Plus/ Time and Material Contracts
The simplest format, in theory, is the cost plus contract (sometimes known as
the "time and materials," or T&M, contract). This is rarely used within Memorial
Hermann and under this scheme, Memorial Hermann agrees to reimburse the
contractor for specified direct and indirect costs, with a fee to cover the
contractor's overhead and profit (often stated as a percentage of the total
reimbursable cost). These contracts have the necessary disadvantage to both
parties of leaving total construction costs unclear; Memorial Hermann, however,
retains more control over the work and over the contractor's methods than there
would be under a lump-sum contract.
Cost-plus contract work is still regarded by many as a suspicious format, since
this plan, in its simplest form, gives the contractor little or no incentive to save
money. Indeed, any incentive would, at least theoretically, be in the opposite
direction, since the greater the cost, the larger the fee. Perhaps as a result,
Owners have derived several cost-plus variations. In one such scheme, the
contractor takes a fixed fee or a declining percentage fee, thereby eliminating or
reducing the contractor's incentive to increase direct costs so as to increase its
fee.
Unit Price Contracts
1.3 Construction Delivery Methods
Page 2 of 6
A final contract type seldom used, the unit price contract, is used commonly in
heavy and subsurface construction. This contract form gives an Owner some of
the advantages of competitive pricing along with an ability to assess actual costs
incurred. This has particular applicability to heavy construction, where estimated
quantities may turn out to have little relationship to the actual quantities of work
performed, making bidding a less than exact science. Accordingly, the Owner
may save itself the payment of substantial contingencies or claims by tying unit
prices to actual work performed.
Under a unit price contract, an Owner must monitor performance to assure the
ability to confirm actual quantities for final payment purposes. Nevertheless, the
advantages may be substantial, especially in subsurface work. As an aside, the
use of a unit price for differing site conditions or changes clause in a lump-sum
contract can help assure an Owner that no contingencies for unknown site
conditions are included by the bidders.
Thus, the use of unit pricing in one form or another may allow an Owner to limit
the risk of substantial contingencies in lump-sum contracts. No such clause can
prevent a claim by the subsurface contractor, but by assuring the contractor of
adequate payment for unanticipated conditions, an Owner may avoid the
contingency. A contract can be negotiated, especially in a unit price context; a
hidden contingency cannot.
OTHER ALTERNATIVE DELIVERY METHODS
B. Construction Management
There are two forms of Construction Management – agency and at-risk.
Agency Agreement
The agency form of Construction Management is when the CM acts as an agent
for an Owner. The CM works for a negotiated fee and reimbursable items. Their
contract does not hold risk in the outcome of the project except litigated
professional negligence. The CM does not hold any contracts of contractors or
consultants. They are the Owner’s representative in the construction process
beginning typically in the pre-construction/design phase. They are not typically
involved in planning.
They do not have contractual authority over the
contractors or consultants. They represent an Owner on the construction site and
maintain an “open-book” relationship with the Owner. They ensure that project
procedures and quality are maintained. They are responsible for document
control and manage the problem-solving process. The Owner maintains control
of the design, contracts, payments and risk.
1.3 Construction Delivery Methods
Page 3 of 6
Guaranteed Maximum Price Contracts (CM-at-Risk)
The guaranteed maximum price contract, also called the GMP or Gmax, is
actually another variation on the cost-plus contract, although there are elements
of the lump-sum contract included as well. While the contract is on a cost-plus
basis up to the GMP agreed upon, the contractor agrees to absorb all costs
beyond the GMP.
The CM-at-Risk contract method is characterized by the following:
1.) The CM holds the contractor contracts.
2.) The CM guarantees the price based on the design documents.
3.) The CM shares in the risk for the project with the Owner.
4.) The CM shares or reverts savings back to the Owner.
5.) The CM shares in or bears the losses of exceeding the approved
Guaranteed Maximum Price (GMP).
6.) The CM has an “open book” relationship with the Owner.
7.) The CM ensures project procedures and quality or maintained.
8.) The CM maintains document control and manages the problem-solving
process.
9.) The CM works in tandem with the Owner to manage the cost and
schedule.
10.) The Owner maintains control of the design.
As with the standard cost-plus contract, there is little incentive for a contractor to
reduce costs, at least until the Gmax price is reached. As a practical matter,
therefore, where an Owner requires the contractor to agree to a guaranteed
maximum price, it may make sense to give the contractor a portion of any cost
savings that are recognized in order to give the contractor an affirmative
incentive to minimize construction costs, benefiting both parties.
Some Owners may feel that GMP contracts imply a lack of competition in pricing.
While GMP contracts are often negotiated with a contractor with whom an Owner
is familiar, there is nothing to prevent the Owner from soliciting several GMP
1.3 Construction Delivery Methods
Page 4 of 6
proposals from pre-qualified contractors on a competitive basis. This can be
done at the completion of construction documents in the same manner as is
traditionally done with lump sum contracts.
In institutional and commercial construction, typically subcontractors perform 80
to 85 percent of the work in a general construction contract. An Owner can
therefore, reasonably require in the GMP contract that the general contractor
obtain a minimum of three or four lump sum competitive bids from pre-qualified
subcontractors on the major portions of the work. The Owner can retain the
right to review and approve subcontractor selection. This ensures competitive
pricing on the majority of the work.
Additionally, there are often options within a GMP contract for improving the
economy to the Owner. For example, the contractor's fee can be set at a fixed
amount to be adjusted only if approved change orders exceed a specified range.
The contractor's cost of general conditions can be set as a separate GMP within
the overall GMP. These approaches prevent the contractor from loading the job
with excessive supervision if he perceives an under-run in the overall GMP.
On phased or fast track projects, one way to employ a GMP at early stages
would include soliciting proposals from pre-qualified contractors for a lump sum
fee and general conditions cost at some design milestone such as design
development. The actual GMP amount can be negotiated later, including
subcontractor bids. This approach provides site planning, scheduling and
estimating prior to completion of the documents.
C. Design Build
Design-build means contracting with a single entity for performing both design
and construction on an entire project. Design-build is a contracting process that
brings designers and contractors together early in the detail design portion of a
project. The Owner clearly defines the standards and general specifications they
expect for a project, and the design-build team works together to satisfy those
requirements. Because the team works together, they are able to develop
innovative and efficient solutions to meet the Owner's expectations. The designbuild process differs from the traditional method by overlapping design and
construction, allowing construction to begin after a portion of the design has
been completed. Design-build has a significantly different approach to risk
management and project responsibilities. Recently, however, "design-build"
contracting has emerged anew wherein the Owner looks entirely to one entity
hired by contract to do all functions normally provided by the previously
independent design professional and construction professionals, as well as, the
entire project construction.
1.3 Construction Delivery Methods
Page 5 of 6
Some of the benefits and drawbacks are as follows:
1.) Shorter time to complete a project by overlapping design and construction
by allowing construction to begin before all design details is finalized.
2.) Results in economy in selection of design, materials, and construction
methods due to collaboration between the designers and contractors.
3.) Reduces claims construction delays due to design errors because the
design and construction are performed under the same contract.
4.) Accelerates response times, and resolves concerns and disputes more
quickly through a team environment.
5.) Provides a single point of contact for quality, cost, and schedule from
design through construction.
6.) Allows for the use of the best-value project award-selection criteria, which
evaluates both technical and financial elements.
7.) The rules and practices of the traditional process are familiar to
contractors, and consulting engineers. New rules for design-build changes
stakeholders' roles.
8.) The bidding process is more expensive for design build teams.
9.) Coordination responsibility can be more challenging due to a faster pace.
10.) Single Risk for Owner –“eggs all in one basket”.
The application of the type of contracting method selected largely depends on
the project size, schedule, and risk evaluation. The decision to choose a
methodology should be decided upon when the capital project request is
initiated.
APPROVED:
DATE
1.3 Construction Delivery Methods
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CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.4
Policy Title: CRESS and Project Manager Organization / Responsibilities
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
-Need rough/sketch org chart (either description or actual chart), how PM’s fit
*Current list of PM’s
*2 Org charts… 1 internal and 1 internal/external?
-Who does what within CRESS / PM?
-Internal teams (only MHHS and PM)…when use and why? Discuss? Structure? #
of teams?
APPROVED:
DATE
1.4 CRESS & PM Organization and Responsiblities
Page 1 of 1
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.5
Policy Title: Internal Project Teams
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
A. Internal Team Membership
1.) Membership of internal teams varies project by project, depending on
project scope.
2.) The Project Manager shall work with the Project Sponsor to develop
Internal Team membership. Every internal team will consist of CRESS
involvement and either some or all of the following (not intended to be
exhaustive, internal team membership will depend on project’s scope):
a. CRESS
Facility Departments
b.
c.
d.
e.
f.
g.
h.
Laundry/Linen
Safety/Security
Parking
Biomedical
Facilities/Engineering
Property Management
Real Estate
System Departments
i. Infection Control
1.5 Internal Project Teams
Page 1 of 2
j. Information Systems
k. Insurance
3.) Please refer to Section 5 for External Team Membership/Responsibilities.
APPROVED:
DATE
1.5 Internal Project Teams
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CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.6
Policy Title: Reports and Communication Process Overview
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
Preconstruction Conference
A. Preconstruction Conference
1.) Upon placement of the Project Team (Internal (Policy 1.5) and External
Members (Section 5)), the Project Manager should commence the Project
with a Pre-construction Conference. The Pre-construction Conference, Preinstallation Meetings, Job Progress Meetings, and specially called meetings
throughout the progress of the Work should be managed by the Project
Manager or Construction Manager depending on the project delivery type.
2.) Representatives of the Contractors, subcontractors and suppliers attending
the meetings should be qualified and authorized to act on behalf of the
entity each represents. The Construction Manager or Project Manager will
chair all meetings, and will write and distribute the minutes of all meetings
if required. If the attendees do not object in writing to any part of the
meeting minutes within five (5) days of receipt of the minutes, the minutes
should be accepted as written.
a. When: The Pre-construction Conference should be scheduled and
organized at the Project site or other convenient location no later
than 15 days after execution of the Notice to Proceed and prior to
commencement of construction activities. The Project Manager will
1.6 Communication Processes and Formats
Page 1 of 9
conduct the meeting to review responsibilities and personnel
assignments.
b. Attendees: The Construction Manager/General Contractor, Project
Manager, Architect and their consultants, the Contractor and its
superintendent, major subcontractors, manufacturers, suppliers and
other concerned parties should each be represented at the
conference by persons familiar with and authorized to conclude
matters relating to the Work.
c. Agenda: The agenda should include items of significance that could
affect progress including such topics as:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.
xviii.
xix.
Working construction schedule
Critical work & sequencing or phasing
Project coordination and responsibilities
Procedures for processing field directives, proposal requests
and Change Orders
Procedures for resolving Requests for Information (RFI)
Procedures for processing Applications for Payment
Distribution of Contract Documents
Submittal of Shop Drawings, Product Data and Samples
Record documents
Site Logistics
Construction temporary facilities
Office, work and storage areas
Equipment deliveries and priorities
Safety procedures
Security
Housekeeping
Working hours
Traffic and parking procedures
Other critical or operational issues
B. Pre-installation Conference
1.) When: Conduct a Pre-installation Conference at the site before each
construction phase that requires coordination with other construction
phases.
The Installer and representatives of manufacturers and/or
fabricators involved in or affected by the installation, and its coordination
or integration with other materials and installations that have preceded or
will follow should attend the meeting.
1.6 Communication Processes and Formats
Page 2 of 9
2.) Agenda: Review the progress of construction activities and preparations
for the particular activity under consideration at each pre-installation
conference. Be prepared to discuss requirements for:
a. Contract Documents
b. Possible conflicts and Alternate Materials or solutions
c. Change Orders
d. Deliveries of key materials
e. Shop Drawings, Product Data and quality control Samples
f. Compatibility of materials
g. Acceptability of substrates
h. Temporary facilities
i. Space and access limitations
j. Governing regulations
k. Safety
l. Inspection and testing requirements
m. Required performance
n. Recording requirements
o. Protection
C. Construction/Project Weekly Meetings
1.) When: On-site Project Job Progress Meetings should be held on a weekly
basis throughout the duration of the Project.
2.) Attendees: The Construction Manager/General Contractor, Project
Manager, the Architect and their consultants, Contractors (and their
subcontractors and suppliers if requested by the Construction Manager)
should attend. The representatives of the Contractor should be the Project
Manager and Field Superintendent, and required to attend unless a
substitute representative has been approved by the MH Project Manager.
Each Contractor should begin attending the Project Job Progress Meetings
at least four (4) weeks prior to mobilization on site and continue until the
Contractor has fulfilled the obligations of his Contract.
3.) Agenda: The Project Manager will establish the agenda for the Job
Progress Meeting. At a minimum, the Participants should be prepared to
discuss the following:
a.
b.
c.
d.
e.
Review of the Responsibility Matrix
Actual versus scheduled progress for the past week
Planned construction activities for the next three weeks
Anticipated sequencing of the work and any sequencing revisions
Status of submittals and shop drawings
1.6 Communication Processes and Formats
Page 3 of 9
f. Procedures for resolving Requests for Information (RFI)
g. Status of fabrication and delivery schedules
h. Coordination issues
i. Status of any cost proposals and pending change orders
j. Safety
k. Security
l. Site access and utilization
m. Temporary utilities and services
n. Housekeeping
o. Administrative procedures
p. Quality control
q. Status of Requests for Information
r. Anticipated design changes
s. Field observations, problems and conflicts
4.) See Figure 1.6a – Job Progress Meetings for a template.
D. Design Meeting
1.) When
2.) Attendees
3.) Agenda
E. Owner’s Weekly Meeting
1.) When
2.) Attendees
3.) Agenda
F. Monthly Project Status Report
1.) When: The Project Manager should submit a monthly report to CRESS
throughout the duration of the Project.
2.) Format: The Project Manager will write the Monthly Project Status Report.
At a minimum, the Report should include the following:
a.
b.
c.
d.
e.
f.
An executive summary
Project Budget Worksheet & Expense Reconciliation
Project Schedule (Complete, In-progress, Upcoming and milestones)
Relevant Photographs
Major activities
Critical Upcoming Decisions
1.6 Communication Processes and Formats
Page 4 of 9
G. Construction Reports
1.) The Project Manager should be familiar with the construction activity
reports and take action when necessary. The reports are as follows:
2.) CRESS Monthly Facility Capital Report (MFCR)
The CRESS Sr. Financial Analyst produces a monthly report called the
Monthly Facility Capital Report (MFCR). It is a report that is produced
from a database maintained by CRESS and it lists all of the active capital
construction projects and includes the following information:
a. Project name, number, Project Manager, and status
b. Total Original budget, change orders and total final budget
c. Total inception to date funds committed (sum of POs issued against
project)
d. Total inception to date actual expenditures (sum of all invoices paid
against project)
e. Funds remaining on project (total budget less actual expenditures)
Expenditures that are charged to construction projects that are NOT
routed through the CRESS Division will not be included on the MFCR,
would show up on Corporate Accounting’s CIP report (see below)
CRESS will require each Project Manager to periodically reconcile his/her
Project Budget Worksheet with the CRESS database.
3.) Corporate Accounting Construction in Progress (CIP) Report
Corporate Accounting produces a monthly report called the Construction
in Progress (CIP) report. This report is produced from data from the
Lawson general ledger system. Capital construction costs are accounted
for in two main categories on the MHHS general ledger. The first
category is construction in progress (CIP). CIP is the category where
costs of projects currently under construction are accumulated and
accounted for until the project is substantially complete. When the
project is complete, the CIP costs are transferred to the second category
of capital construction costs which is fixed assets.
When costs are transferred to fixed assets, depreciation can begin. To
ensure that depreciation expense is properly stated in the correct
1.6 Communication Processes and Formats
Page 5 of 9
accounting period, Corporate Accounting has to periodically transfer costs
of substantially completed projects to fixed assets, even though the
project may be less than 100% complete.
4.) MFCR vs. CIP
The CIP report shows total construction costs, less amounts transferred
to fixed assets whereas the MFCR shows total costs since the inception of
the project. In other words, the MFCR report shows the gross amount of
the original budget and inception to date expenditures where the CIP
report shows the net amount less costs transferred to fixed assets.
Expenditures that are charged to construction projects that are NOT
routed through the CRESS Division will not be included on the MFCR,
would show up on Corporate Accounting’s CIP report.
CRESS is currently working with ISD to develop an electronic reconciliation
process whereby the CRESS database and Lawson general ledger system
can produce a periodic exception report as needed showing differences
between entries posted on the two databases. This will help ensure the
two databases are in sync with respect to project costs.
H. Web-Based Project Management
1.6 Communication Processes and Formats
Page 6 of 9
Figure 1.6a – Job Progress Meetings
3050 Post Oak Blvd., Suite 700, Houston, Texas 77056
Phone: 713/963-1000 Fax: 713/623-4672
OAC Meeting Agenda
April 6, 2005 – 3:00pm CST
MHSW/Heart Vascular Institute
I. Old Business
A. Contract Review - FKP
a. B141-97 Part 1 & 2 (rev. 04/04/05)
b. A201-97 (rev. 04/04/05)
c.
B. Demolition of Toys R’ Us
a. Recap of today’s 2:00 meeting
b. Parking blocked off today (4/6/05)
c. Demolition Starts Thursday (4/7/05)
d. Duration – 3 weeks
MHHS / TCC
TCC
II. New Business
A. Job Progress Summary –
Demolition to start this week, drawings to go out next week to city and GC, eye
center parking improvements being bid out.
B. Schedule Milestones–
a. Bid Schedule Milestones
i. RFP Review by MHHS – 4/8/05 – 4/11/05 (is this enough time?)
ii. Distribute RFP to GC’s – 4/12/05 (dependant on review)
iii. Pre-Bid Meeting – 4/14/05 or 4/15/05 (per MHHS availability)
iv. GMP Drawings Complete – 4/15/05
v. GC’s Pickup Drawings – 4/18/05
vi. Bid Meeting Q & A – 4/20/05 (answer questions about drawings)
vii. Bids Due – 5/13/05, 2:00pm
viii. Bid Review – 5/13/05 – 5/17/05
b. Permit Schedule Milestones
i. BP #1 – Driveway & Sanitary & Storm Relocation Package Received comments, addressing and resubmitting on 4/7/05 per Walter
P. Moore
ii. BP #1A– Waterline Separation Package - Separated out waterline from
BP#1 due to city requirements
iii. BP #2 – Piers & Building Pad – in to city, no comments yet
1.6 Communication Processes and Formats
Page 7 of 9
iv. BP #3 – Eye Center Parking Improvements - in to city, no comments
yet
v. BP #4 - GMP / Permit Set – ready on 4/15/05 for submittal to city,
revisions/updates to be sent in 6/21/05 to city when final construction set
is complete
c. Construction Schedule Milestones
i. Award Contract Date – 5/17/05
ii. Start Construction Date – 6/1/05
iii. Open Doors Date – 12/1/06
C. Drawing Changes – Drawings being updated for GMP & Permit Issue
D. Submittals – None
E. Change in Services – Dealing w/ Contract Adjustment
a. MHSW - 00R Revision of Basic Services due to scope changes
$3,561,350
b. MHSW - 01R2 Revision of Basic Services due to scope changes
($207,500)
c. MHSW - 02R Site Development Redraw – Invoiced against
$80,000
d. MHSW - 03R Revision of Basic Services due to scope changes
($765,783)
F. Change in Services – Other
a. MHSW - 04 Elevator Consultant Services
$20,700
b. MHSW – 05 Basic Landscaping Plan for HVI due to permit requirements $3,600
G. Interiors – Last Meeting w/ Tracy & O’Neil Hill on 3/29/05
a. Interiors Mockup – Best Practices Mockup - Shared Cost vs. O’Neil Hill CSA
b. Finishes Review (not all Best Practices per MHHS)
H. Telecom/Low Voltage - Meeting w/ Richard Graziani (MHHS), Ray Baker (MHHS), Jill
Allison (TCC), Elliott Avery (SSR) on 4/5/05
a. Notes of meeting & Revised telecom to be sent out by Elliott Avery showing new
conduit routing
I.
Equipment - Meeting w/ Doctors, Chris V., Ray, Genesis, TCC on 4/8/05
a. MRI vs. CT Scan
b. GE vs. Phillips
c. Additional Hospital Requests for equipment
d. Drawing Review / Sign off
e. Doctor Comments on Cath, Radiology, MRI
f. Packs – Volume of system
J. Invoices
a. SSR outstanding invoice
K. Critical Issues/Comments
a.
III. Safety (see Section 7 for Safety Report Template)
1.6 Communication Processes and Formats
Page 8 of 9
APPROVED:
DATE
1.6 Communication Processes and Formats
Page 9 of 9
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.7
Policy Title: Permitting Processes
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
A. External Permitting Requirements
1.) Capital projects must be permitted prior to starting work. It is the Project
Manager’s responsibility to obtain all permits.
2.) The jurisdictional bodies applicable to Memorial Hermann are: The Cities of
Houston, Katy, Missouri City, and the counties of Harris and Fort Bend.
CITY AUTHORITIES
City of Houston
Department of Planning & Community Development
100 Main Street
Houston, TX 72801
(513) 432-7700
City of Katy
Department of Planning & Community Development
100 Main Street
Katy, TX 72801
(513) 432-7700
City of Missouri City
Department of Planning & Community Development
1.7 Permitting Processes
Page 1 of 6
100 Main Street
Missouri City, TX 72801
(513) 432-7700
COUNTY AUTHORITIES
Harris County Building Official:
30 East Main Street
Houston, TX 72801
(513) 564-3040
Fort Bend County Building Official:
30 East Main Street
Houston, TX 72801
(513) 564-3040
STATE AUTHORITIES
Texas Dept of Health
Texas Department of Licensing & Regulation
3.) Harris and Fort Bend Counties require permits for the following:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Additions, Alterations, and Repairs
All New Construction (Building Permit)
Decks
Electrical
Farm Buildings
Mobile Home Placement
Plumbing
Signs
Storage Buildings
Vinyl Siding
4.) There are varying fees associated with the above permits. However, some
requirements vary between the city/county governing bodies. Information
pertaining to city and county entities is described below. However, it is always
important to call the applicable permitting office as requirements may change.
CITY OF HOUSTON/KATY/MISSOURI CITY
1.) The Cities of Houston/Katy/Missouri City requires a permit for the following
construction operations:
1.7 Permitting Processes
Page 2 of 6
a.
b.
c.
d.
e.
f.
g.
Blasting
Building
Demolition
Electrical
Mechanical
Plumbing
Storage Tanks
2.) The Cities of Houston/Katy/Missouri City requires a building permit for the
following:
a.
b.
c.
d.
e.
f.
g.
any new construction
alterations
additions
demolitions
accessory buildings
swimming pools and/or
any other improvements or property upgrades.
3.) An architect or engineers seal is required on all drawings for all construction,
irrelevant of size or complexity, that impacts assembly, educational, high hazard,
institutional, hotel-motel and dormitory use. Other types of construction may
require an architect or engineer’s seal based on height and/or square footage.
4.) All applications must contain the following information:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
Owner’s complete legal name
Owner’s mailing address
Owner’s phone number
Contractors complete legal name
Contractor’s mailing address
Contractor’s phone number
Copy of State Contractors Registration
Contractor’s City business license number
Fees – based on total value of project
Check made payable to the City of Houston/Katy/Missouri City
Site Plan as described below
Building plans
Supplemental plans
5.) The site plan should have the following incorporated therein:
a. A north indicator
b. Actual dimensions of the lot drawn in 1”-20’ scale and to the actual
bearings of the property
c. Actual location and dimensions of existing structures on the property
d. Actual dimensional setbacks form the property lines to the structures
1.7 Permitting Processes
Page 3 of 6
e. Actual size of the property
f. All easements contained within the property or that cross the property at
any point
g. All off-street parking
6.) The building plan must be submitted in two identical sets of documents. One set
will remain on record at the building inspection office. The other set will be
stamped “approved” and returned to the owner or contractor. The “approved
set” must remain on the jobsite at all times during construction. The building
plan should have the following incorporated therein:
a. Scaled floor plan for each floor
b. Typical wall sections
c. At least two elevations
d. Overall dimensions of the structure
e. Internal dimensions of the rooms in the structure
f. All rooms must be labeled as to their use
g. All bathrooms and kitchens must show locations of all fixtures and
appliances to be installed
h. All doors, windows, and stairways must be sized on the drawings
7.) Supplemental plans may be required and include the following:
a.
b.
c.
d.
Electrical
Plumbing
Mechanical
Fire Protection Systems
8.) It is important to note that in addition to the building permit, separate permits
are required for electrical, plumbing, mechanical, signs, and fire protection
systems. When submitting fire protection system drawings, four sets of drawings
and calculations must be submitted in addition to the building permit drawings.
9.) Once a permit has been issued, it must be displayed on the outside of the
building so that it is plainly visible from the street. It cannot be removed until the
building or renovation is complete and ready for occupancy.
10.) During the course of construction, the city building inspector must be called to
inspect the following work:
a. Building
i. Footers
ii. Slabs
iii. Foundations
iv. Framing
v. Insulation
vi. Drywall
vii. Chimney work
viii. Firewalls
1.7 Permitting Processes
Page 4 of 6
ix. Fire separation walls
x. Final construction
b. Plumbing
i. Under slab
ii. Rough-in
iii. Service lines
iv. Final construction
c. Electrical
i. Under slab
ii. Rough-in
iii. Final construction
d. Mechanical
i. Under slab
ii. Rough-in
iii. Gas lines
iv. Gas fireplaces/logs
v. Final construction
11.) Inspections should be called in and set-up the prior day to the needed
inspection. It is a good idea to give the inspectors a “heads-up” prior to the
inspection period so they can assist in planning the inspection dates. This can
help to reduce “downtime” due to prior commitments by the inspectors.
12.) Once the final construction inspections are complete and approved, a
certificate of occupancy will be issued prior to any occupancy by the owner.
Harris/Fort Bend County
1.) Harris and Fort Bend Counties require similar documentation to the Cities of
Houston/Katy/Missouri City as described above. In addition to those
requirements, zoning approval must be obtained. Health Department approval is
required for any habitable buildings not served by public water and sewer
systems. If the building will be serviced by public water and sewer, the service
provider approval is required.
2.) It is always a good idea to communicate with the permitting office prior to
submitting any application to determine what the present fee structure is, what
documents are required, how many sets should be submitted, what
supplemental documents will be required, and approximate estimate of review
time prior to receipt of permit.
State of Texas
Electronic lock
Waste water Impact fees
1.7 Permitting Processes
Page 5 of 6
Food service
Usage/disposal
Certifications?
B. Internal Permitting Requirements
ISLM (Interim Life Safety Measures)
PCRA (Pre-construction Risk Assessment) – see Policy
Filled out prior to construction start and ideally, bid in order that would affect bid
Hatton may have a list
JCAHO
APPROVED:
DATE
1.7 Permitting Processes
Page 6 of 6
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.8
Policy Title: Project Document Controls
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
DOCUMENTATION LOGS
Project logs should be set up at the initiation of a project and should be project
specific. Logs that are typically used for tracking are as follows:
•
•
•
•
•
•
•
•
•
•
Request for Information
Submittals
Hot Issues Tracking Logs
Change Management: Potential Change Orders and Change Orders
Document Log: Drawings, specifications, bulletins, ASI’s, etc.
Rolling Deficiency Log/Non-conformance Log
Payment Log
Testing & Inspection Logs
Punchlist
Close-out Logs
A. Request for Information (RFI)
1.) Contractors are required to submit all questions using a Request for
Information.
1.8 Project Document Controls
Page 1 of 10
2.) When the Contractor requests a new RFI, an identifying number will
automatically be assigned and the Contractor's name, contract number
and contract description will be included on the form. The question will
be scripted into the given box and submitted to the Architect for
answering. The new RFI will be added to the Request for Information
Log which tracks each RFI, date of request, date of response and the
direction or clarification from the Architect/Engineer. All RFI's will be
available to all contractors for reference. Once the RFI is answered it will
appear in the RFI Log with a brief description of the answer. The entire
RFI may be viewed by clicking on the desired RFI number.
B. Submittal Log
1.) A Submittal Log will be used to track the submittals and samples. The
Contractor shall prepare a complete submittal register that identifies all
the submittals required by the Contract Documents and the dates for their
submission.
2.) The submittal log shall, as a minimum, list the following items to be
submitted:
a.
b.
c.
d.
e.
f.
g.
h.
Listing of subcontractors
Insurance certificate
Performance and payment bonds
Permits
Payment applications
Schedule of Values
List of products
Project closeout submittals
3.) The Submittal Log should coordinate with the Contractor's construction
schedule. The log should be prepared in chronological order. The
following information should be provided for each submittal item identified
in the submittal log:
a.
b.
c.
d.
e.
f.
g.
Scheduled date for the initial submittal
Related section number
Submittal category (shop drawing, product data, sample, other)
Name of subcontractor
Description of the part of the Work covered
Scheduled date of resubmittal
Scheduled date for the Architect's final release or approval
C. Hot Issues Log
1.8 Project Document Controls
Page 2 of 10
1.) The hot issues log is a To-do list for the project to track the upcoming hot
issues to ensure timely addressing of potential obstacles for the project.
2.) This log should be used at progress meetings.
D. Change Management Logs
1.) A Change Request will be issued for any revision requiring a cost proposal
from the contractor(s).
2.) The form will contain the Contractor's name, contract name and number
and a description of the revision. A Potential Change Log will be
developed and maintained to record the following:
a. Potential Change Number – sequential listing of all potential
changes, even those not resulting in a cost or schedule
modification.
b. Change Request Date
c. Change Request Description
d. Proposal quotation from the contractor - date and estimate
e. Change Order Number and Date
E. Document Log
1.) The document log should list all of the following:
a. The contract drawings - date, revision numbers and description
b. The contract specifications – date, revision numbers and
description
c. The Bulletins issued by the A/E – date revision number and
description
d. Architect's Supplemental Information (ASI): All A/E clarifications to
RFI's or clarifications in general will be issued as an ASI. The ASI is
a no cost clarification generated by the A/E. ASI's accompanied by
a sketch will be distributed to the appropriate Contractors. An
Architect's Supplemental Information Log should be kept with a
brief description of each ASI.
F. Rolling Deficiency List/Non-conformance Log
1.) As the construction project progresses, the rolling deficiency list/nonconformance log should be tracked and should list the following nonconformances identified by:
a. A/E field inspection reports
1.8 Project Document Controls
Page 3 of 10
b.
c.
d.
e.
Testing and inspection reports
Field Inspections by hospital personnel
Governmental & Jurisdictional Inspection Agents
Other inspections during construction
G. Punchlist
1.) Upon acknowledgement of substantial completion, the project formal
punchlist should be developed.
2.) The Architect/Engineer is contractually obligated to compile the final
punchlist. The Architect/Engineer punchlist is a more formal and
documented process than the deficiency lists developed throughout the
construction process.
3.) Once the punchlist is completed, it should be distributed to all contractors
involved in the project. Once the contractors indicate that the punchlist is
complete, a final sign-off walkthrough needs to be performed.
H. Close-Out Log
1.) The close-out log should track the close-out documents including the
following:
a. Warranties
b. Guarantees
c. Release of Liens
d. Releases from Surety
e. Operation & Maintenance Manuals
f. Final Payment Requests
g. Final Executed Change Orders
h. Permit Release/Sign-offs
i. Spare Parts, Tools & Extra Materials
j. Training Materials
k. Other documents required by the contract documents
2.) See Section 9 for further information about Close-Out Log
PROJECT CONTROL MONITORING REQUIREMENTS
A. Construction Performance Measurement, Reporting and Submittals
1.8 Project Document Controls
Page 4 of 10
1.) Measurement and metrics are important management tools and will be a
key part of monitoring the construction process. Some items that need to
be tracked with each project are as follows:
a. RFI Turn-around
b. Submittal Review Time
c. Invoice Processing Time
d. Quality Performance
e. Safety Performance
f. Project Schedule Progress
g. Earned Value to Date
h. Costs Expended to Date
i. Manpower to Date
j. Contractor Performance
2.) As the Project evolves additional useful metrics to measure progress and
ensure safe, high quality, at-cost on-time performance should be
developed and added to the process.
3.) The measuring and monitoring process starts with the strategic planning
and continues through design and construction.
This information
identifies areas needing corrective action to ensure continuous
improvement. Furthermore, these reports will highlight any trends that
may require special attention.
B. Project Control Inputs and Outputs
1.) Initially, the project control system will function with the items listed in
Figure 1.8b – Project Control Inputs and Outputs below serving as
principal inputs and outputs; however, successful project control is a living
process and evolves with changes and progress through the projects in
continuous improvement.
Figure 1.8b - Project Control Inputs and Outputs
Inputs
• Manpower Costs
• Material Costs
• Unit Costs
• Equipment Costs
• Work Breakdown Structure
1.8 Project Document Controls
Outputs
• Progress Photos
• Milestone Status
• Performance Measurement Report
• Recommended New Metrics
• Contract Costs to Date
Page 5 of 10
•
•
•
•
•
•
•
•
•
•
Integrated Project Schedule
Integrate Project Plan
Milestone Progress
Progress Photos
Team Performance Measurement
Data
Subcontractor Performance Data
Quality and Safety Audit Reports
Design Information
Planning and Estimating Information
Contract
•
•
•
•
•
•
•
•
Cost Curves
Recovery Recommendations
Change
Control
Issues
and
Resolution
Project Schedule Modifications
Project Planning Modifications
Quality Record Documentation
Safety Record Documentation
Lessons Learned – Continuous
Improvement
2.) Communication is vital, the team should be able to view and print specific
project data (meeting minutes, reports, submittal and correspondence
logs, photos and other pertinent project information) as needed.
3.) To allow for timely information the logs and project control measures
should be contained in an electronic “share-able” system. This typically
requires an internet application based system. When the contractors and
consultants use web-based systems, the Project Manager will be able to
access real-time cost and schedule information. The “site manager”
should ensure that the system is secure, and that it has full backup and
restoration processes. A system like this will afford increased access to
project information at a lower overall cost to all project team members.
C. Electronic Document Control
1.) All correspondence for project related subjects should be prepared and
distributed using the latest personal computing software and hardware
such as MS Office. All project documentation should be recorded and
tracked using software.
Windows based software including word
processing, spreadsheets, and data based programs ensure that
correspondence related data can be quickly assembled, revised, and
distributed efficiently. Also, the use of these popular software programs
allows the Project team to be compatible with most other business
applications currently in use.
2.) For more efficient processing, all correspondence entering the project
office could be scanned and filed electronically. Although originals are
maintained at the office, all subsequent “handling” of the document
(reading, copying, transmitting) can be accomplished on the computer
screen. By utilizing e-mail extensively, documents can be transmitted,
edited, and copied, electronically filed, and available as needed to inform
1.8 Project Document Controls
Page 6 of 10
project participants of pertinent data. The best way to explain this type of
system of document control is to outline the path of a document as it
comes into the program office.
a. Document Received. All correspondence of any type is received
at a central location. The clerk opens all envelopes, boxes and
packages. All correspondence is stamped with a date received
stamp and a routing stamp. The routing stamp lists the initials of
the Project team members and a block for them to sign off or
record action. The clerk also logs the correspondence into a
Correspondence Received database and assigns a file number to
the document for later filing.
The database records such
information as Date Received/Sent, Sender/Recipient, Subject,
Letter Number, File Number and a unique log number for each
piece of correspondence.
b. Review by Manager. The manager will review all documentation
daily. The manager determines who needs to review the
correspondence and marks off project team members on the
routing stamp for review, copies, or action. One final check mark is
made to denote whether this item gets scanned or logged into the
Submittals Log.
c. Scanning and Linking.
If it is deemed appropriate, the
document is scanned and linked to the Correspondence Received
database. This allows users of the system to review an electronic
image of the document from their workstation by simply clicking on
a link in the database table.
d. Action. The correspondence is then routed to the appropriate
person for action. The action person will begin processing the
document. If it is a submittal, they will log the submittal into the
submittal log, review the document and forward to the appropriate
organization. If it is a schedule, the scheduler will review it.
Invoices are processed for payment by accounting.
e. Informational Routing. After the appropriate person takes the
required action, the document is then routed through the staff so
that they are aware of its existence.
f. Filing. Upon completion of all routing, the document is filed
according to the File Plan.
1.8 Project Document Controls
Page 7 of 10
g. Read File. The manager will designate which items will need to
be posted in the Project Read File. These items will have an
additional copy made and placed in the read file for that calendar
month. The Read File will be located at the project office and
available for team review.
h. File Plan/Network Drive Organization. The network-shared
drives should be set up with a directory structure that mirrors the
project file plan.
Documents and correspondence sent and
received, RFIs, invoices, schedules, and all other documents will be
filed either physically, electronically, or both according to the file
plan. In addition, each team member should have a shared
directory on the network drive to keep work in progress and other
working documents.
3.) Upon completion of a project, physical files should be archived for storage
by the Project Manager. Electronic files will be written onto dual CDs.
PROJECT RECORD DOCUMENTS
A. Project Record Documents
1.) The contractor should be responsible to maintain at the job site one copy
of the following:
a.
b.
c.
d.
e.
f.
g.
h.
Record Contract Drawings
Record Project Manual
Addenda
Reviewed/Approved Shop Drawings
Change Orders
Other modifications to Contract
Field test records
Affidavits
2.) The Contractor should store the record documents apart from documents
used for construction. They should be maintained in a clean, dry, legible
condition. Failure to maintain documents up-to-date should be used as a
cause for withholding payments to the Contractor.
3.) The Contractor should include the following on the Project Record
Documents:
a. Labels identifying each document as "Project Record".
1.8 Project Document Controls
Page 8 of 10
b. Record documents must be kept current.
c. Work should not be permanently
information has been recorded.
conceal
until
associated
d. Contract Drawings should be legibly marked to record actual
construction:
i. Depths of various elements of foundation in relation to
survey data.
ii. Horizontal and vertical location of underground utilities and
appurtenances
referenced
to
permanent
surface
improvements.
iii. Location and depths of internal utilities and appurtenances
concealed in construction referenced to visible and
accessible features of structure.
iv. Field changes of dimension and detail.
v. Changes made by Field/Change Order.
vi. Details not on original Contract Drawings such as
arrangement of conduits, circuits, piping, ducts and similar
items shown schematically on the Drawings and dimensions
accurate to within 1" of the center of items shown
schematically. Identify each item, for example, "cast iron
drain", etc. Identify location of each item, for example,
"under slab", etc. The Project Manager or the Architect
may waive requirements, when in their opinion, it serves no
beneficial purpose.
e. Technical Specifications and Addenda should include:
i. Manufacturer, trade name, catalog number and Supplier of
each product and item of equipment actually installed.
ii. Changes made by Field/Change Order.
f. The Final Project Record Submittal should include the following:
i. Date
1.8 Project Document Controls
Page 9 of 10
ii. Project title and number
iii. Contractor's name and address
iv. Title and number of each record document
v. Certification that each document as submitted is complete
and accurate.
vi. Signature of Contractor, or his authorized representative.
APPROVED:
DATE
1.8 Project Document Controls
Page 10 of 10
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 1.9
Policy Title: Schedule Development and Management Procedures
Category: Project Administration
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to provide guidelines that pertain to
construction schedule development and schedule management procedures.
Policy Statement:
A.) Critical Path Method (CPM) Schedule
1.) Each Project should have a working schedule created prior to the
commencement of work and act as a basis for the development of the Master
Project Schedule. This schedule should be created using the Critical Path
Method or CPM. The schedule should be monitored regularly. The purpose of
the detailed schedule is to assist the Contractor in completing the Work on time
and as a means for the Project Manager to monitor progress of the contractors.
2.) The Contractor should meet with the Project Manager after award (See Section
5) to review the schedule for their portion of the work. Following the review,
the Contractor should meet with each subcontractor and supplier to prepare
detailed plans for performing the Work. Within fourteen (14) days after
Contract Award or written Notice to Proceed, the Contractor should prepare and
submit the following material for the Project Manager's approval:
a. A bar chart of all activities included in the Scope of Work. This bar chart is
to indicate durations for all activities in working days (as opposed to
calendar days). The activities on the bar chart should be at a level of detail
1.9 Schedule Development
Page 1 of 4
approved by the Project Manager and agree with the terminology
established by the contract documents.
b. Each bar chart activity requiring a cost expenditure should have a cost
associated with it.
c. Precedent relationships between the Contractor's activities and those of
other contractors based on a thorough review of the Contract Drawings
details showing interface between contracts should be identified.
d. Graphic diagrams indicating the proposed direction of work whenever
applicable.
e. Planned crew sizes, equipment, production rates and similar data used to
arrive at adequate durations and sequences.
f. The bar chart should include activity descriptions and durations for shop
drawings preparation and review, fabrication, delivery and installation of
products, materials and equipment.
g. The bar chart and schedule information will be incorporated into a Project
Master Schedule prepared by the Project Manager.
h. The Contractor will be required to send only representatives knowledgeable
of the items to the Schedule Coordination Meetings. The purpose of these
meetings is to coordinate the various contractor schedules.
i. The Construction Manager will utilize the Project Master Schedule to plan
and coordinate all construction activities of the contractors. All contractors
are to complete all work in accordance with the detailed Project Master
Schedule issued by the Construction Manager.
B.) Update and Modifications to the Construction Schedule
1.) If during the progress of the work, the Contractor determines he will not be
able to complete his work in the time allotted, he should notify the Project
Manager after publication of the updated Project Schedule.
2.) Periodic schedule "update" meetings should be held at the job site. The Project
Manager and each contractor are to provide the services of a qualified
representative at each meeting.
Contractors are to provide necessary
scheduling information and manpower commitments at these meetings. The
Construction Manager/General Contractor will update the detailed Project
Master Schedule and prepare progress reports accordingly. Each Contractor
should be responsible to be familiar with this schedule, how it affects or
1.9 Schedule Development
Page 2 of 4
modifies his operations and how it affects his coordination with activities of
other contractors.
3.) Periodic progress meetings will be held at the job site. Field Supervisors from
all contractors are to attend all progress meetings. The Contractor should
prepare a short interval schedule, generally covering four-week periods, to
coordinate the detailed activities of subcontractors and suppliers. The short
interval schedules should be prepared in bar chart form and submitted twentyfour (24) hours prior to the job progress meetings.
4.) Whenever it becomes apparent that any activity duration, activity completion
date, and/or milestone date may not be met, the responsible Contractor should
take the actions to get the schedule back on track. If the Contractor fails to take
action, the Project Manager may proceed in accordance with the terms in the
contract documents.
5.) The Project Manager should establish the Milestone Date for completion of all
contract start-up activities in the Notice to Proceed to the Contractors. Each
Contractor is responsible for construction sequencing and means and methods
for his own work.
C.) Key Administrative Milestone Dates
1.) The following documents should be typically be submitted in accordance with
the following durations:
a. Fully executed contract agreement: 7 days after receipt
b. Contract award or written Notice to Proceed
c. Performance and payment bonds: 10 days after Contract Award or NTP
d. Permits/licenses: prior to start of construction
e. Certificates of insurance: 10 days after Contract Award or written NTP
f. Contractor safety program: prior to start of construction
g. Submittal log: 14 days after receipt
h. Construction schedule and completed work item listing: 14 days after Initial
Schedule Meeting
i. List of subcontractor's, suppliers and fabricators: 14 days after Contract
Award or written NTP
1.9 Schedule Development
Page 3 of 4
j. List of contractor's staff assignments and emergency phone numbers: 14
days after Contract Award or written NTP
k. Schedule of values: 21 days after receipt
APPROVED:
DATE:
1.9 Schedule Development
Page 4 of 4
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 2.1
Policy Title: Project Approval and PRF/CCR Overview
Category: Project Approval
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: To establish an orderly and systematic process for the
initiation, routing, and approval of CCR and PRF forms.
Policy Statement:
There will be a controllable mechanism for capital expenditures encompassing
need and the ability to fund expenditures.
A. Definition of Capital Expenditure
Refer to Policy 1.2
B. Forms Used for Capital Expenditures
1.) Capital Construction Request Form (CCR) – For new projects (or projects
that are ready to proceed) with a budget approved in routine quarterly
capital budget review. A Project Manager initiates all CCR forms (see
Figure 2.1a – CCR Form).
2.) Project Request Form (PRF) – A PRF is used related to investigational fees
to assess the feasibility of a new project that does not have a budget
approved by the President’s Council during the routine quarterly budget
review (see Figure 2.1b – PRF Form).
2.1 Project Approval and PRF- CCR Overview
Page 1 of 12
3.) Capital Equipment Request (CER) – The Purchasing Department will be
the central clearing point for the actual procurement of all capital
equipment and a CER must be completed.
a. CRESS will coordinate all capital projects. The CRESS Accounting
Department will serve as the control point to assure that all capital
expenditures are properly approved and authorized.
b. If an expenditure is being made to replace equipment, a Capital
Equipment Transfer or Disposal form must be completed. (This
form is available on the MHHS intranet).
c. The MHHS Clinical Engineering Department will be involved in every
aspect of medical equipment and system purchases, modifications
and retirement in varying degrees. In some cases, they will need
to know that something is going on and in other cases, such as
installations, they would need to know every detail of the
equipment’s purchase and service life. The Project Manager should
contact the department directly for appropriate coordination of
medical equipment and system purchases, modifications and
retirement.
Please see Figure 2.1c-Clinical Engineering
Responsibility Chart for a current listing of the biomedical
department’s contact information and coordination responsibility
areas.
C. Further Information Regarding the Coordination with Clinical Engineering
1.) The Project Manager will incur charges in coordinating with the Clinical
Engineering Department and those product labor charges are defined as
labor expenses incurred by the MHHS Clinical Engineering Department for
required work accomplished by the members of its Biomedical
Engineering, Radiology SVC Engineering and Electronic Engineering staff
in order to bring about the successful completion of said project. The
bulk of the expense will be incurred during the middle to final states of
the project when equipment is being received and installed. Significant
analytical and consultative work will be required throughout the project.
Currently, the average monthly expense for this labor is $1,557.
2.) Staging Areas are temporary locations for receiving, securing and
processing equipment received into the facility directly associated with
said project. The requirements are as follows:
a. This location must contain appropriate ventilation, lighting and
temperature control.
2.1 Project Approval and PRF- CCR Overview
Page 2 of 12
b. This location must have the ability to be locked and secured at all
times.
c. Clinical Engineering staff must have 24/7 access since much of the
work is accomplished after business hours and on weekends.
d. Multiple electric duplex outlets will be necessary (120 VAC/15A)
3.) Once the bulk of the equipment inventory is received and processed, this
location will be vacated and returned to the proper authorities.
4.) Shop Space are physical locations at or close to the medical equipment
and systems that will need to be maintained by Clinical Engineering
personnel. It is vital that the Department have a maintenance shop
located as close to the equipment as possible. This will minimize
equipment down-time and wear and tear, provide easy and quick access
to parts inventory and minimize response time and our interference in
the customer’s normal routine by bringing the equipment to alternate
shop locations for servicing and repairs. The requirements are as
follows:
a. Industry average for number of pieces of equipment per support
technician – 850 pieces of maintenance significant equipment per
Clinical Engineering technician [each of the three disciplines
(Biomed, Radiology, Electronic) are assessed independently].
b. Shop Space Requirements
i. 100 square feet per technician
ii. 200 square feet for parts and test equipment inventory
(must be secure)
iii. Shop entrance must be one large, double door entry point
for moving large, bulky pieces of equipment in and out of
the shop
iv. Bathroom facilities must be convenient
v. Lighting, Temperature and Noise levels must be considered
c. Shop Utility Requirements
i. Shop Telephone Lines (multiple)
ii. Fax Telephone Lines (multiple)
iii. Network Drops (multiple)
iv. Medical Gases (Air, Water, O2 and Vacuum-multiple)
v. Electrical Duplex Outlets (120 VAC/15A – multiple)
vi. Electrical Outlet (220 VAC/40A)
vii. Cable Television Signal Outlet
viii. Ceiling Bolt for mounting a hoist capable of picking up 1,000
pounds
2.1 Project Approval and PRF- CCR Overview
Page 3 of 12
d. Furniture/Fixture Requirements
i. Work Bench & Chair (1 per technician at $1,200 per set)
ii. Tool Kit (1 per technician, Jensen-PN JTK-7500 DBL at
$500/each)
iii. Multimeter (1 per technician, 87V Fluke True – RMS
Multimeter-Calibrated at $420/each)
iv. Electrical Safety Analyzer (1 per technician, Fluke MedTester
5000 at $6,000 each)
v. Computer (1 per 2 technicians & 1 in the office)
vi. Telephone (multiple)
vii. Fax machine
viii. Copier
ix. Coffee Maker
x. Sink & Counter Space
xi. Computer Work Station & Chair (1 per 2 technicians)
xii. Office Furniture (1 supervisor)
xiii. Shelves (spare parts and technical manuals – multiple)
D. Capital Expenditure Requests
1.) Capital expenditure requests must be submitted and approved to begin
the capital expenditure process.
2.) Upon approval by the appropriate authority, all requests are then
reviewed and approved by the Executive Council before the actual
expenditure. This may be done at budget time as well as periodically
throughout the year, as financing is deemed available or unavailable.
E. Project Initiation and Approval
1.) The CEO / VP and CFO of facility/originating department submit a
routine quarterly list of construction project requests to the President’s
Council for review.
2.) The President’s Council approves a list of projects (Figure 2.1d -
Routine Quarterly Capital Projects Approved by President’s
Council) establishes a project budget and returns signed copies of the
lists to the originating facility and CRESS.
3.) The Project Manager for a project will then complete a CCR (Policy 2.1)
as the project has been given authorization and budget.
2.1 Project Approval and PRF- CCR Overview
Page 4 of 12
4.) The CRESS Sr. Financial Analyst compares individual project requests
documented on CCRs to the approved project list to ensure budgeted
funds were approved.
F. PRF/CCR Initiation
1.) The Project Manager completes the PRF or CCR form, signs it and obtains
signature of facility CEO. Please refer this Policy or MHHS intranet for a
PRF or CCR form. PRF/CCR expenditure categories can be tailored for
specific project needs.
2.) The Project Manager forwards the PRF or CCR to a CRESS Sr. Financial
Analyst who routes for additional approvals in accordance with policy.
See Figure 2.1e – Approval Levels for signature authority levels.
3.) After all approvals obtained, the CRESS Sr. Financial Analyst activates
project and sets up budget worksheet.
4.) The CRESS Sr. Financial Analyst submits the CCR to Corporate Accounting
for entry into Lawson accounting system.
5.) Purchase orders cannot be issued and invoices cannot be paid until the
project is activated in Lawson.
6.) Unused funds must be returned to MHHS and cannot be used for
expenditures not specifically included in approved project budget unless
approved by the Vice President of CRESS and the President’s Council.
2.1 Project Approval and PRF- CCR Overview
Page 5 of 12
Figure 2.1a
Capital Construction Request (CCR) Form
2.1 Project Approval and PRF- CCR Overview
Page 6 of 12
Figure 2.1a
Capital Construction Request Form (cont’d)
2.1 Project Approval and PRF- CCR Overview
Page 7 of 12
Figure 2.1b
Project Request Form (PRF)
2.1 Project Approval and PRF- CCR Overview
Page 8 of 12
Figure 2.1c - Current Clinical Engineering Responsibility Chart
Organizational Chart & General Areas of Responsibilities
NEW Web-Site: www.mhhsclinicalengineering.com
The following individuals are all housed at:
7600 Beechnut Street
Energy Services Building/2nd Floor – Mezzanine Level
Houston, Texas 77074
1. Al Alfonso, Director of Clinical Engineering for MHHS – (713) 4565486
2. Nancy Scales-McDonald, Administrative Assistant – (713) 456-5076
(Pick #4)
2.1.
Doug Dreps, Manager of BioMedical Engineering for MHHS
– (713) 456-4223
2.1.1. General Areas of Responsibility
2.2.
2.1.1.1.
All BioMedical Equipment within the MHHS
2.1.1.2.
Patient Monitoring
2.1.1.3.
Diagnostic Equipment
Dennis Dowell, Manager of Electronic Engineering for
MHHS – (713) 456-2536
2.2.1. General Areas of Responsibility
2.2.1.1.
Security Monitoring (in a partnership with MHHS Security
Department)
2.3.
2.2.1.2.
Overhead Paging
2.2.1.3.
Code Alert System Maintenance
2.2.1.4.
Nurse Call System Maintenance
2.2.1.5.
Television and Cabling System Maintenance
2.2.1.6.
FAX Machine Service Maintenance
Dan Cawthon, Manager of Radiology Engineering for MHHS
– (713) 456-5744
2.1 Project Approval and PRF- CCR Overview
Page 9 of 12
2.3.1. General Areas of Responsibility
2.3.1.1.
X-Ray Imaging Systems and Peripherals (Radiographic,
Fluoroscopy & Mammography)
2.4.
2.3.1.2.
Ultrasound Systems and Peripherals
2.3.1.3.
CT/MR Systems and Peripherals
2.3.1.4.
Catheterization Laboratories
2.3.1.5.
Nuclear Medicine Laboratories
Steve Tipton, Medical Equipment Coordinator for MHHS –
(713) 456-4556
2.4.1. General Areas of Responsibility
Steve will function as the primary Point-of-Contact for issues relating
to Campus Expansion Projects for all of Memorial Hermann
Healthcare System:
¾
¾
¾
¾
¾
MH
MH
MH
MH
MH
Southwest Hospital
The Woodlands Hospital
Northwest Hospital
Memorial City Hospital
Southeast Hospital
¾ MH Continuing Care Centers
¾ MH Hermann Children’s Hospital
2.1 Project Approval and PRF- CCR Overview
MH Health Centers
MH Hermann Hospital
MHHS Corporate Offices
MH Katy Hospital
MHHS Affiliates being
support
¾ MH Fort Bend Hospital
¾ MH Health Centers
¾
¾
¾
¾
¾
Page 10 of 12
Figure 2.1d - Example Listing of Routine Quarterly Capital Projects
Approved by President’s Council (Construction Projects
Only)
FY 2004, 2nd QUARTER
September 2003 through November 2003
Incremental Cash Flow and Capital Spending Requests
Construction/Engineering/Support Services Division
CER #
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
CCR
18605
15061
13872
14598
New CER Requests
System Parking Operations
959G Emergency Garage Repairs
SW Lots Upgrade Scan Parking System
MC Paving Between New Garge and POB I
MC Pay Lot Construction
SW Lone Star Lot Repair/Reconfiguration
SW Lot Renovations
959G Restriping
NWG Pressure Wash Floors
NWG Replace Fire Hose Cabinets
SW Garge Lighting Upgrades
SW Lots Cashier Booth Chairs
NWGII Office/Storage Build-Out
HPB Garage Lighting Replacement
Metronational Garage Street Paving
Beechnut Garage Paint Decking
Beechnut Garage Lighting Replacement
Biomedical / Radiology Engineering Services
Infutester Analyzer, PCA Trigger, Probes, Software
Medtesters
CM 500
Laundry Services
Tunnel Washer System / Renovation / Installation - Phase II
POB Property Management
Beechnut POB - Base Building Improvements
Beechnut POB - Tenant Improvements
Ft. Bend - Base Building Improvements
Health Center I - Base Building Improvements
Health Center I - Tenant Improvements
Health Center II - Base Building Improvements
HPB - Tenant Improvements
HPB - Base Building Improvements
Katy POB - Base Building Improvements
Kingsland POB - Base Building Improvements
Memorial City POB I - Base Building Improvements
Memorial City POB I - Tenant Improvements
Memorial City POB II - Base Building Improvements
Memorial City POB II - Tenant Improvements
Memorial City Medical Square - Base Building Improvements
Northwest POB I - Tenant Improvements
Northwest POB II - Base Building Improvements
Pearland Clinic - Tenant Improvements
Southeast POB - Base Building Improvements
2.1 Project Approval and PRF- CCR Overview
Budgeted
Amount
Requested
Amount
Cash Flow
1st Quarter 2nd Quarter 3rd Quarter
450,000
247,000
115,000
250,000
247,000
250,000
17,000
13,740
5,000
25,000
7,639
15,000
140,000
113,234
50,000
8,500
0
247,000
0
0
0
0
17,000
0
5,000
25,000
7,639
15,000
0
113,234
50,000
8,500
0
247,000
0
0
0
0
17,000
0
5,000
25,000
7,639
15,000
0
113,234
50,000
8,500
10,563
8,459
2,295
10,563
8,459
2,295
10,563
8,459
2,295
2,351,927
1,487,487
1,487,487
32,000
66,288
4,400
16,500
46,225
13,000
475,030
369,800
24,000
2,550
329,000
68,395
553,815
28,528
15,000
73,775
225,000
41,303
41,798
32,000
0
4,400
6,500
0
3,000
254,630
132,400
24,000
2,550
319,000
68,395
152,000
28,528
15,000
73,775
225,000
41,303
11,306
32,000
0
4,400
6,500
0
3,000
254,630
132,400
24,000
2,550
319,000
68,395
152,000
28,528
15,000
73,775
225,000
41,303
11,306
Page 11 of 12
Figure 2.1e - Levels of approval for the request for capital
expenditures:
MEMORIAL HERMANN HEALTHCARE SYSTEM
CAPITAL APPROVAL AUTHORITY GUIDELINES
AMOUNT
$0 - $25,000
$25,000 - $100,000
$100,000 - $150,000
$150,000 - $250,000
$250,000 - $1,500,000
BUDGETED EQUIPMENT
APPROVAL AUTHORITY
Dept Director
AVP or Hospital V
System VP or Hospital CEO
Sr. VP or Executive VP
System CFO & President or COO or Sr. VP
BUDGETED CAPITAL PROJECTS
AMOUNT
APPROVAL AUTHORITY
$0 - $100,000
Hospital VP
$100,000 - $150,000
Hospital CEO & System VP
$150,000 - $250,000
Hospital CEO & Sr. VP or Exec. VP
$250,000 - $1,500,000
System CFO & President
> $1,500,000
MHHS Board of Directors (w/ Business Plan)
AMOUNT
$0 - $25,000
$25,000 - $100,000
$100,000 - $250,000
$250,000 - $1,500,000
UNBUDGETED
APPROVAL AUTHORITY
Hospital VP
Hospital CEO & System VP
Hospital CEO & Sr. VP or Exec. VP
System CFO & President
APPROVED:
DATE:
2.1 Project Approval and PRF- CCR Overview
Page 12 of 12
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 3.1
Policy Title: Project Budget Overview, Preparation and Reporting
Category: Budget Development and Reporting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to outline the general guidelines related
to the preparation of a Project budget and providing CRESS Leadership, various budget
reports.
Policy Statement:
These guidelines provide an overview of the cost estimating process, and summarize
the assumptions and considerations that must be addressed to prepare a
comprehensive budget estimate. It identifies those items and factors which have an
impact on project costs, and provides cost data that can be used to develop the budget
estimate. These are guidelines only, and should be used accordingly. It is the
responsibility of the estimator to ensure that the costs used are complete, accurate, and
reflect actual job conditions.
Care must be exercised in preparing every estimate. This is particularly true when
developing the budget for a remodeling or a multi-use building containing laboratories,
patient rooms, computer facilities, high security, or other complex spaces. The
estimator must thoroughly understand the scope of the project, the sophistication of
the program, specific facility design requirements, how it will be constructed, its
proximity to adjacent facilities, the time of construction, the retroactive applicability of
building codes to an existing building, ADA requirements, site and utility conditions, etc.
Good estimates are the result of searching out program and design details, evaluating
construction and site conditions, and accurately reflecting their cost impacts.
The project budget includes all of the estimated costs associated with an agency’s
request, and quantitatively and qualitatively reflects program requirements. While the
Project Budget Overview
Page 1 of 12
budget estimate is normally prepared far in advance of the actual design and
construction phases, its importance should not be underestimated.
A. Budget Format and Definitions
The following is an outline of the major cost components and their definitions. This list
can be used to summarize the cost estimate developed using the procedures in this
guideline.
1.) Base Building and Remodeling Costs - All general construction including the
excavation, foundations, structure, envelope, interior finishes, fixed equipment,
but excluding site work, major interior demolition and special construction or
built-in equipment. Also included are plumbing and fire protection work; heating,
ventilating, and air conditioning (HVAC); lighting, electrical, and code required
alarm systems; and elevator work.
2.) Special Foundations and Site Preparation - Includes any unusual costs
required to prepare the site to receive the building. For example, rock
outcroppings or unstable soil may require removal, pilings or other stabilization
measures; a site located in a flood-plain may require re-grading or other
protection from flooding before construction can begin. The cost of demolishing
existing buildings, rerouting utilities and roadways, and clearing the site should
also be included.
3.) Special Design Features/Other Construction - Includes additional costs
associated with the construction of special design features and other special
functional spaces not covered by the base building or remodeling cost. This
includes design features such as atriums, plazas, passive solar or other special
interior or exterior finishes. It may also include the added cost of providing
hazardous materials storage facilities, controlled environmental rooms, high
security areas, and other special functional spaces. It should also include the
replacement of windows/exterior doors and replacement of the existing roof
surfaces or roof repair to the existing structure. For remodeling work, the cost of
meeting current fire safety, handicapped access (current ADA requirements), and
other building code requirements occurring outside the area of program
remodeling, but retroactively required because of the degree of remodeling
work, should be included.
4.) Built-in Architectural Equipment - Includes the added cost of providing
special built-in or attached equipment which is bid and installed by the
construction contractor. This includes built-in equipment for food service,
laboratories, specific use areas in hospitals, vehicle maintenance, parking, waste
handling, and other special functional spaces.
Project Budget Overview
Page 2 of 12
5.) Special Mechanical/Electrical Equipment - Includes the added cost for
stand alone source heating and air conditioning systems and special mechanical
systems such as heat recovery or other energy conservation equipment,
refrigeration, chemical fire suppression, or energy management. It also includes
the added cost of special electrical systems such as electronic surveillance and
alarms, special lighting controls, universal telecommunications and data
transmission cabling systems, A/V equipment for Distance Education and other
high technology space, plus special services for owner supplied equipment. For
remodeling, the cost of upgrading existing mechanical and electrical source
equipment should be added.
6.) Testing and Balancing - Includes the cost of testing and balancing the
completed (HVAC) heating, ventilating, and air conditioning systems by an
independent contractor to assure that design performance has been achieved.
7.) Building Complexity - Includes the added cost of unusual design requirements
such as heavy floor loads, irregular building shape, high-rise construction, heavy
HVAC or electrical loads, high density interior construction, etc.
8.) Utility/Service Hook-ups - Includes the cost of extending underground and
overhead utility services such as water, sewer, steam, chilled water, gas, electric,
and mechanical monitoring system from an appropriate source to the building.
All costs of expanding the supporting infrastructure shall be included in the
project budget.
9.) Site Development - Includes access roads, parking, sidewalks, curbs, site
lighting, retaining walls, storm sewers, landscaping, and other site
improvements.
10.) Project Location/Site Conditions - Added costs may be incurred for
projects with such conditions as limited access or storage space, work
occurring within an occupied or secure space, and projects with an unusually
short construction period.
11.) Telecommunications Equipment - Includes the cost of telephone and
authorized terminal data equipment (telephones, data processing, or
audio/video equipment), which is normally purchased and installed
independently from the building construction contracts.
Project Budget Overview
Page 3 of 12
12.) Asbestos Abatement/Environmental Clean-Up - Includes the removal
and proper disposal of asbestos and lead containing materials, PCBs, and
underground fuel storage tanks occurring within the project area, plus the
environmental remediation associated with these or other hazardous materials.
This work may be handled as a separate contract, but the cost should be
included in the budget estimate below the construction line.
13.) Design Fees - Includes the design fees for the architect/engineer services.
14.) Other Design Fees - Includes other Planning and/or Design Consultants, the
cost for surveys, soil borings, master plan studies, Air Balance Consultant,
Asbestos/Environmental Consultant, and other items generally not in the A/E
contract.
15.) Administration/Construction
Management
FeesIncludes
the
management fee for contract administration and construction management.
16.) Project Contingency - Is included in the budget to provide a bidding
contingency and to cover unforeseen revisions required during construction.
The amount of contingency is dependent upon the type of work and the
degree of difficulty in developing the budget estimate. The contingency line
will be reduced on a sliding scale after the design report has been completed
by the A/E and when the project has gone through the bidding process.
17.) Movable Equipment - Includes expenditures for furnishings not provided as
part of the construction work such as chairs, tables, desks, etc. The life
expectancy for items included in the movable equipment list should be at least
10 years.
18.) Special Equipment - Includes special program equipment such as electron
microscopes, automated filing equipment, needed computers & start-up
software, etc. which are generally purchased directly from a manufacturer or
distributor and not included in the building construction contracts.
19.) Land Cost - Includes the cost of all parcels comprising the construction site
and associated costs. Land costs should be included in the project budget only
when land purchase is required. The value of land already owned should not
be included.
Project Budget Overview
Page 4 of 12
20.) Artwork & Plants - All cost associated with the decoration of the facility
relative to artwork (including paintings, sculpture, tapestries, etc.) and interior
plantings.
21.) Start Up Costs - The start up cost for a new building or remodeled facility
should be included in the operating budget. Start up costs normally are
considered to be expendable or consumable supplies.
B. Project Budget Estimating Procedures
The following step-by-step procedure is a summary for developing a project budget
estimate:
1.) Define Project Space Needs - Special features or detailed design
requirements may not be defined at this point and assumptions about their cost
impact may be required. The total gross area to be remodeled or constructed to
accommodate the program is the requested net assignable area divided by an
appropriate efficiency factor. The gross area and cost of individual portions of a
building can be determined separately and added together to arrive at the total
building area and base building cost.
2.) Select Base Building or Remodeling Unit Costs - Perform a thorough
review of the request and select appropriate unit costs from a source of cost
data that closely reflect their scope of work for the proposed project. These unit
costs should be adjusted for size and escalated to the project bid date.
3.) Identify Additional Building/Remodeling Costs - This is additional cost
items generally not covered by the selected base unit costs. Identify and
calculate additional costs and escalate to the proposed bid date. Each of these
additional cost items and factors may have an impact on the cost estimate and, if
overlooked may result in an inaccurate estimate. Amounts used for added costs
can be derived from cost experience on past state projects, estimates provided
by local contractors, or cost estimating data published by R.S. Means or any
other historical data. Each project will usually contain some additional design or
construction features which may result in higher costs. This is especially true for
remodeling projects where the scope of work varies widely from one project to
another. Make sure all costs are documented on the work sheet so the final
project estimate can be reproduced by others.
4.) Calculate Total Building and Construction Cost - The total adjusted
building cost is the sum of the base building cost, plus the additional costs and
adjustments. The cost of site and utility work is then added and further
adjustments for location and site conditions are made, producing a total
Project Budget Overview
Page 5 of 12
estimated construction cost. Finally, allowances for fees, contingency, etc. are
added to arrive at the total project budget estimate.
5.) Calculate Safety Fees - The Project Manager can use the formula below in
developing safety fees for the Project Budgets. This element should be included
always in the budgeting process. Before finalizing the budget, however, the
Project Manager should consult with the Safety Engineering Department to come
to an agreement of what to budget for Safety Engineering.
Revised "Secret Formula" for Safety Fees
Based on Projected Costs ONLY
$
$
$
$
$
$
0
500,000
1,000,000
2,000,000
5,000,000
10,000,000
-
$
499,999
-
$
$
$
$
999,999
1,999,999
4,999,999
9,999,999
+
"In-House Engineering"
NO BUDGET for Safety Fees
1%
0.5%
0.4%
0.3%
0.2%
6.) Review Assumptions and Calculations - Review the project request and
functional program, look at other sources of cost information, and confirm the
validity of the total budget amount.
While the general procedures for cost estimating outlined above are relatively simple,
the estimator must fully assess the scope of work in the program and its cost impact in
order to produce an accurate project budget. Graphs, charts and worksheets on costs
do not substitute for good judgment in arriving at a realistic budget estimate.
C. Cost Estimating Basics- Scope and Purpose
1.) Building Efficiency - A capital improvement need generally defines how much
assignable interior area is required to accommodate a new or modified program.
However, additional non-assignable areas for public circulation, building
mechanical systems, custodial services, and space occupied by walls and other
structural elements must also be designed and constructed to provide a complete
functional building. Building efficiency is the relationship between the net
assignable area (ASF) and the total gross area (GSF) of the completed building.
Following are definitions of these terms:
Project Budget Overview
Page 6 of 12
a) Gross Area: Total gross square feet (GSF) is the sum of all enclosed
building floor areas regardless of functional use, including usable
basements, hallways, attics, and mezzanines. This is also called the shell
of the building. It includes enclosed porches, roofed over work areas,
elevator and mechanical shafts, and unfinished program areas. It does not
include exterior balconies and plaza areas, covered walks, or low-head
pipe trenches. Measurement is from the outside face of the exterior walls,
disregarding cornices, pilasters, chimneys, etc., which extend beyond the
wall face. Large program areas with non-standard ceiling heights such as
an atrium which extends through two or more floors should be measured
only once.
b) Net Assignable Area: A net assignable square feet (NASF) is the sum of all
areas on all floors assigned to or available for assignment to a program.
Areas for public restrooms and circulation (hallways), mechanical systems,
custodial services, or building construction elements are not included.
Measurement is from the inside face of enclosing walls to the occupied
side of a public corridor or permanent wall. No deduction is made for
columns or minor building projections.
c) Non-Assignable Area: Total non-assignable square feet is the difference
between the total gross area and the net assignable area. It generally
includes all mechanical, circulation, custodial, crawl spaces and
construction areas that are not usable by the building occupant for their
functional program.
d) Building Efficiency: Efficiency is a comparison of the net assignable area to
the total gross area, expressed as a percent: Building Efficiency = Net
Assignable Area (ASF)/Total Gross Area (GSF)
To determine the total gross area of the proposed building construction, divide
the net assignable area by the building efficiency factor. If too high an efficiency
factor is used, inadequate space will be available for mechanical equipment and
other non-assignable areas. Conversely, too low an efficiency will make the
project appear too costly. For a building with different types of spaces, the gross
area for each type can be calculated separately and then added together to
derive the total gross building area.
2.) Degree of Remodeling - For a remodeling project it is important to determine
the portion of the total gross area of the building involved in a proposed
remodeling because the Texas Building Code may require up-graded fire exits,
sprinkler systems, and handicapped accessibility work in the non-remodeled
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portions of the building. A change in use of a portion of an existing building to a
more stringent code occupancy classification can also have cost impacts beyond
the limits of the proposed remodeling work. For example, additional fire rated
separations between remodeled and non-remodeled areas. The total square feet
of remodeling is the sum of all areas both assignable and non-assignable which
are directly affected by the remodeling work.
3.) Project Size to Cost Equation - Assuming other cost factors are equal, a
larger project will generally have a lower cost per gross square foot than a
smaller similar type project. Therefore, when using a unit cost from an existing
project to estimate the cost of another, the cost will need to be adjusted to allow
for the difference in construction factors.
4.) Project Scheduling and Cost Escalation - The time required to design a
project may be several months to a year depending upon its size. In order to
provide adequate construction funding, the cost estimate must be adjusted to
reflect any increases in the cost of material and labor, which occur during this
period. In the past few years the rate of inflation has ranged from 2 to 4 percent
per year. Likewise, it is important that once a project schedule is established that
it be followed and any delays and associated cost increases be avoided. An
approximate schedule for the design, preparation of bid documents, and
construction of a project can be developed from the data provided by the
designers and the project planners. The design work cannot begin until the
project program is completed and funding is authorized to hire an A/E. Estimate
when this will occur and establish your schedule accordingly. If a building
occupancy date is critical, work back from the required occupancy date to
determine when the design work must start in order to have the construction
completed on time. From a cost standpoint the key date is the projected bid
date. Unit costs from previous projects or the new construction and remodeling
cost data may be used to develop a cost estimate for the proposed project. This
figure must be escalated to the projected bid date of the proposed project.
5.) Building Design and Construction Cost Factors - Each new building or
remodeling project is unique. Construction costs are dependent on the
complexity of the hospital’s project program, the quantity and quality of the
required construction, the location of the project and its site conditions, the
market conditions at the time of bidding, and many other factors. Therefore, it is
important that the costs used to develop the project cost estimate reflect the
true conditions anticipated for the project.
To make the budget estimate as accurate as possible, additional cost adjustment
factors related to the complexity of the building design and construction, the
Project Budget Overview
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location of the project, site conditions, etc. should be considered and appropriate
assumptions made, based on anticipated conditions.
6.) General Considerations - The cost of constructing a new building or an
addition to an existing building can be estimated by comparing it with the
construction costs of similar projects. The estimate can be prepared utilizing
either the “gross square foot” (GSF) or the “building component” cost methods.
7.) The Gross Square Foot (GSM) Method - These costs provide a design and
quality level consistent with their functional use. They include all general,
mechanical and electrical construction for a complete building, excluding utility
extensions and site work. They include code required fire protection systems.
They also include a reasonable amount of equipment such as standard library
shelving, lab casework, and built-in-food service equipment as indicated. Air
conditioning is included as indicated. They do not provide for special foundations,
unique architectural design or special program construction, telecommunications
cabling systems, or special mechanical and electrical equipment not specifically
identified. Following a complete review of the project program requirements, the
cost estimate is developed by selecting an appropriate GSF unit building cost for
the type of building being constructed, adjusting it for size and cost escalation,
and multiplying it by the gross square feet of building area.
8.) Building Component Cost Record - Use of the Building Component Cost
method requires more detail than is required for the GSF cost method. This
method requires separating the construction work into its basic components or
systems such as excavation and foundations, structure and envelope, interior
subdivision and finishes, plumbing and fire protection, heating and ventilation,
electrical, elevator and other special construction. Quantities or parameters
which define the scope of each section of work are multiplied by an appropriate
unit cost, and the subtotals are added together to produce the estimated total
building cost.
9.) Estimating Remodeling Project Costs - A cost estimate for remodeling an
existing building is generally more difficult to develop than an estimate for
construction of a new building. This is primarily due to the difficulty of assessing
the extent of the revisions required to major components such as the heating,
ventilating, electrical, plumbing systems and to upgrade the building to current
ADA requirements. Therefore, when preparing a remodeling cost estimate it is
necessary to evaluate the condition of those components and to make
assumptions regarding the need for, and cost of, their replacement.
Consideration must also be given to the degree of remodeling involved and any
retroactive fire safety and access barrier removal code work which may be
required in non-remodeled portions of the building. A remodeling cost estimate
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can be prepared utilizing either the “descriptive cost” method or the “detailed
cost” method as described below;
a. Descriptive Cost Method - The descriptive cost method is most
applicable to a large comprehensive interior remodeling project where
program requirements are known, but where quantities or construction
details are difficult to determine. With this method the remodeling work is
classified according to the following definitions:
i. Minor Remodeling - This involves the remodeling of space for the
same occupancy or for occupancy which requires a comparable or
lesser degree of services or surface treatment. The primary
emphasis is on utilizing existing spaces with limited partition
changes and very limited changes in mechanical and electrical
systems. Typically the scope of work involves minor relocating or
adding of movable partitions to improve the space utilization;
patching floor, wall, and ceiling finishes; minor reallocations of
existing plumbing and electrical fixtures; and adjusting the sprinkler
heads and air distribution ducts, grilles, temperature control,
electrical switches and outlets to conform to the new partition
arrangement. It does not include adding air conditioning.
ii. Partial Remodeling - This involves the remodeling of space to
accomplish functional or physical changes for an occupancy which
requires more sophisticated services or a higher degree of surface
treatment. Typically the scope of work includes removing and
replacing a portion of the interior partition systems, upgrading
floors, ceilings and wall finishes, and plumbing and electrical
fixtures; revising the air distribution and air conditioning system;
and rebalancing the air and temperature control system, limited
modifications to the fire sprinkler system and correction of minor
fire safety and accessibility code violations.
iii. Complete Remodeling - This involves extensive demolition and
replacement of existing partitions, floor and ceiling coverings,
mechanical, and electrical distribution systems within the affected
space, and plumbing and electrical fixtures. Replacement of
heating/cooling source equipment, main supply ducts, main
plumbing waste/vent piping, and medium voltage distribution
system are not included. Complete remodeling may also include the
replacement of the windows and correction of major fire safety and
accessibility code violations.
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The cost estimate is computed by multiplying the gross remodeled area by
the appropriate base unit cost.
b. Detailed Cost Method - A more detailed method of cost estimating may
be used where the type and area of work is clearly defined and quantities
can be estimated. This would be most applicable to a smaller, more
limited remodeling project such as remodeling an individual room or
replacing a single building component. This method can also be used in
conjunction with the descriptive method to cost those items of work not
covered by descriptive unit costs.
10.) Total Building Rehabilitation - The cost of total rehabilitation of a building
may exceed the cost of constructing new space; therefore, such a project
requires the evaluation of its total physical, functional, and economic adequacy
for the intended program use.
D. Budget Setup
1.) The preparation of a Project budget will be a collaborative effort led by the
Project Manager, with significant input from the Administrative Team of the
Facility in which the Project is being requested.
2.) Oftentimes, the Project Manager will utilize a Project Request Form (“PRF”), see
Policy 2.1 “Project Approval – PRF/CCR Overview” to launch
investigational fees in order to develop a preliminary budget.
3.) The Project Manager should procure the services of an Architect and any other
necessary parties so as to secure an accurate preliminary budget.
E. Budget Approval
1.) The Project Manager, will finalize a Project Budget, and submit for approval to
the MHHS Finance Committee (for projects > $1.5M.
2.) If approved by the MHHS Finance Committee, it will go to the MHHS Board of
Directors, for final approval and authorization.
3.) At the time of authorization, the Project may complete a Capital Construction
Form in order to initiate the Project. Please refer to Policy 2.1 “Project
Approval – PRF/CCR Overview” for further information.
F. Budget Approval
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1.) The Project Manager should submit to CRESS, a Monthly Project Report in which
a Budget variance is completed (forecast vs. actual). The Project Manager
should:
a. Explain any significant variances and alert CRESS to any future anticipated
cost overrides.
b. State to what extent the Project is on its established schedule
c. Major phases left to complete and timetable
d. Anticipated funds remaining on remaining major phases
DATE:
APPROVED:
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CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.1
Policy Title: Purchase Order Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
systematic process for purchase order initiation, approval, activation,
cancellation/reduction and tracking.
Policy Statement:
A. Administrative Details
Definition:
Purchase Order (PO): A purchase order is needed to charge Project related
invoices.
Form Used to issue purchase order:
Purchase Requisition (PR) Form
Form Completed by:
Project Manager
B. Purchase Order Initiation
1.) Before a purchase order can be issued (or invoices processed), the Project
Budget should be approved and activated in the Lawson accounting
system.
2.) The Project Manager should examine the Project Budget to verify
budgeted funds are available before submitting purchase requisitions to
the CRESS Accounting Office.
4.1 PO Process
Page 1 of 10
3.) If funds are available, the Project Manager prepares a purchase
requisition (a triplicate form) that should be approved in accordance with
purchase order approval levels (see § 4.1 (C)(7). The purchase
requisition should be submitted to the CRESS Accounting Office for
activation.
4.) It is recommended that the Project Manager prepare purchase requisitions
for all blanket purchase orders as soon as possible after Project/budget
activation in order to expedite subsequent payments (e.g. architect,
engineer, consultants and construction contractor).
5.) For Rush purchase orders, the Project Manager should clearly indicate
“RUSH” on the purchase requisition. The use of this should be limited to
only the most urgent requests.
6.) Expenditures not included in the approved Project scope should be
approved in advance. The Project Manager should verify the levels of
approval required with the applicable CRESS AVP/Director.
C. Purchase Order Approval
1.) The Project Manager should include on every purchase requisition all
pertinent information including the Project name, Project number, Activity
number, Subledger (category) number and Account (general ledger)
number corresponding to the Project to which the Project Manager is
issuing a purchase requisition. These numbers will have been provided by
the CRESS Sr. Financial Analyst at the time of Project activation/approval.
All documentation to substantiate the purchase order should be attached
to the purchase requisition.
2.) The Project Manager should include in the “Description” section any
special instructions.
3.) Along with the above, the Project Manager should sign and date the
purchase requisition and any attached documents and forward
immediately to a CRESS Financial Analyst in the CRESS Accounting Office.
a. The Financial Analyst assignment will vary by analyst workload.
Generally, a Financial Analyst will be assigned all Projects at a
Facility. The Facility/financial analyst assignment can be provided
by sending an e-mail request to the Sr. Financial Analyst.
4.1 PO Process
Page 2 of 10
b. The CRESS Financial Analyst to whom the purchase requisition
should be sent to for processing (and future contact), is generally
determined by the three digit Facility code (the last three digits of
the Project number).
4.) The Project Manager should record the purchase requisition into their
Project Budget Worksheet’s Purchase Requisition Table (See Figure 4.1a
– Project Purchase Requisition Table). This table can be provided by
the CRESS Sr. Financial Analyst.
5.) The Project Manager should make a copy of all paperwork before
submitting the paperwork for processing. There should be minimal
requests for processed paperwork from the CRESS Accounting file room.
6.) A CRESS Financial Analyst verifies that the Project budget has sufficient
uncommitted funds remaining to cover the purchase requisition. If a
Project does not appear to have sufficient uncommitted funds, or a
purchase order balance remaining in the budget, or the purchase order
balance appears to be insufficient, a CRESS Financial Analyst will attempt
to resolve the matter with the Project Manager. If the matter cannot be
resolved within approximately three (3) business days, a CRESS Financial
Analyst will return the purchase requisition to the Project Manager for
resolution.
7.) The following signatures are required before the purchase requisition can
be processed into a purchase order:
a. Project Manager – should sign purchase requisition and attached
back-up documentation
b. CRESS AVP/Director – can approve purchase requisition up to
$25,000 without further approval required
c. VP of CRESS – should approve purchase requisition of $25,000 or
more. It is common practice for the CRESS AVP/Director to sign
“Recommended for Approval” before VP of CRESS approval.
If additional signatures are required, the VP of CRESS will obtain them.
D. Respect for CRESS Distribution of Duties/Paperwork Process
1.) There is a methodology to the processing of paperwork in the CRESS
Accounting Office. If there is an urgent issue, a Project Manager may
4.1 PO Process
Page 3 of 10
“expedite a purchase requisition through” for signatures on their own
accord.
2.) If this option is chosen (and it should be an infrequent occurrence), the
Project Manager should “expedite through” from the start. The Project
Manager should not submit a purchase requisition for processing in the
normal way and then later decide to obtain signatures manually as that
will interrupt the accounting process and it creates potential errors and
delays in the CRESS Accounting Office.
E. Purchase Order Activation
1.)
Upon successful completion of the purchase requisition, including
appropriate approval signatures, a CRESS Financial Analyst will set up
the purchase order in the Lawson accounting system, will record the
purchase order in the CRESS database and update the Managerial
Project Budget Summary Worksheet (see Figure 4.1b – Managerial
Project Budget Summary Worksheet). The Project Manager
should NOT input data directly into this Summary Worksheet because it
contains formulas to calculate total budget and commitment amounts.
i. The Project Manager uses the Managerial Project Budget
Summary Worksheet as a tool to track budget versus
inception-to-date commitment amounts.
ii. Timely maintenance of Managerial Project Budget Summary
Worksheet will enable Project Manager to have up-to-date
financial data on the Project.
2.)
A CRESS Financial Analyst will send the pink copy of the purchase
requisition triplicate form with the purchase order number to the
Project Manager. This should serve as notification to the Project
Manager that the purchase order has been approved and set up in the
Lawson system.
3.)
Upon receipt of the pink copy, it is the Project Manager’s responsibility
to:
a. Send a letter to the vendor to communicate contact information
and billing processes. The Project Manager will be the vendor
contact for all vendor inquiries. Please see a sample letter
template to utilize upon initial communication with the vendor
(Figure 4.1c – Initial Vendor Correspondence).
4.1 PO Process
Page 4 of 10
i. Some vendors may be unable to send correspondence and
invoices to a Project Manager. In those cases, the Project
Manager should communicate to the vendor that all invoices
should reference all information provided on the vendor
letter, but at a minimum should reference a purchase order
and Project number. The Project Manager’s name as well as
the Facility and Project name should be in the billing
notations.
ii. By doing this, when an invoice is received at MHHS, it can
be forwarded to the Project Manager for appropriate
processing.
4.)
The Project Manager is allowed to approve a one-time increase in a
purchase order up to $1,000 to cover freight, shipping/handling or
minor price differences. This prevents the need to issue a new
purchase requisition if there are not enough funds available on a
purchase order to pay for this increase. If the Project Manager elects
to increase the purchase order amount, the Project manager should
document the amount of the purchase order increase and the new
purchase order amount on the invoice and their purchase requisition
table and forward to a CRESS Financial Analyst. A CRESS Financial
Analyst will then verify available funds and increase the purchase order
amount in Lawson.
F. Purchase Order Cancellation/Reduction
1.)
A purchase order should not be cancelled or reduced without the
written acknowledgement from the vendor whereby they agree that
they will cease billing invoices under a certain purchase order number.
Refer to Figure 4.1d – Purchase Order Cancellation Request,
for an example that the Project Manager can utilize. An electronic
copy can be supplied by the Assistant to the CRESS Director of
Architecture & Construction.
a. An exception to this is if the Project Manager overestimated the
freight, shipping or handling charges.
b. In this case the Project Manager should attach a copy of the
original quote/proposal to the original purchase requisition and
note “Amendment of estimated freight/shipping and handling
charges”.
4.1 PO Process
Page 5 of 10
2.)
If the Project Manager is unable to obtain written confirmation from
the vendor, he/she should attach the letter as illustrated in Figure
4.1d and note “unable to obtain signature”, sign the letter and
return it to a CRESS Financial Analyst along with the purchase
requisition in order to reduce the purchase order.
3.)
When voiding a purchase requisition due to a quote that was not
used, the Project Manager should write “VOID” on the purchase
requisition and follow steps 1 and 2 above.
4.)
Upon the Project Manager’s receipt of the vendor’s written
acknowledgement of a request for purchase order cancellation, the
Project Manager will forward the purchase requisition with the letter
to a CRESS Financial Analyst to process.
G. Purchase Requisition Tracking
1.) To foster purchase requisition accountability for all team members, the
following aggregate data will be presented periodically at the Project
Manager Team Meetings by the CRESS Sr. Financial Analyst:
a. Total Time to Process Purchase Requisitions (in calendar days)
b. Time between quote date and receipt of purchase requisition in the
CRESS Accounting office
c. Time between receipt of purchase requisition and issuance of
purchase order
APPROVED:
DATE:
4.1 PO Process
Page 6 of 10
Figure 4.1a
Project Purchase Requisition Table
APpurchase requistionOVED:
DATE:
4.1 PO Process
Page 7 of 10
4.1b
Managerial Project Budget Summary Worksheet
(Do Not Input Data Into This Worksheet)
4.1 PO Process
Page 8 of 10
Figure 4.1c
Initial Vendor Correspondence
July 15,2004
VIA FACSIMILE 214-576-7771 and U.S. Mail
SBC
Attn: Rose Bivond
2600 N. Central Expressway
Richardson, Texas 75080
Re:
Project Billing
The purchase order below is now activated. Please use the information listed below
for Project correspondence and invoicing:
Project Name: LTACN
Project Number: 0402009
Project Manager: Laura Schmidt
Project Location: Memorial Northwest
P.O. Amount: $6,637.36
Proposal Date: 06/28/2004
Purchase Order Number: 123275-6
Any and all correspondence, contracts, invoices and change orders received without
this information will be returned. All correspondence should be mailed to 9401
Southwest Freeway, Suite 1103-A, Houston, Texas 77074-140 1, Attention : Laura
Schmidt. Direct all questions, confirmations & delivery inquiries to Laura Schmidt at
713-448-6408.
Your cooperation in fulfilling this request will expedite the processing and payment
of your invoices.
Thank you for your attention to this matter.
Sincerely,
Laura Schmidt
Senior Project Manager
Corporate Offices
Memorial Hermann Healthcare System
9 4 0 1 SOUTHWEST FREEWAY a HOUSTON, TEXAS 7 7 0 7 4
4.1 PO Process
Page 9 of 10
Figure 4.1d
PO Cancellation Request (for Vendor to Sign)
[Click here and type DATE]
[Click here and type Vendor Name, Contact, Vendor Address]
Re:
Purchase Order Closure
Project:
Location:
[Click here and type PROJECT AND NUMBER]
[Click here and type LOCATION]
This correspondence confirms that [Click here and type VENDOR NAME] will not be further
billing against Memorial Hermann Healthcare System using Purchase Order #
[Click here and type PURCHASE ORDER NUMBER] for services identified in your
proposal/quote to us. Total billing to-date on the purchase order is
[Click here and type AMOUNT].
Proposals or invoices for subsequent services you provide will be issued a new Memorial
Hermann Healthcare System purchase order.
Please sign, date and return to [Click here and type PROJECT MANAGER] at facsimile number:
[Click here and type FAX NUMBER] immediately.
Thank you,
________________________________
Signature and Date
________________________________
Printed Name/Title
4.1 PO Process
Page 10 of 10
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.2
Policy Title: Invoice Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
systematic process for invoice payment initiation and disbursement of funds.
Policy Statement:
A. Administrative Details
Definition:
Invoice: An invoice is submitted by vendors for payment of services.
Form Used:
Original Vendor Invoice. If the invoice is a duplicate, it should clearly be
marked “COPY” to avoid duplicate payment.
Form Completion/Routing:
The vendor sends an invoice to the Project Manager who will forward to a
CRESS Financial Analyst.
B. Invoice Payment Initiation
1.) An invoice cannot be paid without a purchase order. See Policy 4.1“Purchase Order Process” for the process of obtaining a purchase
order.
2.) The vendor will send an invoice for payment to the Project Manager as
the Project Manager is the vendor’s contact on all
communication. The Project Manager should give the vendor a
4.2 Invoice Process
Page 1 of 11
secondary contact, preferably the CRESS Director of Architecture and
Construction in case of contact difficulty with the Project Manager.
a. The Project Manager will use the form letter (illustrated in Figure
4.2a – Initial Vendor Correspondence) as the notification to
the vendor that all correspondence, contracts, invoices and change
orders should be sent to the proper Project Manager, at a correct
address and should contain all of the information listed in Figure
4.2a.
b. Failure of a vendor to timely submit invoices to the appropriate
Project Manager may delay processing.
c. Some vendors confuse the handling of multiple contacts for one
client and are thus unable to send an invoice to Project a Manager
directly. In those cases, the vendor will still need to include a
purchase order and Project number on the invoice and the vendor
can reference in the billing notations, the Project Manager’s name
and the Project name and forward to the address on record for
MHHS, which is oftentimes Accounts Payable in this situation. The
recipient will then forward the invoice to the Assistant to the CRESS
Director of Architecture & Construction.
The Assistant will
summarily forward those to the respective PM for processing.
3.) After receipt of the Invoice, the Project Manager should log the invoice
into the Invoice Table of his/her Budget Tracking Worksheet (see Figure
4.2b – Invoice Table). Budget Tracking Worksheets will be provided by
the CRESS Sr. Financial Analyst.
4.) Before a Project invoice can be paid, the Project Budget and associated
purchase order should be approved and activated in the Lawson
accounting system
a. Project invoices can only be charged to the Project that those
invoices are related.
b. If there is a request to use funds from another Project, a request
should be submitted to the CRESS Director of Architecture and
Construction in advance of committing the funds with an indication
as to why the other Project funds should be considered. The
CRESS Director of Architecture and Construction will review the
request and if appropriate, will process the request with the
appropriate signatures(s) as required and outlined in §4.2(B)(9).
4.2 Invoice Process
Page 2 of 11
5.) For Federal Emergency Management Agency (FEMA) invoices, the
following process should be followed:
a. The outlined policy in §4.2(B)(2a-c) is especially critical as it
relates to FEMA Projects as there are regulatory issues that could
compromise FEMA funding to MHHS.
b. No commitment of funds should be authorized unless a specific
category line item with an associated Project work number
(provided by the Corporate Accounting Financial Analyst) has
already been identified on the approved Capital Construction
Request (CCR) form (please refer to Policy 2.1-“CCR/PRF
Usage” for further information on CCRs). For example, there is
often an “other” line item for capital Projects, but FEMA Projects
should be specific. The Project Manager’s budget should include
for example, “Safety Engineering” and “Dust Control”.
6.) Upon receipt of the invoice, the Project Manager will immediately date
stamp the invoice and will verify the following:
a. The purchase order number is indicated on the invoice.
b. The purchase order
quantity/amount.
quantity/amount
matches
the
invoice
c. The invoice is for the proper Project number.
7.) If there is a discrepancy over an invoice, the Project Manager will need to
request that the vendor provide a full credit invoice and rebill a new
invoice. The rebilled invoice date will be used for reporting purposes.
Potential issues include:
a. Non-compliance with agreed billing terms
b. Incomplete shipment received
c. Incorrect services rendered or goods received
d. Damaged goods
e. Incomplete services rendered
f. Incorrect pricing per agreement/quote/contract, or
4.2 Invoice Process
Page 3 of 11
g. Any other invoice /service related issue
The Project Manager (or IS Project Manager) will not return the
original invoice, but will send the vendor a form letter of invoice
rejection (Figure 4.2c – Form Letter of Invoice Rejection) along with
a copy of the invoice, indicating the following:
a. The vendor to whom the letter is addressed
b. The Project name and number
c. The individual to whom the letter is addressed
d. Why the invoice is being rejected
e. A request for a corrected invoice with preferably a new invoice
number and new date, along with a full credit memo for the
rejected invoice.
f. Other notes as applicable.
In the case of the IS Project Manager, the letter should be copied to the
Construction Project Manager so he/she can note it in their records in case
the vendor calls.
In order to avoid duplicate payments and ensure quality control, no
invoice numbers or dates can be manually changed as Accounts Payable
will not process invoices that have manual changes in the date or invoice
number.
8.)
Upon successful verification of the invoice to the purchase order, the
Project Manager will write on the invoice or circle if already provided:
the Project number, Activity number, Subledger (category) number and
Account (general ledger) number. The Project Manager will then sign
and date the invoice and forward immediately (within 10 business days
of date stamp of receipt) to a CRESS Financial Analyst in the CRESS
Accounting Office.
a. The CRESS Financial Analyst assignment will vary by analyst
workload. Generally, a Financial Analyst will be assigned all
Projects at a Facility. The Facility/financial analyst assignment can
be provided by sending an e-mail request to the Sr. Financial
Analyst.
4.2 Invoice Process
Page 4 of 11
b. The CRESS Financial Analyst to whom the invoice should be sent to
for processing (and future contact), is determined by the three digit
Facility code (the last three digits of the Project number).
c. For Rush Invoice payment, the Project Manager should clearly
indicate “RUSH” on the invoice and ensure that it is submitted to a
CRESS Financial Analyst in a timely manner. Rush invoice payment
should be for special circumstances and not frequently
encountered.
d. The Project Manager should make a copy of all paperwork before
submitting the paperwork for processing.
9.)
A CRESS Financial Analyst will perform the following functions:
a. Date stamp receipt of invoice upon arrival in the CRESS Accounting
Office
b. Verify the PO balance
c. Route for approval for signatures and dates of signature
i. Project Manager – Can approve up to $25,000 for a
previously approved Purchase Order.
ii. CRESS AVP/Director – Must sign and approve invoice without
a previously approved Purchase Order and can approve up
to $50,000 with an existing Purchase Order.
iii. VP of CRESS – Must sign and approve invoice if $25,000 or
greater without a previously approved Purchase Order and
all invoices with a previously approved Purchase Order
$50,000 or greater.
d. Log invoice in the CRESS database
e. Send invoice to Accounts Payable for payment
10.)
There should be minimal requests for processed paperwork from the
CRESS Accounting file room.
11.)
A CRESS Financial Analyst should process the invoice within ten (10)
business days of receipt or less.
4.2 Invoice Process
Page 5 of 11
C. Respect for CRESS Distribution of Duties/Paperwork Process
1.) There is a methodology to the processing of paperwork in the CRESS
Accounting Office. If there is an urgent issue, a Project Manager may
“expedite a purchase requisition through” for signatures on their own
accord.
2.) If this option is chosen (and it should be an infrequent occurrence), the
Project Manager should “expedite through” from the start. The Project
Manager should not submit a purchase requisition for processing in the
normal way and then later decide to obtain signatures manually as that
will interrupt the accounting process and it creates potential errors and
delays in the CRESS Accounting Office.
D. Handling of Freight PO/Invoice Differentiation
1.) If the invoice and the purchase order do not match and the difference is
related to freight, shipping/handling charges or a minor price difference
and because the Project Manager can approve a $1,000 increase in
purchase order amount, the Project Manager should not only sign the
invoice but write/acknowledge upon the invoice that the
difference is related to freight/insignificant price variance and
note the new purchase order total. This will prevent the need to
issue a new purchase requisition if there are not enough funds available
on a purchase order to pay for this increase.
2.) The Project Manager should record the invoice and the new purchase
order total on his/her Project Purchase Requisition table as well.
3.) Invoices that are received that exceed the purchase order amount and
have no additional notation that the Project Manager acknowledges and
approves this additional amount will result in the purchase order being
sent back to the Project Manager.
E. Invoices for Reimbursables, PSSA’s and Additional Services
1.) Invoices for reimbursables should be submitted on a separate invoice fees
and should include a copy of the expenses to substantiate the
reimbursables.
It will be the Project Manager’s responsibility to
communicate this to the vendor. If an invoice is received with a total and
without a backup to substantiate the cost and purpose of the
reimbursable, the Project Manager should follow the process as outlined in
§4.2(B)(7). Additionally, if reimbursables include a mark-up then the
4.2 Invoice Process
Page 6 of 11
invoice should reflect this as a mark-up. The mark-up is zero unless
otherwise agreed to in a contract or agreement.
2.) The Project Manager should submit invoices for additional services
separately, rather than the existing base amount of services. This will be
the Project Manager’s responsibility to communicate this to the vendor.
By keeping them separate, it will simplify the management of the contract
and improve CRESS’ ability to audit.
3.) Additional services should be approved in advance by the CRESS Director
of Architecture and Construction or the appropriate person at CRESS. The
Owner’s representative on a specific Project can advise the Project
Manager who is the appropriate person to sign these. An invoice should
not be submitted by a consultant without having approval in advance.
F. Invoice Payment
1.) Accounts Payable typically generates checks twice per week.
2.) Invoices will not be short paid, except for sales tax, which is not
applicable.
G. Invoice Payment Tracking
1.) To foster accountability among all team members, the following
aggregate data will be presented periodically at the Project Manager
Team Meetings by the CRESS Sr. Financial Analyst:
a. Total time to process invoices (in days)
b. Days past invoice date when received by CRESS Accounting Office,
broken out by:
i. 0-45 days past invoice date
ii. 45 or more days past invoice date
c. CRESS Accounting Office processing time (in days)
d. AP processing time (in days)
e. Average invoice age when received in CRESS Accounting Office by
Project by Project Manager
4.2 Invoice Process
Page 7 of 11
APPROVED:
DATE:
4.2 Invoice Process
Page 8 of 11
Figure 4.2a
Initial Vendor Correspondence
July 15,2004
VIA FACSIMILE 214-576-7771 and U.S. Mail
SBC
Attn: Rose Bivond
2600 N. Central Expressway
Richardson, Texas 75080
Re:
Project Billing
The purchase order below is now activated. Please use the information listed below
for Project correspondence and invoicing:
Project Name: LTACN
Project Number: 0402009
Project Manager: Laura Schmidt
Project Location: Memorial Northwest
P.O. Amount: $6,637.36
Proposal Date: 06/28/2004
Purchase Order Number: 123275-6
Any and all correspondence, contracts, invoices and change orders received without
this information will be returned. All correspondence should be mailed to 9401
Southwest Freeway, Suite 1103-A, Houston, Texas 77074-140 1, Attention : Laura
Schmidt. Direct all questions, confirmations & delivery inquiries to Laura Schmidt at
713-448-6408.
Your cooperation in fulfilling this request will expedite the processing and payment
of your invoices.
Thank you for your attention to this matter.
Sincerely,
Laura Schmidt
Senior Project Manager
Corporate Offices
Memorial Hermann Healthcare System
9 4 0 1 SOUTHWEST FREEWAY a HOUSTON, TEXAS 7 7 0 7 4
4.2 Invoice Process
Page 9 of 11
Figure 4.2b
4.2 Invoice Process
Invoice Table
Page 10 of 11
Figure 4.2c
Form Letter of Invoice Rejection
FORM LETTER
Date
John Doe
0000 Doe Street
Anytown, USA 00000-0000
Project:
Name and Number
RE:
Invoice Rejection
Dear ________,
The attached invoice is being rejected for the following reason (s):
_____
_____
_____
_____
_____
Non-compliance with agreed billing terms
Incomplete shipment received
Incorrect pricing per agreement/quote/contract
Incomplete services rendered
Other
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Notes:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Please submit a corrected invoice with a new invoice number and date along with a full
credit memo for the rejected invoice. Please reference the above PO and Project
information on the corrected invoice and the credit memo and send them directly to me at
_____________________________.
If you have any questions, please feel free to call me at _________________. Thank you
for your assistance.
Sincerely,
Project Manager Name
4.2 Invoice Process
Page 11 of 11
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.3
Policy Title: Purchase Requisition and Invoice Inquiry Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
organized process for inquiries regarding purchase requisition and invoice status.
Policy Statement:
1.) Purchase Requisition and Invoice Inquiries:
a. Inquiries to CRESS Accounting are to be submitted by the Project
Manager via e-mail to the CRESS Financial Analyst assigned to
process payments for the applicable Facility. The purpose of
requiring e-mail requests is to facilitate tracking the quality and
timeliness of the CRESS Department’s responses to Project
Manager inquiries.
b. Inquiries from vendors and consultants are to be directed to the
assigned Project Manager. Vendor inquiries to CRESS Accounting
or to the CRESS Director of Architecture & Construction will
generally be forwarded to the Project Manager unless the vendor
indicates they cannot get a response from the Project Manager.
2.) At a minimum, all inquiries should include the following information in
order to facilitate timely investigation and response:
a. Date of inquiry
b. Project number
c. Project name
4.3 PR and Invoice Inquiry Process
Page 1 of 3
d. Project Manager
e. Vendor name
f. Purchase requisition or invoice number
g. Purchase requisition or invoice date
h. Dollar amount
i. Purchase order number (if known)
j. Date originally sent to CRESS Accounting
k. Nature of inquiry
3.) If the Project Manager does not provide the required information, CRESS
staff will respond with the following message:
“We do not have sufficient information to respond to your
inquiry at this time.
Please provide the necessary
information and we will respond as soon as possible”.
4.) Response Time:
a. It is the goal of CRESS Accounting staff to respond to inquiries
within one business day.
b. Project Managers should respond to inquiries within two business
days.
5.) CRESS Accounting staff will research inquiries if both of the following
criteria are met:
a. The item(s) should have been received in the CRESS office more
than fifteen (15) days prior to the date of the inquiry, and
b. Forty-five (45) or more days have elapsed from the invoice date or
purchase requisition date and the date of the inquiry.
6.) CRESS Accounting staff will respond to all inquiries that do not meet the
criteria described in #5 above with the following message:
4.3 PR and Invoice Inquiry Process
Page 2 of 3
“Due to the volume of paperwork received and processed
through CRESS, any paperwork received by CRESS within the
previous 15 days can be considered “in process.” If there are
urgent, extenuating circumstances that require research or
status inquiries, within the given time frames, please direct
them to the CRESS Sr. Financial Analyst per his/her request.”
7.) Responses to inquiries by both CRESS Accounting staff and by Project
Managers should indicate the current status and the estimated timeframe
for processing. The vendor should be advised of the status. If there is a
reason the purchase requisition or invoice will be delayed, the vendor
should be notified in writing and if necessary, the documentation provided
by the vendor returned to the vendor.
APPROVED:
DATE:
4.3 PR and Invoice Inquiry Process
Page 3 of 3
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.4
Policy Title: Vendor Categorization
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish a consistent
categorization of expenditure types for Project Manager use.
Policy Statement:
1.) Category 0010 – Architecture: This category is to be used to capture
architecture related costs. Some architect contracts include engineering
fees. In those cases, it is acceptable to classify all fees related to the
contract to this category, including engineering. Some architecture firms
also provide Project management services. Project management fees, if
performed by an Architect, should be a separate contract and classified
separately in Category 0015 – Professional Fees.
2.) Category 0011 – Construction: This category should be for
construction contracts or work performed by construction contractors.
3.) Category 0012 – Abatement: This category is to be used to capture
abatement costs such as asbestos removal.
4.) Category 0013 – Contract Labor: This category is to be used to
capture costs for contract labor.
The contract labor can include
administrative temporary employees or contract skilled labor such as
plumbers or welders.
5.) Category 0014 – Engineering: This category is to be used to record
engineering-related costs that are not part of architecture services
(Category 0010).
4.4 Vendor Categories
Page 1 of 2
6.) Category 0015 – Professional Fees: This category should be for
services performed by a professional consultant, if Memorial Hermann
Hospital System is paying for the consultant’s knowledge and there is no
installation or construction deliverable. Project management fees, preconstruction services, medical equipment planning, graphics design and
financial services (e.g. auditing) would be classified in this category.
7.) Category 0016 – Construction Materials: This category is to be used
to track the costs of construction materials that are not part of a
construction contract.
8.) Category 0018 – Administrative Fees: This category includes legal
fees, regulatory fees, internal staffing charges such as ISD PM salaries,
CRESS salaries, Biomedical Engineering expenses, Security expenses and
marketing related expenses.
9.) Category 0017 – Purchased Services: This category includes third
party services such as printing, repairs, material testing, waste disposal,
environmental services, couriers, landscaping and work that is
permanently a part of the building but not included in the construction
contract such as signage and graphics. Cabling and ISD servers would be
coded here if not part of the construction contract.
10.) Category 0019 – Safety Engineering: This category is to be used to
track costs of Project safety charges.
11.) Category 0200 – Equipment: This category is to be used to account
for costs of medical and non-medical equipment, furniture and artwork.
Equipment should not include infrastructure equipment such as an ISD
server.
12.) Category 0008 – Contingency: This category is to be used to
account for the Project contingency.
APPROVED:
DATE:
4.4 Vendor Categories
Page 2 of 2
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.6
Policy Title: Project Budget Change Process – HCCO and SCO
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
systematic process for processing requests to reallocate, increase or decrease
capital Project budgets.
Policy Statement:
A. Administrative Details
Definitions:
Hidden Condition Changes – Occurrence of a hidden condition such as
asbestos, which could not have been anticipated prior to the start of the
Project. This cost should be paid from the Project contingency budget.
Scope Changes – Project scope change that will require an adjustment in
funding (an increase or decrease in budget).
Form Used:
Hidden Condition Change Order (HCCO)
Scope Change Order (SCO)
Forms Prepared by:
Project Manager
B. Hidden Condition Change Order (HCCO) Approval
4.6 HCCO & SCO
Page 1 of 7
1.) If a change order arises because a hidden condition is discovered (e.g.
asbestos) that could not have been anticipated prior to Project
commencement, and once the Project Manager reviews the Change
Proposal for compliance, he/she should follow the process as delineated in
§4.6 (B)(6)(a-c), that calls for a HCCO to be completed when contingency
funds should be used to fund the work. Reasonable contingency funds
should be included in a Project budget for unanticipated occurrences.
2.) The Project Manager must complete and sign the Hidden Condition
Change Order (HCCO) form as illustrated in Figure 4.6a – Hidden
Condition Change Order Form and the following:
a. A memo containing
i. A description of the hidden condition
ii. Project Manager’s recommendation and justification as to
why the HCCO is needed
iii. An indication if the change will negatively affect the Project
budget
b. Printout of the Project Manager’s Project Budget Worksheet
showing the current reconciliation of budget and forecasted to
complete
c. Other documentation as applicable such as quotes and purchase
requisitions
3.) Purchase orders cannot be issued and invoices cannot be paid until the
HCCO is reflected in Lawson. To expedite processing, pending purchase
requisitions may be attached to the HCCO to be processed once the HCCO
is activated.
4.) The Project Manager will have the designated Administrator sign the
HCCO (if applicable) and then forward the HCCO, along with the other
required documentation as noted in § 4.5 (A)(8)(a-g), to the CRESS Sr.
Financial Analyst who will then verify funding, sign and route the HCCO
for additional approvals which may include the following:
a. CRESS AVP/Director
b. VP of CRESS
4.6 HCCO & SCO
Page 2 of 7
c. If additional signatures are required, the VP of CRESS will obtain
them.
5.) After all the requisite approvals have been obtained on the HCCO, the
CRESS Sr. Financial Analyst will amend the Project Budget Worksheet.
6.) The CRESS Sr. Financial Analyst will then submit the HCCO to Corporate
Accounting for entry into Lawson accounting system.
7.) Upon approval of the HCCO, the CRESS Sr. Financial Analyst will notify the
Project Manager who in turn will follow-up as required.
8.) Approvals may be obtained from the VP of CRESS in advance and followed
by a written HCCO if a Project schedule or budget will be negatively
impacted.
C. Scope Change Order (SCO) Approval
1.) The Project Manager should complete the Scope Change Order form (See
Figure 4.6b – Scope Change Order Form) to request an increase or
decrease in funds on the Project budget. The SCO should provide details
on how the funds will be allocated between the budget categories.
2.) See § 4.6 (B) (2-8) for guidelines related to the proper processing of
SCOs.
APPROVED:
DATE:
4.6 HCCO & SCO
Page 3 of 7
Figure 4.6a
4.6 HCCO & SCO
Hidden Condition Change Order Form
Page 4 of 7
Figure 4.6a
4.6 HCCO & SCO
Hidden Condition Change Order Form (cont’d)
Page 5 of 7
Figure 4.6b
4.6 HCCO & SCO
Scope Change Order Form
Page 6 of 7
Figure 4.6b
4.6 HCCO & SCO
Scope Order Change Form (cont’d)
Page 7 of 7
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.5
Policy Title: Construction Change Order Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: This policy sets forth the proper process whereby a change
order is initiated and approved.
Policy Statement:
In spite of a design team's best efforts, there is no such thing as a perfect set of
Drawings and Specifications, and consequently there will potentially be Change
Orders required to complete the Project.
It is the Project Manager's
responsibility to try to ensure that these changes do not negatively impact the
Schedule or quality of the Project and that they can be accomplished within the
Project budget. The Construction Contract requires, and the Project Manager
should enforce, that the Contractor not proceed with changes without a Change
Order or Construction Change Directive signed by the Owner.
A. Change Order Process Overview
1.) If a change issued by the Architect could result in an additional cost to the
Contractor; the Project Manager will issue a "Request for Proposal (RFP)
with the Architect's documents. The RFP will describe the change or
reference the appropriate documents and will have attached the detailed
descriptions, sketches and plans required for the contractor to quote the
change. The RFP should be sent to the affected Contractor. Once the
Contractor receives the Request for Proposal, he/she should prepare a
detailed cost estimate for the change. This estimate should include an
itemized takeoff of labor, equipment and material with a unit cost for each
item.
4.5 Change Order Process Overview
Page 1 of 7
2.) The Contractor and its Subcontractors should sign and date the RFP upon
receipt, and respond with the proper backup to the Project Manager. The
response should include a price, schedule impact (if any), and include all
appropriate backup along with a detailed breakdown supporting the costs.
There should be no exceptions.
3.) The Architect and Project Manager should review, evaluate, possibly
negotiate and then process the Change Proposal to ensure it includes the
following:
a. Proper scope
b. Conforms with the contract documents
c. Priced fairly
d. Addresses any time extension accurately, and
e. Respond to the Contractor with any required revisions or necessary
clarification as soon as possible.
4.) The “Cost of the Changed Work” estimate should include the following:
a. Total labor
b. Equipment, materials and supplies
c. Rental equipment charges
d. Bond insurance premium (if applicable)
e. Sales tax (if applicable)
f. Subcontractor cost
g. Mark-up (if applicable)
A sample format for the Change Proposal Estimate is provided in Figure
4.5a – Change Proposal Format. The Contractor is to provide backup
and breakdown of all work items sufficient for the Project Manager to
accurately approve for Change Order.
5.) An executed change order will include the following items:
4.5 Change Order Process Overview
Page 2 of 7
a. All costs, impacts, delays, time extensions, damages, and other
claims of any nature, resulting in whole or in part from the
change(s) reflected in the change order
b. Language that ensures the contractor waives all claims to the
extent not requested within the change order
6.) The Change Order can modify not only the Contract Sum but also the
contract terms and schedule as well. It is important to:
a. Periodically revise the Schedule of Values and Request for Payment
forms to record each change as a separate item of Work, and to
record the adjusted Contract Sum.
b. Periodically revise the Construction Schedule to reflect each change
in Contract Time; including revising sub-schedules to show changes
for other items of work affected by the changes.
c. The changes should be recorded in the Record Documents.
7.) Upon a satisfactory review, the Project Manager will forward the Change
Proposal with recommendation for approval to the Owner for approval and
signature.
The Change Proposal should include signatures of the
Contractor, Architect, and Project Manager.
8.) Upon approval of the Change Proposal (or revised proposal) by the
Owner, copies will be returned to the Project Manager who will have a
Change Order prepared that will be signed by the Contractor, Architect
and Project Manager. The Project Manager will forward the following
documentation to a CRESS Financial Analyst, who will in turn process with
the required approvals (see Figure 4.5b – Change Order
Documentation).
a. A purchase requisition to adjust the purchase order amount if it will
be modified
b. A memo containing:
i. Project Manager’s recommendation
ii. An indication if the scope of the Change Order is within
budget.
iii. An indication how the change will be funded.
4.5 Change Order Process Overview
Page 3 of 7
c. A HCCO or SCO if the Change Order is not within the Project
Budget (Please refer to Policy 4.6- “Project Budget Change
Process” for detailed handling of HCCO and SCOs).
d. Four (4) originals of a Change Order
e. A list of the original contract amount plus previous Change Orders
and this Change Order along with the original Purchase Order
amount and new purchase order amount
f. Printout of the Project Manager’s Project Budget Worksheet
showing the current reconciliation of the budget and forecasted to
complete.
g. A summary description of each change and whether it is a: Hidden
Condition; Error or Omission; Owner Request; or Code or
Regulatory.
9.) Once approved, a CRESS Financial Analyst will send two (2) originals of
the executed Change Order for the Project Manager to forward to the
Contractor and Architect.
10.) Upon receipt of a fully executed Change Order, the Contractor may
proceed with the change.
11.) Final approval of the Change Order is required prior to any billing for the
Change Order in the regular monthly Applications for Payment submitted
by the Contractor.
B. Construction Change Directive
1.) There may be times where it is not possible to follow the above-stated
process without adversely impacting the Project schedule.
2.) In those cases, the Project Manager and the Contractor should agree on
the impact of the change to the Schedule and a not-to-exceed price (if
possible) or allowance amount for the change.
3.) A Construction Change Directive should be executed by the Contractor
and Owner. The Project Manager and Architect will recommend approval
to the Owner, who will execute the Directive accordingly, allowing the
Contractor to proceed with the changed Work as directed. Once the
change has been fully priced, a Change Order should be issued and
4.5 Change Order Process Overview
Page 4 of 7
executed to adjust the Guaranteed Maximum Price (where applicable) or
Contract Sum following the Change Order process noted above.
C. Change Order Discipline
1.) The Project Manager should have a goal of never allowing the Contractor
to proceed without an executed Change Order or Construction Change
Directive. To do so could result in unavailable funds or agreeing to a
schedule that may not be acceptable.
2.) It may be very difficult to negotiate the price and time extension of a
change after the changed Work has been done. In addition, executed
Change Orders greatly reduce the Contractor's ability to make claims for
changes made on the Project. For these reasons, Construction Change
Directives should only be used when absolutely necessary.
Reference: MHHS Standard Construction Contract A111 Article 6;
MHHS Standard General Conditions A201 Article 7.
D.) Change Order Log
1.) The Project Manager is responsible for the management of a Change
Order Log, which should identify the status of all Change Proposals,
Change Orders and Construction Change Directives.
2.) It is necessary that the Project Manager control this process, as
Contractors tend to add to the log any conceivable item that could be a
possible cause for additional compensation and extension of time.
Therefore, it is important that the Project Manager control this process
and require the Contractor to follow the proper steps for requesting
additional compensation or extensions of time instead of circumventing
the process through the Change Order Log. The Change Order Log
should then be linked to the Project Budget in order to track the impact of
Change Proposals, Change Orders and Change Directives on the Project
Budget.
APPROVED:
DATE:
4.5 Change Order Process Overview
Page 5 of 7
Figure 4.5a
Change Proposal Format
The following format could be utilized by Contractors on their letterhead or format
for capital Project change proposal estimates:
RFP/Directive/etc. Identification # _______________________
Date
_______________________
Description of Change
Estimated Cost of Change:
Labor:
Carpenter
(No. of Hrs. x Rate)
Labor
(No. of Hrs. x Rate)
Ironworker
(No. of Hrs. x Rate)
Subtotal
Mark-up on labor @
Equipment, Materials, Supplies:
Vendor 1 price with backup
Vendor 2 price with backup
xxx.xx
xxx.xx
xxx.xx
%
xxx.xx
xxx.xx
Subtotal
OH&P @ ____ %
Subcontractor Costs
Firm 1 price with backup
Firm 2 price with backup
Subtotal
OH&P @ ____ %
xxx.xx
xxx.xx
xxx.xx
xxx.xx
xxx.xx
xxx.xx
xxx.xx
xxx.xx
Total Change
xxx.xx
4.5 Change Order Process Overview
Page 6 of 7
4.5b
Change Order Documentation
CONSTRUCTION CONTRACT CHANGE ORDER MEMO
Construction, Real Estate, and Support Services
Date:
Project:
PCO #:
PO #:
Change Order #:
Budget Acct. #:
Change Order w/in
Budget (Y/N)?:
ICO/SCO/HCCO
Attached (Y/N)?:
Contract #:
To:
In accordance with the terms of your Contract cited above with ____________, you are directed to execute the changes to
that Contract described herein. It is agreed that the compensation and time provided by this Change Order constitute full
and complete
DESCRIPTION OF CHANGE ORDER
Cost Cause
Code
Contract Cost
(Dollars)
Contract Time
(Calendar Days)
Original Contract
Previous Change Orders
Adjustments this change order
Current Contract
Why is this work necessary?
Differing Site Conditions
Field Conditions
Value Engineering
Acts of God
Fire Code/Life Safety Issues
Errors & Omissions
Other (List)
Scope Increase by Owner
Inspector Requests
Why wasn’t this work included in the original contract?
(Owner’s Representative)
(Signature and date)
(Architect)
(Signature and date)
(Contractor)
(Signature and date)
(Owner)
(Signature and date)
For Accounting Purposes Only:
Encumbered
Date
Initials
Approval Code
4.5 Change Order Process Overview
Page 7 of 7
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.7
Policy Title: Reconciliation Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
systematic process for reconciling the accounting records maintained separately
by Project Managers, CRESS and Memorial Hermann Corporate Accounting.
Project Managers should perform reconciliations on a quarterly basis at the least,
however, CRESS reserves the right to ask for more frequent reconciliations
should the need arise.
Project reconciliations do not include examination of forecast expenditures.
Forecasted expenditures are tracked and maintained by the Project Manager
within his/her Project budget and reported monthly to the CRESS Director of
Architecture and Construction.
Policy Statement:
A.) Responsibilities of Project Manager In Reconciliation
1.) The Project Manager is responsible for the following:
a. Performing a reconciliation between their Project accounting records
and the records maintained by CRESS. Reconciliations should occur
quarterly or as directed by the CRESS Sr. Financial Analyst or the
CRESS Director of Architecture and Construction.
b. Submitting a written reconciliation report with the Project Monthly
Report, to the CRESS Director of Architecture and Construction and
when applicable, explain variances and opportunities to resolve
variance differences.
4.7 Reconciliation Process
Page 1 of 2
B.) Responsibilities of CRESS Accounting Office in Reconciliation
1.) CRESS Accounting personnel are responsible for the following:
a. Providing CRESS Project accounting reports to Project Managers for
their use in performing reconciliations.
b. Responding to Project Manager inquiries resulting from reconciliations.
c. Assisting Project
reconciliations.
Managers
in
resolving
issues
arising
from
d. Performing periodic reconciliations between CRESS accounting system
(Access database) and MHHS Corporate Accounting system (Lawson).
APPROVED:
DATE:
4.7 Reconciliation Process
Page 2 of 2
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.8
Policy Title: Audit Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish an orderly and
systematic process for:
ƒ
Auditing construction contracts
ƒ
Auditing Project accounting records maintained separately by Project
Managers, CRESS and Memorial Hermann Corporate Accounting
ƒ
Ensuring that capital construction Project accounting records are accurate
and complete
ƒ
Ensuring that all capital construction Project transactions are properly
approved, processed in a timely manner and accurately recorded in
Project accounting systems.
The Project audits do not include examination of forecast expenditures. These
forecasted expenditures are tracked and maintained by the Project Manager
within his/her Project budget.
Policy Statement:
A.) Construction Contract Audits
1.) Timing - Guaranteed maximum price (GMP) contracts will be audited
twice. The first audit will be when the Project is approximately 25%
complete and the second will come at the end of the Project. Lump sum
contracts will be audited at the discretion of the CRESS Accounting Office.
4.8 Audit Process
Page 1 of 5
CRESS management reserves the right to conduct unscheduled audits and
additional audits, as they deem necessary and appropriate. CRESS
management will generally give advance notice to the contractor that an
audit will be performed.
2.) Scope - The auditor’s scope of work on construction contract audits will
include, but is not limited to the following:
a. Examining contracts, change orders and any other documentation
necessary to evaluate whether Project commitments and actual
expenditures are in accordance with the contract and are
accurately stated and recorded in the accounting records of the
Project Manager and CRESS.
b. Interviewing contractor, Project management and any other
personnel involved in the negotiation, preparation and execution of
construction contracts.
3.) Contractor personnel are responsible for the following:
a. Allowing the auditor access to contract files and documentation
that are pertinent to the construction contract under review.
b. Responding to inquiries of the auditor during audit fieldwork.
c. Providing written responses to audit findings and implementing
audit recommendations pertaining to the contract.
4.) The Project Manager is responsible for the following:
a. Managing the construction contract audit. All correspondence will
be coordinated through the Project Manager and all follow-up
actions will be tracked by the Project Manager to verify completion
with copies to the CRESS Director of Architecture and Construction.
b. Determining with the CRESS Director of Architecture & Construction
or Director of Capital Construction the timing of the audit.
c. Providing supporting documentation requested by the auditor that
is necessary to perform the audit process.
d. Responding to inquiries of the auditor during audit fieldwork.
4.8 Audit Process
Page 2 of 5
e. Providing written responses to audit findings and implementing
audit recommendations pertaining to Project management.
f. Provide audit report and results to CRESS Director of Architecture &
Construction.
g. Resolving any findings/variances CRESS elects to address
5.) CRESS personnel are responsible for the following:
a. Providing supporting documentation requested by the auditor that
is necessary to perform the audit process.
b. Responding to inquiries of the auditor during audit fieldwork.
c. Providing written responses to audit findings and implementing
audit recommendations pertaining to CRESS operations.
6.) Audit Reports – Auditor will provide a written report providing detailed
explanations of findings and recommendations at the conclusion of the
audit and issue the report to the Project Manager, CRESS Director of
Architecture and Construction and Director of Capital Construction.
B.) Capital Construction Project Audits
1.) Timing- Generally, each major Project will be audited twice. The first
audit will be when the Project is approximately 25% complete and the
second will come at the end of the Project. CRESS management reserves
the right to conduct unscheduled audits and additional audits, as they
deem necessary and appropriate. CRESS management will generally give
advance notice to the Project Manager that an audit will be performed.
2.) Scope- The auditor’s scope of work on the capital Project audits will
include, but is not limited to the following:
a. Selecting a sample of transactions from the Project Manager’s and
CRESS accounting records and reviewing supporting documentation
to ensure transactions were approved in accordance with policy
and correctly recorded in the accounting records.
b. Examining selected Project Manager’s monthly reconciliation
reports and evaluating the nature of reconciling items identified
and whether they were sufficiently resolved in a timely manner.
4.8 Audit Process
Page 3 of 5
c. Reviewing Project Manager and CRESS accounting records to
determine if they are complete with respect to inclusion of all
transactions.
d. Interviewing Project management and CRESS staff as necessary.
e. Performing other audit processes as needed.
f. Providing final reports to CRESS Director of Architecture and
Construction.
3.) The Project Manager is responsible for the following:
a. Providing reports and documentation to the auditor as needed.
b. Responding to auditor inquiries during audit fieldwork.
c. Responding to audit findings and implementing recommendations
that pertain to Project Manager records.
4.) CRESS staff is responsible for the following:
a. Managing the capital Project audit. All correspondence will be
coordinated through a designated CRESS staff member and all
follow-up actions will be tracked by the CRESS staff member to
verify completion.
b. Providing supporting documentation requested by the auditor that
is necessary to perform the audit process.
c. Responding to inquiries of the auditor during audit fieldwork.
d. Providing written responses to audit findings and implementing
audit recommendations pertaining to Project management.
e. Provide audit report and results to CRESS Director of Architecture &
Construction.
5.) Audit Reports – Auditor will provide a written report providing detailed
explanations of findings and recommendations at the conclusion of the
audit and issue the report to the CRESS Director of Architecture and
Construction and Director of Capital Construction.
4.8 Audit Process
Page 4 of 5
APPROVED:
DATE:
4.8 Audit Process
Page 5 of 5
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 4.9
Policy Title: Project Closure Process
Category: Project Accounting
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to describe the process for the
accounting close of a Project.
Policy Statement:
1.) The CRESS Sr. Financial Analyst monitors the Monthly Financial Capital Report
for completion dates and follows up with Project Managers regarding Project
status.
2.) The Project Manager should send letters to all Project vendors informing them
that the Project will be closed as of a specified date and that all invoices should
be paid prior to that date. Please refer to Figure 4.9a – Letter to Vendor
Notifying of Project Closure Date for a sample letter template. This can be
sent electronically to the Project Manager, by requesting the template from the
Assistant to the CRESS Director of Architecture & Construction.
3.) After a Project is closed, no additional expenditures can be charged to the
Project.
4.) The Project Manager will complete and sign the Project Closure form (see
Figure 4.9b – Project Closure Form) and obtain the signature of the
representative of the user group for whom the Project was completed.
5.) After the signature of the representative of the user group for whom the
Project was completed is obtained, the Project Manager will submit the
completed Project Closure form to the CRESS Sr. Financial Analyst.
4.9 Project Closure
Page 1 of 5
6.) The Project Manager then submits the Project Closure form to the CRESS Sr.
Financial Analyst.
7.) The CRESS Sr. Financial Analyst will obtain the approval, via signature, of the
CRESS AVP/Director and VP of CRESS on the Project Closure Form.
8.) After the Project Closure form has been completed and approved, the CRESS
Sr. Financial Analyst will send the completed and signed Project Closure form
to MHHS Corporate Accounting where the Project will be closed in the Lawson
Accounting System and transferred to a fixed assets account. Any remaining
funds will be transferred to the Memorial Hermann General Fund.
9.)
The CRESS Sr. Financial Analyst will notify the Project Manager and the CFO
of the Facility in which the Project was completed that the Project has been
closed.
APPROVED:
DATE:
4.9 Project Closure
Page 2 of 5
4.9a
Letter to Vendor Notifying of Project Closure Date
MEMORIAL HERMANN HEALTHCARE SYSTEM
Construction, Real Estate and Support Services
January 1, 2006
Vendor Name
Street Address
City, State, Zip
Attn: Accounts Receivable
RE: FINAL PROJECT BILLING
Project Name
Facility Name
MHHS Project #9999999
Please be advised that January 15, 2006 is the scheduled date for closure of the
Project Name Project. Final invoices are due to the Project manager, ________,
before this date. Please advise all of your subcontractors accordingly. Sources for
payment are not accessible once a Project is formally closed. Memorial Hermann
Healthcare System will not pay any invoices submitted for this Project after the
scheduled closure date.
Thank you in advance for your attention to this matter.
Sincerely,
Project Manager
Company Name
4.9 Project Closure
Page 3 of 5
cc:
CRESS AVP/Director
CRESS Sr. Financial Analyst
Project File
Figure 4.9b
4.9 Project Closure
Project Closure Form
Page 4 of 5
MEMORIAL HERMANN HEALTHCARE SYSTEM
CONSTRUCTION, REAL ESTATE AND SUPPORT SERVICES
PROJECT CLOSURE FORM
CORP:
PROJECT #
PROJECT
NAME:
LOCATION
COST CTR:
CONTRACTOR:
ARCHITECT:
COMPLETION/CANCELLATION AGREEMENT
The work performed under this contract has been reviewed by the tenant or user group and has been found to be ready
for occupancy. All warranties/guarantees will be effective as of the date stated on the Certificate of Substantial
Completion. A list of items to be completed or corrected by the contractor is attached hereto.
IN-SERVICE DATE:
CANCELLATION DATE:
APPROVALS
Department Director
Date
Sr. Financial Analyst
Paul Shearon
Date
Project Director
Date
Vice President, Construction,
Real Estate and Support Services
Marshall Heins
Date
PROJECT BALANCE $ ____________________________________
4.9 Project Closure
Page 5 of 5
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 5.1
Policy Title: External Project Team Procurement Process
Category: Team Procurement Processes
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Introduction to the Selection Process
A. External Team Selection and Timing
1.) The process of consultant and contractor selections can be a time consuming and
complex process. The timing for selection of consultants/contractors may vary from
project to project; however, the timing for selection should in general follow these
guidelines:
a. Functional Programmer - Assuming the project is large enough to warrant
the services of a functional programmer, the selection thereof is the first key
step to the development process. In some cases, a project will be small
enough that the architect can provide adequate programming services. On a
large, complex healthcare project it is common to need the services of a
functional programmer who specializes in this work. The programmer must
be selected early enough to provide the architect with the foundation of the
schematic design. Therefore, based on a desired design schedule, work
backward from the desired start of schematics to determine when the
programmer must be engaged.
b. Architect/Engineer (A/E) - For the purposes of this discussion, it is
assumed that A/E selection includes master site planning, MEP design,
structural design, civil engineering, and landscape design. The A/E team
should generally be selected during the latter stages of the programming
phase. This will allow input from the A/E team into the program and for a
smooth transition into schematic design.
5.1 External Project Team Procurement
Page 1 of 4
c. Equipment Planner - The equipment planner must provide information to
the A/E team and can be crucial to finalizing the budget for a large project.
The A/E team will need equipment information during design development.
Therefore, the equipment planner should be selected shortly after the
architect such that major fixed equipment information can be compiled
before the A/E team gets very far into design development.
d. Telecommunications Consultant - The telecommunications consultant will
provide a wide variety of information pertaining to the way verbal and nonverbal communication will be transmitted in the new project which in turn
may have profound impact on the schematic layout. All too often the
telecommunications element of the project is introduced well into the design
process. The potential to include communication systems in the proximity
equation when laying out spaces should not be overlooked as modern
systems are capable of saving steps, reducing staffing requirements and
minimizing the need to meet physically with someone to communicate
effectively. The telecommunications consultant should be selected shortly
after the selection of the architect.
e. Interior Design/Signage and Graphics Consultant - The interior
design/signage and graphics consultant should be selected by the end of the
schematic design phase to assist in the aesthetic development of the finish
spaces. The scope of services provided by the interior designer should be
well defined as to not to conflict with the services being provided by the
architect. Many times the interior design consultant will also provide the
signage and graphics; however, there are separate firms that specialize in the
design and manufacturing of exterior and interior signs that may be more
appropriate for the scope of the project.
f. Geotechnical Engineer/Materials Testing Firm - The geotechnical
engineer (GE) is required in order to provide soils and foundation design
information to the A/E at least by the end of schematic design if not earlier.
It is usually desirable for the geotechnical engineer who performs the site
investigation to be the same as who provides subsurface inspection during
construction. Most inspection firms can also provide materials testing
services. It is not imperative to select the inspection/testing firm in
conjunction with the geotechnical engineering firm. Usually the design is not
far enough along at the time the GE is selected to obtain firm and reasonable
pricing for inspection and testing. Selection of an inspection and testing firm
can occur later, just prior to start of construction.
g. Preconstruction Contractor (PC) - It is advantageous to select the PC as
early as possible and, at the latest, upon completion of schematic design.
Then the PC can comment on the schematics and provide pricing for same.
5.1 External Project Team Procurement
Page 2 of 4
h. Construction Contractor - Obviously, engagement of a construction
contractor depends on many factors, including financing, rezoning, CON
issues, design completion, etc. With a given desired construction start date,
the contractor should be selected to allow time for contract negotiation and
execution, assistance with permitting, and mobilization.
i.
Relocation Services Contractor - All projects will not require a relocation
services contractor but as the effort to reduce materials management staff in
our client’s facilities accelerates relocation services will become the norm
rather than the exception. Very few firms specialize in moving contents of
healthcare facilities. Those available are very knowledgeable and can be
instrumental in the move planning effort. For this reason the relocation
services contractor should be selected shortly after the establishment of the
Owner’s Move Coordination Committee.
B. How Firms are Selected
1.) The process by which firms are selected may vary from project to project. On a
new project where there are no pre-existing relationships, there are three basic
steps to the selection process:
a.
b.
c.
d.
Prequalification
Solicitation
Evaluation of proposals, and
Selection
2.) Selection may or may not include interviews. The specific procedures for each of
these steps have been outlined below. It is important to understand the project
criteria to use for selection prior to developing request for proposals and evaluating
them.
3.) As stated earlier, the criteria for selecting a particular firm may vary between
projects. For The list of firms to be invited and the criteria or selection must be
tailored to the specific needs of a project. If an interview process is involved, often
the firms selected for interview are all qualified to do the work. The selected firm
from an interview session is often only a matter of "chemistry" and a good fit to the
specific project.
4.) In general, the selection process will often include evaluation of the following
information relative to each firm:
a. Related experience of firm - size and type of projects
b. Location of firm
c. Resumes of proposed project team
5.1 External Project Team Procurement
Page 3 of 4
d. Depth of firm's resources, including personnel, finances, etc.
e. Use of subconsultants
f. Fee structure, including markups on expenses, subconsultant, and estimated
reimbursables, if applicable
g. Unique capabilities of the firm in providing the desired services
5.) While the above represents a generalized list of criteria, it is often necessary to
evaluate voluminous information and ask several questions to extract the data
necessary for this criterion.
6.) Several documents are involved throughout the selection process as follows:
a. Request for Qualifications (RFQ) - Outlines qualification data required for
review prior to selecting firms to solicit proposals from.
b. RFQ Evaluation - Objective format for evaluating RFQ and developing a
recommendation.
c. Request for Proposal (RFP) – Outlines the information required, selection
criteria, scope of work required, calendar of events, etc., to be evaluated for
selection for interview. See Policy 5.2 “Request for Proposals” for more
information on RFPs.
d. Evaluation of Proposals - Objective format for evaluating and provide
weighted value to data supplied in proposals.
e. Invitation to Interview - Letter inviting firm to make a presentation.
f. Interview Evaluation - Objective format for evaluating a firms interview.
g. Rejection Letter – Letter informing the firms of their unsuccessful status in
the various stages of the process. This letter should be sent at each stage of
elimination.
h. Acceptance Letter – Letter to successful firm indicating their successful
status in the various stages of the process. This letter should be sent to the
successful firms at the various stages of the project. The final letter would be
to the selected firm.
DATE:
APPROVED:
5.1 External Project Team Procurement
Page 4 of 4
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 5.2
Policy Title: Request for Proposals and Bidding Phase
Category: Team Procurement Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to outline the proper process that a
Project Manager should follow when initiating and evaluating a Request for Proposal
(“RFP”).
Policy Statement:
A. Request for Proposals
1.) Proposals are required for the following:
a. Architect Services
b. Consultants
c. Medical Equipment Planners (MEPs) – Proposal should include
performance standard requirements
d. Graphics
e. General Contracting
2.) The Project Manager should prepare a Request for Proposal (“RFP”). See
Figure 5.2a – Sample General Contractor RFP for format template.
3.) No RFP should be sent to a contractor/consultant without a contract. See
Policy 6.1 - “Contract Types” for the appropriate contract for a given
situation.
4.) No RFP should be sent to potential bidders with the “A701 – Instructions to
Bidders”.
5.2 Request for Proposals
Page 1 of 23
5.) All proposal responses should include estimated reimbursable expenses,
which are to be documented on purchase requisition.
6.) If the party to whom the RFP/contract is sent, has issue with the contract,
the party should indicate within the RFP response that they “accept the
contract with no exceptions” or note specific exceptions in the RFP
response.
B. Bidding Phase
This phase is used to secure the CM guaranteed maximum price (GMP), or a
General Conditions (GC) lump sum bid and to provide oversight of all bid
solicitation and procurement processes.
Advertisement, availability and
distribution of documents are key components of accurate subcontractor
bidding. The responsibility for marketing the project to subcontractors and
distribution of documents lies with the CM/GC; however, the Project team
should be responsible for authorizations to the A/E for sufficient numbers for
documents. Adequate bidding times, in accordance with the Master Schedule,
should be allowed based on the complexity of the Project.
When the preferred method of General Contracting Method is used, the
Owner/Project Manager will solicit bids directly from Contractors and will
control the bid process. When a Construction Management Delivery Method is
incorporated and prior to receipt of bids, the Project Team should be assured
that the CM has an organized and efficient process for capturing the best value
from all bidders for incorporation with the guaranteed price. Sufficient time
should be discussed and agreed upon from the date of receipt of the
subcontractor bids to the actual presentation of the GMP. The presentation of
the GMP should contain sufficient detail to compare with previous budgets.
The Project Team and planning resources should be permitted to review bid
tabulation and other qualification information and actual bids to ascertain
agreement with the CM regarding bidder/primary recommendation. Unless
otherwise waived for the Project, the CM will require all major subcontractors
to provide appropriate performance bonds. Consideration for a waiver may be
given to the CM for bonding of the overall project if sufficient safe guards are
in place to ensure the Owner’s payments flow promptly to subcontractors.
Ultimately, the decision to bond a project or not comes down to an assessment
of risk and the tolerance or risk on the part of the Hospital Facility. With the
cost of bonds adding .5% to 2% of construction cost, the advantage of waiving
the bond is clear. However, prior to making this decision, the Project team,
planning resources, and the Hospital Facility representative should discuss this
and evaluate the many relevant factors: proposed cost of the bond, current
market conditions, financial condition of the CM and major subcontractors,
their backlog, etc. Consensus should be gained and then the decision
implemented.
5.2 Request for Proposals
Page 2 of 23
What follows is a general overview related to insurance and bonding during the
bidding process, for further information regarding Contractor Insurance
Requirements; please refer to Policy 6.3 “Insurance and Bonding”.
Within the contract and bidding documents, it is common practice to require
various bonds and insurance. They are usually provided by the contractor
within his/her bid price. The bonds required are Bid Bond, Performance Bond
and Labor/Material Bond. Insurances are usually general liability insurance
(claims made on Occurrence Form) which covers premises and operations,
lightning, extended coverage, vandalism and malicious mischief. Finally,
workman’s compensation insurance is required.
C. Bond and Insurance Types
1.) Bid Bonds - A bid bond warrants that a selected bidder will execute
the construction contract and if required, furnish a performance bond.
Generally, governmental or public agencies, who are required by law to
take public bids and who usually take the “low” bidder, require bid
bonds. Some private owners require a bid bond but a licensed surety
does not have to be used as it does for public work. Cash, certified or
cashier’s check, bank draft or money order are acceptable bid securities
in a private owner situation.
A bid bond can be a lump sum or a percentage of the contractor’s based
bid. The bid bond is a mere formality. The surety company executing
the bond has done most of its underwriting and investigation for the bid
bond so that by the time a performance bond is to be issued, all
information is available.
2.) Performance Bonds - The general conditions of the contract for
construction AIA A201-1987 Article 11.4 states that “The Owner
shall have the right to require the Contractor to furnish bonds covering
faithful performance of the contract and payment of obligations arising
thereunder”. The performance bond is issued after a proposal has been
accepted. It binds a surety company to complete the construction
contract if the Contractor defaults. It guarantees that the work will be
completed in accordance with the plans and specifications and at the
contract price. The performance bond protects the Owner only to
ensure completion of the Project. It does not guarantee to creditors of
the Contactor that unpaid obligations are directly covered.
3.) Labor and Material Payment Bonds - The labor and material
payment bond protects from liens or suits arising out of the original
Contractor’s failure to pay for labor (subcontractors) and material
(manufactured supplies). Usually the labor and material payment bond
5.2 Request for Proposals
Page 3 of 23
is issued in conjunction with the performance bond. The labor and
material bond allows the Owner to take possession of a lien free project
on completion. It is normally issued for the same coverage as the
performance bond. Occasionally a combination “performance and
payment bond” is asked for in lieu of two separate bonds. To be sure of
adequate protection, it is recommended that the bonds be separate and
not combined.
4.) Builder’s Risk Insurance - Builder’s Risk Insurance purchased by the
Contractor protects against physical damage to a building or a structure
and equipment to be installed or incorporated in the structure during the
course of construction. The most common and accepted type of
Builder’s Risk Insurance is a Completed Value Form insuring the Project
for the full contract price or at least the full value of all destructible
work. Normally a reduced rate is charged for this form of insurance
since the full value is not at risk until actual completion of the contract.
Another method for providing Builder’s Risk Insurance is on a reporting
basis for Projects with unusual construction schedules. An example
would be a building complex involving several structures that are not
directly exposed to each other.
5.) Liability Insurance - Commercial general liability insurance purchased
by the Contractor covers against claims arising out of:
a. Premises owned, rented, leased or used by the Contractor and for
operations such as actual construction work
b. Operations performed by subcontractors and sub-subcontractors
c. Bodily injury and property damage which occur after the
operations or work have been completed
d. Products manufactured, sold or distributed
e. Broad Form Property Damage Liability which modifies the old
care, custody or control exclusion and provides coverage for real
property considered in the Contractor’s care, custody or control
f. Damage by fire to premises rented or leased to the insured
Contractor if the fire damage results from the Contractor’s
negligence
g. Bodily injury or damage to property lease agreements, easement
agreements and permits required by cities, counties and other
public entities
5.2 Request for Proposals
Page 4 of 23
h. “Personal Injury” claims defined in the policy as claims for false
arrest, detention or imprisonment, malicious prosecution,
wrongful entry or eviction, libel, slander and oral or written
publication of material that violates a person’s right to privacy.
There are two (2) versions of the General Liability policy. The
“Occurrence” form and the “Claims Made” form. The coverage is
identical under both policies. The different is the “triggering” of
coverage. The “Occurrence” form uses the date of the injury or loss as
the “trigger”. With this form the Contractor is assured that protection
will be available for claims made at any time in the future if the injury or
damage occurs during the policy period. A “Claims Made” policy is
triggered when the claim is made against he insured rather that when
the covered injury or damage occurs.
6.) Once the Project team is ready to recommend approval of a guaranteed
price, a formal amendment is prepared. This amendment to the CM
contract should fully incorporate, at a minimum, the following:
a.
b.
c.
d.
e.
Guaranteed maximum price
Revised set of contract documents with a specific list attached
Revised contract price and appropriate breakdown
List of the major subcontractors
Updated schedule with any contract schedules specifically
addressed in the body of the contract
f. Updated risk assessment requirements including insurance and/or
adequate modifications that may be required.
7.) The architect and/or the contractor are not invited to the bid opening
and no details of the bid are discussed until a decision to awards is
made. Bids should be received and opened at MHHS. All bids are
privately opened.
D. Letters of Intent and Notices to Proceed
1.) Letters of Intent or Notices to Proceed need to be signed off by the
CRESS Director of Architecture and Construction or the appropriate
person at CRESS. This is necessary because CRESS policies do not
permit the Project Manager to authorize funds on behalf of MHHS.
APPROVED:
DATE:
5.2 Request for Proposals
Page 5 of 23
Figure 5.2a – Request for Proposal (SAMPLE)
MEMORIAL HERMANN HOSPITAL SYSTEM
REQUEST FOR PROPOSAL
FOR
GENERAL CONTRACTOR
PROJECT:
MEMORIAL HERMANN MEMORIAL CITY HOSPITAL
HEART CENTER
HOUSTON, TEXAS
August 12, 2004
5.2 Request for Proposals
Page 6 of 23
TABLE OF CONTENTS
1.
SCOPE OF PROJECT
2.
SCOPE OF SERVICES
3.
PROJECT TEAM
4.
AGREEMENT BETWEEN OWNER AND CONTRACTOR
5.
PROPOSAL PROCEDURES / SUBMITTAL DUE DATE
6.
PROJECT SCHEDULE
7.
GENERAL CONDITIONS DEFINITION
8.
PREAPPROVED SUBCONTRACTORS & VENDORS
9.
PROPOSAL LETTER FORMAT
10.
PROJECT COST WORKSHEET
11.
LIST OF PROPOSED G.C. SUBCONTRACTORS
12.
OWNER SUPPLIED OR ASSIGNED SUBCONTRACTORS, VENDORS OR
EQUIPMENT
5.2 Request for Proposals
Page 7 of 23
1.
SCOPE OF PROJECT
The project includes 3 stories (Levels 7, 8 & 9) approximately 90,000 S.F. of medical interiors,
including M.E.P. systems, and finishes within an existing 9 story hospital building. Levels 7, 8 &
9 are currently in shell condition, with some M.E.P. distribution of which a portion (in
accordance with the contract documents) will have to be relocated.
FF & E/ medical equipment is NOT part of this request for proposal.
General Contractor Services will include all work in accordance with the plans and specifications
as issued for the project.
5.2 Request for Proposals
Page 8 of 23
2.
SCOPE OF SERVICES
This Request For Proposal (RFP) seeks to identify a General Contractor for the Memorial
Hermann Memorial City Hospital Heart Center (MHMC).
The General Contractor (GC) will be required to work in conjunction with the owner’s
representatives and the architect to accomplish the work outlined. The selected GC will be
expected to enter into a modified AIA A111 agreement. No further modifications to the
agreement will be accepted. The GC will work with Memorial Hermann Memorial City
Hospital’s designated program manager, Irvine Team, to ensure that the construction efforts
adhere to the quality, cost, and schedule objectives of the project.
The scope of services for the GC will include those services traditionally performed by a GC and
as referred to within the agreement between owner and GC, in addition to the following:
1. Perform the services outlined in the agreement between owner and GC for the
construction of the MHMC project in a manner acceptable to the owner and in keeping
with the financial resources of the owner.
2. Agree that your firm is familiar with MHMC best practices standards before bidding on
the project and identify any discrepancies on the documents which may conflict with
the owner’s best practices standards for all components of the building.
3. Work closely with the project team to ensure resources are wisely allocated and rework
is not necessary.
4. Provide qualified project staff with the necessary experience to ensure the successful
execution of the work in a safe, quality-focused, cost effective manner within the
scheduled time frames.
Listed below are some of the areas the GC will provide services on the project;
A. Coordinate with MHMC designated program manager (Irvine Team) and architect
(Morris Architects) in the successful execution of the project.
B. Provide a complete review of the construction documents and examination of the site
prior to start of construction and to the best of your abilities as an experienced GC firm
assure the owner that the documents do not conflict with one another, that they are free
of errors and omissions and that the site and its condition which you have examined in
detail is identified accordingly on the documents provided.
5.2 Request for Proposals
Page 9 of 23
(Scope of Services continued)
C. Provide a complete code review, MEP and waterproofing systems review of the project
to the best of your ability as an experienced GC and consult or advise the owner on
recommendations, conflicts, errors, or omissions that are discovered during the preconstruction review of the project documents.
D. Assist the owner in coordinating the planning and phasing of necessary temporary relocations or shutdowns due to the progress of the work.
E. Familiarize your firm, staff, and subcontractors or suppliers with MHMC best
practices, and safety policies and assure compliance to those policies.
F. The GC agrees to enter into an owner contractor agreement as qualified within this
RFP, and agrees to meet the guaranteed maximum price, scheduled completion date
and the quality and safety requirements of the project.
G. The GC agrees to accept the role of the owner’s program manager (Irvine Team) as the
project team leader and the GC will work thru Irvine Team as the owner’s designated
representative and primary contact.
The GC understands that the owner will monitor the progress of the work and that the owner will
evaluate the success of the project based on the ability of the GC to clearly communicate
throughout the project with the other members of the project team and the GC ability to perform
the work in a quality like and safe manner within the projects schedule and agreed-to GMP.
5.2 Request for Proposals
Page 10 of 23
3.
PROJECT TEAM
At the present time the project team for the project includes the following parties:
All inquires should be directed to the Owner’s Representative / Project Manager
Owner:
Memorial Hermann Hospital System
System Contact:
Mr. Adam Lane
Director of Capital Planning & Asset Development
Memorial Hermann Healthcare System
Telephone: (713) 448-5090
Fax: (713) 448-5373
Project Manager:
(Owner’s Representative)
Mr. Chris Kay
Irvine Team
Telephone: (713) 840-1880
Fax: (713) 840-1891
E-Mail: [email protected]
Architect:
Mr. David Asaud, Project Architect
Morris Architects
Telephone: (713) 622-1180
Fax: (713) 622-7021
M.E.P.S. Engineer:
Carter Burgess
Structural Engineer:
Haynes Whaley & Associates, Inc.
Graphics:
FD2S, Inc.
5.2 Request for Proposals
Page 11 of 23
4.
AGGREEMENT BETWEEN OWNER AND CONTRACTOR
A standard AIA document, modified by the owner to meet its needs will be utilized. Refer to the
attached copy.
The selected GC is expected to have reviewed this agreement in detail prior to submitting their
response to the owner’s RFP and has included any and all proposed qualifications to this
agreement. The owner will evaluate qualifications proposed and will take such qualifications into
account when determining a final selection for GC on the project.
5.2 Request for Proposals
Page 12 of 23
5.
PROPOSAL PROCEDURES
The purpose of this Request For Proposal is to select a GC on a competitive basis to provide total
construction services to accomplish the successful execution of the work as shown within the contract
documents.
The successful participant will be expected to work with the owner, its representatives including, but
not limited to, Irvine Team and Morris Architects to help accomplish the project with satisfactory
levels of quality, cost effectiveness and the minimum time consumption or time disruption to the
owner’s existing facilities.
The successful participant is requested to indicate a stipulated fixed fee and stipulated fixed
general conditions cost for the project. The guaranteed maximum price for the cost of the work will
be fixed upon owner acceptance of the respondent’s proposal including, but not limited to, contractors
proposed subcontractors for the project.
Respondents to the RFP are requested to provide (in addition to their stipulated fees, stipulated
general conditions, and GMP on the cost of the work) a project schedule identifying by calendar days
the construction, commissioning and post construction close out phases of the work and to include
any and all critical milestone dates.
In addition to fees and schedules the owner’s acceptance of proposals will be based significantly on
the participants past experience, current staffing being proposed, and ability to be a productive team
member who can provide input beneficial to the project and the proven ability to meet an aggressive
schedule that will be required by the owner.
ALL PROPOSALS MUST INCLUDE THE FOLLOWING IN THE ORDER AS SHOWN:
A. A brief summary regarding the history and milestones of your firm.
B. A fully executed AIA qualification statement.
C. Recent professional and financial references (including a letter from your bonding
company stating that if selected bonding is available).
D. A record of all litigation that your firm is or has been involved with during the last five
years and including this fiscal year.
E. A history of both insurance claims and insurance reserves for open claims against your firm
during the last five years in excess of $10,000.00 along with proof of insurance.
F. Information on 3 to 5 recent representative projects including medical facilities similar in
scope within the State of Texas including:
• Project name and location, with photos;
• Client reference, name and contact information;
• Project scope, size, cost and completion schedule.
G. Identify and describe the key members of your team being proposed, including an
organization chart. Include resumes, photos, and references. Individuals should include at
a minimum.
• Project executive
• Project manager
• Project superintendent
• Project engineer
(Proposal Procedures continued)
5.2 Request for Proposals
Page 13 of 23
H. Provide any indication of ownership in any companies that may participate in any portion
or capacity with the project.
I. A phasing and logistics plan for the project.
ALL PARTICIPANTS SHALL RECOGNIZE AND CONFORM TO THE FOLLOWING
STIPULATIONS REGARDING THE SUBMITTAL OF THIS PROPOSAL:
A. Each participant, by submitting a proposal, represents that it has read and understands this
Request for Proposal and that his or her proposal is made in accordance herewith on or
before 31 August 2004 @ 2PM.
B. Participants shall promptly notify Chris Kay of any ambiguity, inconsistency or error which
they may discover upon examination of the Request for Proposal.
C. All clarifications, interpretations, exceptions or qualifications to this Request for Proposal
will be made to Chris Kay at the time of receipt of this Request for Proposal. Any
interpretation, correction, or change of the Request for Proposal will be made by a written
addendum. Interpretations, corrections or changes of the Request for Proposal made in any
other manner will not be binding, and participants shall not rely upon such interpretations,
corrections or changes.
D. Proposals shall be submitted on forms identical to the proposal letter included in this
Request for Proposal. Proposals shall be typewritten only.
E. Each proposal shall state that the participant is a sole proprietor, a partnership, a
corporation or a legal entity. Each copy shall be signed by the person or persons legally
authorized to bind the participant to a contract. A bid by a corporation shall give the state
of incorporation and have the corporate seal affixed thereto.
F. All proposals shall be submitted with a total of three (3) copies. All proposals will be
submitted in a sealed opaque envelope addressed to the party receiving the proposal and
shall be identified with the project name. Proposals shall be submitted in accordance with
the date and time stipulated. Participants shall assume full responsibility for timely
delivery at the location designated for receipt of the proposals. Oral, facsimile, telephonic
or telegraphic proposals are invalid and will not receive consideration.
G. These proposals submitted cannot be withdrawn, modified or canceled by the participant
for sixty (60) days after the date of proposal submittal.
H. Prior to the time and date designated for receipt of proposals, any proposal may be
modified or withdrawn by notice to the Owner at the place designated for receipt of the
proposals. Such notice shall be in writing over the signature of the participant. Withdrawn
proposals may be resubmitted up to the time designated for the receipt of proposals
provided that they fully conform to the Request for Proposal.
I. All proposals will be opened privately. The Owner will not issue proposal results.
J. The Owner shall have the right to reject any or all proposals, including but not limited to
those that are in any way incomplete, inconsistent or irregular with respect to the Request
for Proposal.
5.2 Request for Proposals
Page 14 of 23
(Proposal Procedures continued)
K. It is the intent of the Owner to award a contract for the project to a responsible General
Contractor that offers the best team for the overall requirements of this Request for
Proposal. The contract will be executed upon the selection of that team. The Owner shall
have the right to waive any informality or irregularity in any proposal received and to
accept the proposal which, in its judgment, is in its own best interest.
L. Prior to the commencement of work, the successful participant shall furnish evidence of
insurance covering the faithful performance of the Contract.
M. Participants shall return their copy of the Request for Proposal with the proposal
response.
SELECTION OF THE GC WILL BE BASED ON THE FOLLOWING CRITERIA:
A. The qualifications and proven experience of the proposed firm.
B. The experience of the proposed firm in the construction of medical facilities.
C. The ability of the construction team to produce excellent proven results and maintain cost
and schedule.
D. The fee and general conditions based on a stipulated fixed dollar amount.
E. The project schedule phasing and logistics plan. The Contractor should include a two week
Owner negotiations/approval period at the beginning of the project for contract execution.
F. The demonstrated ability/capacity of the firm to work effectively with the project team and
owner’s representatives.
G. The respondent’s safety record.
H. The respondent’s financial and bonding resources.
Please note that the owner assumes no obligation for the costs your firm may incur in preparing and
submitting this proposal. Any materials submitted in connection with this process will become the property
of the owner.
RFP SUBMITTAL DUE DATE:
Submit (3) three signed originals by 2PM CDT 12 August 2004 to:
Mr. Adam Lane
Director, Capital Planning and Asset Development
Memorial Hermann Healthcare System
9401 SW Freeway, Ste 1103A
Houston, TX 77074
Submit (1) copy of original by noon CDT 13 August 2004 to:
Chris Kay
Irvine Team
One Riverway, Suite 1800
Houston, TX 77056
5.2 Request for Proposals
Page 15 of 23
6.
PROJECT SCHEDULE
It is expected that the construction phase will begin immediately after the owner’s notice to proceed is
issued.
The owner requires the project to be completed within 6 months from the date of the owner’s notice
to proceed.
The respondent to this RFP should include a construction schedule, and logistics plan illustrating the
proposed phasing and sequence of the work to achieve the schedule goal set forth in this proposal.
5.2 Request for Proposals
Page 16 of 23
GENERAL CONDITIONS DEFINITION
7.
GENERAL CONDITIONS OUTLINE
The following items of work will be considered general conditions and should not be included in the cost of
work.
The owner intends to award a contract for construction services based on a fixed fee and fixed general
conditions with the cost of work to be a guaranteed maximum price.
GENERAL CONDITIONS SHOULD BE LIMITED TO:
(All other scopes of work excluding fee should be included in the cost of the work as identified by the
contract documents)
Miscellaneous Reimbursables:
•
•
•
•
•
•
•
All temporary job site facilities (including installation & maintenance, etc.)
Office supplies
Office equipment
Telephones/Facsimile/Computers/Copiers
Project photos
Miscellaneous office / administrative expenses
Pre-construction services (including, but not limited to, estimating and purchasing)
Staff Reimbursables:
•
•
•
•
•
•
•
All G.C. project staff (including home office staff involved with project)
Staff burdens / Fringes, Taxes, and Insurance
Staff vacations, relocation fees, bonuses or other expenses/benefits
Permits / Insurance, Sub bonds, Association fees
SubGuard or SubBonds
Builders risk insurance
Contractors equipment insurance (if applicable)
Project Support Costs:
•
•
•
•
•
•
•
•
•
•
•
8.
Safety programs and expenses (including safety equipment and supplies)
Surveying and equipment
Security
Signage
Other consultants (please specify)
Staff autos, fuel, maintenance, tires, etc.
Project accounting and cost support
Miscellaneous printing costs (after permit documents)
Scheduling
Home office support services (equipment and labor)
Cell phones and radios
PRE-APPROVED VENDORS / SUBS
5.2 Request for Proposals
Page 17 of 23
Memorial Hermann Healthcare System has pre-approved the following vendors / subcontractors to be used
for seeking bids for the following scopes of work for The Memorial City Heart Center Project.
HVAC
LOW VOLTAGE / CABLING
Gowen Mechanical
Way Engineering
T.D. Industries
Letsos Mechanical
Fisk
MCA
PLUMBING
SECURITY / CCTV & ALARMS
Humprhries
Gowen Mechanical
Way Engineering
Fisk
SecureNet
Siemens
T.D. Industries
MCA
Access & Video Integration
D/A MidSouth
ELECTRICAL
CONTROLS
To Be Assigned
MidWest Electrical
Fisk Electrical
Melton Electrical
Capp Electric
Merit Electric
8.1
AV
To Be Assigned
MILLWORK
To Be Assigned
ASSIGNED VENDORS, SUPPLIERS, SUBCONTRACTORS
It is Memorial Hermann’s intent to assign the following trades to the successful
general contractor.
•
•
•
•
Audio visual equipment subcontractor
Architectural woodwork and millwork subcontractor
Decorative glass subcontractor
Building controls subcontractor
5.2 Request for Proposals
Page 18 of 23
9.
PROPOSAL LETTER FORMAT
_____ August 2004
Adam Lane
Director, Capital Planning and Asset Development
Memorial Hermann Healthcare System
9401 Southwest Freeway, Suite 1103A
Houston, Texas 77074
RE:
Memorial Hermann Memorial City Hospital Heart Center
General Contractor Services
Dear Mr. Lane:
We are pleased to submit our proposal to you to provide General Contractor Services. Our proposal is
based on the Request For Proposal issued on July 23, 2004. Should our proposal be accepted, we will
enter into a contract for the work under the terms and conditions requested within the RFP.
We propose the following:
1. A fixed fee amount of:
$____________________
2. A fixed general conditions amount of:
$____________________
3 A guaranteed maximum price on the cost of the work of:
$____________________
(Excluding Fee & GC costs listed above)
4. A scheduled completion of __________ calendar days
5. A ______% markup on changes to the work (that effects the
scheduled completion of the project).
6. A proposed shared savings of __________ to the owner, and __________ to the GC.
7. A P&P bond cost of:
•
•
•
1.
2.
3.
4.
$____________________
Please refer to the attached schedule of values and list of proposed subcontractors as requested
within the RFP.
Please refer to our attached proposed project phasing and logistics plan along with our project
team organization chart.
Also enclosed herewith are the following items of information requested in the Request For
Proposal.
A brief history of the firm;
An AIA qualification agreement;
History of litigation over the past five years;
Insurance claims and reserves for open claims over the past five years;
5.2 Request for Proposals
Page 19 of 23
(Proposal Letter Format continued)
5. Information on similar projects;
6. A listing of ownership interests (if any) in any firms that may participate in the project.
Also, returned herewith is the original Request For Proposal document.
This proposal will not be withdrawn or amended for a minimum of sixty (60) days from the date submitted.
Thank you for the opportunity to submit this proposal.
Yours Truly,
___________________________________
Company Officer (Title)
___________________________________
Notary
________________________________________________
Corporate Seal
5.2 Request for Proposals
Page 20 of 23
10.
PROJECT COST WORKSHEET
General Contractor Proposal
Schedule of values proposal form
"Cost of the work"
PROJECT NAME: _______________________________________
Proposers Name: _______________________________________
Date: _________________________________________
AMOUNT $
Demolition
Concrete
Steel / Misc. Metals
Drywall / Framing
Water Proofing / Roofing
Rough Carpentry
Lath & Plaster
Glass Glazing
Millwork / Finish Carpentry
Doors, Frames, Hardware
Terrazzo
Tile Finishes
VCT Carpet Base
Paint / VWC
Wallguards / Rails
Wall Protection – Wains Coating
Specialties
Security
Fire Sprinkler System
Plumbing
Electrical
Low Voltage
Fire Alarm
HVAC
Controls
The Total GMP on the cost of work is:
_________________
General Contractors Proposal
5.2 Request for Proposals
Page 21 of 23
11.
LIST OF PROPOSED SUBCONTRACTORS
General Contractor Proposal
Proposed Subcontractor Listing
PROJECT NAME:
Memorial Hermann Memorial City Hospital Heart Center
Proposers Name: _____________________________________________________________
Date: _________________________
•
Subcontractor
•
Subcontractor
•
Subcontractor
•
Subcontractor
•
Subcontractor
5.2 Request for Proposals
Page 22 of 23
12.
OWNER SUPPLIED OR ASSIGNED SUBCONTRACTORS, VENDORS, OR EQUIPMENT
To be provided by owner, coordinated by G.C. or assigned to G.C. (Owner’s option)
•
Millwork will be assigned to the successful General Contractor.
•
Medical equipment will be owner furnished and owner installed, with the exception of medical
equipment listed in the contract documents as G.C. installed.
•
Building control systems will be assigned to the successful general contractor.
•
Banquet seating will be assigned to the successful general contractor.
•
Decorative art glass will be assigned to the successful general contractor.
•
Non medical furniture will be supplied and installed by owner.
coordination of all FF&E.
5.2 Request for Proposals
The GC is to facilitate the
Page 23 of 23
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 5.3
Policy Title: Policy on Bid and Rebid for Products and Services
Category: CORPORATE ADMINISTRATION
Original Date: 05/22/2003
Last Review Date: 4/27/04
Supersedes: 5/22/03
Policy Purpose: To ensure that Memorial Hermann is receiving the best valued
for products and services being provided to Memorial Hermann by its vendors.
For products or services where the annualized dollar volume to be paid by
Memorial Hermann will be greater than $100,000, the Chief Financial Officer
(CFO) of MHHS shall formally evaluate whether to Bid or Rebid for these
products or services at least every 3 years. The CFO shall also present the
results of the Bid or Rebid evaluation to the Audit Committee of the Board on a
quarterly basis. Contracts negotiated by the Group Purchasing Organization
(VHA) will be excluded from this process because the VHA already adheres to a
Bid/Rebid process.
Policy Statement:
A. Definitions
1.) Bid/Rebid: Obtain a proposal from at least three (3) providers of the
particular product or service, based on a formal and consistent request
for proposal using a standard format from the CRESS department.
2.) Items Excluded from this Policy: Minor Construction, Minor Repairs and
Maintenance (unless the total dollar amount for an individual Vendor
exceeds $100,000 per year) and Utilities.
3.) Major Vendors with multiple products: Major healthcare vendors often
provide more than one product. When this is the case, the Bid/Rebid
process will apply to major product categories where the $ volume of
purchases exceeds $100,000 per year.
5.3 MHHS Bid and Rebid Policy
Page 1 of 3
B. Procedure
1.)
To initiate this policy, the CFO shall convene a group to screen the
complete population of vendors (not excluded above) and product
categories from Major Vendors to determine a suggested schedule and
timeline for vendors and products to undergo the rebidding process.
This schedule and timeline shall then be reviewed by the Executive
Council. Subsequent to the Executive Council’s review and approval, the
CFO shall present the prioritized schedule and timeline to the Audit
Committee of the Board of Driectors. Once all applicable vendors and
products have been screened and reviewed for Bid or Rebid, applicable
vendors and products shall be screened for review on a rolling 3-year
basis.
2.)
MHHS’ Purchasing Department shall maintain a master list of providers
of products or services and related contracts and contract terms.
3.)
Each quarter, the Purchasing Department shall prepare a list of vendors
and products due for review, sorted in descending order by annual dollar
volume and provide this list to the CFO for screening and review. This
list shall include the following categories:
a. Name of Vendor
b. Category of Vendor, i.e. Consulting, Legal, Outsourced Pharmacy
c. Services of products provided
d. Date of latest Bid or Rebid
e. Date of contract, length of term and other pertinent contract
provisions
f. Estimated total annual $ volume of business done with MHHS by
the Vendor
g. Estimated total annual $ volume of major product where the
vendor is a Major Vendor with multiple products
4.)
Based on the MHHS Executive Council review and recommendation for
Bid or Rebid and subsequent review and concurrence from the Audit
Committee, the AVP/VP responsible for the product or services shall
proceed with the request for proposal process. MHHS Corporate
5.3 MHHS Bid and Rebid Policy
Page 2 of 3
Purchasing Department shall assist in all request for proposal Bid or
Rebid processes to ensure consistency and independence.
5.)
Prior to entering into a purchase agreement for products or services, the
AVP/VP shall obtain approval of MHHCS’ Legal department.
6.)
Unless otherwise approved by the Executive Council, no contractual
arrangement to purchase products or services shall have a term longer
than 3 years.
APPROVED:
Carol E. Aulbaugh
Senior Vice President and CFO
Kenneth J. Wine
Executive Vice President and COO
DATE:
April 27, 2004
5.3 MHHS Bid and Rebid Policy
Page 3 of 3
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 6.1
Policy Title: Contract Types
Category: Contract Development Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to illustrate the different types of
construction contracts currently utilized by Memorial Hermann Hospital System. The
Project Manager should consult with CRESS Management to determine which contract
should be used for the Project in which they are to manage. Current versions of each
contract form are kept on file within the CRESS Department and can be obtained by
requesting the appropriate form from CRESS Management.
Policy Statement:
A. A101 – Standard Form of Agreement Between Owner and Contractor (where
the basis of payment is a STIPULATED SUM). This contract form requires the
A201 General Conditions form (see below).
B. A107 – Abbreviated Standard Form of Agreement Between Owner and
Contractor for Construction Projects of Limited Scope (where the basis of
payment is a STIPULATED SUM).
C. A111 – Standard Form of Agreement Between Owner and Contractor (where
the basis of payment is the COST OF THE WORK PLUS A FEE with a negotiated
GMP). This contract form requires the A201 General Conditions form (see
below).
D. A121 (with Amendment #1) – Standard Form of Agreement Between
Owner and Construction Manager (where the CM is also the Constructor). This
contract form requires the A201 General Conditions form (see below).
6.1 Contract Types
Page 1 of 2
E. A201– General Conditions of the Contract for Construction. The A201 General
Conditions contract form is for use with the A101, A111 and A121 contract
forms.
F. B141 (Part 1&2) – Standard Form of Agreement Between Owner and
Architect (with Standard Form of Architect’s Services).
G. B171 – Standard Form of Agreement Between Owner and Architect for
Architectural Interior Design Services.
H. General Consultant Agreement (with Exhibits A&B).
APPROVED:
DATE:
6.1 Contract Types
Page 2 of 2
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 6.2
Policy Title: Construction Contract Approval
Category: Contract Approval Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to establish guidelines for the approval
and execution of construction contracts.
Policy Statement:
Contracts may be signed only by the authorized official as designated herein
below. The Memorial Hermann corporate party to a contract should be that
corporate subsidiary the assets of which are the primary subject of the contract
(e.g. the Hospital system for services rendered by or to one or more hospitals,
including construction services).
A. Construction Services
1.) Requires same approvals as Purchase Requisitions and Invoices (see
Policy 4.1 – “PO Process” & 4.3 – “Invoice Process”).
2.) Requires additional review of VP of CRESS (A CRESS representative will
forward for legal review).
3.) Project Manager should:
a. Obtain four (4) originals of contracts (one for contractor, Project
Manager, legal and CRESS) and three (3) construction change
orders and change directives (one for contractor, Project
Manager and CRESS)
b. Verify that budgeted funds are available
6.2 Contract Approval Process
Page 1 of 2
c. Prepare purchase requisition, enter the purchase requisition into
the Purchase Requisition Log (See Policy 4.1 – “Purchase
Order Process”), and attach original contracts, construction
change orders and change directives and forward to the CRESS
Financial Analyst for processing.
4.) The CRESS Financial Analyst will:
a. Verify budget
b. Route contract/Change Order/Change Directive for appropriate
signatures
c. Return two signed, executed copies of the contract/Change
Order/Change Directive with the pink copy of the purchase
requisition to the Project Manager (who will distribute to the
Project Manager files and contractor)
APPROVED:
DATE:
6.2 Contract Approval Process
Page 2 of 2
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 6.3
Policy Title: Insurance and Bonding Requirements
Category: Contract Development Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to detail the requirements for
insurance and bonding on the part of the engaged Contractor.
Policy Statement:
CONTRACTOR INSURANCE REQUIREMENT
Contractor will keep in force during the course of the contract, policies of insurance
covering Worker’s Compensation and Employer’s Liability, Automobile Liability and
Commercial General Liability, and if there is design responsibility, Professional Liability,
with minimum limits as provided below or as modified by the Contract Documents, if
any, with an insurance company licensed to operate in the State where work is being
done. Contractor will advise its insurer of its obligations under the contract documents,
including indemnification, and will provide contractual coverage as part of its
commercial general liability insurance with limits sufficient to discharge its obligations
therein set forth. Contractor will furnish, before any work is started, certificates from
said insurance companies showing the coverage, limits of liability, and policy expiration
dates as required herein.
As a condition of performing work as a Contractor with Memorial Hermann Hospital
System (MHHS), the Contractor should provide satisfactory evidence of their insurance
coverage as follows:
A.) Minimum Scope of Insurance
6.3 Insurance and Bonding
Page 1 of 7
Coverage should be at least as broad as:
1.)
Insurance Services Office Commercial General Liability coverage
(“occurrence” form CG 0001, Ed. 10/1993 or later edition).
2.)
Insurance Services office form number CA 0001 (Ed. 12/1993 or later
edition) covering Automobile Liability, Symbol 1 “any auto”
3.)
Worker’s Compensation Insurance and Employers’ Liability insurance on
forms approved by the Texas Department of Insurance.
B.) Minimum Limits of Insurance
Contractor should maintain limits no less than:
1.)
Commercial General Liability:
$1,000,000 limit per occurrence / $2,000,000 General Aggregate /
$2,000,000 Products Completed Operation Aggregate for bodily injury,
personal injury and property damage.
The General Aggregate limit should apply separately to this Project
location.
2.)
Automobile Liability:
$1,000,000 limit per accident for bodily injury and property damage
3.)
Workers Compensation and Employer’s Liability:
Providing Statutory Limits for the Sate of Texas and Employers’ Liability
with limits of $1,000,000 per accident Bodily Injury by Accident /
$1,000,000 policy limit Bodily Injury by Disease / $1,000,000 each
employee Bodily Injury by Disease
a) Subcontractors’ Employers’ Liability Limits:
$500,000 each accident Bodily Injury by Accident / $500,000
policy limit Bodily Injury by Disease / $500,000 each employee
Bodily Injury by Disease
4.)
Excess Liability (Umbrella):
$10,000,000 per occurrence / $10,000,000 general aggregate /
$10,000,000 completed operations aggregate
a) Subcontractors’ Excess Liability (Umbrella) Limits:
6.3 Insurance and Bonding
Page 2 of 7
$2,000,000 per occurrence / $2,000,000 general aggregate /
$2,000,000 completed operations aggregate
5.)
Contractors’ Pollution Liability:
$5,000,000 each claim / $5,000,000 aggregate
a) Subcontractors’ Contractors’ Pollution Liability Limits:
$1,000,000 each claim / $1,000,000 aggregate
C.) Other Insurance Provisions
The policies are to contain, or be endorsed to contain, the following provisions:
1.)
Commercial General Liability, Automobile Liability Coverages, and
Contractors’ Pollution Liability:
a) MHHS, its officers, directors, shareholders, partners, managers,
members, employees, agents, subsidiaries, and affiliates, and the
foregoing’s respective successors, assigns, heirs, estates, and
personal representatives collectively called herein, the
“Indemnified Parties” are to be covered as insureds as respects:
liability arising out of activities performed by or on behalf of the
Contractor, general supervision of the work by MHHS, products,
and completed operations of the contractor, premises owned,
occupied or used by the Contractor, or automobiles owned,
leased, hired, or borrowed by the Contractor. The coverage
should contain no special limitations on the scope of protection
afforded to the indemnified parties.
b) The Contractors’ insurance coverage should be primary insurance
as respects the indemnified parties. Any insurance or selfinsurance maintained by the indemnified parties should be
excess of the Contractors’ insurance and should not contribute to
it.
c) Any failure to comply with reporting provisions of the policies
should not affect coverage provided to the indemnified parties.
d) Completed Operations coverage should be maintained for 10
years after substantial completion of the work.
e) Contractors’ Pollution Liability should include coverage for mold.
2.)
Workers’ Compensation and Employers’ Liability Coverage:
6.3 Insurance and Bonding
Page 3 of 7
a) The insurer should agree to waive all rights of subrogation
against the indemnified parties for losses arising from work
performed by the contractor for MHHS.
b) MHHS should require an “Alternate Employer” endorsement,
naming the indemnified parties as the alternative employer.
3.)
All Coverages:
Each insurance policy required by this clause should be endorsed to
state that coverage should not be suspended, voided, canceled by
either party, reduced in coverage or in limits except after 60 days’ prior
written notice by certified mail, return receipt requested, has been
given to MHHS.
D.) Builder’s Risk Coverage
1.)
MHHS master property policy (Chubb) automatically affords Builders’
Risk coverage (property coverage only excluding flood) for all Projects
$5,000,000 or less. Coverage applies only to locations scheduled on
MHHS’s policy. For any Projects requiring Builders’ Risk coverage that
exceed $5,000,000 in completed value, a separate Project specific
Builders’ Risk is required. Builders’ Risk coverage for Projects that
exceed $5,000,000 will be obtained by MHHS. However, at MHHS’s
option, Builders’ Risk coverage for Projects exceeding $5,000,000 may
be requested to be provided by the General Contractor
The coverage will be subject to policy, terms, conditions, exclusions,
and will cover all buildings, structures, and materials to be incorporated
into and forming a part of the structure, whether or not such buildings,
structures, materials, or real property will have been supplied or made
available to the Contractor or subcontractors by MHHS.
2.)
The Builders’ Risk Insurance may contain such deductibles as MHHS
may select. The Contractor should be accountable for the first $25,000
deductible each claim arising from loss for all perils including flood,
earthquake, and wind. The Contractor should require each tier of
subcontractor to be accountable for the first $10,000 deductible each
claim arising from loss for all perils including flood, earthquake, and
wind. Any deductible amounts remaining after the application of such
deductible should be borne by MHHS.
3.)
MHHS and/or its insurer(s) will not be responsible in any way for
equipment, tools, construction trailers, and any other property of similar
nature of the contractor or its employees or subcontractors which are
not consumed in or do not form a part of the completed work.
6.3 Insurance and Bonding
Page 4 of 7
4.)
Any insured loss should be adjusted with MHHS and made payable to
MHHS as trustee for the insureds, as their interest may appear, subject
to the requirements of any applicable lender’s clause.
5.)
The contractor should agree to waive and should require each
subcontractor to waive all rights of subrogation against each other and
MHHS, its officers, and employees for damages caused by fire or other
perils to the extent covered by Builders’ Risk Insurance. This waiver
should not apply to loss or damage for which contractor, manufacturer,
supplier, or vendor has agreed under a guarantee or warranty to make
good.
6.)
Contractor should report the value, time and means/location of any
transit to MHHS prior to transit or storage. Contractor should be
responsible for any loss that is uninsured or underinsured arising out of
such failure to notify MHHS.
E.) Acceptability of Insurers
Insurance is to be placed with insurers with an A.M Best rating of no less than
“A”, FSC VII.
F.) Verification of Coverage
Contractor should furnish MHHS with certificates of insurance effecting coverage
required by this clause. All certificates are to be received and approved by
MHHS before work commences. MHHS reserves the right to require complete,
certified copies of all required insurance policies at any time. Certificates of
Insurance are to be provided annually as evidence thereof of Completed
Operations coverage for five (5) years after completion of the work.
G.) Subcontractors
Contractor should include all subcontractors as insureds under its policies or
should furnish separate certificates for each subcontractor. All coverages for
subcontractors should be subject to all of the requirements stated herein.
H.) Surety Bonds
1.)
Not later than ten (10) days from and after date on which a contract
between MHHS and Contractor is entered into, Contractor should
execute, as Principal, bonds joined into by a Surety Company,
acceptable to MHHS as follows:
6.3 Insurance and Bonding
Page 5 of 7
a) Bonds should remain in-force for and until one year after final
completion and final acceptance by MHHS of the work.
b) Surety Company executing bonds should be acceptable to MHHS,
authorized to do business in Texas and acceptable according to
the latest list of companies holding Certificates of Authority from
the United States Secretary of the Treasury.
I.) Expired Coverages During Term of Contract
If the coverages required herein have an expiration or renewal date occurring
during the term of the contract, such renewal certificates are to be delivered
prior to the expiration of the existing coverage(s). Each coverage specified
herein should be carried until the respective obligations required to be performed
have been completed in accordance with the terms of the contract.
J.) Warranty Work
If Contractor or any tier of subcontractor is required to return to the site of the
work during a warranty period, insurance should be provided and maintained as
required herein.
K.) Vendors, Suppliers, Material Dealers, Off-site Fabricators, Haulers, and Others
The Contractor and each tier of subcontractor should require their respective
vendors, suppliers, material dealers, off-site fabricators, haulers, and others who
merely transport, pick up, deliver, or carry materials, personnel, parts or
equipment or any other items or person to or from the site of the work to
maintain Workers’ Compensation, General Liability, Automobile Liability, and if
purchased, Umbrella Liability coverages. Contractor should furnish certificates of
insurance to MHHS.
L.) Aviation and/or Marine
Should aircraft or watercraft of any kind be used by Contractor or any tier of
subcontractor or anyone else on their behalf, Contractor or subcontractor should
maintain or cause the operator of the aircraft or watercraft to maintain aircraft or
watercraft public liability insurance for bodily injury, property damage including
passenger liability in limits of $5,000,000 each occurrence each aircraft or
watercraft.
M.) Failure to Provide Certificates of Insurance or to Carry and Maintain Insurance
Failure of the Contractor to provide certificates of insurance and/or carry and
maintain such insurance in force as required herein or to require the same of
6.3 Insurance and Bonding
Page 6 of 7
their subcontractor should constitute an event of default under the contract.
MHHS maintains the right to withhold the issuance of the Notice to Proceed, to
deny access to the site of the work, or to withhold payments under the
contract until MHHS receives proper evidence of insurance as required herein.
N.) Professional Indemnification
Consultants will defend, indemnify and hold harmless the MHHS Facility from
all claims and lawsuits, including reasonable legal fees, arising from any and all
negligent acts, errors or omissions of the Consultant in the performance of
professional services under this agreement, to the extent that the Consultant is
responsible directly or indirectly for such losses.
O.) Royalties and Patents Indemnification Clause for Consultant
Consultants will indemnify and hold the MHHS Facility harmless from all liability
of alleged or actual infringement of any patent resulting from the use of
apparatus or equipment furnished, designed or specified by Consultant or from
the use of any process designed or specified by consultant or effected by said
apparatus or equipment, and consultant should indemnify and hold the MHHS
Facility harmless from and against all costs, legal fees, expenses and liabilities
incurred in or about any claim of or action for such infringement; provided,
however, that the MHHS Facility promptly transmits to Consultant all papers
served on the MHHS Facility in any suit involving such claim of infringement.
If, because of actual infringement, the use of such apparatus, equipment
design or process is enjoined, Consultant will refund the purchase price thereof
in proportion to the length of service uncompleted, and the life of such
apparatus or equipment being assumed as five (5) years.
Consultant should be required to grant the MHHS Facility a non-exclusive,
royalty-free license under patents now or hereafter owned by Consultant
covering any machines, apparatus, processes, articles, designs or products
included in the Work.
APPROVED:
DATE:
6.3 Insurance and Bonding
Page 7 of 7
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 6.4
Policy Title: Role of Risk Management
Category: Contract Approval Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to detail the roles of the MHHS Risk
Management Department and MHHS’ Insurance Carrier in capital construction
projects.
Policy Statement:
A. Role of Risk Management and Insurance Carrier
1.) System Risk Management (Risk Manager and Insurance Specialist) and
Memorial Hermann Hospital System’s (MHHS) Insurance Carrier should be
should be notified (and appropriate plans/documents transmitted) during
project planning (SD/DD time frame) for kept apprised by the Project Manager
(or Facility Engineer) anytime the Facility undertakes the following:
a. All projects that have a TIV (property and equipment costs along with
estimated BI values) of $1 million or greater.
b. Projects involving high value equipment such as OR suites, MRI suites,
CT scanner rooms, Catheterization Labs, Central Pharmacy, EDP
scanner, etc.
c. All projects, regardless of cost, involving high hazard areas such as
kitchens, Central Plant areas, Central Supply, Laundry, helipads, etc.
6.4 Role of Risk Management
Page 1 of 11
d. All new building construction projects (primary building construction
features along with fire protection information) that include flood plain
information and flood mitigation specifications, if any.
2.) It is not necessary for the two parties to review small head re-locations, small
projects (less than $1 million in TIV) involving patient care rooms, lobby areas,
administrative offices, etc.
3.) It is important to provide information to these parties regarding any projects
that fit the aforementioned criteria to ensure that timely comments can be
obtained from Risk Management and the MHHS Insurance Carrier so that
MHHS can keep coverage in effect for MHHS properties as they change.
4.) Figure 6.4a – Construction Protection Requirements and Figure 6.4b –
Computer Room Protection Requirements contains current Insurance
Carrier construction guidelines to help reduce the possibility of having to
rework plans based upon the Insurance Carrier’s requirements.
APPROVED:
DATE:
6.4 Role of Risk Management
Page 2 of 11
Figure 6.4a – Construction Protection Requirements
FOR LOSS CONTROL PURPOSES ONLY
CHUBB GROUP OF INSURANCE COMPANIES
Loss Control Services
9606 Mopac Expressway North, Suite 925
Austin, TX 78759
CONSTRUCTION & PROTECTION REQUIREMENTS
Frame or Ordinary Construction
1.) Buildings of frame or ordinary construction shall be fully automatic sprinklered.
2.) Horizontal fire/smoke areas shall have separation by a minimum of a 3-hr. rated parapeted fire
wall with all openings protected with 3-hr. rated U. L. listed Class A automatic self closing fire
doors.
Non-Combustible or Fire Resistive
1.) Non-combustible or fire resistive constructed hospitals should be fully sprinklered. Nonsprinklered hospital buildings shall be 100% equipped with a fire detection system of the
products of combustion type.
2.) Guidelines for separation:
• Three (3) hour (as opposed to four (4) hour) fire ratings on masonry walls. ) Dry wall or
gypsum board on metal or wood studs or similar non-masonry construction is not an
acceptable fire division.
• Single automatic self-closing 1 ½ hour rated (Class B) fire door protecting all doorways,
stairways, elevator shafts.
• Protection of all other openings which penetrate fire walls, floors or ceilings (i.e., penings for
electrical cable, piping, ductwork, etc.) in accordance with the standards set by the
appropriate regulatory agency, commission or organizations (e.g., The Joint Commission of
Accreditation of Healthcare Organization).
• Two (2) floors subject for FIRE RESISTIVE construction, with two (2) hour cut-offs from floor
to floor.
• Four (4) floors subject for NON-COMBUSTIBLE construction, with two (2) hour cut-offs from
floor to floor.
New Construction or Building Additions
1.) Construction should be of non-combustible or fire-resistive construction.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 3 of 11
FOR LOSS CONTROL PURPOSES ONLY
2.) Roof - Class I (Factory Mutual Standard) or non-combustible UL-listed roof assembly should be
specified and must meet the wind load design requirements per ASCE-7(American Society of
Civil Engineering).
3.) Fire Areas - Building should be subdivided into fire areas with a maximum of 100,000 square
feet.
4.) Fire walls should be reinforced concrete or masonry 3-hour construction. The walls should be
designed to confirm to NFPA 221. The wall should be freestanding with Class A fire doors
protecting all openings and all wall penetrations meeting UL Fire Resistance Standards. The
number of openings in the wall should be kept to a minimum. There should be no unprotected
steel columns permitted within the firewall. Roof support details at the fire wall junction should
be such that collapse of the roof on either side will not affect the integrity of the firewall. Where
a roof deck deficient to the Class I FM Standard is utilized, the firewall should be parapeted 3
feet through the roof.
5.) All openings should be protected by fire doors and meet the following criteria:
a. At least a 3 hour rating, UL Listed or FM Approved.
b. Installed as per NFPA 80 Fire Doors and Windows.
c.
To minimize the possibility of sprinkler main rupture due to building settling, metal
sleeves should be used to surround any sprinkler main penetration. These sleeves
should have an inner diameter of 1.5 times the outer diameter of the sprinkler main.
d. All wall/floor penetrations should be sealed with UL listed materials to minimize the
spread of fire. All openings (i.e. ventilation ducts, electrical, etc.) should be protected by
3 hour rated UL Listed or FM Approved automatic closing fire dampers.
6.) Water Damage Potential:
a. The surrounding land should pitch away from the building and drains and/or pumps
should discharge the water well away from foundation walls and event levels openings.
b. All vital electrical and boiler machinery equipment should be placed at an above grade
level.
c.
Basement sump pumps, with back flow preventors, should be designed for adequate
capacity and a back up pump should be available on site.
d. Pumps should be tied into the emergency generator.
e. All remaining equipment and inventory should be placed on shelves or pedestals a
minimum of four inches from the floor and anchored.
f.
Hydrostatic seal concrete floor slabs and below grade walls.
Fire Protection
1.) Provide sprinkler protection to conform to current NFPA 13.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 4 of 11
FOR LOSS CONTROL PURPOSES ONLY
2.) Areas of particular concern should be provided with additional or special fixed extinguishing
systems and include:
a. NUCLEAR MEDICINE, MRI’s, CT SCANNERS, X-RAY EQUIPMENT FACILITIES Describe the special shielding construction requirements, storage and handling of
radioactive isotopes, number & types of equipment, any special fire detection or
extinguishing systems.
b. HYPERBARIC OR HYPOBARIC CHAMBERS - Describe the size, construction &
location of the chambers, operating pressures and protection systems. Reference
NFPA 99, Chapter 19, Hyperbaric Facilities.
c.
KITCHEN AND LAUNDRY FACILITIES - Describe cooking capabilities in the cafeterias
or kitchens and fixed fire extinguishing systems above the equipment and in exhaust
hoods. Describe laundry facilities. Include number and type of equipment, particularly
dryers. What energy source is used for dryers,steamers and presses? Any special fire
protection? References NFPA 96, 82, 54.
d. UTILITIES (ELECTRIC, GAS, WATER), BACK-UP CAPABILITIES, DURATION Describe the type of utilities hospital is dependent on, back-up systems, fuel supplies,
protection & detection. Describe gas systems of the hospital and the storage & piping
methods. References NFPA 99, 70, 100.
e. HELICOPTER LANDING PAD - Describe the construction and location of any aircraft
landing pads – roof top or ground level. Detail fuel storage & refueling arrangements
and fire protection systems. Note any obstructions – power lines, trees, other buildings.
References NFPA 418, 407, 1.
f.
F. FLAMMABLE LIQUID AND GAS STORAGE & HANDLING - Describe type,
quantities, storage arrangements and handling procedures. Include details on fire
protection – detection, ventilation, sprinklers, spill containment, grounding, explosion
proof electrical fixtures. References NFPA 99, 30.
g. Electronic Data Processing - Describe: Construction of the room, UPS system or
emergency power, Location – (Must be located at grade or above grade), Air
conditioning equipment, Smoke detection, Liquid (water) detection, Flame spread
rating less than 25, Fixed automatic fire suppression.
h. Record Storage Rooms.
i.
Cooling Towers.
3.) Every building should have a manual operated fire alarm system with audible alarm devices
where practical. Visible alarms may be used in place of audible alarms, where there may be an
adverse effect on patients.
4.) Clearly mark all shut-off valves for a sprinkler system by signs. Many times, sprinkler control
valves are located above suspended ceilings and in closets. NFPA 25
5.) Provide as much information as possible relating to the maintenance and documentation
procedures for all fire protection equipment. NFPA 25
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 5 of 11
FOR LOSS CONTROL PURPOSES ONLY
6.) Fire extinguishers suitable for the particular hazard shall be located throughout the hospital and
in all ancillary buildings. They should be properly maintained and inspected so that they will be
readily available to personnel in accordance with NFPA10.
7.) Determine the quantity and method of storage of flammable anesthetics and disinfecting
agents. Common gaseous agents include ethylene and cyclopropane and common liquid
agents include diethyl ether, divinyl ether, and ether chloride. Gaseous and flammable
anesthetic and disinfecting agents should be properly stored in a dedicated room. It should be
provided with Exhaust that should discharge to the exterior of the building at least 12 feet
above grade in a manner to prevent reentry into the building. Electrical wiring should conform to
NFPA 70, National Electrical Code for hazardous locations. These enclosures should not be
used for any purposes other than storage flammable agents. It is also important that the abovementioned chemicals not be stored in close proximity to cylinders containing oxidizing gases
(i.e. oxygen or nitrous oxide). These agents should be stored in separate rooms. Reference
NFPA 99.
8.) Minimum Water Supply Criteria
a. Design in accordance with NFPA 13.
b. Safety Factor- For hydraulically designed systems, a safety factor of 10 psi or 10% of
the demand pressure, which ever is greater, should be included in the calculations at
the point of connection (city, fire pump discharge, etc.)
c.
Underground mains - Looped mains with minimum size of 8 inches for buildings over
250,000-sq.ft. Divisional control values should be installed in the loop. The number of
divisional valves required will vary however at minimum of no more then 6 sprinkler
systems and fire hydrants should be impaired by any one divisional valve.
Underground main should be installed in accordance with NFPA 24.
9.) Gate Valves and Post Indicator Valves - Inside sprinkler control valves will be accepted if
located 25 feet or less from an accessible door. Otherwise a post indicator valve or wall
indicator valve should be provided. Butterfly type control valves are not recommended.
10.) Hydrant and Post Indicator Valve Location (NFPA 24)
a. Hydrants and PIV's should be located not less than 40 feet from the building.
b. Private hydrants with at least two 2 ½-inch hose connections should be installed 300feet or less apart if any part of the building perimeter is more than 400 feet from a
municipal hydrant. Fire hydrants should be equipped with a foot valve to isolate the
hydrant from the underground water main. If exposed to damage, i.e. parking lots, the
fire hydrant should be protected from damage by guard posts (such as concrete filled
steel pipe and painted yellow). The threads on the hydrant should match the local fire
department.
11.) Inside Hose Stations should be installed in accordance with applicable NFPA codes.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 6 of 11
FOR LOSS CONTROL PURPOSES ONLY
12.) Fire department (Siamese) connection should be minimum of 2 1/2-inch diameter with two
connections. If flow rates, sprinkler and hose demands combined are greater then 1500 gpm
then additional 2 1/2 inch connection should be added at a rate of 750 gpm per connection. The
pipe for the connection should be increased from 4 inch to 6 inch. Where the local fire
department utilizes large diameter hose, 4” & 5”, the connection can be a single 4” or 5” for
flows up to 1500 gpm. Note most fire department pumpers are 1500 gpm, use the above as a
guideline. If possible, the fire department connection should be no more then 50 feet from a
municipal fire hydrant. The threads of the connection should be the same as the local fire
department.
13.) A secondary water supply is highly desirable when the primary water supply cannot be
expected to control a fire situation. Size of tanks/ reservoirs should be consistent with supply
duration requirements.
14.) Fire Pumps
a. Should a fire pump (booster or fire pump) be required, it should be diesel fired. An
electric driven pump is acceptable if the electric power in the area is reliable and the
electrical entry is protected. i.e. power with NFPA 20. The electrical power should be
provided directly from the utility to the pump room without passing through the plant or
any plant switch gear. The incoming power electrical before all facility disconnects.
Turning the power off to the building should not cut the power supply to the fire pump.
For high valued properties, backup emergency power is required.
b. Should this be impossible, NFPA 20 addresses alternatives.
c.
The recommended location of a booster pump is a detached non-combustible
sprinklered building. If the pump is located in the building, it should be cut off from the
rest of the building by a 3 hour rated wall, if the wall does not extend tight to the roof
then the ceiling should also be 3 hour rated. The preferred entry into the room is from
the outside of the building, if not practical, then the door to the room should be 3 hour
rated.
Fire Department Access
1.) Means of access for the fire department apparatus must conform to NFPA 1141.
2.) Other factors adversely affecting access to the property should be considered, including snow
removal, railroad crossings, a stream or river subject to recurrent flooding, etc.
Alarms
UL Listed FC or FA Central station should monitor the fire protection systems on site as follows:
Wet Systems- Water flow, valve tamper, and low building temperature alarms (in areas subject to
freezing temperatures). On wet pipe sprinkler systems only, a vane type water flow detector is
desirable.
Dry System- Water flow, valve tamper, and low temperature alarms in the valve room (in areas subject
to freezing temperatures). Also monitor low and high air pressure in system side of the system.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 7 of 11
FOR LOSS CONTROL PURPOSES ONLY
Pre-Action Systems- Water flow, valve tamper, and low temperature alarms in the valve room (in areas
subject to freezing temperatures). Also monitor low air pressure in system side of the system.
Deluge Systems- Water flow, valve tamper, and low temperature alarms in the valve room (in areas
subject to freezing temperatures).
Fire Pumps- Electric- Pump running, power availability, and phase reversal. Diesel- Pump running,
engine or controller in trouble, and controller switch in position other than automatic. Low fuel if
automatic test timer for weekly test is used (NOT RECOMMENDED).
1.) Pump room/building should be monitored for low temperature (in areas subject to freezing
temperatures).
2.) Valves- All valves, 2 1/2” and larger should be monitored as listed above. If post indicator
valves are used the wires for valve tamper should be installed when the valve is installed to
reduce the cost of installation.
3.) Suction Tanks- Low water level in tank, low tank temperature (in areas subject to freezing
temperatures).
4.) Plug type valve tamper switches are not desirable.
5.) A burglar alarm system should be installed, monitored by a UL certified central station.
Certification requirements for the system depend on the extent of exposure.
When UL listed central station monitoring services are not available, consult Chubb to determine the
best possible alternative.
Our review is not intended to imply, guarantee, ensure or warrant in any way that Hermann Memorial is
in compliance with any Federal, State or local codes, laws or regulations including those relating to life
safety issues. Additionally, our review does not imply in any way that compliance with these comments
or recommendations as stated in this document will eliminate all hazards or accidents or that hazards
not referred to in this letter do not exist. Compliance with the comments stated in this document, does
not relieve Hermann Memorial from its obligations to comply with project specifications, design
drawings, applicable law, NFPA standards and the provisions of local code requirements.
Our review is for insurance purposes only.
6.4 Role of Risk Management
Page 8 of 11
Figure 6.4b – Computer Room Protection Requirements
FOR LOSS CONTROL PURPOSES ONLY
DATA CENTER MINIMUM REQUIREMENTS
1. CONSTRUCTION OF THE BUILDING
The data center must be located in a building of fire resistive, non-combustible, or tilt-up
construction. Buildings of frame, ordinary, or tilt-up construction with combustible floor, roof, or
structural members are UNACCEPTABLE.
2. FLAME SPREAD RATING
The materials in the data center and storage rooms must be constructed of and contain materials
(e.g.-curtains, carpeting, furniture, or fixtures) with a flame spread rating less than 25.
3. LOCATION
The EDP room must be located at grade level or above. Basement locations are UNACCEPTABLE.
4. EXPOSURE
Data centers containing unusual sources of ignition, flammable liquids, flammable gases,
accumulation of paper or other combustibles, or material beyond a one shift supply are
UNACCEPTABLE.
5. EDP ROOM ACCESS
All areas of data processing and support operations should be restricted to authorized access only.
6. SMOKE DETECTION SYSTEMS
The smoke detection system in the EDP room must be connected to a U.L. listed central station.
The following detection devices are recommended:
a. In the room: smoke detection of the ionization, photoelectric, or projected beam types.
b. Below a raised floor in the room: (Same as A)
c. Above the ceiling: (Nothing is required as long as this area does not communicate with
other areas of the building and the ceiling or is the ceiling is of above the hung ceiling is of
non combustible construction and all wiring is properly plenum rated wire; in BX, conduit or
other non combustible covering. Other situations require the same protection as in A
above.
7. LIQUID DETECTION
Liquid detection systems and/or floor drains are REQUIRED for EDP rooms when total insured
values equal or exceed $2 million. They must be supervised locally and by a U.L. listed central
station.
a. WATER DETECTION DEVICES: There are two detection systems available: spot and strip
type. Consideration should be given to the channeling effects caused by cabling. Also,
system activation should shut down the main water valve and provide a local audible and
U.L. listed central station alarm signal.
1. SPOT DETECTORS should be located 6-8 feet from the environmental control
units in a wet trap or near a floor drain. Sensors should not be mounted directly
under the unit. Experience shows downward air movement from A/C units blows
water away from the detectors and renders them ineffective.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 9 of 11
FOR LOSS CONTROL PURPOSES ONLY
2. STRIP DETECTORS Strip detectors should be arranged so that they surround all
potential water sources. These are the preferred detection devices due to the
extensive coverage they provide. Strip detectors can require rather intensive
maintenance and this should be taken into consideration when selecting a system.
b. PROPER FLOOR DESIGN consists of sloped floors leading to a safe drain. The floor
should be partitioned off with gutters to guide water into the drains. Again, consider how
cabling interacts and affects the floor design system.
8. SUPPORT SYSTEMS
This includes input/output devices, tape, and cartridge libraries and telecommunications equipment,
etc. Protection for these support systems should be the same as in the EDP area. EXCEPTIONS
are:
a. Sprinkler or alternate clean gaseous extinguishing agent deemed acceptable according to
NFPA 2001, protection is not required in battery rooms. Smoke detection, hydrogen
detection, and adequate ventilation are required.
b. Sprinklers are not recommended for the uninterrupted power supply (UPS) room; however,
all other protection and detection requirements apply.
9. EQUIPMENT ROOM CUT-OFF
The following operations must be cut off from the main equipment room:
a. Media library
b. Output devices (printers)
c. Uninterruptible power supply
d. Air Conditioning compressors/pumps (this does not preclude, the use of package AC units
in the room)
e. Manufacturing and warehousing operations.
Walls must have a 1-½ hour fire resistive rating and extend from the concrete floor to the underside
of the noncombustible floor above. (slab to slab)
10. AUTOMATIC FIRE SUPRESSION SYSTEM
An automatic fire suppression system is required in the following situations:
a. When hardware values exceed $5 million.
b. When the data center runs unoccupied, and the total hardware value and business income
limits exceeds $5 million.
c. Where fire/life safety is a major concern.
d. Where there is significant combustible loading.
e. When the data center is critical to the vital business function of the insured.
If any of the above apply, one of the following is required:
a. Sprinkler system designed, installed, and maintained per NFPA 75 Standard for the
Protection of Electronic Computer/Data Processing Equipment 1999 Edition and NFPA 13
Standard for the Installation of Sprinkler Systems 2002 Edition. Wet pipe or pre-action
systems are acceptable. Dry pipe systems are unacceptable.
b. A gaseous fire suppression system listed in NFPA 2001 Standard on Clean Agent Fire
Extinguishing Systems 2000 Edition, in the EDP room and below the floor in rooms not
exceeding 25,000 square feet, or 50,000 square feet where the area is compartmentalized
and no one area exceeds 25,000 square feet.
c. An existing carbon dioxide system that has been installed, maintained, and tested per
NFPA 12.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 10 of 11
FOR LOSS CONTROL PURPOSES ONLY
Life safety issues are paramount in carbon dioxide installations; however, they can be acceptable in
some cases, such as unoccupied computer rooms.
CARBON DIOXIDE SYSTEMS ARE NOT RECOMMENDED FOR NEW FACILITIES.
Existing Halon systems are acceptable protection provided:
a. The protected area is not over 25,000 square feet or 50,000 square feet (2323 or 4645 sq.
m) where compartmentalized and no one area exceeds 25,000 square feet.
b. The system has undergone a full acceptance test, including either a full dump test or a fan
pressurization test per NFPA 12A. All test results must be reviewed.
c. A preventive maintenance and testing program must be in place per NFPA 12A.
Our evaluations, reports and recommendations are made solely to assist the insurer in underwriting and loss control. No warranties or representations of any kind are made to you or any
other party. Evaluation for any hazard or condition does not mean that it is covered under any policy. Any reports or certificates we provide in connection with any state-required pressure
vessel inspection do not mean that all hazards or conditions were under control at the time of the inspection. Neither we nor the insurer shall be liable to you or any other person for the use
of any information provided or statements made by any of our employees or agents during the performance of an evaluation
6.4 Role of Risk Management
Page 11 of 11
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 6.5
Policy Title: Contractor Application for Payment Overview
Category: Contract Development Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to define the process requirements for
the initiation and disbursement of Contractor payment applications.
Policy Statement:
A.) Schedule of Values
1.) Once a construction contract is awarded, using the Project Construction
Schedule as a foundation, each Contractor should submit a Schedule of Values
for their entire contract to the Owner and/or Project Manager for approval. The
contractor/construction manager should submit the Schedule of Values to the
Project Manager for approval no less than fifteen (15) days before the date
scheduled for submittal of the initial Application for Payment.
2.) The Schedule of Values should include sufficient detail and support for each
portion of the work including subcontractor work, self-performed work, bond &
insurance costs, general conditions and fees on a line-item basis to allow for
effective and accurate evaluation by the Owner, Project Manager and/or
Architect. The sum of the parts of the Schedule of Values should total to the
contract sum including a listing of approved and executed change orders to the
contract, if any, in sequential order. Schedule of Value items should have a
direct and understandable relation to the Project master construction schedule.
The Schedule of Values should be the basis for the Contractor's application for
payments.
3.) The Contractor is required to correlate the documentation for payment of stored
materials requested in the application for payment against the agreed upon
6.5 Contractor Application for Payment
Page 1 of 4
breakdown of the Schedule of Values as described in Section B of this policy,
“Payment for Materials Stored Off-Site”.
4.) The Contractor should be advised of the payment cycle utilized by Memorial
Hermann Hospital System (MHHS) prior to bid, award or contract execution.
The following steps should be used to approve payment:
STEP 1
JOB-SITE INSPECTION - DRAFT PAYMENT REQUEST
Once a month the Contractor should submit an itemized rough draft of the
Application for Payment to the Project Manager (using AIA Documents G702 and
G703 and based on the approved Schedule of Values) identifying the work
completed, if any, during the current calendar month and obtain a preliminary
approved copy of the draft for official submission.
STEP 2
PAYMENT REQUEST PREPARATION/SUBMISSION
With the information agreed upon in Step 1, the Contractor will prepare a formal
Application for Payment request. The payment request will be made on an
Application For Payment form (AIA documents G702 and G703).
Before
submitting these documents to the Project Manager, each request for payment
should be signed by an authorized agent of the Contractor and notarized. The
Contractor should include with each request for payment a waiver of lien for all
previous payments, and subcontractor's waivers of lien (See Policy 9.3 – “Lien
Release Procedures”).
STEP 3
CHECK DISTRIBUTION
a. The Project Manager will route the request for payment within MHHS for
appropriate processing.
b. The Contractor should provide all supporting documentation substantiating
the Contractor’s right to payment as MHHS/Project Manager may require.
c. Upon appropriate documentation and approvals, MHHS will issue checks to
each Contractor.
d. MHHS will withhold ten (10%) percent of each payment due to a
Contractor subject to the terms and conditions of this paragraph and other
applicable conditions of the Contract.
6.5 Contractor Application for Payment
Page 2 of 4
e. The Contractor, when requesting a reduction of retention, should submit an
AIA G707, Consent of Surety to Reduction In or Partial Release of
Retention.
f. Within forty-five (45) days after the Certificate of Substantial Completion
has been issued for all portions of his work, the Contractor may invoice for
a sum sufficient to increase total payments to one hundred (100%) percent
of Contract Sum, or portion thereof, less such retainage determined
suitable for all incomplete work and unsettled claims.
B.) Payment For Materials Stored Off-Site
1.) The Contractor, if intending to use an off-site storage area or Facility for stored
materials, should provide a written request and obtain approval prior from the
Project Manager prior to submitting the first application for payment. Properly
stored should mean in an insured warehouse with MHHS being named as the
insured, and all material identified as property of MHHS. The Contractor is
responsible for all associated off site storage costs, transportation, insurance,
including coverage for stored material, while in transit, if not covered by the
Project’s Builders Risk policy, etc.
2.) The Project Manager will require the Contractor to provide supporting
documentation in the form of invoices, etc. for items stored on-site.
Documentation should include the following:
a. Detailed description of the material that will serve as a material
description for the billing and as information to file a claim with an
insurance company.
b. Itemized cost of materials and the total cost value, which should not
exceed the subcontractor's or material supplier cost. The total cost value
should be supported by the subcontractor's or material supplier invoices
for the stored material.
c. An estimated cost value for those materials that are fabricated by the
subcontractor or material supplier.
d. Provide the location where the material is physically stored. The location
will include the warehouse address and storage location within the
warehouse. All material should be segregated and marked.
e. Provide specific insurance coverage that is equal to or exceeds the value
of the material.
6.5 Contractor Application for Payment
Page 3 of 4
f. A certificate of title listing Facility’s ownership of the off-site stored
materials equal to the amount paid effective at the time funds are
delivered.
C.) Waivers Of Lien
1.) The Contractor’s first Application for Payment will be based upon 100% of the
value of work installed. The first payment, amounting up to ninety (90%)
percent of application, will be made to the Contractor without supporting
documentation. Subsequent Applications for Payment should be accompanied
by lien waivers from the Contractor, their sub-contractors, sub-subcontractors,
and suppliers or receipted invoices covering payment to the Contractor for
previous calendar month period. Lien waivers should show the amount paid.
The Waiver of Lien is to be signed by an authorized representative of the
Contractor.
2.) Final payment will not be made until a Final Release has been submitted. The
Final Release should be signed by an authorized representative of the
Company and notarized. In the instance where the bond requirements for the
Project have been waived for the contractor, final unconditional waivers will
be required for all subcontractors/material vendors listed on contractor’s
sworn statement. These final waivers should be submitted along with the
final release, before payment can be made.
Waivers of Lien are discussed more in Policy 9.3 – “Lien Release Process”
APPROVED:
DATE:
6.5 Contractor Application for Payment
Page 4 of 4
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 7.1
Policy Title: Contractor Safety Requirements
Category: Safety
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose:
Policy Statement:
7.1 Contractor Safety Requirement
Page 1 of 55
CONTRACTOR SAFETY REQUIREMENTS
Section Title
Section Title
1
General
16
Fire Prevention
2
Penalty Provisions
17
Fire Reporting & Evacuation
3
Contractor Safety Data
18
Housekeeping
4
Contractor Safety Orientation
19
Hazard Communications
5
Contractor Identification
20
Contractor Injuries
6
Permits & Activity Board
21
Personal Protective Equipment
7
Safe Work Permit
22
Work Zone Safety
8
Lock Out/Tag Out
23
Labs
9
Hot Work Permit
24
Pharmacy
10
Infection Control & Pre-
25
Electrical Safety
Construction Risk Assessment
11
Asbestos Containing Material
26
Ladder Safety
12
Confined Space Entry Permit
27
Fall Protection
13
Cable Pull Permit
28
Roof Work
14
Bloodborne Pathogens
29
Sanitation
15
Interim Life Safety Measures
30
End Of The Day Or Shift
7.1 Contractor Safety Requirement
Page 2 of 55
APPENDICIES
Appendix
Subject
1
Contractor Safety Data
2
Site Specific Information
3
Safe Work Permit
4
Hot Work Permit
5
Infection Control (ICRA)
6
Pre-Construction Risk Assessment (PCRA)
7
Confined Space
8
Cable Pull Permit
9
Interim Life Safety Measures
7.1 Contractor Safety Requirement
Page 3 of 55
CONTRACTOR SAFETY REQUIREMENTS
The Memorial Hermann Healthcare System is dedicated to the preservation of life and property. It
is through this commitment that we provide our patients, visitors, employees, and contractors
with a safe and healthy work environment. We believe safety must be equal to productivity,
quality, and morale.
OSHA regulations mandate communication between the employer and contractor; prudence
dictates enforcement of all required safety rules while personnel are working on hospital property.
These requirements summarize the safety rules and procedures with which the contractor and
their employees must comply. These will be used by the Architecture & Construction Services,
Facilities Engineering, and Safety Departments when advising the contractors’ employees and all
sub-contractors of pertinent safety requirements.
These requirements cover some, but not all of the rules mandated by the hospital. Contractors are
expected to comply with all applicable federal, state, and local regulations. Contractors shall
comply with any additional safety requirements deemed necessary and appropriate by the Safety
Departments, Facilities Engineering, or other owner representative.
1.
GENERAL
Failure to adhere to these contractor safety requirements or the OSHA safety requirements
in the General and Construction Industry Standards (29 CFR 1910 & 1926) may be cause for
interruption of contractual agreement and dismissal from properties, or invoke the
“penalty” provision outlined in Section 2.
1.1
Smoking will be permitted only in designated smoking areas. Anyone found in
violation of this policy will be immediately dismissed from the job site. (See
Appendix 2)
1.2
No alcoholic beverages or controlled substances will be allowed on the project site.
Contractor shall not permit any person to operate any vehicle or heavy equipment
while taking any prescription medication that may impair their ability to operate
safely.
1.3
All contractors are responsible for public safety as well as the safety of their
employees and Memorial Hermann Healthcare System employees at the work site.
Contractors are responsible for providing whatever devices or equipment is needed
to accomplish this task per city, state, or OSHA Regulations / Guidelines.
1.4
Contractor personnel shall be courteous to all tenants, business invitees, patients,
visitors, and employees.
1.5
Personal grooming, personal hygiene and language by all contractors must be
conducted in a professional manner at all times.
7.1 Contractor Safety Requirement
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1.6
All contract personnel will adhere to these minimum standards of attire:
1.6.1
Shirts must have collars and at least 3” of sleeve, measured from the armpit seam
(Polo type or button front). Shirts must be buttoned to at least the third button
from the top. T-shirt styles may be approved if part of a contractor’s uniform
and identified with the company logo or legend.
1.6.2
Pants that are excessively loose, torn, ragged or with dragging cuffs will not be
permitted. Shorts are not allowed.
1.6.3
All clothing must be clean and sanitary at the beginning of the work shift.
1.6.4
No clothing, accessories, or Hard Hat stickers that display offensive, derogatory
or inflammatory wording or graphics may be worn on the work site. Per
Hospital policy, Tattoos must remain covered.
1.6.5
Footwear shall be leather work shoes or boots. Work Boots with fabric or nylon
may be permitted on a case-by-case basis. Specialized footwear and foot
protection may be required for specific tasks.
1.7
No radios or music shall be allowed on the project including headphone systems.
Personnel must be able to hear alarms and warnings in the immediate work area.
(This does not pertain to the use of two-way hand held communications equipment.)
1.8
No tools or equipment will be loaned to contractors to assist them in completing
projects.
1.9
Hazardous materials shall be stored and disposed of properly. No waste products of
any type are allowed to be disposed of in any storm drain.
1.10
Hazardous materials are limited to one days supply and must be properly labeled.
(See also Hazard Communications, Section 19)
1.11
Contractors will obtain prior approval for the use of storage areas for supplies and
tools that are to be used on projects.
1.12
Contractor personnel shall not tape back lock/latch mechanisms nor prop open any
exterior door, security door, stairwell door, or fire/smoke door.
1.13
Escape routes and evacuation routes in the project shall remain free and
unobstructed at all times.
1.14
All damages to hospital property resulting from faulty workmanship, neglect, or
accident will be back charged to the contractor. This sum will be deducted from his
bid price or fee. The balance will be paid out thereafter.
7.1 Contractor Safety Requirement
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2.
1.15
Contractor shall be responsible for the inspection, quality control, and punch-out of
contractor’s work. This should be done on a daily basis and specifically prior to
contractor’s request for payment on work completed. No payment shall be made by
the owner for work that is not in compliance with the contract.
1.16
The Director of Contractor Safety, or his representative may visit the job site at any
time to perform inspections and identify any problems. A job may be suspended if
an imminent danger to patients, visitors, hospital employees, or contractor personnel
is observed. Violations will be brought to the attention of the Project Manager and
immediate corrective action will be taken.
PENALTY PROVISIONS
Violations of these safety requirements will be reviewed and given a limited time frame for
abatement of conditions. The abatement time will be determined according to the severity
of the condition and the immediate effects to contractor and Hospital safety. Convenience
of completing the abatement measures will not be a decisive factor.
Contractors who violate the provisions of these requirements more than twice during the
scope of the project, or who fail to abate the conditions in the allowable time frame may be
assessed a $1,000 per day or occurrence penalty.
3.
CONTRACTOR SAFETY DATA
All contractors and sub-contractors are required to provide data related to their safety
performance no later than February 1st annually. (See Appendix 1)
The Director of Contractor Safety will review the safety data and determine the contractor’s
eligibility to perform work at Memorial Hermann Hospital System based on the following
criteria:
3.1
Contractors current Experience Modification Rate (E.M.R.) must be less than or equal
to 1.00.
3.2
If a contractors current E.M.R. is greater than 1.00, then the immediate past 3 year
trend must be downward with no single E.M.R. greater than 1.20.
3.3
If a contractor E.M.R. cannot be provided due to size, self-insured status or length of
time in business then the OSHA recordable incident rate must be less than or equal to
15 injuries or illnesses per 200,000 man-hours.
3.4
Any OSHA recordable incident greater than 15 per 200,000 man-hours with an
acceptable EMR will not disqualify contractors provided adequate explanation of
injuries and illnesses is provided.
7.1 Contractor Safety Requirement
Page 6 of 55
4.
CONTRACTOR SAFETY ORIENTATION
All contractor and sub-contractor personnel are required to complete the safety orientation
before beginning work on any of the hospital projects.
5.
4.1
Completion of the orientation is required to obtain a Contractor Identification Badge.
4.2
Contractor must make reservations for the next available orientation session at least
one working day prior to the session no later than 3:00 p.m.
4.3
A fee of $10.00 is required for each person attending the orientation. Payment will be
by company check or money order; cash will not be accepted. For Capitol
Construction projects, these fees may be included in the project budget.
4.4
Safety orientation credentials are valid for one year. An annual refresher will be
required to review any changes during the past year.
4.5
Variances from this requirement may be permitted on a case-by-case basis by the
Manager of Facilities Engineering and/or the Contractor Safety Department. (i.e.,
day laborers, emergency repairs, etc.)
4.6
Contractor Safety Orientation will be held on an as needed basis. Appendix 2
contains site-specific information about location and scheduling of sessions.
CONTRACTOR IDENTIFICATION
All contractor and sub-contractor personnel are required to display their BLUE Contractor
Identification Badge when working in or around the hospital.
Contractor Project Managers, Superintendents or Service Technicians who require Electronic Access
Cards must display BOTH I.D.s. Expiration dates must be the same.
5.1
The badge is valid for one year after completion of the Contractor Safety Orientation.
5.2
A fee of $5.00 will be required to replace a lost Contractor badge.
The replacement fee for a lost Electronic Access Cards will be determined by campus policy.
Loss of an access card shall be immediately reported to Security.
5.3
Damaged I.D. badges will be replaced free of charge.
5.4
A VISITOR PASS for Contractors or Vendors may be obtained through Facilities
Engineering or Security.
7.1 Contractor Safety Requirement
Page 7 of 55
6.
PERMIT SYSTEM
Permits serve to coordinate those activities necessary to safely complete a task or project
that may impact patient care and also protect hospital property.
7.
6.1
All shutdowns of Medical Gas, Oxygen, Vacuum Systems, Deionized Water,
Domestic Water, Natural Gas, Electrical Systems, Fire Suppression, and Fire Alarm
Systems will be scheduled a minimum of 48 hours in advance, in writing, before
work can begin. The Manager of Facilities Engineering at each campus may determine the
lead-time required for a shutdown request. The only exception to this is in the event of
an emergency. In either case, written (verbal for emergences) approval is required by
the Manager of Facilities Engineering or designated representative. (See also Lock
Out/Tag Out, Section 8)
6.2
Major construction projects that are isolated from the existing hospital facilities may
be granted a blanket work permit, exempting the project from the daily permit
issuance process.
6.3
In general, permits are issued for one shift only. If work will continue past the time
of shift change, the permit must be re-issued or issued over multiple shifts at the
onset of permit issuance.
6.4
Contractors will check in with Facilities Engineering at the beginning of the shift to
obtain applicable permits.
6.5
A copy of any and all permits issued will be posted on the Activity Board in Facilities
Engineering.
6.6
When work is completed or at the end of the day, contractors will close out their
permits before leaving the hospital property.
SAFE WORK PERMITS
7.1
Safe Work Permits are required for all construction or renovation projects, and for
contractors engaged in maintenance work. (See Appendix 3)
7.2
Safe Work Permits are issued in Facilities Engineering Work Control and must be
issued daily unless prior arrangements are made.
7.3
A copy of the Permit will be posted on the Activity Board in Facilities Engineering and
the original form must be posted at the job site.
7.4
Any additional specialized permits will be noted on the Safe Work Permit.
7.1 Contractor Safety Requirement
Page 8 of 55
8.
LOCKOUT/TAGOUT
Each facility has a Lockout/Tag out Program. Contractors whose work will involve the
lockout/tag out process shall comply with all provisions of the Facilities Engineering
program. If there is a difference between the contractor’s program and the hospital’s
program, the more stringent procedure shall prevail.
9.
HOT WORK PERMIT
Hot Work includes welding, cutting, soldering, burning, grinding, friction cut-off saws and
the use of open flame, such as propane torches for heating floor tiles. All Hot Work requires
the issuance of a fully executed Hot Work Permit from the Facilities Engineering
Department. (See Appendix 4)
9.1
Any cutting or welding will require welding screens or shields be used to block
welding flash and debris from the public.
9.2
The contractor will be responsible for the evacuation of smoke from the building
through exhaust fans, fume vacuums, “smoke eaters”, or other ventilation
equipment. The use of mechanical ventilation equipment and points of exhaust from the
building will require approval from the Manager of Facilities Engineering and Security.
Smoke detectors in the area must be taken off line for the duration of hot work.
9.3
Protective eyewear that meets ANSI standards for welding or cutting shall be worn.
Standard safety glasses or sunglasses shall not be used.
9.4
Combustibles must be removed or covered with a fire blanket.
9.5
The contractor must furnish a 20-pound ABC Dry Chemical Extinguisher within 20
feet of the Hot Work. Hospital fire extinguishers will not be loaned.
9.6
A fire watch must be present and remain for 20 minutes after the Hot Work is
completed to ensure no smoldering materials remain or re-ignite.
9.7
The area shall be monitored for TWO HOURS. A final inspection of the area will be
conducted.
9.8
The completed Hot Work Permit must be returned to Facilities Engineering.
7.1 Contractor Safety Requirement
Page 9 of 55
10.
INFECTION CONTROL RISK ASSESMENT (ICRA) AND
PRE-CONSTRUCTION RISK ASSESSMENT (PCRA)
Contractors working in or near patient areas may be required to obtain an Infection Control
Permit and implement special precautions to reduce the risk of infection to patients during
the project. Each hospital has their own Infection Control Permit developed for their
specific needs. (See Appendix 5)
A pre-construction risk assessment must be completed for all activities that will impact a
patient care area for more than three consecutive shifts or if deemed a construction project.
(See Appendix 6)
11.
ASBESTOS CONTAINING MATERIALS
11.1 All jobs must be reviewed prior to start date to determine the presence of Asbestos
Containing Material (ACM)
11.2 All ACM must be removed by a licensed abatement contractor (by owner’s direction)
before any job can begin that may disturb or release asbestos fibers.
11.3 No suspected ACM or unknown material shall be dislodged or removed by a
contractor that is not a licensed asbestos abatement contractor.
12.
13.
CONFINED SPACE ENTRY PERMITS
12.1
If entry into a Permit Required Confined Space is necessary, a confined space entry
permit must be issued by the Facilities Engineering Manager.
12.2
The contractor or sub-contractor is required to provide all safety equipment needed
for the entry including rescue equipment.
12.3
Each hospital has their own confined space entry program. (See Appendix 7)
CABLE PULL PERMIT
Contractors installing communication cables, antenna leads, or data transmission
equipment shall comply with all provisions of the Cable Pull Permit and appropriate
infection control requirement (See Appendix 8)
7.1 Contractor Safety Requirement
Page 10 of 55
14.
15.
BLOODBORNE PATHOGENS
14.1
The contractor must make every effort to prevent exposure to blood and/or
body fluids while in the hospital.
14.2
All patient care areas are considered to have the potential for exposure and
instructions will be given by the nursing unit manager on how to avoid
potential contamination.
14.3
Contractors shall instruct their employees in the concept of Universal
Precautions and document such training.
14.4
Contractor employees shall not handle bags or containers identified as
containing biohazards materials; (red biohazard bags/containers).
INTERIM LIFE SAFETY MEASURES (ILSM)
Any project that compromises life safety features of the hospital will require the
implementation of appropriate Interim Life Safety Measures. (ILSM)
15.1
A Pre-Construction review of the project scope, prior to the start date, will
determine which of the stated ILSM’s are appropriate and should be
implemented for the project.
15.2
Appendix 9 outlines the decision logic to be used in determining the
applicable ILSM for each project.
15.3
ILSM may include the following minimum provisions as appropriate:
15.3.1 Ensuring free and unobstructed exits. Staff get additional training when
alternative exits are designated. Buildings or areas under construction
must maintain escape routes for construction workers at all times and
the means of exiting construction areas are inspected daily.
15.3.2 Ensuring free and unobstructed access to emergency services for fire,
police, and other emergency forces.
15.3.3 Ensuring that fire alarm, detection, and suppression systems are in
good working order. A temporary but equivalent system must be
provided when any fire system is impaired for an extended period of
time. Temporary systems must be inspected and tested monthly.
Note: The Life Safety Code (LSC), NFPA 101, requires that the
municipal fire department (or applicable emergency forces group) be
notified and a fire watch be provided whenever an approved fire alarm
7.1 Contractor Safety Requirement
Page 11 of 55
or automatic sprinkler system is out of service for more that 4 hours in
a 24-hour period in an occupied building.
15.3.4 Ensuring that temporary construction partitions are smoke tight and
built of noncombustible or limited combustible materials that will not
contribute to the development or spread of fire.
15.3.5 Providing additional fire-fighting equipment and training staff in its
use.
15.3.6 Prohibiting smoking throughout the hospital’s buildings and, in or near
construction areas.
15.3.7 Developing and enforcing storage, housekeeping, and debris-removal
practices that reduce the buildings flammable and combustible fire load
to the lowest feasible level.
15.3.8 Conducting a minimum of two fire drills per shift per quarter for
workers and adjacent departments (as applicable).
15.3.9 Increasing hazard surveillance of buildings, grounds, and equipment,
with special attention to excavations, construction areas, construction
storage, and field offices.
15.3.10 Training staff to compensate for impaired structural or
compartmentalization features of fire safety.
15.3.11 Conducting hospital wide safety education programs to promote
awareness of life safety building deficiencies, construction hazards, and
ISLM.
15.4
16.
Contractor shall post and maintain any required temporary signs directing
Exit routes.
FIRE PREVENTION
16.1
All combustible materials shall only be stored in approved areas.
16.2
Combustible scrap, trash, and debris shall be removed from the project site on
a daily basis, or, more frequently as required.
16.3
Flammable products shall be limited to one days supply inside the building.
Flammable materials shall be stored outside the building or in approved
storage cabinets. Flammable liquids shall be in approved safety cans.
7.1 Contractor Safety Requirement
Page 12 of 55
16.4
Compressed flammable gas cylinders (i.e., propane, LPG, acetylene) shall not
remain inside the building overnight and must be stored in a designated
flammable storage area.
16.5
Work on fire sprinkler systems shall continue until the system operation is
fully restored. No impairments will be allowed for extended periods of time
or during times when the site is left unattended.
16.6
When working in the ceiling space, all holes and penetrations through
firewalls for wires, pipes, and conduits shall be sleeved and fire safed.
16.6.1 The sleeve must be of ferrous metal and extend at least one inch on
both sides of the wall.
16.6.2 All penetrations shall be sealed prior to the end of each shift with an
approved UL fire resistant sealant. The Manager of Facilities
Engineering or designated representative must approve the specific
sealant used.
17 FIRE REPORTING AND EVACUATION PLAN
In the event of a smoke or fire incident the following procedures should be followed:
Remember the key word R.A.C.E.
Rescue
Alarm
Confine
Extinguish
17.1.1 Rescue efforts need to start immediately.
17.1.2 A fire alarm station should be activated as quickly as possible.
17.1.3 Confine the fire or smoke by closing all doors to the area.
17.1.4 Extinguish the fire only if you can do so safely.
17.2
When reporting a fire by phone:
17.2.1 Call the emergency number found on your badge, phone, or emergency
information poster. (See Appendix 2)
17.2.2 Give your name, the location of the fire, and a brief description of the
incident. Do Not hang up until the other party is finished.
7.1 Contractor Safety Requirement
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17.3
Be prepared to guide the Hospital Fire Response Team to the fire location.
17.4
All contractor personnel shall report to their designated assembly area
immediately. (See Appendix 2)
18 HOUSEKEEPING
Contractors shall keep construction areas as clean as possible during the workday.
It is recommended that crews clean up as they go though the workday.
18.1
The work site shall be clean at the end of the shift. Scrap, trash, and debris
shall be removed daily. No more than half of a trash buggy should remain
overnight.
18.2
Aisles, corridors, and exits shall remain unobstructed at all times.
18.3
Contractors must use appropriate signage or other warning devices as
necessary.
18.4
Materials must be stored and secured properly, (i.e. electrical wiring and
components, conduit, pipes, metal framing materials, lumber, etc.).
18.5
Any mess made by the contractor shall be cleaned up before leaving the area
(i.e., sweeping, vacuuming, dust mopping, etc.).
18.6
When working in areas that have carpet, a drop cloth or plastic sheeting will
be laid down first over the area before any work is started.
18.7
There will be no cleaning supplies provided by the hospital for the contractor
to clean up their area.
18.8
Any ceiling tiles that are damaged, broken, or soiled while working on the job,
will be replaced by the contractor before he will be paid.
18.9
If, after written notice, the contractor fails to clean up, the owner may have the
area cleaned up by others and the contractor back charged for the cost of clean
up. In addition to the cost of clean up, the owner may invoke the penalty
provisions in Section 2 of $1,000 per day.
7.1 Contractor Safety Requirement
Page 14 of 55
19 HAZARD COMMUNICATION (HAZ COM)
19.1
The contractor shall provide documentation that their personnel and subcontractors have received proper training in Hazard Communications under
the provisions of OSHA’s requirements in 29 CFR 1910.1200 and/or 1926.59.
19.2
The contractor shall provide a Chemical Inventory of all chemicals and
hazardous materials that will be brought onto the job site. The inventory must
be amended when a new substance is to be introduced. A copy of the current Chemical
Inventory shall be provided to Contractor Safety and the Hospital Safety Officer.
19.3
A printed, legible copy of the Material Safety Data Sheet (MSDS) shall be
immediately available on the job site for each chemical on the inventory.
19.4
Hazardous materials shall be stored in properly labeled approved containers.
19.5
Hazardous materials shall be limited to amounts that can be used in one shift.
20 CONTRACTOR INJURIES
20.1
Contractors shall make prior provisions for the treatment of minor injuries.
20.2
Contractor employees requiring immediate medical treatment should be taken
to the emergency center.
20.3
If an injured worker cannot be moved and assistance is needed, call the
emergency number on your emergency information poster. (See Appendix 2)
20.4
Any injury requiring treatment, beyond Job Site First Aid, shall be reported
immediately to Facilities Engineering and Contractor Safety.
20.5
A copy of any Incident / Accident Report must be provided in a timely manner to
Contractor Safety and to the hospital’s Safety Officer. A preliminary report must be
made within 24 hours or the end of the next working day.
21 PERSONAL PROTECTIVE EQUIPMENT (PPE)
21.1
The contractor shall ensure that all workers on the job are provided the
appropriate Personal Protective Equipment and are properly trained in their use.
21.2
All PPE and safety equipment is subject to inspection and approval by
Contractor Safety.
7.1 Contractor Safety Requirement
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21.3
If the scope of the project, or the MSDS for the material in use, requires the use of
respiratory protective equipment, the contractor shall document compliance
with 29 CFR 1910.134 “Respiratory Protection”. Only N.I.O.S.H. or M.S.H.A.
approved equipment shall be used.
21.4
Projects involving major construction or renovation activities with overhead
work above the ceiling grid level shall be designated “Hard Hat Areas”.
The following shall apply to all personnel entering the area regardless of
purpose or duration.
21.4.1 ANSI approved Hard Hats shall be properly worn at all times. Except
for specific Craft’s requirements, the bill shall be in the front and the
suspension properly mounted with the nape strap to the rear. Ball caps or
knit hats shall not be worn under Hard Hats. Snug fitting welder’s
caps or similar may be permitted provided they do not impair the fit.
21.4.2 ANSI approved safety eyewear shall be worn at all times. Prescription
eyewear must be industrial grade and have side shields. Cover type Visitor
eyewear may be permitted over regular street type prescription eyewear.
21.4.3 Dark tinted Safety glasses shall not be worn inside the building as soon as
exterior walls are in place.
21.4.4 Footwear shall meet the requirements under Section 1.6.5.
21.5
Projects that do not involve overhead work, the ceiling grid is installed and
the permanent lighting is in place, may be reduced from the requirements of a
Hard Hat Area. The General Contractor’s rules then apply to the wearing of Hard
Hats in the work area.
21.5.1 ANSI approved protective eyewear is required for any task presenting
an eye hazard (i.e. powder actuated tools, drilling overhead, etc.).
21.6
Face shields, in addition to safety glasses, shall be used when grinding,
chipping concrete, or using a friction cut-off saw.
21.7
Appropriate hearing protection shall be used in high noise operations or loud
impact noise tasks.
7.1 Contractor Safety Requirement
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22 WORK ZONE SAFETY
Construction areas must be delineated from public access areas.
22.1
Construction areas shall be separated by appropriate barriers to control noise,
dust, and the spread of fire.
22.1.1 DUST BARRIERS are intended only to control dust and particulate matter.
The material shall be of Fire Resistant Polyethylene, 6-mil minimum thickness,
and sealed to floors, walls and ceilings. Poly barriers are intended for a
maximum use of only FIVE working days.
22.1.2 DUST BARRIERS intended to be used for more than FIVE working days
shall be drywall with joints covered and sealed.
22.2
TEMPORARY FIREWALLS shall be smoke tight and non-combustible.
22.3
To maintain Indoor Air Quality, the Contractor shall provide for adequate removal of
dust, particulates, gasses, irritants, fumes, and flammable vapors to the exterior of the
building. The use of mechanical ventilation equipment and points of exhaust from the
building will require approval of the Manager of Facilities Engineering and Security.
22.4
When working in hallways and public areas the work zone shall be marked by
orange safety cones.
22.4.1 Minimum height of cones to be 12”.
22.4.2 Minimum of 6 cones is required.
22.4.3 When working near a corridor intersection, place one cone at the corner
to be seen by persons in the other corridor.
22.4.4 When working near doorways, appropriate signage or other warnings must be
posted to warn persons on the other side.
22.5
All tools, supplies, and equipment shall be kept to one side.
22.6
Staff, patients, and visitors will be given the right of way.
22.7
When painting, “Wet Paint” signs will be posted liberally throughout the
affected area.
23 LABORATORY SERVICES
Contractor employees must receive orientation from a Laboratory Services Supervisor
before work is allowed in any laboratory area.
7.1 Contractor Safety Requirement
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24 PHARMACY AREAS
Contractor must coordinate any work in pharmacy areas with the Manager of Pharmacy
Operations and Security.
25 ELECTRICAL POWER TOOLS AND CORDS
All electric power tools, equipment and extension cords must be inspected daily before use.
Defective items shall be immediately removed from service for repair or replacement.
NOTICE: RED OUTLETS are for power requirements provided by the Emergency Generator
System and shall not be used by contractor personnel.
25.1
.
Ground Fault Circuit Interrupters (GFI’s) shall be in use between any hospital
permanent receptacle and any contractor equipment.
25.1.1 Temporary power panels shall have GFI protected circuits built into the
panel.
25.1.2 The GFI shall be tested for function before plugging in any contractor
equipment.
25.2
Electric power tools shall be grounded, doubled insulated or battery powered.
The cord on the tool must be free of defects.
25.3
Extension cord sets shall be the heavy duty three-wire grounded typed.
25.3.1 Three wire flat type extension cords are not permitted.
25.3.2 Defective cord ends must be replaced with a UL rated repair end;
follow the manufacture instructions.
25.3.3 Damage to the cord jacket shall not be repaired or taped over.
25.3.4 Extension cords shall be routed 7’ overhead whenever possible or
otherwise protected against damage.
26 LADDER SAFETY
Ladders must be inspected prior to each use. Defective ladders shall be removed from
service, immediately tagged as defective and removed from the job site.
Ladders shall be used only in accordance with the manufacturers’ labeled instructions.
7.1 Contractor Safety Requirement
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26.1
Stepladders shall be used only in the fully opened position with spreaders
locked in place. Using a folded stepladder leaned against a support is
prohibited.
26.1.1 Employees shall not stand on the top platform, the step below the top
platform or the back stretchers.
26.1.2 No sitting on, or straddling the top platform.
26.1.3 Stepladders shall not be used for access to platforms or other elevated
areas – an extension ladder is required.
26.2
Extension ladders must be properly positioned and locked in place.
26.2.1 Extension ladders used for access to elevated areas shall extend at least
three feet beyond the supporting structure.
26.2.2 Extension ladders must be secured to the supporting structure or be
held at the base by another employee.
26.3
Job built ladders shall conform to applicable ANSI Standards AND shall be limited to use in
excavations or concrete form work only.
27 FALL PROTECTION
Work in areas not protected by standard guardrail system OR present a fall hazard greater
than six feet shall require compliance with all current applicable OSHA Fall Protection
requirements.
28 ROOF WORK
28.1
Contractors shall comply with all applicable Fall Protection requirements.
28.2 The contractor shall have a 20 pound ABC Fire Extinguisher on the roof and
immediately available for use. Hospital fire extinguishers will not be loaned.
28.3
Any roof repairs that are performed around fresh air intakes will have to be
scheduled with Facilities Engineering 24 hours in advance. Contractor is required to
provide fume control devices when performing roof repair/replacement/new
installation.
7.1 Contractor Safety Requirement
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29 SANITATION
29.2
On stand-alone projects, the contractor shall furnish chemical toilets and hand
washing facilities.
29.3
Toilet facilities in the hospital shall be kept clean or privileges may be revoked. Only
designated toilet facilities shall be utilized.
29.4
Food and beverages will be consumed only in designated break areas. Trash,
garbage, and beverage containers shall be properly disposed of. Glass containers are
prohibited on any project.
29.5
Portable water cans shall meet the following requirements:
29.5.1 Water cans shall be cleaned and sanitized DAILY using a bleach solution and
be thoroughly rinsed.
29.5.2 Can lids will be sealed with duct tape. The date and initials of the person
filling the water can shall be written in permanent maker on the tape.
29.5.3 When electrolyte solutions (Gatorade, Quencher, etc.) are provided, the water can
shall be labeled as to its contents. The empty pouch may be taped to the water can to
identify the specific contents.
29.5.4 Single use cups and a trashcan are required for each water can location.
30 END OF DAY OR SHIFT
30.2
When contractors are working on equipment, they will ensure all panels; covers, etc.
are secured back in place before they leave that job for the day.
30.3
All smoke detectors on construction projects that are covered to prevent dust from
setting them off will be required to be put back in service before that job is finished
for the day. Verify all protection systems are operational.
30.4
All penetrations shall be sealed with an appropriate fire/smoke sealant prior to the
end of shift.
30.5
Complete daily inspection (safety) logs and daily sign-off of job site safety
inspections.
30.6
Before leaving the job for the day, contractors shall clear any permits in Facilities
Engineering.
7.1 Contractor Safety Requirement
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APPENDIX 1
Contractor’s Safety Data
See Section 3
Specific questions should be directed to the Director of Contractor Safety and/or
Local Facility Management.
NOTE: This report format is under revision to reflect changes according to the
now required OSHA 300 form.
7.1 Contractor Safety Requirement
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Memorial Hermann
HEALTHCARE SYSTEM
CONTRACTOR’S SAFETY DATA
Contractor’s Name
Address
Project Number
City
Contact
State
Zip Code
Telephone Number
Memorial Hermann Healthcare System is committed to working with safe contractors. Toward
that end, we have”pass/fail” criteria to help find contractors with good safety track records.
Before you can work at a Memorial Hermann Healthcare System site as a prime contractor or as
a subcontractor, your safety performance is compared to these criteria. If your performance
does not pass, Memorial Hermann Healthcare System can utilize your company only on an
exception basis. An explanation of your “pass/fail” criteria is given in Section II. First, please
complete the safety data in Section I.
I.
YOUR FIRM’S SAFETY PERFORMANCE AND PROGRAM
A. Worker’s Compensation Insurance–Experience Modification Rate (EMR)
1.
Please obtain from your insurance agent (or state fund, if applicable) your interstate
EMR’s for the last three rating periods. If you do not have an interstate rating, obtain
your intrastate EMR’s. Then complete the following data:
Policy Year
Modification Rate
Most Recent Policy Year
1 Year Previously
2 Years Previously
Are the above rates interstate or intrastate? _________________________________________
If intrastate, which state? ________________________________________________________
If your EMR is exactly 1.0 for any policy year, is it because your firm is (or was) too new or too small to
have an EMR calculated?
_______ YES
_______ NO
2.
We require back up for the above information. Any of the following methods would be
acceptable:
•
Furnish a letter from your insurance carrier, or state fund on their letterhead)
verifying the EMR data listed above; or
7.1 Contractor Safety Requirement
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•
Furnish copies of the last three years Experience Rating Calculation Sheets which
your insurance carrier should forward to you annually; or
•
Furnish a copy of the page from each of your last three years insurance policies
showing the modification rate and the coverage period; or
•
If you’re in a “state fund” state, such as Ohio or West Virginia, furnish a copy of the
state’s last three years annual statement pages showing the modification rate and the
coverage period.
B. OSHA Recordable Incidents
1.
Furnish a copy of your firms OSHA 300 Log from last year. It is unlikely we can qualify
your company to bid Memorial Hermann Healthcare System work without your OSHA 300
Log.
2.
Some firms are not permitted to complete the OSHA 300 Log, because they have too few
employees or are exempted by virtue of the services they perform. If you don’t complete the
OSHA 200 Log, is it because your firm has too few employees? _______ YES _______ NO
_______ N/A
Or is it because your firm performs a service that is exempted from completing an OSHA 300
Log? _______ YES _______ NO _______ N/A
If you do not complete an OSHA 300 Log and you answered “NO” to the above questions,
please explain.
____________________________________________________________
____________________________________________________________
3.
Using the OSHA 300 Log, complete the following:
a.
b.
c.
d.
e.
f.
g.
h.
4.
Number of injury-related fatalities from Column 1
_______
Number of injuries with lost workdays from Column 2
_______
Number of injuries without lost workdays from Column 6
_______
Number of illness-related fatalities from Column 8
_______
Number of illnesses with lost workdays from Column 9
_______
Number of illnesses without lost workdays form Column 13 _______
Total number of injuries and illnesses on OSHA 300 Log
_______
Total number of cases listed in Columns 6 and 13 that are
“first aid” cases. Highlight each of these cases by placing
an asterisk beside them on the OSHA 300 Log.
(_______)
Total employee hours worked last year (field, supervisory, and clerical) by your firm.
__________
7.1 Contractor Safety Requirement
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C. Safety Program
1.
Do you hold site safety meetings for:
YES
NO
FREQUENCY *
TITLE OF PERSON
CONDUCTING MEETING
Field Supervisor?
Employee?
New Hire?
Sub-Contractors?
2.
Do you conduct job safety inspections?
_________ YES _________ NO _________ FREQUENCY
3.
Do you have a formal (written) safety program? _______ YES _______ NO
May we obtain a copy upon request? _______ YES _______ NO
*
D - Daily
W - Weekly
M - Monthly
Q - Quarterly
II.
SAFETY “PASS/FAIL” CRITERIA
A - Annually
N – None
Beginning February 1, 2003, our safety “pass/fail” criteria are as follows:
•
“Pass” a contractor whose current Workers Compensation Insurance Experience Modification Rate
(EMR) is less than or equal to 1.00.
•
“Pass” a contractor whose current EMR is greater than 1.00, if the trend of his last three EMR’s is
downward and no single EMR in that period is above 1.20. (For example, pass someone whose
EMR’s for the last three years have been 2000 – 1.19, 2001 – 1.13, 2002 – 1.05)
•
For a contractor who can’t provide a true EMR because their firm is too new, too small, or selfinsured, “pass” them if the OSHA Recordable Incident Rate is less than or equal to 15 injuries and
illnesses per 200,000 man-hours.
•
If a contractor “passes” the EMR criteria, the OSHA data is not “pass/fail”. However, Memorial
Hermann Hospital System must analyze any OSHA 300 Log with a Recordable Incident Rate greater
than 15 injuries and illnesses per 200,000 man-hours. In this analysis, we’ll be trying to understand
the types of safety problems experienced by the contractor.
If your firm does not “pass” our safety criteria, we invite you to explain why and the steps being taken to improve your
safety performance.
Printed Name: _________________________________ Title: ___________________________
Signature: ____________________________________ Date: ___________________________
7.1 Contractor Safety Requirement
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APPENDIX 2
Site Specific Information
This information should be completed by the Director of Facilities Engineering and a copy
given to each primary contractor working on your campus.
Emergency Telephone Numbers
These are the in-house numbers or extensions accessible from any facility telephone (Security,
Emergency Teams, etc.). The Area Code and Prefix should also be provided for access by nonsystem phones (i.e. Contractor office trailer or Cellular phones). Use 911 only for the Fire
Department or Police.
Contractor Assembly Areas
These areas should be selected for:
•
•
•
•
Access from the exterior of the facility
Out of the way of Fire Lanes and approaches by Emergency Vehicles
Large enough for the contractor’s work force
Utilize landmarks when possible and post signs as necessary
Designated Smoking Areas
Contractor Smoking Areas should be located away from doors to the facility. The specific area should be
delineated rather than simply “outside the building”. Ash Cans and signs should be provided and maintained
by the contractor.
Hospital Rest Rooms
Your Campus policy of assigning Rest Rooms for use by contractor personnel OR requirements for placing
portable toilettes on campus.
Cafeteria Usage
Your Campus policy for contractor personnel to utilize the cafeteria facilities.
Contractor Safety Orientation
These instructions are for your facilities in-house Contractor Safety Orientation.
7.1 Contractor Safety Requirement
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SITE SPECIFIC SAFETY INFORMATION
CAMPUS _____________________________________________________________
Address ______________________________________________________________
EMERGENCY TELEPHONE NUMBERS
Hospital Emergency Services
Area Code _____ Prefix _____ Extension _______
Security …………………………………………………………………..Extension _______
Fire
………………………………………………………………….
Extension _______
Facilities Engineering ………………………………………………….. Extension _______
CONTRACTOR ASSEMBLY AREAS
Primary
_____________________________________________________
First Alternate _____________________________________________________
Second Alternate
_____________________________________________________
DESIGNATED SMOKING AREAS
_____________________________________________________________________________
_____________________________________________________________________________
USE OF HOSPITAL RESTROOMS
_____________________________________________________________________
_____________________________________________________________________
CAFETERIA USAGE
_____________________________________________________________________
_____________________________________________________________________
CONTRACTOR SAFETY ORIENTATION
_____________________________________________________________________
_____________________________________________________________________
Revised 11/03
7.1 Contractor Safety Requirement
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7.1 Contractor Safety Requirement
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APPENDIX 3
Safe Work Permit
See Sections 6 & 7
See following example of the permit form.
Specific questions should be directed to the Shift Supervisor of Facilities
Engineering.
7.1 Contractor Safety Requirement
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INSERT
SAFE
WORK
PERMIT
Form No. 80407
7.1 Contractor Safety Requirement
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APPENDIX 4
Hot Work Permit
See Section 9
The term “Firesafety Supervisor” applies to:
• Current Shift Supervisor of Facilities Engineering
• Senior Maintenance Technicians who maintain fire detection and
suppression systems.
The Manager of Facilities Engineering will designate those individuals who are
authorized to sign the permit.
Specific questions should be directed to the Manager of Facilities Engineering, or
Fire Safety Supervisor.
7.1 Contractor Safety Requirement
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INSERT
HOT
WORK
PERMIT
Form No. 80406
7.1 Contractor Safety Requirement
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APPENDIX 5
Infection Control Risk Assessment
(ICRA)
Each hospital has determined their Risk Groups in Part 1.2
Each Hospital has reviewed their Infection Control Procedures as they pertain to
construction activities and modified the attached procedures as necessary.
This is an example of the Infection Control Procedures developed for the Memorial
Hermann Hospital Campus.
7.1 Contractor Safety Requirement
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INFECTION CONTROL
PART I – GENERAL
1.1
CONSTRUCTION ACTIVITY TYPES
A.
The construction activity types are defined by the amount of dust that is generated, the
duration of the activity, and the amount of shared HVAC systems. Contact the Owner’s
Safety, Construction & Architectural Services and Infection Control Departments if any
activity is questionable under these guidelines.
B.
Inspections and Non-invasive activities. Includes, but is not limited to
Type A:
removal of ceiling tiles for visual inspection (limited to 1 tile per 50 square fee)
painting (but not sanding), wall covering, electrical trim
work, minor plumbing,
and activities that do not generate dust or require cutting of walls or access to ceiling
other than for visual inspection.
C.
Type B:
Small scale, short duration activities that create minimal dust. Includes,
but is not limited to, installation of telephone and computer cabling, access to chase
spaces, cutting of walls or ceiling where dust migration can be controlled.
D.
Type C:
Any work that generates a moderate to high level of dust or requires
demolition or removal of any fixed building components or assemblies. Includes,
but is not limited to, sanding of walls for painting or wall covering, removal of floor
coverings, ceiling tiles and casework, new wall construction, minor ductwork or
electrical work above ceilings, major cabling activities and any activity that cannot be
completed within a single work shift.
E.
Major demolition and construction projects. Includes, but is not limited
Type D:
to, activities that require consecutive work shifts, requires heavy demolition or
removal of a complete ceiling system and new construction.
7.1 Contractor Safety Requirement
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1.2
INFECTION CONTROL RISK GROUPS
GROUP I
GROUP 2
• All Office Areas • Rehab
• Sleep Lab
• Hallways and Lobbies
not in patient care areas
GROUP 3
GROUP 4
• All Patient Care Areas
• All Clinics
• Admitting and Discharge Areas
• Emergency Center
• Children’s Hospital
• Radiology/M.R.I.
• Nuclear Medicine
• Gamma Knife
• 4 Jones
• 5 Jones
• 6 Jones
• 7 Jones
• 8 Jones (Nephrology)
• Epilepsy Monitoring
• C.O.U.
• P.A.C.U.
• L&D
• Newborn
• Day Surgery
• PT/OT (Including
Tank Rooms)
• Cardiac I.M.U.
• Oncology
• Kitchen & Cafeteria
Areas
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Burn Unit
All O.R.’s
All I.C.U.’s
Dialysis
L & D O. R.
Pulmonary/G.I.
Cath. Labs
Hyperbaric/
Wound Care
Transplant
N.I.C.U.
N.S.C.
P.S.C.U.
4 Cullen
5 Cullen
Endoscopy
Sterile Supply
Work Room
Pharmacy –
Admixture
Area
Laboratories
Reviewed by Infection Control Department: Date: ____________ By: ______________________
1.3
CONSTRUCTION ACTIVITY/INFECTION CONTROL MATRIX
A.
If not shown on the drawings, determine the level of infection control classification necessary
for the work by matching the construction activity with the designated risk group in the matrix
below. Provide the associated infection control procedures under Part 3 – Execution of this
specification.
7.1 Contractor Safety Requirement
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RISK LEVEL
GROUP 1
GROUP 2
GROUP 3
GROUP 4
1.4
1.5
1.6
TYPE “A”
I
I
I
III
CONSTRUCTION ACTIVITY
TYPE “B”
TYPE “C”
II
II
II
III
III
III/IV
III/IV
III/IV
TYPE “D”
III/IV
IV
IV
IV
PERFORMANCE REQUIREMENTS
A.
Infection control is critical in areas of all facilities. Construction activities causing
disturbance of existing dust, or creating new dust, must be conducted in tight enclosures
cutting off any flow of particles into patient areas.
B.
Require all contractors, sub-contractors, material suppliers, vendors, employees, or agents to
be bound by these same requirements. Before any construction on site begins, the
contractor’s on-site management team shall attend a mandatory meeting held by the Owner’s
Infection Control authorities, for training and instruction on precautions to be taken.
C.
HEPA equipped air filtration machines shall provide air flow into construction area fewer
than 100 fpm at barricade entrances with doors fully open. HEPA equipped air filtration
machines shall be connected to normal power, ganged to a single switch for emergency shut
off, and shall run continuously.
D.
Performance requirement for certain activities may be modified by the Owner’s Safety or
Infection Control Departments. Any modifications will be written on the Infection Control
Permit. Any modifications made by Owner’s personnel do not relieve the Contractor of
compliance with proper infection control procedures.
SUBMITTALS
A.
Submit report of infection control procedures, including location and details of barriers.
B.
Product Data: Submit product data for products used in infection control program.
QUALITY CONTROL
A.
The Owner’s Infection Control Department will determine the need to monitor biological
counts in vicinity of work. Whenever safe levels are exceeded, Contractor will be notified to
correct conditions immediately.
1.
All work shall be stopped on the project whenever a hazardous infection control
deficiency exists.
2.
Contractor shall take immediate action to correct all deficiencies.
3.
Failure of Contractor to correct such deficiencies will result in corrective action taken
by the Owner and deduction of all costs to correct the deficiencies from the contract.
1.7
INFECTION CONTROL PERMIT
7.1 Contractor Safety Requirement
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A.
An infection Control Permit is required for Class III or higher procedures and any activity in a
Group 4 Infection Control Group. Refer to shaded area on Construction Activity Control
Matrix.
B.
When required, obtain Infection Control Permit from the Owner’s Safety Department before
beginning any demolition or construction work.
C.
Infection Control Permit is to be displayed at entrance to work area during entire construction
period.
D.
Return permit at completion of work.
PART 2 – PRODUCTS
2.1
2.2
MATERIALS
A.
Sheet plastic: fire retardant polyethylene, 6-mil thickness.
B.
Barrier doors: solid core wood in metal frame, painted.
C.
HEPA equipped air filtration machines: Forced Air 2000 HEPA equipped air filtration units
as manufactured by Advanced Containment Systems, Inc., Houston, Texas 77075. Provide
HEPA filter, primary and secondary filters or equal.
D.
Exhaust hoses: heavy duty, flexible steel reinforced, Ventilation Blower Hose, WPC as
manufactured by Federal Hose Mfg. Co., Painesville, Ohio 44077 or equal.
E.
Adhesive walk off mats; provide minimum size mats of 24” x 36” as manufactured by 3M,
St. Paul, Minnesota 55144 or equal.
F.
G.
Disinfectant: Owner-approved disinfectant.
Control Cube: portable ceiling access module, “Kontrol Kube, Jr.” with heavy duty vinyl
enclosure as manufactured by Fiberlock Technologies, Inc. 630 Putnam Ave., Cambridge,
Massachusetts 02139 or equal.
BARRIERS
A.
Closed door with masking tape applied over the frame and door is acceptable for projects that
can be contained within a single room.
B.
Construction, demolition or reconstruction not capable of containment within a single room
must have the following barriers erected:
1.
Airtight plastic barrier that extends from floor to ceiling. Seams must be sealed with
duct tape to prevent dust and debris from escaping.
2.
Dry wall barrier erected with joints covered or sealed to prevent dust and debris from
escaping.
3.
Seal all penetrations in existing barriers airtight.
7.1 Contractor Safety Requirement
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4.
Barriers at penetration of ceiling envelops, chases, and ceiling spaces to stop
movement of air and debris.
5.
Anteroom or double entrance openings that allow for workers to remove protective
clothing or vacuum off existing clothing.
6.
At elevator shafts or stairways within the field of construction.
7.
Overlapping flap minimum 2 feet wide at polyethylene enclosures for personnel
access.
PART 3 – EXECUTION
3.1
3.2
GENERAL
A.
Maintain manpower and equipment, including dust mops, brooms, buckets and clean wiping
rags, for cleaning fine dust from floors in adjacent occupied areas.
B.
Contain work areas outside of construction barriers, including spaces above ceilings, with full
height polyethylene sheet barrier, tightly taped.
C.
Clean up dust tracked outside of construction area immediately.
INSTALLATION
A.
Temporary construction barriers and closures above ceilings shall be dust tight.
B.
Removal of debris shall be in tightly covered containers.
C.
Adhesive mats or carpets at barricade entrances and in the anteroom shall be clean and
changed daily, or as necessary, to prevent accumulation of dust.
D.
Any dust tracked outside of barrier shall be removed immediately. Cleaning outside barrier to
be done by HEPA filtered vacuum or damp mop.
E.
Any ceiling access panels opened for investigation beyond sealed areas shall be replaced
immediately when unattended.
F.
Block off all existing ventilation ducts within the construction area. Method of capping ducts
shall be dust tight and withstand airflow.
G.
When openings are made into existing ceilings, use Control Cube or provide polyethylene
enclosure around ladder sealing off opening, fitted tight to ceiling and floor. Provide
thorough cleaning of existing surfaces, which become exposed to dust.
H.
Removal of construction barriers and ceiling protection shall be done carefully, outside of
normal work hours. Vacuum and clean all surfaces free of dust after the removal.
I.
When access panels are opened in occupied areas, for work above ceilings, use Control Cube
or provide polyethylene enclosure around ladder sealing off opening, fitted tight to ceiling and
floor.
7.1 Contractor Safety Requirement
Page 37 of 55
3.3
J.
All vacuuming outside areas not under negative pressure to be with a certified HEPA filtered
vacuum.
K.
Construct anteroom to maintain negative airflow from clean area through anteroom and into
work area.
INFECTION CONTROL PROCEDURES
A.
The Contractor is responsible for obtaining the Infection Control Permit from the Owner’s
Safety Department prior to commencing construction.
B.
The Owner’s Safety, Construction & Architectural Services and Infection Control
Departments will evaluate every work order. They reserve the right to add requirements to a
project on an individual basis.
C.
The Owner’s Safety Department will make periodic visits to work site to ensure compliance
with this policy.
D.
CLASS I:
1.
2.
E.
CLASS II:
1.
2.
3.
4.
5.
6.
7.
8.
F.
Execute work by methods to minimize raising dust from construction operations.
Immediately replace any ceiling tile displaced for visual inspection.
Provide active means to prevent air borne dust from dispersing into atmosphere.
Water mist work surfaces to control dust while cutting.
Seal unused doors with duct tape or masking tape.
Block off and seal air vents.
Wipe work surfaces with disinfectant.
Contain construction waste before transport in tightly covered containers.
Wet mop and/or vacuum with filtered vacuum before leaving work area.
Place dust mat at entrance and exit of work area.
CLASS III:
1.
2.
3.
4.
5.
6.
7.
8.
Obtain Infection Control Permit from the Owner’s Safety Department before
construction begins.
Isolate HVAC system in area where work is being done to prevent contamination of
duct system.
Complete all critical barriers before construction begins or implement Control Cube
method.
Maintain negative air pressure within work site utilizing HEPA equipped air filtration
units.
Do not remove barriers from work area until complete project is inspected by the
Owner’s Safety Department and (if required in block below) Infection Control
Department, and thoroughly cleaned by the Owner’s Environmental Services
Department.
Vacuum work area with HEPA filtered vacuum.
Wet mop area with disinfectant.
Remove barrier materials carefully to minimize spreading of dirt and debris associated
with construction.
7.1 Contractor Safety Requirement
Page 38 of 55
9.
10.
11.
G.
CLASS IV:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
3.4
3.5
Contain construction waste before transport in tightly covered containers.
Cover transport receptacles or carts. Tape covering.
Remove isolation of HVAC system in areas where work is being performed.
Obtain Infection Control Permit from the Owner’s Safety Department before
construction begins.
Isolate HVAC system in area where work is being done to prevent contamination of
duct system.
Complete all critical barriers or implement Control Cube method before construction
begins.
Maintain negative air pressure within work site utilizing HEPA equipped air filtration
units.
Seal holes, pipes, conduits and punctures appropriately.
Construct ante-room and require all personnel to pass through this room so they can be
vacuumed using a HEPA vacuum cleaner before leaving work site or they can wear
cloth or paper coveralls that are removed each time they leave the work site.
All personnel entering work site are required to wear shoe covers. Shoe covers must
be changed each time the worker exits the work area.
Provide adhesive walk off mats at entrance to work area within the anteroom. Replace
used mats with new mats in accordance with manufacturer’s recommendations.
Do not remove barriers from work area until complete project is inspected by the
Owner’s Safety Department (if required in block below) Infection Control
Department, and thoroughly cleaned by the Owner’s Environmental Services
Department.
Vacuum work area with HEPA filtered vacuums.
Wet mop area with disinfectant.
Remove barrier materials carefully to minimize spreading of dirt and debris associated
with construction.
Contain construction waste before transport in tightly covered containers.
Cover transport receptacles or carts. Tape covering.
Remove isolation of HVAC system in areas where work is being performed.
FIELD QUALITY CONTROL
A.
Contractor is responsible for maintaining equipment and replacement of HEPA and other
filters in accordance with manufacturer’s recommendations.
B.
Field inspection and testing will be performed by the Owner’s Safety and Infection Control
Departments.
C.
Owner’s Safety Department will confirm specified air velocity whenever barricades are
erected or modified.
D.
Owner’s personnel will monitor air quality throughout project
ENFORCEMENT
7.1 Contractor Safety Requirement
Page 39 of 55
A.
For any breach of this infection control policy, the Owner will stop the work of the project
and the Contractor shall pay for all associated costs incurred by the Owner, as well as for
correction of the work.
B.
The Owner’s Safety, Construction & Architectural Services and Infection Control
departments will record the following:
1.
2.
3.
C.
Document each violation with photographs.
Extract Contractor or department information from the work tag.
Maintain a record of all infection control violations.
Violations of infection control policies may affect status as a responsible Contractor for
bidding future work.
7.1 Contractor Safety Requirement
Page 40 of 55
INFECTION CONTROL CONSTRUCTION PERMIT
Permit #:
Location of Construction:
Project Start Date:
Project Manager:
Estimated Duration:
Contractor Performing Work:
Permit Expiration Date:
Supervisor:
Telephone #:
YES
NO
YES
Construction Activity
NO
TYPE A: Inspection, non-invasive activity
TYPE B: Small scale, short duration, minimal dust
generating activity
TYPE C: Activity that generates moderate to high levels
of dust, requires greater than one work shift for
completion
TYPE D: Major demolition and construction activities
requiring consecutive workshifts
Infection Control Risk Group
GROUP 1: Least Risk
GROUP 2: Medium Risk
GROUP 3: Medium/High Risk
GROUP 4: Highest Risk
CLASS I:
1)
Execute work by methods to minimize raising dust from
construction operations.
2)
Immediately replace any ceiling tile displaced for visual
inspection.
CLASS II:
1)
Provide active means to prevent air-borne dust from
dispersing into atmosphere.
Water mist work surfaces to control dust while cutting.
Seal unused doors with duct tape or masking tape.
Block off and seal air vents.
Wipe work surfaces with disinfectant.
6)
Contain construction waste before transport in tightly
covered containers.
Wet mop and/or vacuum with filtered vacuum before
leaving work area.
Place dust mat at entrance and exit of work area.
Obtain infection control permit from Owner’s Safety
Department before construction begins.
Isolate HVAC system in area where work is being done to
prevent contamination of duct system.
Complete all critical barriers or implement control cube
method before construction begins.
Maintain negative air pressure within work site utilizing
HEPA equipped air filtration units.
Do not remove barriers from work area until complete project
is inspected by the Owner’s Safety Department and (if
required in block below) Infection Control department, and
thoroughly cleaned by the owner’s Environmental Services
department.
6)
7)
8)
Obtain Infection Control Permit from Owner’s Safety
Department. Before construction begins.
Isolate HVAC system in area where work is being done to
prevent contamination of duct system.
Complete all critical barriers or implement control cube
method before construction begins.
Maintain negative air pressure within work site utilizing
HEPA equipped air filtration units.
Seal holes, pipes, conduits and punctures appropriately.
Construct anteroom and require all personnel to pass
through this room so they can be vacuumed using a HEPA
vacuum cleaner before leaving work site or they can wear
cloth or paper coveralls that are removed each time they
leave the work site.
All personnel entering the work site are required to wear
shoe covers. Shoe covers must be changed each time the
worker exits the work area.
Provide adhesive walk off mats at entrance to work area
within the anteroom. Replace used mats with new mats in
accordance with manufacture’s recommendations.
9)
DATE
INITIALS
2)
3)
4)
5)
CLASS III:
1)
2)
DATE
3)
4)
INITIALS
5)
CLASS IV:
1)
2)
3)
DATE:
4)
5)
6)
INITIALS
7)
8)
Permit sent to Infection Control Department for review: COPY
Final inspection by Infection Control required:
YES
FAX
7)
8)
Vacuum work area with HEPA filtered vacuum.
Wet mop area with disinfectant.
Remove barrier materials carefully to minimize spreading
of dirt and debris associated with construction.
9) Contain construction waste before trans- port in tightly
covered containers.
10) Cover transport receptacles or carts. Tape covering.
11) Remove isolation of HVAC system in areas where work
is being performed.
10)
11)
12)
13)
14)
15)
Do not remove barriers from work area until complete
project is inspected by the Owner’s Safety Department
and (if required in block below) Infection Control
Department, and thoroughly cleaned by the Owner’s
Environmental Services Department.
Vacuum work area with HEPA filtered vacuums.
Wet mop area with disinfectant.
Remove barrier materials carefully to minimize spreading
of dirt and debris associated with construction.
Contain construction waste before transporting in tightly
covered containers.
Cover transport receptacles or carts. Tape covering.
Remove isolation of HVAC system in areas where work
is being performed.
DATE: __________ BY: _________________________________
NO
Additional Requirements:
12 hour uninterrupted air exchange required
Date: _______________ Initials: _______________
Exceptions/Additions to this permit are noted by attached memo
Date: _______________ Initials: ______________
Permit requested by: ________________________ Date: ______________
Permit Authorized by: ___________________ Date: _____________
7.1 Contractor Safety Requirement
Page 41 of 55
CONSTRUCTION ACTIVITY TYPES
TYPE A:
TYPE B:
TYPE C:
TYPE D:
Inspection and non-invasive activities. Includes, but is not limited to removal of ceiling tiles for visual
protection limited to 1 tile per 50 square feel, painting (but not sanding), wallcovering, electrical trim
work, minor plumbing and activities which do not generate dust or require cutting of walls or access to
ceilings other than for visual inspection.
Small-scale short duration activities which create minimal dust. Includes, but is not limited to,
installation of telephone and computer cabling, access to chase spaces, cutting of walls or ceilings where
dust migration can be controlled.
Any work, which generates a moderate to high level of dust or requires demolition or removal of any
fixed building components or assemblies. Includes, but is not limited to, sanding of walls for painting or
wallcovering, removal of floorcoverings, ceiling tiles and casework, new wall construction, minor duct
work or electrical work above ceilings, major cabling activities and any activity which cannot be
completed within a single workshift.
Major demolition and construction of projects. Includes, but is not limited to, activities which require
consecutive work shifts, requires heavy demolition or removal of a complete cabling system and new
construction.
INFECTION CONTROL RISK GROUPS
GROUP I
• All Office Areas
GROUP 2
• Rehab
• Sleep Lab
• Hallways and Lobbies
not in patient care areas
GROUP 3
GROUP 4
• All Patient Care Areas
• All Clinics
• Admitting and Discharge Areas
• Emergency Center
• Children’s Hospital
• Radiology/M.R.I.
• Nuclear Medicine
• Gamma Knife
• 4 Jones
• 5 Jones
• 6 Jones
• 7 Jones
• 8 Jones (Nephrology)
• Epilepsy Monitoring
• C.O.U.
• P.A.C.U.
• L&D
• Newborn
• Day Surgery
• PT/OT (Including Tank Rooms)
• Cardiac I.M.U.
• Oncology
• Kitchen & Cafeteria Areas
• Burn Unit
• All O.R.’s
• All I.C.U.’s
• Dialysis
• L & D O. R.
• Pulmonary/G.I.
• Cath. Labs
• Hyperbaric/Wound Care
• Transplant
• N.I.C.U.
• N.S.C.
• P.S.C.U.
• 4 Cullen
• 5 Cullen
• Endoscopy
• Sterile Supply Work Room
• Pharmacy – Admixture
Area
• Laboratories
CONSTRUCTION ACTIVITY/INFECTION CONTROL MATRIX
Infection Control Permit will be required when the Construction Activity and Risk Level indicate that Class III and Class IV
control procedures are necessary.
CONSTRUCTION ACTIVITY
RISK LEVEL
TYPE “A”
TYPE “B”
TYPE “C”
TYPE “D”
GROUP 1
I
II
II
III/IV
GROUP 2
I
II
III
IV
GROUP 3
I
III
III/IV
IV
GROUP 4
III
III/IV
III/IV
IV
7.1 Contractor Safety Requirement
Page 42 of 55
APPENDIX 6
Pre-Construction Risk Assessment
(PCRA)
This is a proactive method to analyze the projects potential impact on air
quality, infection control, utilities, noise, vibration, life safety and
emergency procedures. The attached risk assessment tool (PCRA) is
designed for evaluating the project prior to commencement of
construction. Team members involved in this process (as applicable)
include the A&E group, Contractors, Safety, Infection Control, Project
Manager, and Facilities Engineering.
7.1 Contractor Safety Requirement
Page 43 of 55
Memorial Hermann Hospital System
Facility Engineering
Policy & Procedure
Subject:
Pre-Construction Risk Assessment
Date: 8/02
1.0
To ensure that appropriate design, safety and risk assessments are
performed when designing and building the hospital environment.
The construction project team will conduct a proactive risk assessment
using risk criteria to identify hazards that could potentially compromise
patient care activities when planning demolition, construction, and
renovation work.
DEFINITIONS
3.1
4.0
Page: 1 of 2
GUIDELINES
2.1
3.0
9/02
PURPOSE
1.1
2.0
Revised:
Policy: FE-SM-115
Construction Project Team – a collaborative group, (as applicable) of
design professionals, clinical specialists, infection control practitioners,
facilities/safety, project management, and construction personnel.
PROCEDURES
4.1
Pre-construction Risk Assessment (PCRA) process:
4.1.1 The Construction Project Team evaluates the risk and impact of the
proposed project on the facility and patient care environment
during the planning and implementation state of the project.
4.1.2 A Pre-Construction Risk Assessment (PCRA) form has been
developed which provides a framework for discussions and
assessment of risks to the built environment relative to air quality
7.1 Contractor Safety Requirement
Page 44 of 55
and infection control, utility systems, noise, vibration, and
emergency procedures or impacts to fire and life safety systems.
4.1.3 From the assessment, specific recommendations and further
research/processes may be outlined to minimize the impact of the
proposed project on the patient care environment.
4.1.4 There are existing procedures and assessments that are utilized in
conjunction with this evaluation to provide the complete
evaluation. The initial team review will outline which issues
require in-depth assessments (as applicable) and further follow-up.
4.2
Implementation:
4.2.1 Construction Project Team reviews and documents required
analysis utilizing the PCRA form. If applicable, additional
documentation is completed regarding ILSM, Infection Control,
Emergency Procedures and Utility Interruption notices (as
applicable).
4.2.2 Project manager(s) ensure documentation is properly executed and
distributed to team members.
4.2.3 PCRA should be posted on the job site and the original form(s)
should be kept in the project file.
4.3
Reporting:
4.3.1 A summary of projects that are included in this process shall be
periodically reviewed by the hospital Safety Committee or
Construction Coordinating Committee reporting structure.
References:
•
•
Attachment:
Management of the Environment of Care, CAMH
Guidelines for Design and Construction of Hospitals and Healthcare Facilities, the AIA
PCRA Process Diagram
7.1 Contractor Safety Requirement
Page 45 of 55
Memorial Hermann Healthcare System
Pre-Construction Risk Assessment
Process
Infection Control
Indoor Air Quality
Emergency Procedures
Utility Impacts
Pre-Construction
Risk Assessment
(PCRA)
Process
Vibration
ILSM
Noise
Fire & Life Safety
New Construction
Demolition
Renovation
Risk Minimization
Steps for:
Safety Committee
or
Construction Committee
Patient Environment of Care
7.1 Contractor Safety Requirement
Page 46 of 55
APPENDIX 7
Confined Space Entry Permit
See Section 12 – See following form
Each hospital has their individual Confined Space Entry Program to comply with
applicable facility, OSHA and your firm’s requirements.
Specific questions should be directed to the Manager of Facilities Engineering.
7.1 Contractor Safety Requirement
Page 47 of 55
CONFINED SPACE ENTRY PERMIT
(All copies of permit must remain at job site until operation is complete)
Location And Description Of Confined Space
Date of Entry _____________________
Time of Entry _________________________
Expiration ____________________________
Description Of Work To Be Done
Test (s) To Be Taken Prior To Entry
Valid for one 8 hour period only
P.E.L. *
% of Oxygen
>19.5% and <23.5%
% of L.E.L. **
< 10%
Carbon Monoxide
<50ppm
Hydrogen Sulfide
<10ppm
Aromatic Hydrocarbon
<10ppm
YES
NO
RESULTS
SIGNATURE
DATE/TIME
Other Tests (list below):
Testing/Monitoring Instruments Used
I.D. Number
Note: Continuous or periodic testing must be performed for the duration of the job.
Perform applicable tests across different sections of the space.
Individual(s) performing test(s): __________________________________________
Specify frequency of test(s): _______________________________________________________
* P.E.L. (Permissible Entry Level)
** L.E.L. (Lower Explosion Level)
7.1 Contractor Safety Requirement
Page 48 of 55
SPECIAL REQUIREMENTS
Lock Out/De-energize
YES
NO
RESULTS
SIGNATURE
DATE/TIME
Lines Broken – Capped or Blanked
Purge – Flush and Vent
Ventilation
Secure Area
Other Requirements (specify):
Personal Protective Equipment (check if required for entry)
Hard Hat
Gloves
Hearing Protection
Lighting
Respirator
Safety Harness
Goggles
Gas Monitor
Lifeline
Protective Clothing
Fire Extinguisher
Emergency Retrieval
System
Other (specify)
_________________________________________________________________
Supervisor(s) in Charge of Operation
Department
Phone
Authorized Entrant(s) ________________
Attendant(s) ___________________________
____________________________________
_______________________________________
In Emergency Contact _______________
_______________________________________
_____________________________________
Signature of Supervisor Authorizing Entry
Work Completed and Ready for Operation
Authorizing Signature _____________________
Date: __________________________
_________________________________________
Time: __________________________
7.1 Contractor Safety Requirement
Page 49 of 55
APPENDIX 8
Cable Pull Permit
See Section 13 – See following form
Specific questions should be directed to the Manager of Facilities Engineering.
7.1 Contractor Safety Requirement
Page 50 of 55
CABLE PULL PERMIT
DATE:
NUMBER:
COMPANY NAME: ____________________________
CONTACT:
___________________________
HOSPITAL DEPT. WORKING FOR: ________________________________________________________
HOSPITAL CONTACT: __________________________________________________________________
TYPE OF WORK BEING DONE: ___________________________________________________________
STARTING LOCATION: __________________________________________________________________
ENDING LOCATION: ____________________________________________________________________
TYPE & QUANTITY OF ITEMS BEING INSTALLED (i.e. number and type of cables, conduits, water lines,
etc.): _________________________________________________________________________________
NUMBER OF WALLS OR FLOORS TO BE PENETRATED: _____________________________________
∗
ACTIVITY IS APPROVED ONLY DURING THE CALENDER WEEK FOR
WHICH THE PERMIT IS DATED.
∗
PERMIT WILL BE ATTACHED TO SIDE OF LADDER OR WORK CART.
∗
ALL FLOOR AND WALL PENETRATIONS MADE DURING THIS PROJECT SHALL BE SLEEVED (WITH
FERROUS METAL EXTENDING ONE INCH EITHER SIDE) AND SEALED WITH APPROVED FIRE
RESISTANT MATERIAL BY CONTRACTOR ACCOMPLISHING THE WORK.
∗
PERMIT NUMBER SHALL BE APPLIED BY PERMIT HOLDER TO THE CABLE BEING PULLED (conduit,
pipe, duct, etc.) ON EACH SIDE OF A PENETRATION.
∗
MAKE NOTE OF ANY EXISTING IMPROPER PENETRATIONS IN THE AREA WHICH YOU ARE
WORKING AND REPORT THESE TO WORK CONTROL.
∗
ABOVE CEILING CHECKLIST
CORRIDOR BARRICADE (MIN. 6 CONES)
SEAL ALL WALL PENETRATIONS
ASBESTOS PRECAUTIONS
NO OPEN CEILING AROUND PATIENTS
CERTIFIED WORKER
REPLACE TILES
AIR MONITORING
CLEAN AREA
CONTROL CUBE / CONTAINMENT
PPE REQUIREMENTS___________________
______________________________________
NEGATIVE AIR SYSTEM – HEPA FILTERED
Signed: __________________________ Title: ______________________ Date: __________________
REV 10/03
7.1 Contractor Safety Requirement
Page 51 of 55
APPENDIX 9
Interim Life Safety Measures
See Section 15 – See following forms
Specific questions should be directed to Contractor Safety and/or local campus
Safety Officer and Facilities Engineering.
7.1 Contractor Safety Requirement
Page 52 of 55
Memorial Hermann Healthcare System
INTERIM LIFE SAFETY MEASURES
DECISION LOGIC
NO
I.L.S.M.
REQUIRED
RE-EVALUATE
AS NECESSARY
CONSTRUCTION
OR
REMODELING
IMPLEMENT
I.L.S.M.
AS APPROPRIATE
WILL THE SCOPE
OF THE PROJECT:
REQUIRE EXIT DOORS
OR
EXIT COORIDORS TO BE
BLOCKED OR RE-ROUTED
OR
REQUIRE ADDITIONAL
COMBUSTIBLE OR
FLAMMABLE MATERIALS
TO BE BROUGHT INTO
THE AREA
OR
CAUSE FIRE ALARM
OR EXTINGUISHMENT
SYSTEMS TO BE IMPAIREDFOR
4 HOURS OR LONGER
NO
TO ALL
QUESTIONS
OR
YES
TO ANY
QUESTION
REQUIRE FIRE WALLS
OF FIRE DOORS TO BE
REMOVED, PENETRATED
OR COMPROMISED FOR
GREATER THAN ONE SHIFT
OR
CAUSE EXITWAY LIGHTING
OR
EXIT SIGNS TO BE REDUCED
7.1 Contractor Safety Requirement
Page 53 of 55
ILSM Assessment
x
x
x
x
x
Provide additional fire fighting
equipment.
Smoke tight temporary partitions
built of non-combustible materials.
Temporary but equivalent fire alarm
system provided
Train Personnel within or Adjacent to
the Area
Ensure Operational Life Safety
System
Notify AHJ
x
x
Staff training and ILSM / safety
education
Exitway lighting or exit signs to be
reduced.
x
Conduct a minimum of two fire drills
per shift per quarter.
Require substantial amount of
additional flammable materials within
the area.
Fire alarm or extinguishment systems
are/to be impaired more than 4 hours
in a 24 hour period.
Fire/smoke walls or doors to be
removed, penetrated or compromised
in any other way.
Develop and enforce storage,
housekeeping and debris removal
practices.
Exit doors or exit corridors to be
blocked or re-routed.
Ensure Egress
Location:
Contractor(s):
Date:
ILSM Required (Yes/No)
Project:
Start Date:
Assessment Completed By:
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
* Smoking is limited only to designated areas (external) on all MHHS projects. Increased hazard surveillance of facility and
construction areas are standard practice for active projects.
Comments:
Note: Although the items indicated are typical, each project must be examined on a case by case basis.
Copies: Project Manager, Safety Office, Contractors (as applicable), Project file(s)
7.1 Contractor Safety Requirement
Page 54 of 55
DATE:
APPROVED:
7.1 Contractor Safety Requirement
Page 55 of 55
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 7.2
Policy Title: Inspections
Discuss with CRESS to clarify
Category: Safety
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to give guidelines related to an
appropriately scheduled and conducted facility inspection.
Policy Statement:
All required inspections should be anticipated and scheduled in advance. On all
final occupancy inspections, the following steps should be taken:
ƒ
Verify that the building is clean and appears ready for its intended use
ƒ
Verify that representatives from each major subcontractor are available at
the job site to answer questions from inspectors and to make immediate
adjustments or corrections to work in place at the recommendation of the
inspectors.
ƒ
Note takers should accompany each inspector during the inspection to
record all inspection comments.
ƒ
When required, early conditional occupancies should be coordinated with
Hospital Facility.
The following is specific protocol for the Project Manager to follow for
inspections:
A. Protocol for Job Site / Area Inspections
1.) All individuals performing inspections should inform the Project Manager
that they will be on the project and during what time frame.
7.2 Inspections
Page 1 of 4
2.) Note in your Daily Log, the start time for billing purposes.
3.) Check the Facilities Engineering Board for PERMITS
4.) SIGN-IN SHEET
a. General Contractor
b. Job Site
c. Facilities Engineering (in-house projects)
5.) Contact the Job Superintendent (or designated “Responsible Person”)
a. If neither is available nor on the job site, inform the Facilities
Engineering Manager or Director immediately.
b. A representative of the General Contractor and the Facilities
Engineer shall accompany the Contractor Safety Inspector
throughout any Audit.
6.) Conduct Inspection / Audit / Fire Drill
7.) Complete the Job Site / Area Inspection Report
8.) Obtain signature of appropriate Job Representative. Leave top sheet of
report.
9.) Leave a copy with the Facilities Engineering Director
10.) Sign Out
11.) Note time of departure from site or campus in Daily Log.
12.) Note in Daily Log of time spent for making copies, reports and
distribution to support time charged to the Project.
7.2 Inspections
Page 2 of 4
Contractor Safety
Job Site / Area Inspection
DATE:_________
TIME:_________
CAMPUS:___________
Project Name:_____________________________________________
Project Manager:__________________________________________
Specific Location:__________________________________________
General Contractor/Company:________________________________
Contractor or Job Site Representative:__________________________
The following violations of the Contractor Safety Requirements OR
Safety deficiencies are noted:
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
IMMEDIATE CORRECTIVE ACTION IS REQUIRED
This is a REPEAT violation
SERIOUS VIOLATION – WRITTEN RESPONSE IS REQUIRED
Failure to abate these conditions by (DATE)_______(TIME)________ may
result in penalties outlined in Section 2 of the Contractor Safety
Requirements.
Safety Representative:__________________________________________
Job Representative:____________________________________________
7.2 Inspections
Page 3 of 4
CONTRACTOR SAFETY
JOB SITE / AREA INSPECTION
DISTRIBUTION
Original (White)
Job Representative
- GC Superintendant
- Craft Foreman
Form Copy (Yellow)
Safety Campus/Project Binder
Copies
Facilities Engineering
(Hermann – To Kent Trammel)
Project Manager
(All SpawMaxwell – Charlene)
John Houchin Packet - Friday
APPROVED:
DATE:
7.2 Inspections
Page 4 of 4
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 8.1
Policy Title: Best Practices for Design/Planning
Category: Design and Planning Best Practices
Original Date: November 2005
Last Review Date: November 2005
Supersedes: No prior policy
Policy Purpose: The purpose of this policy is to provide the Project Manager
with CRESS Best Practices related to:
□
□
□
□
Architectural/Design
Interior Design
Parking
Engineering
□ Biomedical Engineering
□ Engineering
□ Security
Policy Statement:
A. Architectural and Design Best Practices
1.) Patient Room – Existing
2.) Patient Room – In-Design
3.) Catheterization Lab
4.) Intensive Care Unit – Existing
5.) Intensive Care Unit – In-Design
6.) Nursing Care
7.) Operating Room
8.) Imaging Equipment Decisions
9.) Outpatient Imaging
10.) Post Occupancy Measurements
8.1 Best Practices for Design & Planning
Page 1 of 3
B. Interior Finishes
1.) Finishes
a. System
b. Facilities
2.) Furniture
a. Office Typicals
b. Task & General Seating
c. Filing & Storage
d. Tables
e. Waiting Area Seating
f. Patient Room Furniture
g. Pediatric Furniture
h. Outdoor Furniture
i. Accessories
j. Bariatric Seating
C. Graphics & Wayfinding
1.) General Specifications
2.) Interior Graphics
3.) Exterior Graphics
D. Parking
1.) Fire Cabinets
2.) Garage Lighting
3.) Miscellaneous
4.) Parking Booths
5.) Parking Equipment
6.) Security Systems
E. Biomedical Engineering
1.) Medical Equipment Management Plan
2.) Performance Improvement Plan
3.) JCAHO Cross-Reference
4.) Annual Analysis
5.) MEMP Binder Procedures
6.) General Reference Material
F. Engineering
8.1 Best Practices for Design & Planning
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1.) Benchmarking
2.) Master Specifications
3.) System Engineering Standard of Practices
4.) JCAHO Compliance Metrics
5.) SOC/PFI
G. Security
1.) Standard Designs for New Projects
2.) Standard Equipment for New Projects
3.) Standard ACMS Configuration for New Projects
APPROVED:
DATE:
8.1 Best Practices for Design & Planning
Page 3 of 3
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 9.1
Policy Title: Construction Closeout Process
Category: Project Closeout Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: As a Project nears the completion phase of construction, the formal
process for substantial completion, final completion begins, turnover, occupancy and
commissioning begins. The purpose of this policy is to describe the general closeout
process, as well as develop and administer Project closeout coordination with the
Facility/Project Manager, governing agencies, other parties and activities, including:
ƒ
ƒ
ƒ
ƒ
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ƒ
ƒ
ƒ
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System Demonstration/Start-Up
Closeout Requirements for Consultants/Contractors
Final Certification
Agency preliminary inspections
Punch list inspections
Agency final inspections
Construction phase substantial completion
Staff and stock occupancy
In-service training
Policy Statement:
A.) Closeout Process Defined
Closeout is the process of organizing the general Project requirements near the end of
contract time to evidence the completion of the work. The time of closeout directly
relates to "Substantial and Final Completion". It can either be a single time period for
the entire work, or a series of time periods for individual components of the work,
which have been certified as Substantially of Finally Complete on different dates.
9.1 Construction Closeout Process FULL
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Substantial Completion of the Work is the stage in the progress of construction
when the work is sufficiently complete in accordance with the contract documents so
that the Owner can occupy or utilize the work for its intended use. At a minimum, this
is usually represented by the Occupancy Permit or Certificate of Occupancy issued by
the local jurisdictional authority.
Final Completion of the Project is the stage when all of the obligations of the
contract have been satisfied and a Certification of Final Completion has been issued by
the Architect according to the terms and conditions of the contract documents and a
Certified Application for Payment has been received from the Architect allowing for a
release of final payment to the Contractor.
B.) Closeout Process Overview
As the Contract approaches completion, each Contractor should be required to
commence the Closeout Documentation Process. Typically, a 75% completion is used
as the milestone for organizing and commencing the Contractor's Closeout. The
closeout process takes time and planning therefore an adequate schedule for the
activities is required.
Before processing the completion of all contractual responsibilities of the Contractor and
to expedite final payment to the Contractor, a detailed review of all contractual
requirements should be performed along with compiling a list of deficiencies - punchlist.
Effective and timely contract closeout is the objective, but it also requires efficient and
timely action of the Contractor to provide the necessary punch list completion work,
documents, materials, etc.
In most cases, the Project closeout phase will commence with the issuance of
Certificate of Substantial Completion and ends with the submission of the final record
documents and the payment of the Construction Manager’s/General Contractor’s
(CM/GC) final application for payment. The warranty period, in most instances, is
subsequent to the Project closeout phase and occupancy. Warranty periods are
typically begun by the formal acceptance of the building, described here and
elsewhere as “substantial completion”. The Contractor should submit the following
Project closeout submittals:
a. Evidence of compliance with the requirements of the governing
authorities
b. Certificates of occupancy
c. Certificates of inspection for special systems such as plumbing,
mechanical, electrical, fire alarm, fire protection, communications,
elevators, x-ray protection, medical gas certification, etc.
9.1 Construction Closeout Process FULL
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d. State governing authority approval
e. Attic-stock materials as per the specification and contract documents
f. Project record documents in accordance with the requirements of the
Project specifications, which include final record “as-built” drawings
g. Operating and maintenance data in accordance with the requirements of
the Project specifications
h. Warranties and guarantees in accordance with the requirements of the
Project specifications
i. Keys and keying schedules in accordance with the requirements of the
Project specifications
j. Evidence of payments to all subcontractors and material suppliers and
final appropriate lien waver and bonding company notices of final
payments
C.) Project Closeout Documentation Checklist
1.) As the Project draws near to completion, the Project Manager should utilize a
Project Checklist (as shown below in Figure 9.1a – Project Closeout
Checklist) to ensure that every close out activity has been completed.
a. Please note that each Project is unique and the requirements vary so
tailor the Project Checklist to properly reflect the particular aspects of
the Project in question.
b. The Project Manager may request a template checklist by e-mailing the
Assistant to the CRESS Director of Architecture and Construction and
asking for an electronic copy.
D.) 9 Steps to an Effective Closeout
The following process and forms should be used to progress through the contract
closeout stage in a productive and timely manner.
1.) Preparation for Future Contract Closeout
Prior to the signing of a Contract with a CM/GC, the Contract Documentation
should relate the requirements and obligations for all parties for proper
9.1 Construction Closeout Process FULL
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submittals, shop drawings, material certifications, waivers, certificates of
insurance, bonds and other contractual requirements impacting contract
closeout.
2.) Initiating the Closeout Process
At 75% completion, the Project Team should review the Closeout process with
the Contractor. Tracking of the closeout documents should begin and a file
system for the closeout documents should be started.
3.) Informing the Vendor(s)
a.) The Project Manager will send letters to vendor(s) informing them that
the Project will be closed as of a specified date and that all invoices
should be paid prior to that date. Ample notification should be
provided and generally, thirty (30) days is recommended. Please refer
to Figure 9.1b - Letter to Vendor Notifying of Project Closure
Date for a sample letter template. This can be sent electronically to
the Project Manager, by requesting the template from the Assistant to
the CRESS Accounting Office.
b.) The Project Manager then notifies the CRESS Sr. Financial Analyst that
a Project will be closed.
4.) Obtaining the Certificate of Substantial Completion
a.) As the Contractor is nearing the completion of the work, he/she should
submit a request for substantial completion and a listing of all
deficiencies yet to be completed from the Project punchlist.
b.) The following documents are the minimum normally required at the time
of request for substantial completion if required by the contract
documents for the Contractor's work (not intended to be a complete
listing):
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AIA G704 Certificate of Substantial Completion
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As-built records (electronic and hard copy)
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Operation and Maintenance Manuals - Typically, all O&M manuals
will be submitted to the Owner prior to acceptance of equipment
systems or building occupancy
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Keys, Maintenance Stock and Spare Parts
9.1 Construction Closeout Process FULL
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Test and Start-up Reports
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Owner Training Sessions
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Equipment/System Acceptance - This form will be completed for
each piece of equipment or system for each contract that requires
operational testing and/or training before acceptance. This will
document the date of testing, the equipment tested, personnel to
witness the testing and acceptance
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Owner Training Register - This form will be completed for each
contract that requires training to be provided to the Owner. This
will document the date of training, type of training, personnel
trained and the acceptance of the training.
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Submission of Permits
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Fire Marshal and Department of Public Health Approvals, etc.
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Guarantees and Warranties
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Punchlist (list of work to be completed)
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Letters of acceptance and other pertinent documents per the
specifications
c.) The Contract file will contain the correspondence files created during the
Project, the submittal records as well as all other documentation
required. The as-built records and O&M manuals in both electronic and
hard copy format will be sent to the Owner's administration once they
have been reviewed and approved by the Architect. This will allow the
Architect to incorporate all revisions as required and the Owner to
become familiar with the operation of the new Facility.
d.) As the Project progresses, the GC/CM should develop a schedule for the
training, start-up and turnover of all systems and equipment for building
occupancy. Please refer to Policy 9.4 “Closeout Log” for a further
description of this.
e.) The Architect and/or Owner will review the Contractor's request for
substantial completion. When the Architect determines that the work is
substantially complete, he should complete and sign the Certificate of
Substantial Completion.
9.1 Construction Closeout Process FULL
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f.) The Certificate of Substantial Completion will then be sent by the
Architect, along with the remaining punchlist to the Project Manger/End
User at Facility for written acceptance. The Project Manager will sign off
on the G704 and issue the Certificate of Substantial Completion to the
Contractor.
5.) Contractor Completes Punchlist Work
CM/GC Contractor should submit a letter certifying all punchlist items are
completed.
6.) Inspections
The Project Manager should anticipate and schedule all required inspections in
advance. On all final occupancy inspections, the following steps should be
taken:
a. Verify that the building is clean and appears ready for its intended use
b. Verify that the representatives from each major subcontractor are
available at the job site to answer questions from inspectors and to
make immediate adjustments or corrections to work in place at the
recommendation of the inspectors
c. Note takers should accompany each inspector during the inspection to
record all inspection comments
d. When required, early conditional occupancies should be coordinated
with the Facility
e. Complete any commission or environmental testing as required by the
Project type
The Project Manager should oversee and participate with all authorities having
jurisdiction in iterative closeout processes, including:
a. State of Texas Fire Marshal
b. Local fire department
c. Texas/Federal agencies (including the Texas Department of State Health
Services [DSHS])
d. Local building jurisdiction
9.1 Construction Closeout Process FULL
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The Contractor is to forward (written notice and accompanying documentation)
that the work is ready for final inspection and acceptance. The Architect will
perform a final inspection and sign off on the punchlist if the work is completed.
If punchlist work is, in the opinion of the Architect, not completed, the CM/GC
should take action to remedy any insufficiencies and then re-submit the written
notice and accompanying documentation that work is ready for final inspection
and acceptance (See Policy 7.2 – “Inspections” for further information).
7.) Documents Needed for Final Payment
a. The following documents are the minimum normally required to complete final
payment (not intended to be a complete listing):
i.
ii.
iii.
iv.
v.
vi.
vii.
Final Payment Request
Guarantees/Warranties (including subs and suppliers)
Final Lien Statements
Acknowledgment of Payment and Partial Unconditional Release
Final Releases from Sub-tier contractors and suppliers
Consent of Surety Company to Final Payment (AIA G707).
Consent of Surety to Reduction or Partial Release of Retainage (AIA
G707A)
viii. Certificate of Substantial Completion (AIA G704).
ix. Completion and acceptance of all punchlist work.
b. Upon submission of the final Project closeout documents, the CM/GC should
submit the final application for payment. This application includes a final
statement of accounting, which reflects all adjustments to the contract sum.
The final statement of accounting should be submitted in the following format:
i. Original contract sum
Additions or deductions resulting from:
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
Change Orders
Allowances
Unit prices
Deductions for uncorrected work
Deductions for re-inspection payments
Other adjustments
Total contract sum (as adjusted)
Total of previous payments
Total balance due
9.1 Construction Closeout Process FULL
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The following are the current MHHS A201 guidelines regarding final payment, which
Project Managers should follow:
§ 9.10 FINAL COMPLETION AND FINAL PAYMENT
§ 9.10.1 Upon receipt of written notice that the Work is ready for final
inspection and acceptance and upon receipt of a final Application for Payment,
the Architect will promptly make such inspection and, when the Architect finds
the Work acceptable under the Contract Documents and the Contract fully
performed, the Architect will promptly issue a final Certificate for Payment
stating that to the best of the Architect's knowledge, information and belief, and
on the basis of the Architect's on-site visits and inspections, the Work has been
completed in accordance with terms and conditions of the Contract Documents
and that the entire balance found to be due the Contractor and noted in the final
Certificate is due and payable. The Architect's final Certificate for Payment will
constitute a further representation that conditions listed in Section 9.10.2 as
precedent to the Contractor's being entitled to final payment have been fulfilled.
All warranties and guarantees required under or pursuant to the Contract
Documents should be assembled and delivered by the Contractor to the Architect
as part of the final Application for Payment. The final Certificate for Payment will
not be issued by the Architect until all warranties and guarantees have been
received and accepted by the Owner.
§ 9.10.2 Neither final payment nor any remaining retained percentage should
become due until the Contractor submits to the Architect (1) an affidavit that
payrolls, bills for materials and equipment, and other indebtedness connected
with the Work for which the Owner or the Owner's property might be responsible
or encumbered (less amounts withheld by Owner) have been paid or otherwise
satisfied, (2) a certificate evidencing that insurance required by the Contract
Documents to remain in force after final payment is currently in effect and will
not be canceled or allowed to expire until at least 30 days' prior written notice
has been given to the Owner, (3) a written statement that the Contractor knows
of no substantial reason that the insurance will not be renewable to cover the
period required by the Contract Documents, (4) consent of surety, if any, to final
payment; (5), if required by the Owner, other data establishing payment or
satisfaction of obligations, such as receipts, releases and waivers of liens, claims,
security interests or encumbrances arising out of the Contract, to the extent and
in such form as may be designated by the Owner , and (6) such other
information or documentation as Owner's lender reasonably may require. If a
Subcontractor refuses to furnish a release or waiver required by the Owner, the
Contractor may furnish a bond satisfactory to the Owner to indemnify the Owner
against such lien. If such lien remains unsatisfied after payments are made, the
Contractor should refund to the Owner all money that the Owner may be
compelled to pay in discharging such lien, including all costs and reasonable
9.1 Construction Closeout Process FULL
Page 8 of 18
attorneys' fees unless Contractor is proceeding diligently and in good faith to
contest such lien and has furnished to Owner reasonably security, such as a
bond, title insurance, letter of credit, etc., to reasonably protect Owner and the
Project against such lien. In addition to those items set forth in this paragraph,
the Contractor should provide the Owner, before the Owner's payment of the
final monthly progress payment, the following:
.1 A complete list of subcontractors and principal material and equipment
suppliers, including addresses, telephone numbers, and name of individuals to
contact who are familiar with the Project (including the Contractor);
.2 Three (3) copies of all maintenance and operating manuals, reviewed by
the Architect;
.3 Three (3) copies of all written guarantees in the form prescribed by the
Contract documents after being reviewed and approved by the Architect;
.4 One (1) printed set and (1) electronic copy of as-built drawings and
specifications prepared by the Architect;
.5
Three (3) sets of the Project Manual, reviewed by the Architect;
.6 Payments which may otherwise become due to the Contractor at or
following the point of Substantial Completion should be withheld contingent
upon receipt of the above;
.7 All warranties and guarantees signed and dated by an authorized offer
of the Company issuing the document;
.8 Sixty (60) days prior to Substantial Completion Contractor should
provide the Owner "working copies" of all Operation/Maintenance Manuals;
.9 One (1) copy of a detailed Quantity Survey which breaks down the final
cost of the work by square foot, by discipline or trade, by department (as
defined by Owner) and by any other criteria required by the Owner at the time
of Final Completion, and
.10 Any and all other items required by the Contract Documents.
§ 9.10.3 If, after Substantial Completion of the Work, final completion thereof is
materially delayed through no fault of the Contractor or by issuance of Change
Orders affecting final completion, and the Architect so confirms, the Owner
should, upon application by the Contractor and certification by the Architect, and
without terminating the Contract, make payment of the balance due for that
9.1 Construction Closeout Process FULL
Page 9 of 18
portion of the Work fully completed and accepted. If the remaining balance for
Work not fully completed or corrected is less than retainage stipulated in the
Contract Documents, and if bonds have been furnished, the written consent of
surety to payment of the balance due for that portion of the Work fully
completed and accepted should be submitted by the Contractor to the Architect
prior to certification of such payment. Such payment should be made under
terms and conditions governing final payment, except that it should not
constitute a waiver of claims.
§ 9.10.4 The making of final payment should constitute a waiver of Claims by
the Owner except those arising from:
.1 liens, Claims, security interests or encumbrances arising out of the
Contract and unsettled;
.2 failure of the Work to comply with the requirements of the Contract
Documents; or
.3
terms of special warranties required by the Contract Documents.
§ 9.10.5 Acceptance of final payment by the Contractor, a Subcontractor or
material supplier should constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the time
of final Application for Payment.
8.) Final Payment Request
The Architect will review the Contractor's final payment request and Closeout files.
If all administrative documents are attached or have been submitted (i.e.
guarantee, warranty, waiver of lien, etc.) all work is complete and all other
responsibilities are met, the Architect will recommend final payments to be
released by Memorial Hermann.
9.) Project Closure Form, Payment Disbursement and Final Closeout
If in the Project Manager’s opinion, all conditions of the Contract have been
satisfied, the Project Manager will complete and sign the Project Closure form
(see Figure 9.1c – Project Closure Form) and obtain the signature of the
director of the user group for whom the Project was completed.
a. After the signature of the director of the user group for whom the
Project was completed is obtained, the Project Manager will submit the
completed Project Closure form to the CRESS Sr. Financial Analyst.
9.1 Construction Closeout Process FULL
Page 10 of 18
b. The CRESS Sr. Financial Analyst will obtain the approval, via signature,
of the CRESS AVP/Director and VP of CRESS on the Project Closure
Form.
c. After the Project Closure form has been completed and approved, the
CRESS Sr. Financial Analyst will send the completed and signed Project
Closure form to MHHS Corporate Accounting where the Project will be
closed in the Lawson Accounting System and transferred to a fixed
assets account.
d. The CRESS Sr. Financial Analyst will notify the CFO of the Facility in
which the Project was completed for, after the Project has been closed.
e. AFTER A PROJECT IS CLOSED, NO ADDITIONAL EXPENDITURES
CAN BE CHARGED TO THE PROJECT.
E.) Closeout Requirements for Consultants/Contractors
1.)
The closeout requirements for the consultants and contractors are similar, but
less involved than the process required for the CM/GC’s closeout. The
consultants and contractors may provide such services as functional
programming, A/E firms, geotechnical services, equipment plans, interior
designs, signage, graphics, telecommunication services, major equipment
vendors, telephone, television, patient monitoring, nurse call, intercom,
paging and window treatment contractors.
2.)
The closeout process for consultants and contractors are as follows:
a. Obtain all final Project closeout documents such as record drawings,
operation and maintenance manuals, warranties, guarantees and atticstock from relevant vendors
b. Monitor the vendors’ completion of all in-service training session with
Facility personnel.
3.)
Upon submission of the final Project closeout documents, all consultants and
vendors should submit the final application for payment. This application
should include a final statement of accounting, which should reflect all
adjustments to the contract sum. The final statement of accounting should
be submitted in the following format:
a. Original contract sum
Additions or deductions resulting from:
9.1 Construction Closeout Process FULL
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b.
c.
d.
e.
f.
g.
h.
i.
j.
Change Orders
Allowances
Unit prices
Deductions for uncorrected work
Deductions for re-inspection payments
Other adjustments
Total contract sum, as adjusted
Total of previous payments
Total balance due
F. Move Planning
1.) The most important aspects of move planning are patient safety and proper
sequencing and scheduling of activities.
To implement the
relocation/occupancy plan, determine the items that need to be moved and
determine if these items can be moved before occupancy. The items involved
in moving a Facility are typically divided into the following areas:
a. Fixed Minor Equipment – This category covers items such as surgical
lights, exam lights, IV poles, kitchen equipment, warming cabinets,
illuminators,
pharmacy,
laboratory
and
blood
refrigerators,
miscellaneous shelving unites and diagnostic sets
b. Items that require electrical and mechanical connections are usually
removed, relocated and reinstalled by the CM/GC and his/her
subcontractors. Typically, these items would be included in a list
provided by the Equipment Planner.
c. Fixed Major Equipment – This category covers items such as
RAD/Flouro, RAD/TOMO, Cath Labs, Nuclear Medicine machines, etc.
They require a more sophisticated installation process. This relocation is
typically completed by the actual vendors of the equipment or a firm
that specializes in this type of relocation.
d. Contents Move Items – This category covers items such as desks, filing
cabinets, books and other miscellaneous items, which typically are
handled by a moving company. All items should be clearly marked with
an item number that designates the location of the contents in the new
Facility. A summary of the furniture items to be relocated should be
included as part of the Interior Designer’s report.
e. Patients – Patient moves should be handled by the employees and
volunteers of the hospital. Volunteer ambulance services can be utilized
for transporting patients from a different site to the new hospital.
9.1 Construction Closeout Process FULL
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f. Clinical Engineering – The Clinical Engineering Department should be
integrated into the move process planning and implementation. This
department will help identify outside contractors and department
personnel who can assist with the move.
g. Other elements of major relocations involve operational readiness and
Facility readiness. Operational readiness deals with issues related to
developing emergency plans and disaster drills. Facility readiness
examines the completeness and functionality of the new Facility. This
analysis makes sure that the systems function properly, that life safety
issues are addressed and that all licensing requirements have been met.
G. System Demonstration and Start-Up
This section describes the process for demonstration of equipment operation and
instruction of Owner's personnel.
1.) When specified in individual Specification Sections, the required manufacturer
should provide an authorized representative to demonstrate operation of
equipment and systems, instruct Facility personnel and provide a written
report that demonstrations and instructions have been completed.
2.) The Project Manager will provide to the contractor a list of personnel to
receive instructions and will coordinate their attendance at agreed-upon times.
3.) The Contractor should submit a preliminary schedule to the Project Manager
listing times and dates for demonstration of each item of equipment and each
system, at least two (2) weeks prior to proposed dates.
4.) The Contractor should submit reports within one week after completion of
demonstrations, that demonstrations and instructions have been satisfactorily
completed. The report should give the time and date of each demonstration
and hours devoted to demonstration, with a list of all attendees.
5.) The Contractor should provide substantiating information that verifies
equipment has been inspected and put into operation; testing, adjusting and
balancing has been performed; and equipment and systems are fully
operational.
6.) The Contractor should submit copies of the completed operation and
maintenance manuals at least two (2) weeks before for review by Project
Manager and have a copy at hand for use in demonstrations and instruction.
9.1 Construction Closeout Process FULL
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H. Demonstration Instructions
1.) The Contractor and/or manufacturers representative should demonstrate the
operation and maintenance of equipment and systems to Facility personnel
two (2) weeks prior to date of final inspection.
2.) For equipment requiring seasonal operation, this demonstration should be
performed for other seasons within six months. The Contractor should
document the testing, equipment start-up and training sessions.
3.) The Contractor should notify Project Manager of the amount of time required
for instruction on each item of equipment and system. They should then
demonstrate start-up, operation, control, adjustment, troubleshooting,
servicing, maintenance and shutdown of each item of equipment at agreedupon times, at designated location. Operation and maintenance manuals
should be used as a basis of instruction.
4.) The Contractor should review the contents of the manuals with the
appropriate Facility personnel in full detail to explain all aspects of operations
and maintenance. If the need for additional data becomes apparent during
instructions, the Contractor should supply within a timely manner to Project
Manager who will insert the additional data in the operations and maintenance
manuals upon receipt.
APPROVED:
DATE:
9.1 Construction Closeout Process FULL
Page 14 of 18
Figure 9.1a
Project Closeout Checklist
MEMORIAL HERMANN
Memorial Hermann - Southwest Hospital - ER Fast Track
MH Project Number - 0018013
Project Close-out Documentation Check List
Activity
Certificate of Substantial Completion
Certificat of Occupancy
Project Record Photographs
Record Shop Drawings
Record Contract Drawings
Record Specifications, Addenda, & Change Orders
Record Produect Data Submittals
Record Samples
Field Records
Operating & Maintenance Manuals
Soil Treatment Warranty
Testing & Disinfection of Water Lines
Sewer Testing
Storm Sewer Test
Precast concrete guarantee
Structural steel testing
Sheet waterproofing warranty
Water repellent warranty
Roofing insurance certification
Joint sealer testing
Labeled door & frame certification
Wood door warranty
Overhead coiling door certification & test
Folding doors & partitions certification
Aluminum entrance certification
Glass & glazing certification
Keying
Owner's instruction to hardware
Glass & glazing warranty
Glazed curtain wall warranty
Structurally glazed curtain wall testing
Structurally glazed curtain wall inspections
Extra acoustical ceiling materials
Extra resilient flooring material
Carpet mainetnance instructions
Extra carpeting stock
Extra wallcovering stock
Chalkboard warranty
Extra access flooring material
Extra operable partitions materials
Record drawigns
Maintenance data
Receipt for instruction of operating personnel
Receipt for spare parts for variable speed drives
Certification of start-up and operation for variable speed drives
Certification of installation of vibration isolation equipment
Certification per NFPA 13-987 for fire protection
Certification of installation of underground fire protection piping
Certification of installation of fire pumps
Certification of plumbing piping tests
Certification of installation and operation of vaccum cleaning system
Receipt for spare medical gas system master alarm light bulbs
Certification of installation and operation of medical gas systems
Receipt for extra mechanical seals for pumps
Certification of alignment of pumps
Certification of operation and accuracy for air measuring stations and control systems
9.1 Construction Closeout Process FULL
Date Rec'd
Comment
Complete
Page 15 of 18
Figure 9.1a
Project Closeout Checklist (cont’d)
Receipt for bulk filter media and inserting tool
Test, adjust and balance reports
Certification of DDC system calibration and testing
Plug-in modules and printed circuit boards
Hydronic and steam systems certificate
Record documents - fire protection
Fire pump testing
Automatic temperature controls record diagrams
Air pumping tests
Test, adjust , and balancing cycle test certification
Provide spare fuses
Fire alarm test and certification
Fire alarm guarantee
Nurse call guarantee
Intercom certification
Team call certification
Paging system certification
Television certification
Warranty Reserve
General Contractor's Warrany
Lien wavers
Keys
Finance accounting of purchased materials
Complete sub and supplier listing
Precast mix design
9.1 Construction Closeout Process FULL
Page 16 of 18
9.1b
Letter to Vendor Notifying of Project Closure Date
PM Company LOGO
January 1, 2006
Vendor Name
Street Address
City, State, Zip
Attn: Accounts Receivable
RE: FINAL PROJECT BILLING
Project Name
Facility Name
MHHS Project #9999999
Please be advised that January 15, 2006 is the scheduled date for closure of the Project Name
Project. Final invoices are due to the Project manager, ________, before this date. Please
advise all of your subcontractors accordingly. Sources for Project payment are not available
once a Project is formally closed. Memorial Hermann Healthcare System will not pay any
invoices submitted for this Project after the scheduled closure date.
Thank you in advance for your attention to this matter.
Sincerely,
Project Manager
cc: Project File
Figure 9.1c
Project Closure Form
9.1 Construction Closeout Process FULL
Page 17 of 18
MEMORIAL HERMANN HEALTHCARE SYSTEM
CONSTRUCTION, REAL ESTATE AND SUPPORT SERVICES
PROJECT CLOSURE FORM
CORP:
PROJECT #
PROJECT
NAME:
LOCATION
COST CTR:
CONTRACTOR:
ARCHITECT:
COMPLETION/CANCELLATION AGREEMENT
The work performed under this contract has been reviewed by the tenant or user group and has been found to be ready
for occupancy. All warranties/guarantees will be effective as of the date stated on the Certificate of Substantial
Completion. A list of items to be completed or corrected by the contractor is attached hereto.
IN-SERVICE DATE:
CANCELLATION DATE:
APPROVALS
Department Director
Date
Sr. Financial Analyst
Paul Shearon
Date
Project Director
Date
Vice President, Construction,
Real Estate and Support Services
Marshall Heins
Date
PROJECT BALANCE $ ____________________________________
9.1 Construction Closeout Process FULL
Page 18 of 18
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 9.2
Policy Title: Closeout Log
Category: Project Closeout Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to delineate and describe the closeout
documents that should be maintained by the Project Manager and/or End User of the
Facility. The items that should be tracked on the closeout log include:
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
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Warranties/Guarantee Matrix
Release of Liens
Releases from Surety
Operations & Maintenance Manuals
Final Payment Requests
Final Executed Change Orders
Permit Release / Sign-Offs
Spare Parts, Tools & Extra Materials
Training Materials
Other documents required by the contract documents
Each item is explained in detail below.
Policy Statement:
A.) Warranties/Guarantee Matrix
1.) Each Project Manager should initiate, alongside the Facility Engineer, a
Warranty/Guarantee Matrix to log all warranties/guarantees associated with the
completion of the Project.
2.) The warranty period, in most instances is subsequent to the Project closeout
phase and occupancy.
Warranty periods are typically begun by the
9.2 Closeout Log
Page 1 of 6
formal acceptance of the building, described here and elsewhere as
“substantial completion”.
4.) The Warranty/Guarantee Matrix should contain the following:
a. The names of all equipment/materials under warranty/guarantee.
b. The date of start of the warranty/guarantee period per each
equipment/material.
c. The length of the warranty/guarantee and the date of expiration.
d. The location of the material/equipment at the Facility.
e. The maintenance requirements to allow guarantee to be enforced.
f. The manufacturers name, address and phone number.
5.) An example of the Warranty/Guarantee Matrix is shown in Figure 9.2a –
Warranty/Guarantee Matrix.
B.) Release of Liens
1.) The Project Manager should track and log the Final Lien Release associated
with the Final Pay Application. Lien Releases are discussed in Policy – 9.3
“Lien Release Process”.
C.) Releases from Surety
1.) The Project Manager should verify receipt of all Releases from Surety prior to
the Final Pay Application. This would involve the receipt of written notification
from every Surety (both General Contractor and Subcontractors) that final
payment is being considered. This should be a prerequisite to the release of
final payment.
D.) Operations & Maintenance Manual
The Contractor should prepare Operation and Maintenance Manuals for use by
the End Users at the Facility in which the Project is being completed. The
manuals should follow the general format described below:
1.) Paper: 8-1/2" x 11", white, for typed pages.
2.) Text: Manufacturer's printed data, or neatly typewritten.
3.) Drawings:
9.2 Closeout Log
Page 2 of 6
a. Reinforced punched binder tab, bind in with text.
b. Folded larger drawings to size of text pages.
4.) Product Data for each product, or piece of operating equipment.
5.) Cover: Identify each volume with typed or printed title "OPERATING AND
MAINTENANCE INSTRUCTIONS" and Title of Project.
6.) It should be submitted in a binder as described below:
a. Commercial quality three-ring binders with durable and cleanable plastic
covers
b. Maximum ring size: 3"
c. When multiple binders are used, correlate the data into consistent
groupings.
The manual should contain:
1.)
Neatly typewritten table of contents for each volume, arranged in
systematic order.
2.) Contractor, name of responsible principal, address and telephone number.
3.)
A list of each product required to be included, indexed to content of the
volume.
4.)
List with each product, name, address and telephone number of the
contractor or installer and a local source of supply for parts and
replacement.
5.)
Identify each product-by-product name and other identifying symbols as
set forth in Contract Documents.
6.) Product Data including pertinent information to the specific product.
7.)
Drawings to supplement product data as necessary to clearly illustrate
relations of component parts or equipment and systems and control and
flow diagrams.
8.)
Written text, as required to supplement product data for the particular
installation.
9.2 Closeout Log
Page 3 of 6
9.) Copy of each warranty, bond and service contract issued.
10.) Information about proper processes in event of failure.
11.) Conditions that might affect validity of warranties or bonds.
12.) Instructions for care, maintenance and preventative maintenance, which
should include the following:
a. Manufacturer's recommendation for types of cleaning agents and
methods.
b. Cautions against cleaning agents and methods that are harmful to
product.
the
c. Recommended schedule for cleaning and maintenance.
13.) Servicing and lubrication schedule and a listing of the lubricants required.
14.) Manufacturer's printed operating and maintenance instructions.
15.) Description of sequence of operation by control manufacturer.
16.) Original manufacturer's parts, list, illustrations, assembly drawings and
diagrams required for maintenance.
a. Predicted life of parts subject to wear.
b. Items recommended to be stocked as spare parts.
E.) Final Payment Requests
Refer to Policy 9.1 – “Construction Closeout Process” for further information
regarding Final Payment Requests.
F.) Final Executed Change Orders
Refer to Policy 4.5 – “Change Order Process” for further information regarding
Final Executed Change Orders.
G.) Permit Release / Sign-Offs
Refer to Policy 1.6 – “External and Internal Permitting” for further information
regarding Permit Release and Sign-Offs.
9.2 Closeout Log
Page 4 of 6
G.) Spare Parts, Tools and Extra Materials
H.) Training Materials
1.) The Project Manager, along with Equipment Vendor, develop and maintain a
Training Register.
2.) This register should contain the following:
a. The names of the equipment requiring training.
b. The location of the equipment requiring training.
c. The manufacturer of the equipment.
d. The date of initial training and anticipated length of time required for
training.
e. The individuals, firms or departments requiring training.
f. Any special requirements or tools to allow internal training in the future.
g. If a video tape or manual is available for future training.
APPROVED:
DATE:
9.2 Closeout Log
Page 5 of 6
Figure 9.2a
Warranty/Guarantee Matrix
Warranty/Guarantee Matrix
Item
Installed
Location
9.2 Closeout Log
Purchased Purchase
Manufacturer
From
Date
Model
Number
Serial
Number
Registration Registration
Number
Date
Contact
Information
Warranty
Description
Page 6 of 6
Expiration
Date
CAPITAL CONSTRUCTION
STANDARDS OF PRACTICE MANUAL
Policy #: 9.3
Policy Title: Lien Release Process
Category: Project Closeout Process
Original Date: November 2005
Last Review Date: November 2005
Supersedes: New policy
Policy Purpose: The purpose of this policy is to describe the appropriate use and
timing of lien release forms.
Policy Statement:
A.) Interim/Final Lien Releases for Standard Construction Contracts
1.) For Projects using Memorial Hermann Hospital System (MHHS) Standard
Construction Contracts, all of the contracts now include the required Interim
and Final Lien Releases to accompany all Contractor Pay Applications. No other
format should be accepted.
2.) The MHHS Standard Contracts are:
a.
A101
b.
A107
c.
A111
d.
A121
B.) Interim/Final Lien Releases for Projects NOT Using Standard Construction Contracts
1.) For Projects that preceded the use of the MHHS Standard Construction
Contracts, either the Project Manager can provide the Contractor the MHHS
Standard Lien Release Forms MHHS now uses or MHHS can consider accepting
the standard form used by the Contractor.
9.3 Lien Release Process
Page 1 of 13
2.) MHHS Standard Construction Contracts require Contractors to use MHHS
Standard Lien Release Forms. Therefore, the Project Manager should insist
Contractors use only MHHS supplied Standard Waiver and Release Forms.
C.) Lien Releases with Pay Applications
1.) All Pay Applications should include a Partial (or Interim) Lien Release.
a. A Partial Lien Release cannot be accepted as a substitution for a Final Lien
Release Form or when submitted with a Final Pay Application. Such forms
typically provide a release, which is limited to claims related to a particular
payment for a portion of the Project. Such releases do not extend to any
claims related to payment of the retainage or amounts, which may be
disputed between the Owner and the releasing party.
b. An Affidavit of Payment cannot be accepted as a substitution for a Partial or
Final Lien Release.
2.) For progress payments, the standard waiver and release form identifies the
amount received by the Contractor/Subcontractor/Supplier and the end date of
the payment period for which such payment was received. The consideration
is described in the form of an acknowledgment by the payee that such amount
is "payment in full, less the Retainage withheld, for all labor, services and/or
materials furnished and/or stored by the Contractor and/or its Subcontractors
through the Payment Period End Date." The Contractor/Subcontractor/Supplier
then "waives, releases and quitclaims in the favor of the Owner all rights to any
Claim against the Owner, the Owner's Lender and the Property, except for the
Retainage withheld, related to the furnishing and/or storing of such labor,
services and/or materials."
a. Both the progress and final forms contain an agreement to defend,
indemnify and hold the Owner harmless from any Claims waive, released
"or intended to be waived and released" by the instrument.
b. Lien Release and waiver documents which reference a payment
application, but do not state an amount and identify a specific payment
period or invoice for which such payment was received, do not provided
sufficient protection from subsequent lien claims.
c. It is better practice to identify the amount received by the releasing
party and describe the consideration received for such payment.
3.) The Final Pay Application must include a Final Lien Release.
a. A Partial Lien Release cannot be accepted as a substitution for a Final
Lien Release when submitted with a Final Pay Application.
9.3 Lien Release Process
Page 2 of 13
b. An Affidavit of Payment cannot be accepted as a substitution for a
Partial or Final Lien Release.
c. Lien Release and waiver documents which reference a payment
application, but do not state an amount and identify a specific payment
period or invoice for which such payment was received, do not provided
sufficient protection from subsequent lien claims. It is better practice to
identify the amount received by the releasing party and describe the
consideration received for such payment.
d. Final Release forms should release the Owner from all claims related to
payment of every kind.
e. Regarding final releases, the standard form describes the consideration
received in exchange for final payment as "all labor, services and/or
materials furnished and/or stored by the Contractor and/or its
Subcontractors in connection with the Project." The payee forever
releases, waives, and discharges the Owner of any and all claims related
to the Project "without regard as to whether such Claims are presently
ascertainable" at the time payment is received or at any time in the
future. Also, our forms contain a certification that the amount of final
payment is correct and there are no additional claims for costs related to
additional labor, services and/or materials.
f. Both the progress and final forms contain an agreement to defend,
indemnify and hold the Owner harmless from any Claims waive, released
"or intended to be waived and released" by the instrument.
APPROVED:
DATE:
9.3 Lien Release Process
Page 3 of 13
THIS IS A PLACEHOLDER. THIS IS WHERE THE LIEN RELEASE FORMS SENT BY D.
NOVELLI WOULD GO. WE WILL PRINT OFF AND INSERT MANUALLY SINCE
COPY/PASTE FROM ADOBE DISTORTS FORMATTING
CONTRACTOR’S WAIVER AND RELEASE OF LIEN
(To Accompany Each Application for Progress Payment)
EFFECTIVE DATE:
[DATE]
To OWNER:
From CONTRACTOR:
MEMORIAL HERMANN HOSPITAL SYSTEM
[CORPORATE NAME]
9401 Southwest Freeway, Suite 1100
[Address]
Houston, Texas 77074
[Address]
For certain improvements to the PROPERTY described in Attachment “B,” such
improvements referred to herein as the PROJECT and identified by name and location as
follows:
[PROJECT TITLE]
[Address]
[Address]
CONTRACT DATE:
[DATE]
APPLICATION FOR PAYMENT NO.:
PAYMENT PERIOD:
Start Date:
End Date:
[NUMBER]
[DATE]
[DATE]
CONTRACT ACCOUNTING:
1. ORIGINAL CONTRACT AMOUNT:
2. Plus/(Less) APPROVED CHANGE ORDERS:
$0.00
$0.00
3. ADJUSTED CONTRACT AMOUNT (Add Lines 1 through 2):
$0.00
4. COST OF THE WORK TO EFFECTIVE DATE:
$0.00
5. (Less) RETAINAGE WITHHELD TO EFFECTIVE DATE:
(Less) TOTAL PAYMENTS RECEIVED TO EFFECTIVE
6.
DATE:
7. NET AMOUNT DUE (From Line 4, subtract Lines 5 and 6):
($0.00)
($0.00)
$0.00
FOR AND IN CONSIDERATION of payments made to it by Owner, the undersigned hereby acknowledges and
certifies as follows:
1.
The undersigned hereby acknowledges receipt of the Total Payments Received to Effective Date
as payment in full, less the Retainage Withheld to Effective Date, for all labor, services, materials (including,
without limitation, all supplies, tools, equipment, machinery, and goods) furnished, stored and/or otherwise
procured during each preceding Payment Period by the Contractor and its SUBCONTRACTORS (including,
9.3 Lien Release Process
Page 4 of 13
without limitation, all subcontractors of every tier and all laborers, mechanics, materialmen, suppliers, vendors,
agents, brokers, attorneys, architects, engineers and any other person or entity furnishing labor, services and
materials to the Contractor for any purpose related to the Project) and the undersigned hereby now and forever
waives, releases and quitclaims in favor of Owner all rights to any CLAIM (including, without limitation, all
demands, suits, causes of action, liens and any other assertions) against the Owner, the Owner’s lender and the
Property arising out of or related to such labor, services and/or materials. The undersigned hereby affirms that, as
of the Effective Date, there are no outstanding Claims against the Contractor and/or its sureties in connection with
the Project.
2.
Upon receipt of the sum identified above as the Net Amount Due, the undersigned
acknowledges and agrees that it will have received payment in full, less the Retainage withheld, for all labor,
services and/or materials furnished and/or stored by the Contractor and/or its Subcontractors through the Payment
Period End Date and the undersigned hereby now and forever waives, releases and quitclaims in favor of the
Owner all rights to any Claim against the Owner, the Owner’s lender and the Property, except for the Retainage
withheld, arising out of or related to the furnishing and/or storing of such labor, services and materials. Except for
receipt of said payment, and as an inducement to the Owner and the Owner’s lender to make the same, the
undersigned hereby affirms that, as of the Effective Date, there are no outstanding Claims against the Contractor
and/or its sureties in connection with the Project.
3.
Contingent upon the receipt of the sum of the Net Amount Due, and except for any unpaid
Retainage, the undersigned does hereby forever waive, release and quitclaim in favor of Owner, the Owner’s
lender, each and every party acquiring title to and/or making a loan on the Project, and the title company or
companies examining and/or insuring title to the Project and any and all of their successors and assignees, all
rights that presently exist to any type and form of lien which may be charged against the Property by Contractor
as a result of furnishing labor, services and/or materials for the Project including, without limitation, any
mechanic’s and materialmen’s lien evidenced by affidavit and/or preliminary notice filed in accordance with
applicable law governing the same. The undersigned further warrants that all applicable taxes, fees and benefits
relating directly or indirectly to the undersigned’s work have been paid in full.
4.
The undersigned further states on oath that all Subcontractors from which it has acquired labor,
services and/or materials for any purpose related to the Project, and any lien or bond claimant relating to the
undersigned’s work, has been paid their respective portion of all prior payments received from the Owner (less
any Retainage withheld) for any labor, services and/or materials furnished, stored and/or otherwise procured by
such Subcontractor and that no Subcontractor has any Claim or lien, either actual or inchoate, against the
undersigned’s work, the Project, the Owner, the Owner’s lender or the Property by virtue of their having furnished
labor, services and/or materials for the Project.
5.
The undersigned hereby certifies that, as of the Effective Date, no security interest has been
given or executed by the undersigned for or in connection with any materials, appliances, machinery, fixtures or
furnishings placed upon or installed in the Project.
6.
The undersigned hereby certifies that the amounts set forth above are true and correct and
acknowledges that there are no additional costs or claims for any extras of additions for labor, services and/or
materials on the Project other than as set forth above.
7.
The undersigned hereby certifies a complete and accurate list of all Subcontractors who have
furnished or agreed to furnish any labor, services and/or materials (as of the Effective Date) is attached hereto as
Attachment “A,” each Subcontractor identified therein has been paid, in full, the sum set forth therein as the
“Amount Paid,” and such sum constitutes payment, in full (except for any unpaid Retainage which is not yet due
and the Net Amount Due), for all labor, services and/or materials furnished and/or stored in connection with the
Project.
8.
The undersigned represents and warrants that it has not assigned any lien or right to perfect a
lien against the Project, and the undersigned has the right, power and authority to execute this document.
9.3 Lien Release Process
Page 5 of 13
9.
In consideration of receipt of the Net Amount Due, the Contractor hereby agrees to defend,
indemnify and hold the Owner (including its affiliated enterprises, lessees, successors, assigns, secured lenders
and title insurance companies, and each of the above mentioned parties' officers, directors, shareholders,
employees and agents) harmless from and against any and all Claims (including, without limitation, all liens)
waived, released or intended to be waived and/or released by this instrument and to remove, release or otherwise
discharge all such Claims (including, without limitation, all such liens) immediately upon receipt of notice
thereof.
DULY SWORN UPON OATH, executed and delivered by the undersigned this _____ day of
_________________, 20____.
BY:
(Signature of Corporate Representative)
(Printed Name)
(Corporate Title)
WITNESS:
Sworn to and subscribed before me by _____________________________________
on this ______ day of ___________, 20___.
(SEAL)
(Notary Public)
My commission expires:
(Date)
9.3 Lien Release Process
Page 6 of 13
ATTACHMENT "A"
SUBCONTRACTOR LIST
The following is a complete and accurate list of all Subcontractors who, as of the
Effective Date, furnished, or agreed to furnish, any labor, services and/or materials for the
Project; all of whom have received the “Amount Paid” as payment, in full, for all costs
(including, without limitation, storage costs) resulting from such labor, services and/or
materials.
NAME:
ADDRESS:
AMOUNT PAID:
[CORPORATE NAME]
[ADDRESS]
[$ 0.00]
9.3 Lien Release Process
Page 7 of 13
ATTACHMENT "B"
PROPERTY DESCRIPTION
[ENTER PROPERTY DESCRIPTION]
9.3 Lien Release Process
Page 8 of 13
CONTRACTOR’S FINAL AFFIDAVIT AND RELEASE OF CLAIMS
(To Accompany Each Application for Final Payment)
EFFECTIVE DATE:
[DATE]
To OWNER:
From CONTRACTOR:
MEMORIAL HERMANN HOSPITAL SYSTEM
[CORPORATE NAME]
9401 Southwest Freeway, Suite 1100
[Address]
Houston, Texas 77074
[Address]
For certain improvements to the PROPERTY described in Attachment “B,” such
improvements referred to herein as the PROJECT and identified by name and location as
follows:
[PROJECT TITLE]
[Address]
[Address]
CONTRACT DATE:
[DATE]
APPLICATION FOR PAYMENT NO.:
[NUMBER]
CONTRACT ACCOUNTING:
1. ORIGINAL CONTRACT AMOUNT:
2. Plus/(Less) APPROVED CHANGE ORDERS:
$0.00
$0.00
3. ADJUSTED CONTRACT AMOUNT (Add Lines 1 through 2):
$0.00
4. (Less) FINAL COST OF THE WORK:
5. (Less) TOTAL PAYMENTS RECEIVED TO EFFECTIVE DATE:
($0.00)
($0.00)
6. REMAINING BALANCE (Subtract Line 5 from Line 4):
$0.00
7. (Plus) SAVINGS:
$0.00
8. FINAL PAYMENT DUE (Add Lines 6 and 7):
$0.00
FOR AND IN CONSIDERATION of payments made to it by Owner, the undersigned hereby acknowledges and
certifies as follows:
10.
The undersigned hereby acknowledges receipt of the Total Payments Received to Effective Date
as payment in full, less the Retainage Withheld to Effective Date, for all labor, services, materials (including,
without limitation, all supplies, tools, equipment, machinery, and goods) furnished, stored and/or otherwise
procured during each preceding Payment Period by the Contractor and its SUBCONTRACTORS (including,
without limitation, all subcontractors of every tier and all laborers, mechanics, materialmen, suppliers, vendors,
agents, brokers, attorneys, architects, engineers and any other person or entity furnishing labor, services and
materials to the Contractor for any purpose related to the Project) and the undersigned hereby now and forever
waives, releases and quitclaims in favor of Owner all rights to any CLAIM (including, without limitation, all
demands, suits, causes of action, liens and any other assertions) against the Owner, the Owner’s lender and the
Property arising out of or related to such labor, services and/or materials. The undersigned hereby affirms that, as
of the Effective Date, there are no outstanding Claims against the Contractor and/or its sureties, and no unpaid
bills by the Contractor and/or its sureties, in connection with the Project.
9.3 Lien Release Process
Page 9 of 13
11.
Upon receipt of the sum identified above as Final Payment Due, the undersigned acknowledges
and agrees that it will have received payment in full for all labor, services and/or materials furnished and/or stored
by the Contractor and/or its Subcontractors in connection with the Project and the undersigned hereby now and
forever waives, releases and quitclaims in favor of the Owner all rights to any Claim against the Owner, the
Owner’s lender and the Property, except for the Retainage withheld, arising out of or related to the furnishing
and/or storing of such labor, services and materials. Except for receipt of said payment, and as an inducement to
the Owner and the Owner’s lender to make the same, the undersigned hereby affirms that, as of the Effective
Date, there are no outstanding Claims against the Contractor and/or its sureties in connection with the Project and
no unpaid bills by the Contractor and/or its sureties, in connection with the Project.
12.
Contingent upon the receipt of the sum identified above as Final Payment Due, the undersigned
does hereby forever waive, release and quitclaim in favor of Owner, the Owner’s lender, each and every party
acquiring title to and/or making a loan on the Project, and the title company or companies examining and/or
insuring title to the Project and any and all of their successors and assignees, all rights that presently exist to any
type and form of lien which may be charged against the Property by Contractor as a result of furnishing labor,
services and/or materials for the Project including, without limitation, any mechanic’s and materialmen’s lien
evidenced by affidavit and/or preliminary notice filed in accordance with applicable law governing the same. The
undersigned further warrants that all applicable taxes, fees and benefits relating directly or indirectly to the
undersigned’s work have been paid in full.
13.
The undersigned further states on oath that all Subcontractors from which it has acquired labor,
services and/or materials for any purpose related to the Project, and any lien or bond claimant relating to the
undersigned’s work, has been paid their respective portion of all prior payments received from the Owner for any
labor, services and/or materials furnished, stored and/or otherwise procured by such Subcontractor and that no
Subcontractor has any Claim or lien, either actual or inchoate, against the undersigned’s work, the Project, the
Owner, the Owner’s lender or the Property by virtue of their having furnished labor, services and/or materials for
the Project.
14.
The undersigned hereby certifies that, as of the Effective Date, no security interest has been
given or executed by the undersigned for or in connection with any materials, appliances, machinery, fixtures or
furnishings placed upon or installed in the Project.
15.
The undersigned hereby certifies that the amounts set forth above are true and correct and
acknowledges that there are no additional costs or claims for any extras of additions for labor, services and/or
materials on the Project other than as set forth above.
16.
The undersigned hereby certifies a complete and accurate list of all Subcontractors who have
ever furnished any labor, services and/or materials for the Project is attached hereto as Attachment “A,” each
Subcontractor identified therein has been paid, in full, the sum set forth therein as the “Amount Paid,” and such
sum constitutes payment, in full, for all labor, services and/or materials furnished and/or stored in connection with
the Project.
17.
The undersigned represents and warrants that it has not assigned any lien or right to perfect a
lien against the Project, and the undersigned has the right, power and authority to execute this instrument.
18.
The undersigned does hereby forever release, waive and discharge the Owner, the Owner’s
lender from (and quitclaim to them) any and all Claims on, against, related to, arising out of, connected with,
and/or on account of the Project, the construction contract and/or all labor, services and/or materials furnished in
connection therewith, whether known or unknown, and without regard to whether such Claims are presently
ascertainable, which the undersigned or its successors and/or assignees ever had, now have, or ever will have
against the Owner, the Owner’s lender, the Property and/or Project.
19.
In consideration of receipt of the sum identified above as Final Payment Due, the Contractor
hereby agrees to defend, indemnify and hold the Owner (including its affiliated enterprises, lessees, successors,
9.3 Lien Release Process
Page 10 of 13
assigns, secured lenders and title insurance companies, and each of the above mentioned parties' officers,
directors, shareholders, employees and agents) harmless from and against any and all Claims (including, without
limitation, all liens) waived, released or intended to be waived and/or released by this instrument and to remove,
release or otherwise discharge all such Claims (including, without limitation, all such liens) immediately upon
receipt of notice thereof.
DULY SWORN UPON OATH, executed and delivered by the undersigned this _____ day of
_________________, 20____.
BY:
(Signature of Corporate Representative)
(Printed Name)
(Corporate Title)
WITNESS:
Sworn to and subscribed before me by _____________________________________
on this ______ day of ___________, 20___.
(SEAL)
(Notary Public)
My commission expires:
(Date)
9.3 Lien Release Process
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ATTACHMENT "A"
SUBCONTRACTOR LIST
The following is a complete and accurate list of all Subcontractors who ever furnished
any labor, services and/or materials for the Project; all of whom have received the “Amount
Paid” as payment, in full, for all costs (including, without limitation, storage costs) resulting
from such labor, services and/or materials.
NAME:
ADDRESS:
AMOUNT PAID:
[CORPORATE NAME]
[ADDRESS]
[$ 0.00]
9.3 Lien Release Process
Page 12 of 13
Duly sworn upon oath, executed and delivered by the undersigned this _____ day of
_________________, 20____.
WITNESS:
BY:
TITLE:
Sworn to and subscribed before me
this ______ day of ___________, 20___.
Notary Public
My commission expires:
(SEAL)
9.3 Lien Release Process
Page 13 of 13