What is a RFI? A RFI is a “Request for Information”. More specifically, it is a mechanism Contractors use to resolve conflicts, ambiguities and inconsistencies found during the bidding or construction phases of a project. The result of a RFI can be something as minor as showing the Contractor where the information can be found in the contract, or can result in a significant change order. When the answer to a RFI is significant it is usually followed by a request for proposal (RFP). The requestor specifies a scope of work that needs to be performed and describes how it would be executed, including pricing information and impact on project schedule.
RFIs can be costly for all parties involved. They cause an interruption in the work flow of the contractor because work in that particular area must either slow down or stop. If the work phase needing the RFI is critical path, then the project may not be completed per the schedule. Then, depending upon the conditions of the contract, the delay may cause the Owner money through loss of building use or at the very least some frustration. The Owner will have some protection from delays if liquidated damages are part of the contract, but not always.
The effect of RFIs can be felt quite heavily by the design firm needing to address the questions. It is not just a matter of the Project Manager (PM) writing a response to the Contractor. Worse-case scenario is the RFI affects multiple disciplines. When a RFI is sent to the PM, the PM must stop what they are doing, refresh their memories on a project which may have been designed more than six months ago, determine the implications of the problem, talk to the other disciplines involved which also must gather their thoughts about a project designed months ago, design a solution, have the solution peer reviewed, stamp the new design, determine the cost of the solution, determine the effect on schedule of the solution, and finally give the answer to the Contractor.
So how do these efforts by the design firm cost money? Let’s use a scenario where the installation of a roof top HVAC unit was not carried through to the structural, electrical, or architectural plans. When the Contractor sends the RFI to the PM:
PM Stops what they are working on to investigate question – 1 hr.
PM gives the problem to the structural engineer for analysis from the roof down through to the foundation – 4 hr.
Electrical engineer analyzes the change – 2 hr.
Architect needs to determine what affect the changes will have on the architectural aspects of the project – 1 hr.
Peer review of plans and specifications affected by change – 2 hr.
PM writes up answer –1 hr.
PM discusses RFI with contractor – 1 hour
Total hours = 12 hours
At an average billing rate of $100/hr., that is $1,200 per RFI in lost effort. Even if this number is somewhat generous in the hours of effort required, $1,000 per RFI is a good estimate. This does not even include the time it takes the PM, architect and engineer to get back into the design or plans they were working on prior to the interruption. Additionally, this does not include the possible negative effect on schedule or the frustration of the Owner.
While each project is different, 48 RFIs is not an unreasonable number for a plan set with 180 sheets. Even if half of those were able to be answered by reading the contract with minimal effort by the PM, it is still $24,000 in lost billable hours to the design firm.
Given the financial impact of RFIs on the design firm, what can be done to reduce the number of these during a construction project? The quick answer would be to compile a perfect bid document and construction contract from the start. However, since this is not possible, steps need to be taken to reduce the likelihood of conflicts, ambiguities and inconsistencies. This can be accomplished through an internal quality assurance/quality control program. Many design firms do not want to invest in an employee to perform this specific function. Instead, they rely on current employees. The down side with this approach is that while an employee is reviewing plans and specifications they are not generating billable hours. Additionally, very few employees are versed in the various disciplines involved in a design or renovation.
Instead of hiring an additional full-time employee, with all of the additional costs and overhead, design firms could hire a consultant to perform constructability and peer reviews. The benefit of hiring someone who specializes in plan and specification review is that they see the big picture of the design vs. being a member of a team designing one specific section; they can see the forest for the trees, so to speak. Another bonus is that the cost to the design firm for a consultant such as this is strictly the consultants billable rate, which is typically lower than the billable rate for the design firm.
How much could a design firm save by hiring a consultant for the review of plans and specifications? In the previous example, RFIs cost the design firm $24,000 in lost billable hours for a plan set consisting of 180 sheets. While the intent of reviewing plans is to have to no RFIs, some will still be present. Let’s say the consultant would have caught 20 of the 24 RFIs which made it through the previous example. Proper review of a set of plans and associated specifications takes approximately one hour per plan sheet. Therefore, at $75/hour the cost to the design firm for an independent contractor to review the plans would be $13,500 plus the $4,000 in lost billable hours for the 4 RFIs which were missed. This comes to a total of $17,500; well below the $24,000 in lost billable hours. Given the fact the consultant can focus on the task at hand without interruption, the quality of the review will be much better than that of the designer of record who is interrupted periodically and may miss something. With fewer RFIs there will be less likelihood for change orders. Aside from the additional cost of a change to the Owner, change orders do not allow the Owner to have as much control over what they are purchasing than as when the item is included in the original bid documents.
The next time you have a set of plans and specifications to put out to bid, consider hiring A-Team Engineering to perform a review for you. Our goal is to help your team complete a project with minimal delays and frustration by reducing potential RFIs.