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Business and Financial Policies and Procedures

Section 17.4 - Capital Professional Services Consultant (PSC) Error and Omission Policy

University Policy Statement:

The policy and procedures of the University of Illinois System require that a PSC's performance on a project be reviewed and damages assessed when the cumulative value of change orders due to PSC Errors and/or 30% of Omissions is equal to or exceeds 3% of the original construction bids.

Modification: Neither this policy nor its process may be modified without the prior written approval of the University Office of Capital Programs & Real Estate Services.

Background:

In accordance with University Policy design errors and omissions that exceed minor levels on a project merit a review of the Professional Services Consultant's (PSC) performance and possible recovery of University cost due to the errors and omissions. PSC error and omission are defined as follows:

  • PSC Error is defined as a change in buildings/systems design, detailing, or documentation in the contract documents that requires repurchase of materials, reconstruction of work in place, or revisions during the construction/warranty process to make the project work properly and that is the result from incorrect information or a lack of information (See Appendix A for examples).
  • PSC Omission is defined as a change or that portion of a change in buildings/systems design that could/should have been included initially in the contract documents and that does not require repurchase of materials or reconstruction of work in place and that is the result from incorrect information or a lack of information (See Appendix A for examples).
  • Exception: Costs due to programmatic changes made after completion of the bid documents, user changes, staff changes scope, or unforeseeable conditions are not considered an error or omission.  Costs to comply with codes or standards that changed after issuance of the bid documents are not considered an error or omission.  Delivery or schedule changes are not considered an error or omission except when they result from an error or omission.

The University of Illinois has determined allowable acceptable limits for error and omission change orders that are acceptable without prejudice to the PSC, and require neither an assessment nor waiver of any assessment by the Project Manager (PM).

On projects where the criteria are met, the CCU representative(s) shall either:

1. Assess the PSC the cost of the PSC Error change orders that they are directly responsible for that exceeds the allowable limits.  Assess the PSC 30% of the PSC Omission change orders that exceed the allowable limits.
This shall be accomplished by a modification to the PSC contract; and, if included as part of a final modification, the assessed amount shall be clearly shown in the calculations on the modifications (); or
2. Waive the assessment.  Waivers of any or all assessment(s) shall be documented in writing and indicate the factors that support the waiver of the assessment.
3. Based on the amount of the assessment above, approval of the assessment or waiver shall be as follows:

Procedures:

  1. It is the PM's responsibility to classify all change orders. The PM shall consult with the CCU representative(s) and the project team as appropriate for determining the classification. The PM shall indicate on the Construction Contract Change Order form (See Appendix C) the appropriate classification.

  2. The PM shall consider the PSC's overall performance and the complexity of the project, when making determination and/or recommendations on any waiver requests. Any error or omission classification disputes between the PSC and PM/CCU representatives may be changed with the written approval of the University of Illinois at Chicago Vice Chancellor for Administration, University of Illinois at Urbana-Champaign Executive Director of Facilities and Services, or University of Illinois at Springfield Associate Chancellor of Administrative Affairs.

  3. Prior to the PSC's final payment and as part of the PSC's contract close out package, the PM shall initiate a memorandum documenting the disposition of any and all assessments on projects that exceeded the error and/or omission limits. This memorandum shall in all instances be submitted to, and if applicable, approved by, both the Senior Associate Vice President of Business and Finance and the respective campus representative as follows: University of Illinois at Chicago Vice Chancellor for Administration, University of Illinois at Urbana-Champaign Executive Director of Facilities and Services, or University of Illinois at Springfield Associate Chancellor of Administrative Affairs and state the amount to be assessed or waived.
  4. The PSC shall be notified of any assessment by the PM prior to the final close out of the contract. Assessments shall be incorporated by a modification to the contract and the amount assessed clearly noted.

  5. The PSC may appeal the assessment to the University of Illinois at Chicago Vice Chancellor for Administration, University of Illinois at Urbana-Champaign Executive Director of Facilities and Services, or University of Illinois at Springfield Associate Chancellor of Administrative Affairs upon notification from the PM of the pending modification to the contract.

  6. A copy of the final PSC contract modification showing the assessment was either executed, or a memorandum from the PM indicating the approval of a waiver of the assessment, shall be included with the final voucher.
  7. The PM shall use the University financial tracking system to monitor PSC error and omission change orders to ensure potential assessments do not exceed PSC contract funding.

  8. PSC error and omission may affect the PSC performance evaluation.

Policy Statement: All firms including sub-consultants, selected under the QBS Act, shall be formally evaluated at the conclusion of all projects. The results of the evaluation shall be given to firms evaluated and each firm shall have an opportunity to respond in writing. Firms may be evaluated at interim milestones, and the evaluation shared with the firms. All evaluations and responses from the firms shall be kept on file, and not made available to persons or firms outside the University. The QBS Act specifically exempts these evaluations and responses from the Freedom of Information Act.

Evaluations by the Campus Construction Units resulting in less than acceptable performance plus any imposed assessments shall be forwarded for informational purposes to the University Office of Capital Programs & Real Estate Services.

Appendices

Appendix A - PSC Error and Omission Examples  

Appendix B - PSC Error and Omission Damage Assessment Example  

Appendix C - Change Order Example  

 

Please send questions regarding this policy manual to OBFSPolicies@uillinois.edu.

Last Updated: February 21, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: February 2014

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