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PROJECT MANAGERS:
THE ROLE AND THE LAW IN CALIFORNIA
Introduction:
Project Managers are usually persons hired
by an owner of a construction project to supervise and oversee as well
as consult for the owner on the organization and implementation of a
construction project. Unlike general contractors who, for a markup on
the project, often hire the various sub contractors, assuming quite
often some of the construction tasks personally, and supervising all of
the construction, or architects who design the project and often
supervise the work of the general contractor and other trades, a Project
Manager may have no direct input for the design or work on the project
but may simply act as the owner's agent in supervising the progress of
the job.
Project Managers can assume more or less
duties, depending on the agreement between the Project Manager and the
owner. As one client put it, "My project manager is my resident expert
who is not actually doing hands on work on the project but available to
tell me how it is going and who is goofing off." Other Project Managers
take a more controlling role in the project, approving all work, signing
off on all payments, etc.
With such diverse roles,
the law, both in terms of licensing and the cases, had to consider if
such persons required licensing and what duties and limits on
obligations would apply, if any. This article shall discuss the approach
of California to the role of Project Managers.
Project Manager
Overview
1
A project manager is a
professional in the field of project management 2.
The usually have the responsibility of the
planning, execution, and closing of any project, typically relating to
construction industry, architecture or software development. Many other
fields in the production, design and service industries also have
project managers.
1. Duties of a Project Manager in General
The concept of a Project
Manager is not limited to construction and most businesses recognize the
role of a person who undertakes the organization and implementation of a
particular project.
Under most
agreements with owners, a project manager is the person accountable for
accomplishing the stated project objectives. Key project management
responsibilities include creating clear and attainable project
objectives, building the project requirements, and managing the triple
constraints for projects, which are cost, time, and scope.
Most of the project management issues that impact a project arise from
risk, which in turn arises from uncertainty. The successful project
manager is one who focuses on this as their main concern. A successful
project manager reduces risk significantly, often by adhering to a
policy of open communication, ensuring that every significant
participant has an opportunity to express opinions and concerns.
It follows from above
that the project manager is one who is often responsible for making
decisions both small and large, in such a way that risk is controlled
and uncertainty minimized. Every decision made by the project manager
should be taken in such a way that it directly benefits the project.
When recruiting and
building an effective team, the project manager must consider not only
the technical skills of each person, but also the critical roles and
chemistry between workers.
Assuming that a Project Manager is to assume the broad powers described
above, and not merely consult with an owner and advise the owner as to
particular matters, it is clear that expertise is to be required.
Recognizing this, there have developed various programs not only to
train but to certify those who hold them out as Project Managers on
construction projects.
2.
Construction Project Manager Certification
In the
past, construction project managers were individuals who worked in
construction or supporting
industries and were promoted to
foreman. It was not until the
late 20th century that construction and construction project management
became distinct fields.
The
profession has recently grown to accommodate several dozen
Construction Management
Bachelor of Science programs.
Until
recently, the industry lacked any level of standardization, with
individual States determining the eligibility requirements within their
jurisdiction.
However,
several
Trade associations based in
the
United States have made
strides in creating a commonly-accepted set of qualifications and tests
to determine a project manager's competency.
3. California Law
on Construction Project Manager Licensing
While the code does
not address project managers or project management, the United States
Secretary of Labor has defined construction, for purposes of the Federal
Prevailing Wage Law, 40 U.S.C.S. §§ 3141-3148, as: All types of
work done on a particular building or work at the site thereof by
laborers and mechanics employed by a construction
contractor or
construction subcontractor, 29 C.F.R. § 5.2(j)(1) (2004).
Laborers and mechanics generally include those workers whose duties are
manual or physical in nature (including those workers who use tools or
who are performing the work of a trade), as distinguished from mental or
managerial. 29 C.F.R. § 5.2(m) (2004). This definition seemingly
would not cover work done by surveyors, lawyers,
project managers, or
insurance underwriters, who function before actual construction
activities commence.
Whether a Project
Manager needs to be licensed comes down to the nature of the work they
undertake while being project manager. California has strict licensing
requirements that are applicable to a “contractor” or “builder”, that
is, “any person who undertakes to or offers to undertake to…or submits a
bid to, or does himself [or herself] or by or through others, construct,
alter, repair, add to, subtract from, improve, move, wreck or demolish
any building… .” (Business and Professions Code §§ 7026, 7028, subd.
(a).)
In Thoryck
Architecture, Inc., v Trans West Housing, Inc. (2006)
(THIS IS AN
UNPUBLISHED CASE AND ONLY CITED HERE FOR ITS FACTUAL BACKGROUND
NOT LEGAL ANALYSIS)
Thoryck,
the project manager, was responsible for “reviewing the project designs
and construction documents, sending out plans for bid, hiring
subcontractors, reviewing their work, approving their payment requests,
obtaining lien releases from them prior to payment and providing a final
inspection before occupancy.” The evidence in the case showed that
Thoryck entered into certain contracts with subcontractors and laborer’s
without Tran’s West prior approval and also made payments to the
subcontractors and laborers, seeking reimbursement from Trans West
thereafter. These facts show that Throyck, as project manager, did more
than simply act as an architect or as Tran West’s agent in supervising
the project.
Compare Dorsk v.
Spivack (1951) 107 Cal. Ap.2d 206 holding that a person who
supervised the construction of an apartment building as an employee of
the owner was not required to be licensed as an architect or a general
contractor, relying in part on the fact that the owner rather than the
supervisor paid the subcontractors. Based on the nature of the work
Thoryck (above) provided it was required to have a contractor’s license.
The requirements for
a Project Manager to be licensed thus appear to depend upon the nature
of the work the Project Manager undertakes for the project.
This
individual seldom participates directly in the activities that produce
the end result, but rather strives to maintain the progress and
productive mutual interaction of various parties in such a way that
overall risk of failure is reduced. A successful project manager must be
able to envision the entire project from start to finish and to have the
ability to ensure that this vision is realized.3
Conclusion
and Practicalities
Since the
General Contractor is normally charged with the duty of supervising the
project as a whole and the trades and the architect normally supervises
design, the engineer and the general contractor, why is there a need for
the Project Manager?
First,
quite often a project will not have a general contractor with the owner
seeking to occupy that position him or herself and thus save the ten
percent supervision fee.
Second,
often a project will not have an architect supervising day to day
construction. One can simply buy the plans and specifications and seek
to handle the job without the active involvement of the architect.
Lastly,
many owners feel that it is wise to have someone not directly involved,
monetarily or ego wise with the construction project and see the Manager
as the “outside consultant” who will give objective advice.
But our
office has seen enough litigation involving such Managers to know that
it is as common to encounter gigantic egos in that trade as any other.
Negotiating and providing for good lines of authority and responsibility
is vital and, as always, an appropriate written
contract
is a vital part of utilizing their set of skills. They can have
value but simply hiring a Manager without working through the clear
details of their involvement can lead to more trouble than no Manager at
all. With no licensing board involved, and with the field in some flux,
it is up to the wise owner (and Manager) to clearly and fully describe
what will be the duties and expectations of the Manager on the project.
1.
This information is not from statute, as it is not codified, but
generally recognized duties in the field of project management.
2.
Project Management is the discipline of planning, organizing, and
managing resources to bring about the successful completion of specific
project goals and objectives.
3.
Project Management Institute:
http://www.pmi.org/info/PP_OPM3ExecGuide.pdf
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