MEMORANDUM TO: Matthew O’Malley

DATE: March 31, 2015

FROM: Zachary Hicks

SUBJECT: Critical Analysis Project

Project Information

Developer Thomas Kaufman of United Therapeutics Corporation is renovating a historic

townhouse rezoned as an office building located at 1733-1735 Connecticut Avenue NW in

Washington, DC for Owner United Therapeutics Corporation. The site visit and interview were

both conducted on March 26, 2015. The General Contractor is Project Manager Jerry Cripps,

and the Architect is Dan Gulbins of Philadelphia-based Ewing Cole. Ewing Cole has their own

mechanical, electrical, and plumbing design teams that worked on this project. Ewing Cole’s

credentials include being the Architect for MetLife Stadium in East Rutherford, NJ and Lincoln

Financial Field in Philadelphia.

Base Building Improvements

Both buildings will be getting a new roof, new access control and security, and a new

building HVAC system. 1733 Connecticut Avenue NW will be getting a rear façade demolition

and reconstruction.

Basement Improvements

1733 Connecticut Avenue NW’s basement will be getting a new high density filing

system, as well as a new HVAC, new drywall and ceiling, new lights, new carpet, and net paint.

1735 Connecticut Avenue NW’s basement will be getting a new rear emergency egress door,

and all abandoned equipment will be removed.

First Floor Improvements

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1733 will be getting a new conference room on the first floor. The new conference room

will have AV/VTC, lights, furniture, and paint and carpet. 1735 will have new tile put in, as well

as a built-in walk-off matt.

Second Floor Improvements

The second floor at 1733 will have a larger rear office with new furniture, as well as a

lounge area. It will get new carpet, new paint, a new HVAC unit, and new access control. 1735

will get new AV/VTC in the conference room, along with new appliances in the kitchen, a new

washer/dryer, new intercom and access control units, new paint, and seal exposed brick.

Third Floor Improvements

The front office in 1733 will get new lights, new carpet and paint, a new coat closet, and

new furniture. The rear area in 1733 will receive new office furniture, a new work area, new

carpet and paint, and new lights. The third floor in 1735 will get new access control, a chase to

accommodate 4th floor plumbing, and new appliances.

Fourth Floor Improvements

On the fourth floor, the front office of 1733 will get new paint, a new walkstation, and a

new coat closet. The rear area will receive a new galley kitchen, a new work area, new carpet

and paint, and new lights. The fourth floor at 1735 will get a new suite entrance, a new

hardwood floor, a new coat closet, new appliances, a new galley kitchen, and a new copy area.

Fifth Floor Improvements

The fifth floor at 1733 will have another front office. The front office will be expanded,

and will have new lights, new paint, and new countertop, new furniture, a new coat closet, and

the skylight will be replaced. The rear area at 1733 will have a new bathroom with a shower, a

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new washer/dryer, new carpet and paint, new lights, and a new coat closet. Meanwhile, the

fifth floor at 1735 will get new paint and new carpet.

How Successful Has the Project Been?

While there were significant problems in the preconstruction phase of the project, the

project has been successful. There have been no complaints from any of the parties involved

about the difficulty of the job or working with the other parties. The project is a smaller

renovation that has to deal with tenants who are currently occupying the space, and the

General Contractor and the Owner have done an excellent job accommodating the needs of the

tenants and catering to their schedules.

Major Issues on the Project

There were multiple major issues that had to be addressed. Both roofs had serious

water problems and are being replaced. The rear existing brick façade was removed and

replaced with steel stud construction. The Owner wanted to occupy parts of the property

during construction, but they had to move some employees their office in Silver Spring to allow

for easier access by the General Contractor during construction. Furthermore, the second and

third floors are still partially occupied, and the Owner inherited a first floor retail tenant which

is operating during construction.

The property has no rear alley access, so all materials had to enter the building through

the Connecticut Avenue NW basement access stairs. This posed a problem for the General

Contractor. Noise from demolition was also being produced on the back façade and roofs. To

further compound the issue, the Executive only gave the Contractor a narrow two-week

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window when she would not occupy her office, making the Contractor work around this

window.

The Developer’s goal was to keep the lawyer tenants happy. The Developer went

through an extended design process with the Architect, which included two General

Contractors before the current GC. The design was changed several times, and eventually

elements of the design scope were omitted from the final construction documents, including a

roof deck and gym.

Overview of the Contractual Structure and Procurement of the Project

The project was originally a Guaranteed Maximum Price (GMP) project, but changed the

current budget to a stipulated sum. The owner decided on this structure because owner-driven

changes in the design process halved the budget. The owner plans on using this method in the

future.

Project Cost/Budget

The project has a budget of about $2 million. The GC also has a fixed fee of 10% of the

construction cost. The GC also marks up any change order by 10%.

Project Schedule

Spring 2014 – Design with Architect

Summer 2014 – Pricing with GC

Fall 2014 – Value Engineering Exercise

Fall 2014 – Current GC hired

January 2015 – 2 building permits acquired

February 2015 – Construction started

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July 2015 – Move-in

Change Orders

The PM said that no change orders have been processed so far. There are some change

orders in the works, and those will affect the contract sum. The change orders resulted from

owner-driven requests.

Quality of Work

The Developer has been pleased with the quality of work performed by the Contractor.

Overall Management of the Project by the Contractor

The PM stated that the work is not challenging, but the logistics were hard. There is no

rear alley access or outdoor staging area. Workers had to work late afternoon and evenings at

times. The PM said there is usually about a dozen people working on the site per day, including

a laborer to do constant clean-up of debris.

Will the Owner and the Contractor Work Together in the Future?

The GC said he has a good working relationship with the Owner, and the Architect has

been more lenient about submittal processes than expected. The parties plan on working

together for future projects.

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