Periodic Progress - Standard

On-going inspections are performed to ascertain the progress of construction, establish an estimated value of work in place, identify changes in construction costs or completion, and verify adequacy of remaining funds to complete the work. Quality of workmanship and adherence to bank approved plans are key factors to be addressed.

Periodic site visits must be conducted to evaluate the progress of work at the project and may be requested with or without a contractor's application for payment or owner/borrower's request for funds. The Inspecting Consultant is expected to participate as PNC's representative at routine, monthly construction draw meetings. Below are guidelines for standard requirements of progress reports.

General Information

Owner/Borrower Name
Project name and location
Description of the project
Contractor's AIA requisition number and period covered

Standard Scope of Review

Each report should include commentary on the following topics:

Date of inspection and who attended (include time of day and weather conditions). If visit did not coincide with monthly draw meeting, provide an explanation.
Status of Progress Schedule and Inspector's Estimated Completion Date with commentary on Developer's Project/Draw Status Report.
Discussion of quality of workmanship and materials.
Validation of scheduled values, previous draws, current request and reallocations of scheduled values.
Summary of Change Orders - executed and pending. Include dollar value of changes and commentary on availability of funds in project budget; explain scope of work and impact on original plans and specifications (as to design and quality resulting from change) and on project schedule.
Labor disputes or issues related to trades.
Stored materials inventory and usage (on site and off-site, if requested), including controls, anticipated integration of inventory, protection from elements and damage, etc.
Confirm adherence of work to plans and specifications, noting deviations and impact.
Code compliance or possible violations.
Tenant finish completion: Borrower to provide summary by tenant or trade breakdown for tenant work. Inspector to confirm spaces under construction and progress of each space.
Dollar value of work in place for each draw with explanations of differences between actual costs incurred and requested amounts, if applicable.
Percentage of completion--per line item and overall construction budget.
Adequacy of project funds available to complete project. Indicate if contingency funds are recognized in balancing available funds.
Review retainage. Confirm that retention is consistent with construction documents. Provide opinion on reduction or release of retainage when requested.
Review and comment on laboratory tests and other inspections.
Review and comment on subcontracts and purchase orders, including engagement status and:
- conformance to plans and specifications
- availability of funds within general contract allowance
- submission of lien waivers
Other matters that may arise which would affect the timely completion or quality of work.
Photographs. Comprehensive photographs should be labeled, depicting overall progress of construction at time of site visit, as well as pictures that reflect any areas of concern.

Reporting Requirements:

Oral Report

Whenever possible, an oral report of the progress of construction, areas of concern and a recommendation of the amount to be funded should be provided to the PNC designate (usually the loan administrator). If timing or materials constraints prohibit delivery of the written report by the commissioned due date, the consultant must promptly notify REA or the PNC designate to determine how to proceed.

Written Report

A written report is required within 2 weeks following the on-site visit, including copies of relevant documents; such as, application for payment, updated permits, certificates of occupancy, change orders, etc. Additional copies may be required for syndicated transactions or for Real Estate Administration's periodic quality control review. Delayed delivery of this information could impact our ability to comply with Loan Documents and providing Customer funding. Electronic or compact disk delivery of the report, exhibits, and photographs may be provided in lieu of hard copies, provided that these are easily accessible and fully legible. Reports should be delivered to the PNC designate, unless otherwise requested by the Process Managers in Real Estate Administration.

Questions should be directed to Real Estate Administration.