By Bruce Jervis

A typical construction contract is comprised of multiple documents. Others may be incorporated by reference. It is not surprising that these documents may contain conflicting provisions; internal inconsistencies within the contract.

In order to avoid a patent ambiguity, which may or may not be detected in advance by the parties, an “order of precedence” clause attempts to resolve any conflict through the terms of the contract itself. This is accomplished by stipulating, in descending order, which documents take precedence over others. ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Environmental Permits Took Precedence over Drawings
• State Residence Preference Law Did Not Preclude Local Bid Preference
• Attempted Certified Mail Delivery Met Notice Requirement

What are the primary sticking points that still need to be resolved regarding the next version of the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED v4) suite of green building rating systems, and could those sticking points actually delay LEED v4 beyond its scheduled public launch in the fall? Click here to read how Warren Neilson, director of projects for Environmental Building Strategies, answered this question during an interview with ConstructionPro Week.

Building information modeling (BIM) can be used with any project-delivery system in a construction project, an expert from Zetlin & De Chaira LLP emphasized to construction professionals attending a webinar that WPL Publishing held last week. He made this point during a segment of the webinar addressing four key variables that impact BIM contracting, one of which is the type of delivery system being implemented.

Although certain project-delivery systems “are much better suited to work with BIM” than others, “you could still take the classic design-bid-build project-delivery system and get a lot out of [the technology],” Zetlin & De Chaira Managing Partner Michael Vardaro said during “Contracting for BIM Lifecycle Uses,” the target audience of which consisted of architects, engineers, attorneys, public and private owners, construction managers, contractors, subcontractors, suppliers, manufacturers, and BIM consultants. Besides the type of project-delivery system being used, what are the other key variables impacting BIM contracting that he and Kimberly Hurtado, managing shareholder of Hurtado, S.C., Counselors at Law, highlighted during the program? Click here to find out.
 

By Bruce Jervis

Joint check agreements are used when a party down the contracting chain has payment concerns regarding the party with whom it has contracted. A subcontractor may ask a project owner to issue checks payable jointly to the prime contractor and subcontractor. A lower-tier subcontractor may ask a prime to issue checks payable jointly to the subcontractor and lower-tier subcontractor. All three parties must agree to the arrangement.

When structured properly, joint check arrangements are an effective tool for addressing the payment concerns of the party down the chain while protecting the interests of the issuer of the joint checks. These arrangements do pose some challenges, however, primarily regarding the administration and allocation of the joint check proceeds. A recent case out of Delaware raised another, somewhat surprising, issue. ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Joint Check Agreement Did Not Allow Credit for Incomplete Work
• Engineer Denied Payment due to Municipal Misfire
• Contract Administrator Misunderstood Government’s Own Specifications

Does the federal design-build contracting process need an overhaul? The American Institute of Architects (AIA) believes so, alleging that current laws addressing this process are “harming the livelihood" of small architecture firms through increasingly risky bidding competitions. So what exactly does the organization want Congress to do about it? Click here to read how Jessica Salmoiraghi, AIA’s director of federal relations, answered this question during an interview with ConstructionPro Week (CPW).

ConstructionPro Week has profiled 22 green building publications that various government agencies and trade associations have released this year. The publications cover a wide range of topics, from strategies for achieving net-zero homes to energy modeling to commissioning to indoor air quality. The profiles include abstracts and such details as document titles, page lengths, authors, and other information. In many of the profiles, links to the reports are included, while ordering information is included within the other profiles. ... Read more.

By Bruce Jervis

The function of a “termination for the convenience of the owner” clause is straightforward. The project owner, at its discretion, may terminate the project at any time without breaching the contract. The contractor is entitled to the reasonable cost of work performed prior to termination, as well as the cost of closing out the project. The owner is not liable for the contractor’s anticipated profit on the unperformed work.

This sounds like a balanced bargain, yet contractors have long complained about the process. Owners, it is said, use convenience terminations to shield themselves from legitimate claims for bad planning, faulty design, or project mismanagement. Contractors also contend owners allow them to perform unprofitable portions of the work and then terminate profitable portions. These complaints usually come up empty. Abuse of discretion is difficult to prove. ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Contractor Not Responsible for Corrective Work after Convenience Termination
• Default Upheld Despite Government Mishandling of Delay Claim
• Supplier Disclaimed Responsibility for Consequences of Defective Material

When attempting to resolve an issue that has arisen involving a contract requirement for a construction project, it is a good idea to resist trying to recall from memory what that requirement actually says. This is a key piece of advice that Schiff Hardin LLP Partner Amanda Schermer offered to a group of professionals during “Change Order Management: Best Practices & Strategic Considerations,” a webinar that WPL Publishing held earlier this month.

For all parties, “especially for complex projects that have long contracts and … technical specifications that are hundreds -- if not thousands -- of pages long, it is a best practice to not, when an issue arises, … go from memory of what the contract requirements are” even though it may be “very tempting” to do so, Schermer said, addressing a target audience of architects, engineers, public and private owners, construction managers, contractors, subcontractors, and consultants. “All parties [should] take the time to review what the actual contract says and then come back and have a discussion, and it’s important … to not go into your contract evaluation assuming you know the answer. It’s good to be open-minded in your analysis, and that will help you think clearer about the issue and reach a solution.” ... Read more.

Owners of commercial buildings, their tenants, architects, and engineers all are expected to benefit from a recently expanded building energy labeling program that, among other things, can help facilitate compliance with local and state requirements compelling disclosure of energy use.
The voluntary Building Energy Quotient (bEQ) program, developed by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), now has an As Designed label to complement its In Operation counterpart. The new As Designed label rates a building’s potential energy use under standardized conditions, independent of the building’s occupancy and usage, whereas the In Operation label rates actual measured energy use as influenced by the building’s occupancy and usage. But how does the program benefit various professionals within the construction community? Click here to find out.

It pays to obtain green certification for buildings, according to information that Triple Green Building Group LLC Principal Kelly Gearhart provided during “Green Standards -- LEED, BREEAM, DGNB and Others,” a WPL Publishing webinar for which a recording recently was added to the ConstructionPro Network (ConstructionProNet.com) Download Library -- free of charge for members. Going green through the U.S. Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED), Building Research Establishment Environmental Assessment Method (BREEAM), and Deutsche Gesellschaft für Nachhaltiges Bauen e.V. (DGNB) rating systems all have their reported benefits, she said.

“Operating costs drop by [approximately] 13.6 percent for [new commercial] buildings that have achieved LEED certification, [and] the value of [such a] building rises by 10.9 percent…. The return on investment improves by 9.9 percent,” Gearhart told a target audience of architects, engineers, public and private owners, developers, construction managers, contractors, subcontractors, consultants, facility and property managers, and others, citing USGBC estimates. ... Read more.