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VOLUME 4   ISSUE 12   MARCH 27, 2015

 

By Bruce Jervis

 

Liquidated damages are assessed against contractors for late completion of a project. They are intended to compensate project owners for the costs of an extended construction period and the delayed use of the facility. Liquidated damages clauses are generally enforceable if the daily rate represents a reasonable forecast, at the time of contract formation, of the owner’s actual costs. If the daily rate is arbitrary – merely an incentive for timely completion by the contractor – the clause may be ruled an unenforceable penalty.

 

On public works projects, the determination of the daily rate of liquidated damages is controversial. Public project owners do not have construction loans. Completed public projects do not generate revenue. What are the owner’s costs of late completion? They are primarily extended inspection and administration costs.  Read more.


 

Last month in ConstructionPro Week, we presented an overview of the results of our January 2015 Estimating Survey, including methods used to perform take-offs, sources of cost/pricing data, use of technology and overall satisfaction ratings.  The survey also asked readers to share three best practices for developing a solid estimate. Here’s what we learned: ... Read more.


 

Software Advice, an online service intended to help match prospective buyers to software companies, has conducted its own surveys over the past few years.  In 2013, it reported that 49% of its survey participants used spreadsheets, supporting ConstructionPro Network’s findings (17% of respondents still prepare an estimate manually, with 46% using a spreadsheet and 31% using an estimating program).  Read more.



From Previous 3 Issues:
Volume: 4, Issue: 11 - 03/20/2015

 

By Bruce Jervis

 

Bid protests are an inherent part of the competitive bidding process. A disappointed, second-low bidder seeks to displace the low bidder by challenging the sufficiency or responsiveness of its bid. This is generally a matter between each of the bidders and the public project owner. On rare occasions, however, bidders actually sue each other.   ... Read more.

 

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The Unified Facilities Guide Specifications (UFGS) Division 01 – General Requirements, Section 01 32 01.00 10, Project Schedule, was updated last month with a number of interesting changes and new sections. The following notes are not inclusive of all changes, but point out no less than 30 significant differences from the previous version (August 2008 with Change 1 – 08/13). There are many other minor revisions including reformatting and cosmetic changes. Links to the two versions are provided at the end of this article. These provisions represent a major shift for those doing work on large Federal construction projects and are clearly intended to improve schedule quality as well as reduce or eliminate schedule "gamesmanship." 

 

One added clause references the use of the AACE Forensic Schedule Analysis (FSA) Recommended Practice, which is expected to be controversial because the FSA is a document that is more about defining analysis methodologies than it is a single, step-by-step analysis method.  Also noteworthy is the Government’s use of Primavera P6 as the “default software,” complete with a listing of specific software settings and controls to be used, but providing that other software compliant with the specification may be used.   Read more...


Volume: 4, Issue: 10 - 03/13/2015

 

By Bruce Jervis

 

Jobsite overhead, sometimes called field office overhead, is not really “overhead” at all. It is a direct cost of performing a single construction contract at a specific site. Nonetheless, the term “overhead” is widely used and the Federal Acquisition Regulations allow government contractors to treat it as an indirect, percentage-of-contract cost component when pricing change orders.  ... Read more.

 

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Last week, we covered some basic demographics and data from ConstructionPro Network’s 2015 BIM Experience Survey. This next installment looks more closely at responses from the 47% of respondents who have had experience with one or more BIM tools or processes to determine which applications are currently being used. Read more...


 

The Apple Watch, to be available in Apple stores on April 24, offers a number of features that should be of interest to contractors. The obvious focus is as a communications tool. A construction project is all about communications. Project managers need to communicate with superintendents, superintendents with foremen with their crews, and crews with each other. Back in the day, we exclusively relied on two-way radios - walkie talkies - which transitioned to cell phones, particularly the Nextel which had a "push-to-talk" feature that emulated the radios. Since the introduction of the iPhone in 2007, smart phones have become a viable alternative to two-way radios, particularly for the ability to send email, messages, documents and photos. Read more...


 

On the heels of our article in the February 27 ConstructionPro Network article on 3D printing, we learned the city of Dubai will be building a museum that will utilize 3D printing in its construction. Unveiled this past week by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the $136 million museum will also serve as an innovation lab and invention hub. Details of the extent of the 3D printing components were not revealed, but are expected to be significant, according to published reports in 3DPrint and Gulf News.


Volume: 4, Issue: 9 - 03/06/2015

 

By Bruce Jervis

 

A recent report on a project owner’s ability to reach contract retainage without any formal determination of contractor default prompted considerable comment. Now, another case illustrates the potential for owner abuse of retained contract payments.


Retainage is intended to protect project owners against mechanic’s liens and deficient contractor performance. But, it can also provide owners with a great deal of leverage in disputes with contractors. This creates a temptation for abuse.   ... Read more.

 

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Construction Law: An Introduction for Engineers, Architects, and Contractors

Gail S. Kelley
John Wiley & Sons, Hoboken, NJ, ISBN 978-1-118-229033

 

Success in construction requires more than design, technical and managerial skills; one must be fully conversant with numerous aspects of construction law in order to fully understand one’s rights and responsibilities.

 

From the perspective of the typical owner, contractor or subcontractor, the primary scope of knowledge needed to achieve a built project is fully contained within the boundaries of the construction contract documents (plans and specifications), including regulations, codes and other documents referenced in the contract. Knowledge of contract law is the primary driver for determining the risks and responsibilities of building the project and resolving any disputes. This has served as the foundation of this reviewer's own writings of books and periodicals about construction contracts and construction law. But there’s more to “construction law” than knowledge of the principles of contract law, in which Gail Kelley’s compact tome succeeds in teaching. Kelley covers basic legal principles, operational processes, contract administration and the roles of the various players as well.  Read more...


 

Building information modeling (BIM) is a controversial topic. BIM champions have been extolling its virtues of design efficiency, construction cost and time savings, and maintenance economies for owners. Yet BIM has not become as widely used as expected in the United States.  In the U.K., for example, the government has put into place standards with the goal that all public construction projects utilize collaborative BIM from start to finish, with all project and asset information, documentation, and data being electronic by 2016-2017.  So what seems to be the issues holding BIM back?  With the 2015 BIM Experience survey launched this past month, ConstructionPro Network set out to see what it could learn. Read more...



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