VOLUME 3   ISSUE 47   NOVEMBER 21, 2014


By Bruce Jervis


A work stoppage is a work stoppage, or so it would seem. Regardless of whether the project owner directs a suspension of work or whether the contractor encounters an unexpected problem that brings work to a halt, the result is the same. But, the contract documents frequently make a distinction, so it does matter.


An owner-directed suspension is usually expressly compensable, with the elements of compensation defined in the contract. Delay and disruption of ongoing work may be treated differently. The contract may disclaim owner liability for delay, regardless of cause. Or, the contract may severely limit recovery of delay damages. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Suspension of Work Distinguished from Standby or Delay
  • Contractor Should Have Priced Utility Work Prior to Bid


Over the last month, America’s construction industry has experienced an absolute profusion of legal activity. To get a better perspective of what is happening on this front, ConstructionPro Week (CPW) put together a short list of what we believe are the most important new developments affecting the industry’s legal landscape. Click here to see brief summaries of the key litigation, legislation, referenda, and documents represented on the list.


For contractors and subcontractors performing construction work on state and federal projects that exceed $2,000 in value, what is the best way for them to create certified payroll reports? Should they use Excel spreadsheets? Should they go full bore and invest in construction-specific software? Are handwritten reports really the most economical way to go? In a webinar that WPL Publishing sponsored earlier this month, Sunburst Software Solutions Inc. President Nancy Smyth shared some interesting observations on this topic. To see what she said, click here.

From Previous 3 Issues:
Volume: 3, Issue: 46 - 11/14/2014


By Bruce Jervis


A mechanic’s lien is a contractor’s best form of payment security on a private construction project. State lien statutes specify the timely steps a contractor must take, from notice to filing to foreclosure. But, what determines the appropriate amount of a lien: the initial filed demand, the reasonable value of the work, or the contract price?


A California court recently addressed this question. A contractor recorded a lien in a stated amount and then attempted to recover an increased amount in foreclosure. The increase reflected work performed, but not yet billed, prior to recording the lien. The project owner argued the contractor was limited to recovery of the initial filed amount. The court said no. The contractor could recover for work performed under the contract prior to the lien filing. The recovery limit was the contract price, not the initial recorded demand. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Lien Foreclosure Recovery Can Exceed Stated Lien Amount
  • Contractor Excluded Due to Past Scheduling Problems


CPM schedules are essential for determining project impact arising from time-related problems, such as delays, suspensions, or accelerations. Changes that add or delete work and differing site conditions may also have a time impact on the contract that can be demonstrated by CPMs. To best analyze the effect of such situations, the CPM is the most often used tool to measure the relative impact of different time factors on project completion. The use of CPMs has long been accepted by the boards and courts, so long as.... Read more.


Now that Trimble has unveiled SketchUp 2015, what should users know before switching to this new version of the 3D modeling software? In search of an answer to this question, ConstructionPro Week (CPW) asked a Trimble representative, as well as several practitioners and trainers who are well-schooled in the program, for their input on the best way to make the transition. To see some of the suggestions they gave, click here.


Although cloud computing can provide significant benefits for construction managers (CMs) and others, they need to “do their homework” on the topic first. This is one of the key points that Marty Turner, senior project controls manager at CH2M Hill, stressed in summing up for ConstructionPro Week the “Demystifying the Cloud” session he co-presented at the recently concluded Construction Managers Association of America National Conference in San Francisco. Click here to see what steps he suggested taking “before you move some or all of your systems, data, applications, etc.” to the cloud.

Volume: 3, Issue: 45 - 11/07/2014


By Bruce Jervis


Pressing needs for infrastructure and other public facilities, combined with limited funding sources, are changing the way public projects are financed. Increasingly, the constructor is also the financier, compensated through lease payments, tolls, or other user fees.


These new project arrangements have proved challenging to the public procurement system. The bidding laws in many states have been slow to keep pace. Some states, however, have been proactive. A recent challenge to a lease-leaseback arrangement in California was squarely addressed by the procurement statutes. The procurement was exempt from competitive bidding. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Lease-Leaseback Exempt from Competitive Bidding
  • Owner Created Separate Prime Contract with Trade


Acceleration is experienced on a construction project when a contractor either wants to finish early, or, more often, to recover lost time due to delays on the project. There are three types of acceleration that can occur: 1) voluntary, b) directed, and c) constructive. Voluntary acceleration is where a contractor makes schedule changes and/or expends additional resources at its own initiative. Directed, or ordered, acceleration occurs when the owner explicitly instructs the contractor to accelerate the work. Constructive acceleration occurs when the contractor is forced to attempt to achieve a completion date that is earlier than what should be required under the contract because the owner did not timely grant an extension for excusable delay. Constructive acceleration arises when the owner causes the contractor to accelerate not by an express direction but implicitly through the owner’s actions, typically failure to grant a time extension that the contractor would otherwise be entitled to. ... Read more.


How has version four (v4) of the Leadership in Energy and Environmental Design (LEED) green building certification system fared since its formal launch a year ago? Has LEED v4 met expectations? Upon delivering a presentation at Greenbuild 2014 about his experience overseeing the third LEED Existing Buildings Operations and Maintenance project certified under the new version, Michael Alexander, senior project manager for Cassidy Turley, offered a candid assessment of LEED v4’s performance to date. Click here to see what he told ConstructionPro Week.


In which ways have smartphones, tablets, and other mobile devices benefitted construction companies the most? This is one of the questions that Sage North America sought to answer via its recent survey to gauge what the most popular mobile devices are within the industry, the tasks that those devices are used for most often, and whether construction companies typically budget for such equipment, among other things. To see some of the survey results, click here.

Volume: 3, Issue: 44 - 10/31/2014


By Bruce Jervis


If a contractor receives a progress payment covering work performed by subcontractors and then fails to use those funds to pay the subcontractors, it is almost certainly a breach of contract. A Missouri court recently ruled it was also civil conspiracy and fraud.


A Missouri construction company was a corporation owned by three shareholders. Those individuals diverted progress payment funds to their own use, leaving subcontractors unpaid. The three shareholders were held personally liable for actual and punitive damages. The court said intentional misrepresentation and misappropriation of the funds distinguished this situation from a “garden variety” breach of contract case. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Individual Owners Liable for Misrepresentation of Subcontractor Payment
  • Public Bidding Restricted to Privately Approved Contractors


What happens when you have conflicting details on two different contract drawings? Which one is the contractor entitled to rely upon? When does “or equal” actually let you substitute a product that you consider equal? What exactly is the role of inspection on a construction project? These questions and more are covered in a chapter on contract interpretation by attorneys Brian Bennett and Jonathan Blocker in an upcoming book on construction claims. In this article, the authors discuss the role of inspection on construction project, which is sometimes misunderstood or misused. ... Read more.


It took three years, but the Treasury Department has responded to some concerns the American Subcontractors Association (ASA) raised about the agency’s planned rulemaking relating to surety companies that do business with the United States. The department offered its reply earlier this month when it issued a final rule to clarify the circumstances in which a federal agency’s bond-approving official can decline to accept a bond underwritten by a Treasury-certified surety. To read the gist of ASA’s concerns and how the department responded to them, click here.


A recent analysis of 18 projects that M.A. Mortenson Company completed between 2004 and 2013 using virtual design and construction (VDC) has uncovered some impressive benefits that others in the industry may want to note. Benefits stemming from the use of VDC in these projects include a collective 600 total days of schedule reductions, productivity increases surpassing 25 percent, and an average cost reduction of 2.9 percent. However, in reporting the results of the analysis during a BIMForum presentation in Dallas earlier this month, Mortenson Integrated Construction Director Ricardo Kahn was quick to point out that the technology alone did not produce these benefits. To see what other factors Mortenson believes contributed to the VDC success story, click here.

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