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VOLUME 4   ISSUE 4   JANUARY 30, 2015

 

By Bruce Jervis

 

Construction contract documents can be complex, which is another way of saying lengthy, redundant and laden with specialized terminology. Some would even say obtuse. But are the contract documents sometimes deliberately obtuse?

 

In one recent case, an indemnification clause was buried on page 86 of a 197-page subcontract, all single-spaced in black type. No effort was made to call the other party’s attention to the clause through the use of capital letters, a different type size or different color ... Read more. 

 

Featured…

 


 

Substantial portions of claims that develop during construction often revolve around issues of fact. Whether it is the existence of a site condition, a weather event, a trade coordination situation, an obstruction or an obstacle, one party to the contract will state a claim asserting that the cause of the claim is the fault of another party to the contract. Once the responsible party is clearly identified, there is the issue of proving and quantifying the resulting direct costs, indirect costs and schedule impact, if any. Nothing resolves a dispute quicker than supporting (or disputing) the claim with proof of the facts, and nothing establishes factual proof better than photographs.  Read more...


 

Last week (Vol. 4, Issue 3, January 23, 2015) we asked our readers if Project Labor Agreements (PLA) restrict competition. A recent Maryland appellate court upheld use of a PLA on a public project, citing the fact it was not proved that a PLA unduly suppresses competition. Of the eight very well-articulated responses, the comments were overwhelming against the use of PLAs. Interestingly enough, many of the comments pointed out that the use of Davis-Bacon wage compliance mostly accomplishes the same competitive goals, with the PLA being redundant, but at the same time, imposing union labor-restrictions that result in driving up costs.  Read more...



From Previous 3 Issues:
Volume: 4, Issue: 3 - 01/23/2015

 

By Bruce Jervis

 

Project Labor Agreements (PLAs) are controversial. These are pre-hire agreements between a general contractor or a construction manager and a designated collective bargaining representative for all labor on the project. Every constructor on the project must sign the PLA and agree to hire workers exclusively through the designated representative, but participation on the project is not limited to union contractors. Labor is not restricted to union members, although non-union labor must be hired through union halls and paid the negotiated rates.

 

A Maryland appellate court recently upheld the imposition of a PLA on a public project even though PLAs are not expressly authorized by state procurement statute or... Read more.

 

Featured in Construction Claims Advisor



 

The October 2014 issue of the consistently excellent Tunnel Business Magazine has an interesting article on “Bullshit in Tunneling, Revisited.” The author, Dr. Thom L. Neff, a civil engineer, geologist and tunnel consultant, posits that anything not based entirely on facts represent BS to some degree. He goes on to explain that BS has increased since his first article appeared in 2010, primarily due to the fact that the population as a whole has become 24/7 connected and is increasingly “…impelled to speak extensively about matters of which they are to some degree ignorant.” This results, asserts Neff, are schedule delays and cost overruns.  Read more...


 

Last week we reviewed the three major tabs that every estimate should have:

  • Project Summary Tab
  • Commentary and Assumptions Tab
  • Estimate Details Tab

These three worksheets provide the contractor with a consistent way to organize an estimate, easily find information, and document pertinent information discerned over the course of producing the estimate. In addition, there are a number of other tabs a contractor might consider adding depending on the nature of work and complexity of the estimated projects. In Part 2 of this article, we offer a few additional tabs to be considered in producing an estimate. Read more...


Volume: 4, Issue: 2 - 01/16/2015

 

By Bruce Jervis

 

Construction contracts make extensive use of trade standards when defining the work. It is common for contracts to utilize or reference industry manuals, standards or specifications. But these objective standards are not the same as “trade custom.”

 

Trade custom is sometimes used to interpret, or understand, trade standards which are used in a contract. It is important to remember, however, that customary practice in the field, no matter how prevalent, cannot alter or supersede the express language of the contract documents. ... Read more.

 

Featured in Construction Claims Advisor: 

  • Fabricated Concrete Wall Panels Were Not a “Product”
  • Trade Custom Could Not Trump Contract Description

 

The spring 2015 edition of Husch Blackwell’s Contractor’s Perspective caught our eye for a number of reasons: “Spending on federal contracts was down in 2014. But False Claims Act settlements were up. So were the number of new regulations, the number of GAO bid protests, and the number of claims at the ASBCA.” ...Read more.


 

While we await the results of the Estimating Survey, which closes February 1, let’s take a look at several actual estimating spreadsheets and see what we can discern as possible best practices. Starting this week, we will be examining estimating templates used by various public agencies and posted on their websites for public use.  Links to the actual templates will be included for our readers use.  In today's issue, we take a look at the use of multiple sheet “tabs” for organizational purposes.

 

Three Sheets Every Estimate Should Contain

In a spreadsheet program like Excel, a single spreadsheet file may contain multiple sheets. In Excel, each sheet has a tab to facilitate accessing the sheet. The tabs can be labeled to identify the contents of the sheets, and can even be color coded, hidden and/or protected. For the purpose of a construction estimate, a common practice is to use two or more tabs in a single spreadsheet file to organize different parts of the estimate. In our first sample, from the British Columbia Ministry of Transportation and Infrastructure, there are three tabs: ... Read more.


 

BNI Books, publisher of  Construction Savvy and over 50 cost estimating guides, and DC&D Technologies, Inc., publisher of Design Cost Data, are co-sponsoring the Estimating Survey with ConstructionPro Network.  We welcome their participation, as they are leading providers of estimating resources in the U.S.  If you haven’t yet participated in our survey, please take five minutes to tell us your experience with estimating processes and applications.  Click here to take the survey now.  Results will be published in February and provided to all ConstructionProNet, Construction Savvy and Design Cost Data subscribers. 

 

We look forward to your participation, as well as the involvement of Construction Savvy and Design Cost Data in developing future construction cost estimating surveys.


Volume: 4, Issue: 1 - 01/09/2015

 

By Bruce Jervis

 

Unpaid subcontractors and suppliers have long been frustrated by the slow processing of claims against payment bonds. These bonds are the best form of payment security on public projects, yet collection can be complex and convoluted. A recent case from the Connecticut Supreme Court illustrates the problem.

 

The state “Little Miller Act” requires public works payment bond sureties to either pay or deny – based on stated good faith grounds – within 90 days of receipt of a claim. The statute is silent, however, regarding the ramifications of noncompliance. ...Read more.

 

Featured in Construction Claims Advisor:

  • Surety’s Late Response Did Not Waive Defense to Claim
  • Contract Line Item Repeated Statement of Work

 

In general, site investigations are based on observance of the apparent surface conditions. Bidders do not usually have access to the project site in order to make detailed studies of surface features, let alone subsurface conditions. Even with access, time and money can present a major obstacle to detailed study and further exploration at the bid stage. However, it is the bidder’s duty to investigate the site in order to become familiar with local conditions and to allow for a bid adjustment following any unusual findings. Nonetheless, the owner is responsible for allowing a reasonable period of time and access so that the bidders can conduct the investigation provided for in the invitation to bid. ...Read more.


 

Estimating is the core function of all construction projects.  Owners start with conceptual estimates when a project is first proposed.  These estimates get refined as the project develops and ultimately, contractors and subcontractors will prepare detailed take-offs and estimates to prepare a bid or establish a budget.  Before microcomputers came around in the 1980s, estimating was primarily a manual function, aided by the use of handheld or desktop calculators.  Today, a significant amount of estimating is automated, even to the point where they can be performed on smartphones.

 

There are three general elements to an estimate: 1) the direct cost of the installed materials, including labor; 2) indirect, or support costs, such as scaffolding, crane usage, testing, inspection and punch lists; and 3) markups, such as overhead, profit and contingency, or risks.  Frequently, particularly for small projects and for change orders, the indirect costs are included as part of overhead.

 

In the upcoming issues of ConstructionPro Week we will be covering estimating-related topics and are interested in hearing your feedback, including learning about best practices, challenges and what our readers see as future directions in construction estimating.  We would like to start this dialogue by inviting you to take our quick, five-minute survey by clicking here.



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