By Bruce Jervis
When a construction contractor bids work, the quantity or volume of that work has a significant impact on the pricing structure and profit expectation. Yet standard clauses commonly found in construction contracts allow for a reduction – even a drastic reduction – in the scope of work. These clauses authorize deductive change orders and partial terminations for convenience. The financial impact on a contractor can be significant.
One recent case involved what appears to be an abuse of the deductive change order. A contractor awarded a unit-price subcontract which authorized changes in the quantity of work without any adjustment to the unit price. At the time of subcontract award, unbeknownst to the subcontractor, the prime contractor had negotiated a change in the design with the project owner. This change effectively eliminated 80 percent of the sub’s work. ... Read more.
Featured in This Week’s Construction Claims Advisor:
- Changes Clause Allowed Huge Reduction in Scope
- Prompt Payment Statute Applied to Suppliers as Well
- Sprinkler Sub Denied Compensation for Design Services
By Steve Rizer
The U.S. Department of Energy (DOE) and Passive House Institute U.S. (PHIUS) have formed a partnership that the federal agency predicted will “provide a seamless path for builders to achieve maximum energy efficiency.” The partnership focuses on a voluntary certification process for homes that are energy-efficient enough to offset at least most of their utility bills with small renewable-energy systems. These homes are referred to as “zero-net-energy-ready” homes. ... Read more.
By Steve Rizer
Arlington, Va. -- Expect a new position paper on design excellence to be released “in the next few months,” an official with the Design-Build Institute of America (DBIA) told attendees of the organization’s “2012 Federal Sector Conference: Design-Build a Better Nation” here late last month. The official, DBIA Rocky Mountain Chapter President Greg Gidez, made the announcement during a presentation to explain what the national organization considers to be design-build best practices. ... Read more.