By Bruce Jervis
A “cash allowance,” or more formally “stipulated allowance,” is an amount stated in a fixed-price contract which is attributable to a discrete element of the work. If the actual cost of that work exceeds the allowance, the project owner is responsible for the overrun. If the cost is less than the allowance, the owner receives a credit.
Allowances can be useful. They provide owners with flexibility while maintaining the predictability of a fixed-price contract. Allowances can also accommodate an element of the work which is still ill-defined. But the excessive use of allowances is a formula for dispute. This was illustrated in a recent Indiana case. ... Read more.
Featured in this Week’s Construction Claims Advisor:
- Notice Not Required for Overrun on Allowance Items
- Engineer Not Responsible for Job Site Safety
- Contract Award Withdrawn but Contractor Denied Lost Profit
By Steve Rizer
There were some interesting developments coming out of the Whole Building Design Guide (WBDG) Board and Committee meeting that took place during the National Institute of Building Sciences’ inaugural Building Innovation Conference earlier this month in Washington, D.C. In an interview with ConstructionPro Week, WBDG Director Richard Paradis reported that the meeting participants “recommended we actively market WBDG to the higher-education sector.” He noted that several universities use the WBDG in their curricula. The panel also has some interesting plans for what it will do at its next meeting, which is scheduled to take place in March. ... Read more.
By Steve Rizer
To what degree have contractors actually embraced building information modeling (BIM) technology? Even though a recent McGraw-Hill Construction survey indicated that more contractors (by percentage) are using BIM than architects, some comments that Dee Cramer BIM/CAD Manager Steve Hunt recently made at the Building Innovation 2013 Conference call into question just how deeply BIM has penetrated the contracting community.
Hunt, an instructor for the Sheet Metal and Air Conditioning Contractors’ National Association’s Chapter Education Program, said “it’s really shocking” that BIM has not made more of an impact among member contractors across the United States. ... Read more.
By Steve Rizer
January 2013 Download Library Addition
As new webinar recordings are made available to the ConstructionPro Network free member Download Library on a monthly basis, ConstructionPro Week will provide a brief summary of each event for the benefit of its readership. Here is the summary for the January 2013 addition:
Although weather delays usually are not compensable, sometimes they are, Trauner Consulting Services Inc. Principal Scott Lowe stressed during a WPL Publishing webinar called “Delays and Time Extensions on Construction Projects: Dealing with [Hurricane] Sandy,” a recording of which recently was added to the ConstructionPro Network (ConstructionProNet.com) Download Library -- free of charge for members.
Because the issue of compensation relating to weather delays is dealt with in different ways, “you need to be very cognizant of what your contract says with regard to that,” Lowe told webinar attendees. “I have encountered contracts that do allow time compensability for weather-related delays. I think the other thing you need to be fully aware of is that there are certainly contracts that would give you a day-for-day time extension for Sandy or, frankly, any weather-related delays, so it’s important for you to be fully aware of what your contract allows for and doesn’t allow for.” ... Read more.