By Bruce Jervis
The concept of an “equitable price adjustment,” which originated in federal construction contract documents, permeates construction contracting. In the event of a change in the scope or definition of the work, the contractor will be entitled to an equitable adjustment of the fixed contract price. There is a problem, however. The calculation of this price adjustment is not defined.
The textbook definition of an equitable price adjustment is one that makes the contractor whole. The contractor is left in the same net financial position it would be in without the change. This definition can be difficult to apply in the real world. Consequently, construction contracts sometimes stipulate a formula for pricing changed work; for instance, documented direct costs plus percentage mark-ups for indirect overhead and profit. More often than not, however, owners and contractors are left grappling with an “equitable” adjustment. ... Read more.
Featured in this Week’s Construction Claims Advisor:
- Construction Manager Recovers Equitable Adjustment to Fee
- Defective Performance Can’t Be Raised after Convenience Termination
- Prime Contracts Directly with Lower-Tier Subcontractor of Defaulted Sub
By Steve Rizer
An “implied duty to provide access” for certain key personnel in a construction project may seem “pretty obvious,” but “you’d be surprised how many times we’ve seen cases” in which admittance became an issue, Bryan Jackson, a partner in the California law firm of Allen Matkins, told professionals attending a webinar that WPL Publishing held last week. He reported that his firm, whose “mainstay” focus is in real estate, has encountered multiple instances “where a party is under contract to build something, and they can’t get to the project because they have to cross over somebody else’s green acre, and they don’t have the right to cross that green acre to get to [the] black acre to do the work.” ... Read more.
By Steve Rizer
April 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 April 2013 addition:
Specification writers for construction projects may be moving into the role of a ‘knowledge manager,’ the president of Kalin Associates, an independent specification consulting firm in metropolitan Boston, said during “BIM (Building Information Modeling) Specifications and Information Management,” a WPL Publishing webinar for which a recording recently was added to the ConstructionPro Network (ConstructionProNet.com) Download Library -- free of charge for members. The webinar was the third of four sessions in a series entitled “BIM Strategy: Leverage Your Business for Profit and Growth.”
Mark Kalin explained that specifiers “can help the design team with a lot of decisions that will constrain [a building information] model appropriately and get the right level of information in there so that everyone from the owner to the designer to the contractor or construction manager, all the way to the installer, will have the ability … to make [implementation of BIM technology] work.” ... Read more.