VOLUME 3   ISSUE 43   OCTOBER 24, 2014


By Bruce Jervis


Mechanic’s liens usually provide contractors and subcontractors with their most effective form of payment security on private construction projects. But, contracts sometimes call for constructors to waive or limit their lien rights before they have even performed the work. Are these prospective lien waivers enforceable? Are they conscionable?


The mechanic’s lien statutes in some states prohibit prospective waivers. These prohibitions may result from lien rights enshrined in the state constitution. Not all states protect lien rights so zealously, however. And, sometimes only second-tier parties such as subcontractors and suppliers are protected. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Prime Contractor Waived Lien Rights through Subordination
  • Principals Paid $1.13 Per Hour in Termination for Convenience


Federal officials have wrapped up another enforcement action against a construction company over alleged violations of U.S. immigration law. Last week, the U.S. Department of Justice (DOJ) settled an immigration-related discrimination claim against Constructor Services Inc. (CSI), a business headquartered in metropolitan Atlanta. DOJ alleged that CSI engaged in discriminatory documentary practices during the employment eligibility verification process in violation of the Immigration and Nationality Act (INA). ... Read more.


Engineering and construction (E&C) entities may need to change some of their revenue recognition practices as a result of new guidance that the Financial Accounting Standards Board (FASB) and International Accounting Standards Board have unveiled, according to an analysis that Ernst & Young LLP released last month. While many of the principles in the new standard are similar to the guidance that remains in effect for now, “entities should not assume that the pattern of revenue recognition for their arrangements will be unchanged. E&C entities will need to make many judgments that they may not be used to making.” ... Read more.


Technology that rapidly 3D prints large-scale structures directly from architectural computer-aided-design models is expected to become commercially available in two to three years, a spokesperson for the research entity developing the Contour Crafting system told ConstructionPro Week. Contour Crafting recently netted the $20,000 grand prize in this year’s “Create the Future” design contest. ... Read more.

From Previous 3 Issues:
Volume: 3, Issue: 42 - 10/17/2014


By Bruce Jervis


The assessment of liquidated damages for late completion would seem straightforward to administer. When the work remains incomplete beyond the contract deadline, the project owner withholds the stipulated daily amount for each calendar day. Yet, project owners repeatedly trip themselves up by failing to act promptly and decisively.


The problem of waiver is well known. If an owner urges continued performance beyond the completion deadline without expressly establishing a new, reasonable completion date, the owner may be held to have waived the right to withhold liquidated damages. A recent situation on a federal project adds another twist. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Assessment of Liquidated Damages Not a “Continuing Claim”
  • Surety Charged with Knowledge of Bonded Contract


To print or not to print? That is perhaps the question William Shakespeare would ask if he were working in today’s construction industry and trying to decide whether it is a good idea to routinely make hard copies of his organization’s electronic documents to prevent some potential legal headaches. And though the playwright did not pose this question to attorney Matthew DeVries during a recent WPL Publishing webinar, someone in the audience did, albeit in a slightly different way. To see how the Stites & Harbison PLLC member responded to the attendee’s inquiry, click here.


Soon there may be a significantly greater demand for those professionals who can help optimize a building’s performance over the long term. Why? Because on Nov. 13, a new U.S. Department of Energy (DOE) rule will go into effect to require verified energy and water performance for new and retrofitted federal buildings that are certified by private-sector green building certification systems. ... Read more.

Volume: 3, Issue: 41 - 10/10/2014


By Bruce Jervis


Active or intentional interference by the project owner with the contractor’s work is a widely recognized exception to the enforceability of no-damage-for-delay clauses. The Texas Supreme Court recently joined the national trend in expressly adopting this exception for private and public construction contracts alike. In so doing, however, the court left open the question of intent.


The question is whether the project owner must intend to delay or disrupt the contractor’s work, or, does the owner merely need to take an affirmative step that has the foreseeable effect of delaying the contractor? The Texas court said public policy prohibits a party from intentionally injuring the other party to a contract. The court spoke of “willful acts” and “bad faith.” The court then muddied the water by referring to “negligence” and “omissions.” ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Intentional Interference Ruled Exception to Delay Disclaimers in Texas
  • Apportionment of Lien Claim by Square Footage Upheld


Courts and board decisions are narrowing the coverage of the Differing Site Conditions (DSC) clause, Navigant Construction Forum (NCF) Executive Director James Zack reported both during a recent WPL Publishing webinar and in a new 32-page NCF research perspective. He noted that this trend is “making it much more difficult for contractors to recover damages.” And, it is a trend that NCF believes, “barring a watershed case concerning [DSC] claims,” likely will continue. Click here to read the steps that Zack and NCF urged contractors to take amid the current DSC environment.


There are some interesting results to report regarding a recent study of wireless sensor networks for indoor construction operations -- results that are expected to provide a reference for future research on the selection of indoor positioning technologies. To see some of these results, click here.

Volume: 3, Issue: 40 - 10/03/2014


By Bruce Jervis


Much has been written about the interplay between arbitration and litigation – the inability to get all parties together in the same room, the danger of inconsistent results, and the inefficiencies of dual forums. A recent federal appellate decision illustrates some of these problems.


There was a consolidated arbitration proceeding involving a mechanical subcontractor, the prime construction contractor, the project owner, the owner’s project architect, and the mechanical engineer. The subcontractor asserted a claim only against the prime contractor, electing not to claim against the design professionals even though they had been brought in as parties to the arbitration by the project owner. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Subcontractor Recovers in Arbitration and Is Allowed to Sue
  • No Punitive Damages for Refusal to Pay for Change Order Work


There has been a “fair amount of misunderstanding” about a certain cost risk that general contractors may assume when signing a guaranteed maximum price (GMP) contract for a construction project -- a misunderstanding that seasoned attorney Richard Burnham discussed at length during a recent WPL Publishing webinar. To see what this misunderstanding is, as well as some of the other potential cost risks he listed during the 90-minute program, “Advanced Issues in GMP Contracts,” click here.


If you possess information about “innovative, transformational” green building technologies that have the potential to improve the economic and environmental performance of federal structures, the U.S. General Services Administration (GSA) wants to hear from you. Through a recently issued request for information (RFI), the agency’s Green Proving Ground (GPG) program is seeking such information from industry stakeholders, commercial organizations, educational institutions, and non-profit organizations. ... Read more.

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