By Bruce Jervis

One of the perceived benefits of the design-build method of construction is the ability to “fast-track” the project. By procuring design and construction services from a single source, it is possible to commence construction before all of the design details have been completed. Shorter total elapsed project duration may save the project owner money.

Fast-track construction poses a challenge, however, when it comes to cost control. On a recent federal project, the contract price was to be “definitized” through negotiations once the design-build contractor had completed 95 percent of the construction documents. The government paid for construction work through a series of contract modifications authorizing “additional undefinitized funding.” ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Contract Price Never ‘Definitized’ So Contractor Recovers Reasonable Cost
• Owner Did Not Have to Correct Defective Work before Recovering Cost
• Contractor Sanctioned for Violating AAA Arbitration Rules

In considering updates to its C-700 General Conditions standard contract document, the Engineers Joint Contract Documents Committee (EJCDC) spent “a lot of time” consulting with experts to determine what insurance provisions should be included, EJCDC Construction and Procurement Subcommittee Chairperson James Brown told professionals attending a webinar that WPL Publishing recently sponsored. The document’s provisions addressing insurance represent one of the four categories containing the “most significant” changes made to C-700, a document that he characterized as “the lynchpin” within the organization’s Construction Series of documents.

Under the revised C-700, insurance companies must, at a minimum, have an A.M. Best Co. financial strength rating of “A” and be classified in a financial size category (FSC) of VII. This new provision is “not the most stringent [one that could have been included], but we believe it’s something sufficient to ensure that you’re going to get a good insurance company," Brown said during the webinar, entitled “EJCDC 2013 New Construction Documents: An Overview.” ... Read more.

Has the U.S. Government Accountability Office (GAO) exposed the tip of a federal iceberg that is made up of flawed construction management practices and that is wreaking havoc via massive cost increases and schedule delays?

Earlier this month, an official from GAO, the investigative arm of Congress, told a House panel that her office has found significant shortcomings in the way the U.S. Department of Veterans Affairs (VA) is managing the construction of major medical facilities. ConstructionPro Week (CPW) then asked the same GAO representative whether she believes similar problems are common throughout the federal government. Click here to read her response.
 

By Bruce Jervis

When contractors start moving the project completion date forward, problems can arise. Sometimes a contractor will inform the project owner of an intention to complete the work prior to the contractual deadline, laying the groundwork for a potential claim for owner interference with scheduled early completion. Other times, a contractor will use early completion as an inducement for contract award. That was the case in a recent federal construction dispute.

In a technical proposal on a design-build project, the contractor offered a shorter performance period as a “project betterment” for the government. The contractor then stated an even earlier date as its “goal” for completion of the work. The government accepted the proposal. The contract award referenced the schedule established in the contractor’s technical proposal. Later, in the context of a dispute over liquidated damages, the parties could not agree which date was the original contract completion deadline. ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Completion ‘Goal’ Not Binding on Contractor
• Caltrans Affirmative Action Plan Upheld
• Court Action Did Not Waive Right to Arbitration

Now that a supplier of ready mix concrete has achieved three groundbreaking milestones involving environmental designations for its products, will a flood of other companies that provide materials for green buildings follow suit? The question arises after Central Concrete Supply Inc. became the first ready mix supplier in the United States to offer concrete environmental product declarations (EPDs). It also is the first such supplier to receive external verification of the EPDs in accordance with the International Organization for Standardization’s (ISO) 14025 standard and ISO 21930. Furthermore, the San Jose, Calif.-based business, which serves the San Francisco Bay area, is believed to be the first U.S. company in any industry to produce EPDs at the individual product level.

What are the chances that other providers of concrete will seek these designations anytime soon? Will more suppliers of products for green buildings seek to produce EPDs at the individual product level? Click here to find out what Central Vice President and General Manager Jeff Davis told ConstructionPro Week in response to these questions.

What are the best practices for avoiding and managing “scope creep,” an ominous term that refers to uncontrolled changes or continuous growth in a construction project’s scope? “First, we recommend that you implement a documented change management process, which can actively manage changes on [a] project,” Marsh Risk Consulting Vice President and Managing Consultant John Ciccarelli told a target audience of engineers, architects, risk management professionals, construction and project managers, presidents, vice presidents, contractors, subcontractors, and others during a webinar that WPL Publishing held late last month. Click here to find out what other steps both he and fellow Marsh Managing Consultant Todd Vandenhaak suggested for preventing and managing scope creep.

By Bruce Jervis

In the solicitation of bids for public contracts, it is common to require bidders to list their intended subcontractors for major components of the work, usually trade by trade. If the bid is accepted, the successful bidder -- now the prime contractor -- may not substitute for a listed subcontractor without the consent of the project owner. Sometimes, permissible grounds for substitution are stipulated in the solicitation.

Bid listing of subcontractors is frequently mandated by state or local procurement law. It may also simply be imposed by the project owner under the terms of the contract documents. Many owners believe it gives them greater project control and protects against “bid shopping” -- the practice of contract awardees shopping trade work around to the lowest bidder regardless of reputation or reliability. In theory, bid listing should protect subcontractors. In practice, many find it a one-way street. ... Read more.

Featured in this Week’s Construction Claims Advisor:

• Government Did Not Guarantee Accuracy of Mandatory Price Book
• Bid Listed Subcontractor Had No Recourse
• Liens Subordinated Due to No Visible Improvements

Construction subcontractors have a new tool for trying to secure payment assurances on projects financed by public-private partnerships (P3), but how successful will the tool prove to be? On one hand, the tool has the American Subcontractors Association Inc.’s (ASA) handiwork behind it; on the other hand, the tool’s success to a large extent will rely upon the support of state legislators, and although a quick Internet search of the success rate for state legislation across the United States turned up nothing, it should be noted that only about four percent of all bills at the federal level become law. But an ASA spokesperson informed ConstructionPro Week that several states already have enacted legislation to the organization’s liking on this front, and other states are considering similar measures. For the complete list, click here.

There is some “exciting” news emerging that involves building information modeling (BIM) levels of development (LOD), Rebecca McWilliams, an architect with Donavan Hatem LLP, told professionals attending a webinar that WPL Publishing held last month.

One such development that McWilliams reported relates to new BIM documents from the American Institute of Architects (AIA) that are expected to build upon the organization’s E202 Building Information Modeling Protocol Exhibit. She revealed to webinar attendees that the documents are expected to be released at the next AIA Convention, which is scheduled to take place June 20-22 in Denver. ... Read more.