It is no secret that the price of construction materials has increased dramatically over the last three years. The price surge has been attributed to COVID-19, foreign wars, and other events throughout the globe, such as a Suez Canal blockage and an unprecedented ice storm in Texas, among other reasons. Consequently, through the use of
Preconstruction Services, Project Savings, and Great Expectations
Many standard construction contracts include a placeholder for incentives for a contractor that completes a new project on time and under budget. Possible rewards include early completion bonuses and/or sharing in the project savings, if any, which can be calculated in several ways. In my latest article for the Daily Journal of Commerce, I
Ways to Guard Against Insolvency Risks
The looming threat of a recession in the U.S. should serve as reminder to members of the construction industry that insolvency risks are real and need to be kept top of mind when moving forward with new construction projects. In my latest article for the Daily Journal of Commerce, I look at several options
A Key Battleground: Material Price Escalations and Supply Chain Disruptions
At the forefront of concerns for those in the construction industry is the escalation in material prices and disruptions to supply chains that were in large part a byproduct of the pandemic. Project owners and contractors want to understand their rights with regard to these risks and also how the risks should be apportioned. In
When to Have the Hard Talk About Setting Liquidated Damages
In my latest column for the Daily Journal of Commerce, I look at the concept of liquidated damages – in my experience one of the top five heavily negotiated (and litigated) clauses in a construction contract. Because a project owner’s potential delay damages are often difficult to determine with certainty at the beginning of
Construction Alert: Washington Court of Appeals’ Conway Opinion Provides New Guidance Regarding a Right to Cure, a Set-Off, and Recovery of Attorney Fees
In Conway Construction Company v. City of Puyallup, No. 80649-1-1 (May 4, 2020), the Washington Court of Appeals, Division 1, adopted Oregon’s Shelter Products, Inc. v. Steelwood Construction, Inc., precluding certain claims for defects in termination cases and limiting the justification for termination to those listed in the termination notice. It also held that Washington’s settlement statute protecting public owners, RCW 39.04.240, trumps an attorney fee provision in a contract.
In Conway, the City of Puyallup (“City”) contracted with Conway Construction Company (“Conway”) to construct certain roadway improvements. During the project, the City became concerned about construction defects. The City issued notices to Conway expressing its concerns. The City also observed unsafe work conditions and reported the safety violations to the Washington State Department of Labor & Industries. After issuing a series of notices, the City terminated Conway because of its defective work and safety violations.
COVID-19 Alert – Governor Jay Inslee Extends Stay at Home, Stay Healthy Proclamation Through May 4, 2020 and Delays Implementation of New State Building Code
On March 23, 2020, Governor Jay Inslee issued the Stay Home, Stay Healthy Proclamation (20‑25) in response to the COVID-19 pandemic. Originally, the Proclamation was to be in effect through April 8, 2020. Despite Washington’s aggressive efforts to flatten the curve, on April 2, 2020, Governor Inslee announced his decision to extend the Proclamation through
COVID-19 Update: Washington Governor Issues Construction Guidance Memorandum
On March 25, 2020, Washington Governor Jay Inslee issued a memorandum that provided members of the construction industry with additional guidance regarding the Stay Home, Stay Healthy Proclamation (20-25) issued on March 23, 2020 in response to the COVID-19 pandemic. The Proclamation raised a number of questions in the industry, including whether all residential construction was deemed an essential service. The Proclamation seemed to indicate in a parenthetical that “housing construction” was permitted but then went on to limit “residential construction” to “emergency repairs and projects that ensure structural integrity.” Because of the resulting confusion, some residential projects began shutting down, while many did not, with the trades on those projects expecting to continue with work.
Yesterday’s memorandum confirms that there is no blanket treatment of residential construction under the Proclamation, and not all residential construction is an essential service. Just as with commercial construction, for a residential construction project to proceed, it must fit into one or more of the following:
- Construction related to essential activities as described in the order;
- To further a public purpose related to a public entity or governmental function or facility, including but not limited to publicly financed low-income housing; or
- To prevent spoliation and avoid damage or unsafe conditions, and address emergency repairs at both non-essential businesses and residential structures.
Design-Build Lite – Construction Contracts with D-B Components
For most in the industry, when we think about a standard construction contract, we envision the construction documents being drafted by the architect and other design consultants. We tend to view the project as design-price-build, unless an alternative procurement mechanism has been selected such as design-build. Consistent with this design-price-build model, the contractor’s review of
Commercial Lease Improvements
On December 13, 2019, I will be giving a presentation on construction-related topics arising from commercial lease improvements. The presentation is part of a two-day seminar on Advanced Commercial Real Estate Leases, co-chaired by my colleague, John A. Fandel, and hosted by Law Seminars International. Topic will include insurance coverage, mechanic’s liens, scheduling, indemnity, safety,