Parties negotiating a design and construction contract for a large project will often leave for the end discussions of a few provisions that one side or the other has characterized as “deal-breakers.” Though the deal may be doomed to fail, one of the parties may also make a concession or concessions, have its bluff called
Looking Back — and Ahead — After Two Years of a Pandemic
In my column for the Daily Journal of Commerce from two years ago, I wrote that proceeding with ongoing or planned construction was not without impact or risk tied to COVID-19, and I provided a checklist for owners, designers and contractors to help them decide whether to continue a project or start a new one
Surety Bonds vs. Subcontractor Default Insurance
If a contractor cannot meet deadlines on a construction project or a subcontractor pulls out of a new project bid in order to pursue a more attractive opportunity, the project owner and/or prime contractor face potentially significant damages, which can include corrective work, costs of completion or substitute performance, and delay. In my latest column
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
Warning Signs that a Contractor May Be Overextended
If you are involved in the construction industry, like it or not risk management is part of your job. From home office executives to workers in the field, each person is expected to manage schedule, cost, and safety risks. While these risks are common, the recent prolonged period of economic growth has created new challenges,
Plan Ahead for Project Challenges in 2020
In the event of a near-term slowdown in the U.S. economy, analysts forecast that any resulting decline in construction starts will nevertheless leave the level of activity in that industry sector “close to recent highs.” As a result, project owners and general contractors already facing a strong demand for
Certifying Subcontractor Claims Under the Contract Disputes Act
When a dispute arises over payment between a contractor and the agency overseeing a Federal government project, the contractor typically submits a request for a reasonable adjustment to the contract price. If the agency disagrees with the adjustment, the contractor may file a formal claim under the Contract Disputes Act (“CDA”), which requires the contractor
Managing Risk from Gaps in Your Construction Project
Experienced project developers know that managing risk on a major project involves initial planning, design, construction, and commissioning. These tasks call for different skill sets — making it tempting to think of them as separate — but they need to be coordinated to prevent the creation of troublesome gaps in areas of responsibility. In my
Solar PPA Provider That Only “Arranges” Installation of System It Owns Is Not a “Contractor” in California
In the recently issued but unpublished decision Reed v. SunRun, Inc. (Los Angeles County Super. Ct. No. BC498002, Feb. 2, 2018), the Second District Court of Appeal ruled that a solar power purchase agreement (“PPA”) provider that only sells solar energy to homeowners is not required to be a licensed California contractor under certain
New Amendment to Washington’s Contractor Registration Act
A recent legislative amendment to the Washington Contractor Registration Act (the “CRA”) underscores the need for residential property developers to assess whether the development activities they perform on their Washington projects constitute those of a “contractor” and thus require registration with the Department of Labor and Industries. On April 22, 2015, Washington Governor Jay Inslee