ConstructionAdvisorToday

Do You Know Who You’re Dealing With?

Bruce Jervis, Editor
Construction Claims Advisor

On virtually every construction project, public or private, the contractor deals directly with a designated representative of the project owner. The owner’s rep provides information, answers questions and conveys directives. The representative seems to act with considerable authority and autonomy. That impression, however, can be misleading.

In a recent Minnesota case, a municipality’s project engineer signed a change order. The contractor acted in reliance on the change order. But the city code stated that this preliminary change order was not final until it had been approved and signed by the city engineer and the city manager. The project engineer signed the change order knowing it was unlikely his boss, the city engineer, would approve the increase in the contract price. The project engineer simply wanted to process the document and maintain a good relationship with the contractor.

When the project engineer’s superiors refused to approve the change order, the contractor was left without recourse. The project engineer had followed the change order procedure. The contractor should have been familiar with the procedure and realized the project engineer lacked authority to finalize a change order.

Do you always determine the scope of authority of the individual with whom you are dealing? It is not always established in the contract itself. In the Minnesota case, it was defined in a municipal code. What do you consider “best practice” in terms of obtaining proper authorization on a construction contract? I welcome your comments.

Featured in Next Week’s Construction Claims Advisor:

• Contractor Delay Caused by Government Design Flaw
• Bidder Nonresponsibility Determination Upheld Despite Subjective Information
• No Price Reformation to Correct Subcontractor’s Mistake

Administration Urged to Broaden Its Program for Promoting Green Buildings

There are plenty of ways that the Obama administration can better promote green buildings without having to wait for Congress to pass new legislation, according to a new report that the U.S. Green Building Council (USGBC) and other advocates released earlier this month. The report suggests nearly three dozen actions Obama should take through 23 executive agencies to bolster his program for sustainable structures.

The report, “Better Buildings Through Executive Action: Leveraging Existing Authorities to Promote Energy Efficiency and Sustainability in Multifamily, Residential and Commercial Buildings,” builds on a similar document, issued in 2010, that identified nearly 100 legal authority opportunities across 30 existing federal programs worth more than $72 billion to improve energy efficiency in America’s building stock.

Preliminary Results of Construction Estimating Survey Deemed ‘Surprising’

Austin, Texas-based Software Advice’s survey of construction professionals about their estimating practices has yielded some “surprising” preliminary results, according to Houston Neal, the company’s marketing director. In an email interview with Construction Project Controls and BIM Report, he disclosed the following early findings of the survey, which can be taken by clicking on the following link: http://software-advice.polldaddy.com/s/construction-estimating-benchmark-survey:

Have You Ever Been Slandered During a Past Performance Review?

In public contracting, a bidder must be deemed “responsible” in order to be eligible for contract award. Bidder responsibility relates to financial resources, managerial capability and past experience. Some of these considerations can be stated clearly and measured objectively. Some cannot. Performance on prior projects is one of the more problematic factors.

CMRA Maintains Membership Base Amid Economic Storm

The Construction Materials Recycling Association (CMRA) recently declared that its membership base has been able to weather the economic storm of recent years. “Despite difficult economic times, [we have] managed to maintain most of [our] membership base, unlike many other trade associations,” according to CMRA. The group attributed the stability to the work it has been doing in serving construction and demolition (C&D) recyclers.

BIM Provision Included in Recently Introduced House Bill

Rep. Russ Carnahan (D-Mo.) has introduced legislation that is designed in part to promote building information modeling (BIM) and integrated design processes.  His High-Performance Buildings bill (H.R. 3371) would require the U.S. General Accountability Office (GAO) to study and report on the use of integrated design processes and BIM for the design and construction of federal buildings.

Should Notice-of-Claim Provisions Be Strictly Enforced?

Construction contracts usually contain notice-of-claim provisions. The contractor must, within a stated period of time, notify the project owner in writing of any occurrence which may give rise to a claim for additional compensation under the contract. The policy behind these requirements is sound. Owners should have the opportunity to respond to problems as promptly as possible while options are available and costs can be mitigated.

New Law Restricts the Use of DoD Funds for Obtaining LEED Gold or Platinum Certification; GBI Profiles Congressional Legislation

President Obama (D) has signed legislation (P.L. 112-81; H.R. 1540) preventing the use of U.S. Department of Defense (DoD) funds for garnering Leadership in Energy and Environmental Design (LEED) Gold or Platinum certification except under certain circumstances. Specifically, no funds authorized to be appropriated by the new National Defense Authorization Act for fiscal 2012 (FY’12) or otherwise made available for DoD for FY’12 may be obligated or expended for achieving Gold or Platinum certification, the two highest designations in the U.S. Green Building Council’s (USGBC) suite of green building rating systems.

Consultant Reports that the Demand for Cutting-Edge Construction Software is Increasing

The demand for cutting-edge construction software is increasing, according to a new report from CTS Inc. President Sheldon Needle, a construction industry consultant. The report examines the business drivers behind the jump in construction technology investments and makes a case for buying construction software this year.

What Do ‘Acceptable Industry Standards’ Add to a Contract?

Construction contracts commonly recite that all work must be performed in accordance with acceptable industry standards. But what are these standards, and how are they determined? Does a recitation of this nature really add anything to a construction contract? Two recent cases addressed these issues head on.