ConstructionAdvisorToday

Should Subcontractors Share the Risk of Owner Nonpayment?

Bruce Jervis, Editor
Construction Claims Advisor

Is it fair for subcontractors to bear the risk of owner nonpayment for their work? Many prime contractors would argue that it is. The subcontractor is being asked to share the risk. If the project owner hasn’t paid the prime for the sub’s work, why should the prime be required to pay the sub, in effect financing the owner’s project?

Subcontractors would respond that the prime contractor elected to do business with the project owner and had the opportunity to evaluate the credit-worthiness of the owner. The sub contracted only with the prime and should be paid by the prime for work performed. The subcontractor has no control over the business relationship between the project owner and the prime contractor.

World Green Building Council, Architect Group Sign Memorandum of Understanding

Steve Rizer, Editor
Green Building Insider

The World Green Building Council (WGBC) and the International Union of Architects (UIA) have signed a memorandum of understanding (MOU) that is designed to "take a step toward strengthening their working relationship" in promoting green buildings. WGBC is a business-led group of national councils whose mission is to accelerate the transformation of the global property industry toward sustainability. IUA is a non-governmental organization representing more than 1.4 million architects in 124 countries.

Tekla Reports Several New BIM-Related Developments

Tekla has launched its annual main version of Tekla Structures BIM (building information modeling) software, one of several developments that the company recently reported.

The new Tekla Structures 16 introduces several workflow benefits, such as an improved solution for cast-in-place concrete and better IFC data exchange, the company stated. Tekla Structures BIM software is developed according to a long-term plan of improved user experience, process, and functionality. "This provides the whole building design and construction project team a unique model-based way of collaboration, including possibilities for increased business, productivity, and sustainability."

Questionable Practices By Construction Lenders

A reader recently called our attention to an interesting problem. He is an HVAC contractor. He provides price quotations to property owners for the replacement and installation of complete systems. The property owner intends to finance this major improvement and approaches a lending institution. The loan officer informs the owner that at least two bids are required before a loan can be approved. The loan officer provides the property owner with the name and contact information of another HVAC contractor.

NIST Official Explains Need For New Guidance Document Promoting Improved Building IAQ

There are "strong arguments" to be made for going beyond minimum standards when it comes to establishing indoor air quality (IAQ) in buildings, said Andrew Persily, who leads the National Institute of Standards and Technology's Indoor Air Quality and Ventilation Group. It is for this reason that five building industry associations and a federal agency last month unveiled the document "Air Quality Guide: Best Practices for Design, Construction and Commissioning."

New Study of IPD Method Demonstrates Efficiencies and Cost Effectiveness

The American Institute of Architects (AIA) and The AIA California Council (AIACC) recently announced the results of a joint project focused on real building projects that used and implemented integrated project delivery (IPD) during the building process. IPD is a construction project model in which owner, design professional, and builder jointly share a project's risk and reward.

Are Project Owners Misusing Convenience Terminations?

A project owner’s right to terminate a contract for the owner’s convenience is a vital tool. A termination without cause gives the owner flexibility to respond to contingencies such as lost project financing or changing market conditions. The contractor, who was not in default, is compensated for work performed prior to termination. The most common contractual formula is cost plus profit, along with settlement costs such as subcontractor termination, demobilization and other contract close-out costs.

Autodesk Acquires Dynamite VSP, SIM Visualization Software Products, Related Assets

Autodesk Inc. recently announced that it has completed the acquisition of Dynamite VSP and Dynamite SIM visualization software products and related assets. The products were purchased from 3AM Solutions, a United Kingdom-based technology company that develops visualization software for civil infrastructure. Terms of the transaction were not disclosed.

Lawmakers Want 10 Million Solar Rooftops

Congressional lawmakers earlier this month introduced legislation designed to get photovoltaic solar panels installed on 10 million rooftops across the United States over the next 10 years. The bill, offered by Sen. Bernie Sanders (I-Vt.) and Rep. Steve Cohen (D-Tenn.), also would increase the capacity of solar hot water by an estimated 10 million gallons over the same period.

Construction Project Governance

FEATURED WEBINAR

WPL Publishing will host a webinar that is designed to help companies understand how a project governance program can help them stand out as an ethical member of the construction community and minimize some of the risks they may face.

For the webinar, entitled "Project Governance: How to Improve on 'One Foot on the Gas' and 'One Foot on the Brake'," WPL will partner with Harold Dorbin, a senior vice president and project advisory leader for Marsh Risk Consulting's Construction Consulting Practice. The 90-minute webinar will take place Tues., Feb. 23 at 1 p.m. To register, click here.