ConstructionAdvisorToday

Can Anything Be Done About Bid Shopping?

The practice of “bid shopping” is the bane of trade contractor existence. This occurs when a bidder on a prime contract obtains a price quotation from a trade contractor and uses that price in calculating its bid. Upon award of the prime contract, the contractor then “shops” the trade contractor’s price around, disclosing it to competitors and inviting them to beat it.

Battling Back Against Indemnification Clauses

Construction industry agreements have traditionally included broadly written indemnification clauses. Everyone has seen them. If anything goes wrong, if any liability is incurred, Party A will be indemnified and held harmless by Party B to the maximum extent permitted by law. Party A will be fully reimbursed, including attorney fees.

Who Pays for Accelerating the Pace of the Work?

Accelerating the planned pace of construction work can be expensive. The contractor may add personnel and equipment. The contractor may incur overtime wage rates. Supervisory and administrative expenses go up as well. It is no surprise that contractors seek compensation for these increased costs. But a contractor’s acceleration of the pace of its work does not necessarily mean the project owner is responsible. This was illustrated on a recent federal construction project.

Do Contract Disclaimers Complicate Project Administration?

One of the primary functions of a contract is to allocate risk between the parties. The primary tool for risk allocation in the construction industry is the use of exculpatory language, or disclaimers. There, disclaimers pertain to a variety of risk factors: delay, coordination, inaccurate quantity estimates, physical site conditions, design flaws, etc.

Loose Lips Sink Low Bids

People have a tendency to want to explain themselves, even when not asked to do so. In the arena of public procurement, this can be disastrous. Unsolicited statements, references or explanations accompanying a bid submittal have ruined many a low bid. There are two recent examples.

Must Job Site Safety Responsibility Impose Unbearable Liability Exposure?

Maintaining job site safety is an extremely important function. It is also a role no one wants. Assignment of that responsibility under the contract documents is viewed – and rightly so – as a lightning rod for litigation. Someone needs to coordinate safety on the overall project, but at what cost in liability exposure?

Is Working Without Written Change Orders Sometimes Justified?

Construction contracts almost invariably state that changed or additional work can be authorized only by a written change order signed by the project owner’s designated representative. Contractors know they act at their peril if they perform extra work without written change orders. Yet it happens all the time. Sometimes there are logical explanations.

Challenging Arbitrator Impartiality

It is a common scenario. A party to a construction contract agrees to binding arbitration of disputes. There is a dispute, and it is submitted to arbitration. The party is unhappy with the result and suddenly wishes it was not binding.

Do Project Owners Ignore Design Professionals During Construction?

Construction contract forms published by professional associations, notably the American Institute of Architects and the American Society of Civil Engineers, detail the project administration duties of the design professional. These responsibilities range from monitoring work for compliance with the drawings and specifications to approving contractor payment applications. On paper, at least, the design professional’s role in the construction process is comprehensive.

Owners Play It Both Ways with Site Condition Information

It’s a common scenario. The contract documents include a geotechnical report which makes a clear representation. Test borings indicate the material to be excavated does not involve hard rock. But there are disclaimers. The report says it is for the exclusive use of the project owner and cannot be used for purposes of bid preparation. The construction contract says bidders must familiarize themselves with physical conditions at the site. The owner does not warrant the accuracy of any site condition information in the contract.