Tag Archives: document

ConsensusDOCS- are they an improvement over AIA construction contracts?

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Have you had occasion to use the (relatively) new ConsensusDOCS? Having just completed my manuscript for the North Carolina Construction Law seminar I’m speaking at in May, I’ve been spending a lot of time comparing the American Institute of Architect’s standard contract general conditions, the AIA A201 (2007) to the ConsensusDOCS 200 (2007) and the Engineering Joint Contracts Document Committee (EJCDC) standard general conditions of the contract, C-700 (2007).

I haven’t yet seen litigation over the ConsensusDOCS, so how courts will interpret its provisions remains to be seen. One major difference: the ConsensusDOCS do diminish some of the architect/design professional’s role on the project.

For example, in the change order process, instead of the architect being involved in the contract price and time adjustment (see AIA A201 Section 7.2.1), the ConsensusDOCS 200 calls for the owner and contractor to negotiate in good faith. No mention is made of the design professional’s role. (See 8.1.2).

If you’ve had occasion to work under the ConsensusDOCS, drop me a line and tell me the advantages and disadvantages over other form contracts.

Spring Cleaning: 6 Contract law tips for limiting risk on construction projects

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cleaning suppliesIt’s springtime! That means spring cleaning. Out with the old and in with the new. This is also a good time to think about cleaning up your systems for limiting your risk on construction projects. Here are a few short things to consider as you attempt to improve your construction contracts:

  1. Do you have a standard written contract or proposal for every project, no matter how small or how long the client has been doing business with your company? This should be your number one priority. If it is a standard form, it shouldn’t be a big deal to use even on short projects. And if you think your longtime customers will be offended, blame it on the attorneys! That’s what construction attorneys are here for– we’re tough and can take being the bad guys.
  2. Has your contract or proposal been reviewed by your insurance carrier? This is an important step you can take to limit any risk issues in your contract. Many insurance carriers will review your contracts at no cost to you– they view it as a good loss prevention measure. Check with your insurance agent or broker to see if your carrier offers this service. This is also a good time to see if your insurance coverage is sufficient for the amount of work you are currently performing.
  3. Has your contract been reviewed by your attorney? If your insurance carrier has an attorney licensed in your jurisdiction review your contract, you can skip this step. Otherwise, strongly consider having the contract reviewed by a professional, preferably an insurance defense attorney. Measure twice and cut once applies to the legal world, too.
  4. Does everyone on your staff know to use the contract or form proposal and where on your system to find it? It does you no good to have a great contract template that some of your employees don’t use. Educate them on the importance of all contracts and proposals being produced in a uniform, systematic way.
  5. Is there a follow up procedure in place, in case a construction contract or proposal is not returned executed by the client? Someone should be tasked with making sure a completely executed contract or signed proposal is obtained, and that it is filed in an easily accessible location for future reference. One idea: do not open a new client or matter number to bill against until the contract is in place.
  6. Consider whether it is worth getting current verbal agreements translated into written agreements. If you have an ongoing project that is only based on a verbal agreement, consider the potential for risk on that project. It might be worth it to ask the client to execute a new written agreement. Again, you can blame it on the lawyers. This *may* not be possible, or it may simply be too awkward to ask for this in the middle of a project that is going well. But at least consider all of your current projects to see if this is a possibility.

Happy Spring Cleaning!

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Photo “Kane Cleaning  Supplies”  by Collin Anderson via Flickr via Creative Commons License

Failure to Coordinate in Design-Bid-Build case costly mistake

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In a recent Business Court decision, an architecture firm was hit with a $2.3+ million judgment stemming from the design and construction of the kitchen exhaust and HVAC ductwork systems in the Charlotte Bobcats Arena.

The project was a “fast track” project, and the architecture firm claimed they were only contracted to provide diagrammatical drawings of the arena’s ductwork system. Subcontractors on the project sued for their cost to perform extra work to remedy alleged design deficiencies. Post-trial relief is currently being sought by the architectural firm (including a motion for judgment notwithstanding the verdict, a new trial, or a new trial on the damages issue).

Whether or not such post-trial motions are granted, however, the case raises the very real issue as to architectural responsibility versus contractor coordination responsibility, especially in fast-track projects. This case highlights the risks to architects in failing to make their responsibilities and contractual limitations explicitly clear to both owners and contractors. The case also highlights the need to explicitly review shop drawings for coordination issues that might be present.

The case is Hunt Construction Group Inc. et al. v. City of Charlotte, North Carolina, and Ellerbe Becket Inc., case number 08-11915, in the Mecklenburg County Superior Court.

Managing Changes on the Construction Project

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As sure as Santa’s arrival each year, the setting of the sun each night, and the arrival of the bowl games each December, there will be changes to a construction project.   How you manage those changes is important.  If you can properly document delays, changes in scope, or other issues, you can recoup your time and expenses.  If you fail to manage changes well, you are literally throwing money away.  And– if you are a design professional and do not have a good system in place for handling change order requests, you are almost guaranteeing a lawsuit at the end of the project.  Read more on Managing Changes on the construction Project  at this link.