Owner’s who demand the highest standards of care and want to attract the best Suppliers are best served by more balanced contracts
Category: Construction
Higher price & cost volatility; mitigating the cost effects of the current inflationary environment.
Material volatility coupled with ever increasing labor costs, have made navigating the current market extremely difficult.
Industry Watch – Payment Terms – Why Extended Payment Terms Could be Bad for Your Company and How They Hurt the Construction Industry.
Extending payment terms is not without consequence and we must be informed on these risks in order to make a sound decision.
Best Practices – The Post-COVID Office – How organizations are managing return to work
The following content was originally published July 2021 on IBM’s Category Newsletter. The Post-COVID Office – Our New Normal By Olivia L’Heureux Category Manager – Facilities With light at the end of the quarantine, Companies are preparing to bring worker’s back to the office. Offices are being reconfigured to promote new safety protocols and make…
Market Watch – How Procurement Can Become a Strategic Partner and Mitigate Supply Chain Disruptions
As we continue our recovery from the impacts of the pandemic, inflation rates across the globe are on the rise.
Commentary – The Master Builder – How The Role of Architects has Evolved and Where You Can Find the Modern Version of the Master Builder
The roots of the architect can be traced back to the times of the Ancient Greeks. The term architect, or arkhitekton in Greek, was the title given to the master builder who would oversee the design and construction
Industry Watch – Pay-When-Paid – A Common but Illegal Term that Exists In Most Construction Contracts.
General Contractor should not rely on the Owner’s contract to define the terms and obligations between the Contractor and his subcontractors. Rather, the GC should specifically state any and all of their sub-contractor terms (including payment obligations) independently of the Owner’s obligations to the GC. The Contractor should adhere to those terms independent of what may or may not be happening between the Contractor and the Owner.
Market Watch – The CoronaVirus – What Will the New Normal Look Like For Construction? How COVID-19 Has Changed Worksites and How Changes Could Impact Cost.
In an article posted on Lexology by the law firm of Gordon Rees Scully Mansukhani, Brenda Radmacher a partner and construction law expert writes about the new jobsite safety measures that Companies will have to observe in light of COVID-19.
Radmacher does a great job of identifying the new norms, both on and off the jobsite, Workers will need to observe in order to avoid spreading the disease.
Some of these new norms are common widespread recommendations such as washing hands and observing social distancing, but some are very specific to construction and some are likely to impact costs and schedules.
I recommend reading Radmacher’s article, but I wanted to address a few specific recommendations.
Market Watch – The CoronaVirus – Is Construction an Essential Business?
Ever since the CoronaVirus landed on the United States it’s impact has been uncertain. Having witnessed the impact it had in China, we collectively braced for impact, but I don’t think anyone thought it would have the effect that it has.
Two week’s ago, I reported that New York, New Jersey, and Pennsylvania had been placed under lock-down by the Governor’s of each state. Since then several states have followed suit.
According to Business Insider.com 36 states plus Washington DC and Puerto Rico are under stay-at-home orders.
A federal directive has yet to be issued as the number of infected persons in the US reaches over 300,000 cases.
Each of the 36 states have generally ordered everyone to stay home and avoid physical contact by observing social distancing of 6 feet or more. All gatherings of 50 or more have been cancelled and areas where people typically congregate like beaches and state parks have been closed. I have heard some anecdotal stories of police breaking up “Corona Parties” of 50 or more people defying the order.
For the most part, businesses have been shuttered and over 3 Million people have filed for unemployment, but some businesses have been allowed to continue operations.
Businesses that can operate remotely and businesses deemed “essential” have been allowed to remain open, but determining whether a business is “essential” has proven to be more difficult than expected.
The construction sector has had an especially difficult time determining how to proceed. This is due in part because of the disparity from state to state and a lack of a federal mandate.
Market Watch – The Corona Virus – How Quarantines Around the Globe Are Impacting Operations and What Owner’s Should Expect When Work Resumes.
If you have been reading this blog consistently for the past few weeks, you probably were expecting this week’s article to be the fourth and final installment detailing my talk from the ProcureCon Conference this past January.
That article will publish next week. Given the massive impact the Corona virus has had on our lives globally, I could not go on with this blog without addressing it.
So this week, we will talk about the impact the virus could have on ongoing bids and active projects.
Industry watch – Collaborative Delivery – Case Studies Of Collaborative Delivery – What They Tell Us and Why Standard Forms of Agreement May not be Right For You.
Over the last two weeks we have been exploring collaborative agreements.
Two weeks ago, I gave you a brief overview of the difference between the AIA’s two collaborative delivery contract models. Last week, I shared some of the most pivotal clauses that shift the relationship of the parties from adversaries to collaborators.
This week, I want to share some of the case studies I have read from projects that used some form of collaborative agreements and share some of the anecdotal comments I have received from friends and colleagues that have worked under one of these models.
Industry watch – Collaborative Delivery – How Contract Templates For Collaborative Agreements Are Structured and Why You Might Choose Not To Use Them
In late January of this year, I attended and spoke at the ProcureCon Facilities Conference. You can read my review of the conference here.
The subject I addressed during my talk was Collaborative Delivery.
For several years the industry has been abuzz about Collaborative Delivery models. I have yet to encounter an Owner who showed interest in collaborative delivery, but the interest from the industry was so strong, that I was curious to learn more. When the opportunity to speak at ProcureCon came, I felt it would be a great topic for that audience.
To deepen my understanding of the topic; I soaked up all of the content available on the American Institute of Architect’s website, read commercially available sample contracts, reviewed case studies, read articles on the subject, and spoke with colleagues that have worked under the model.
The most helpful piece of information I found is a document called the AIA Integrated Project Delivery Guide. I also took the added step of reviewing the standard terms in the contract templates offered by AIA.
I was surprised to find that under the heading of collaborative delivery the AIA includes a contract template for Integrated Project Delivery (IPD) contracts and also for Single Purpose Entity (SPE) contracts.
In this article, I will document the basics of both models. I will follow this article with a deeper dive on the terms that form these agreements.