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Construction Experts and Claims Consultants Articles List

14 Articles Found

Introduction The goal of any contractor is to build a project on time and within budget. To be an effective and productive contractor, one must have a complete understanding of the construction process, which includes not only building the project, but, more importantly, effective scheduling and management of the project. The contractor is ultimately responsible for managing its activities as well as the activities of the construction parties under its supervision. Successfully managing a construction project is a four-step process. It requires that the parties establish a project plan, develop a project schedule, monitor the project schedule, and manage change events. Each step requires dedication and commitment from each team member, and each step in the process is essential to a successful project outcome. Step 1: Establishing a Project Plan The first step in successfully managing a construction project is ...

Introduction This year, exceptionally high price increases of construction materials have caused serious problems for the construction industry. A major factor is the current economic and construction boom occurring in China. China is experiencing rapid growth and, with it, tremendous construction activity which is creating shortages in the US and throughout the world. Background Basic economics tell us that, in an open marketplace, prices will rise when demand increases or when supply decreases. Demand is increasing exponentially in China due in part to a construction boom resulting from the country’s economic revolution, preparations for the 2008 Olympic Games, construction of the Three Gorges Dam, and the construction of thousands of highways throughout the country. Demand is also significantly higher in the US due to a rise in construction activity, related in part to new home construction. Some of the highest ...

Part one of this two-part series addressed change order management and claims from the contractor’s perspective. This article will focus on techniques from the owner’s perspective for planning for and managing project change and avoiding claims. Although this information is geared towards owners, the information can help all parties on a construction project. Construction is not a one-way street, and it is beneficial for each of the parties to have a more complete understanding of the other parties’ perspective. Time is money, and in today’s construction industry, almost all projects are on the fast track. The amount of time taken in the conceptual design, project development, and the detailed engineering phases has become increasingly compressed as cost and schedule concerns become more important. In recent years, innovative project delivery systems such as Design-Build have become more prevalent in an effort ...

In general terms, force majeure is considered to be “an act of God” or an occurrence outside the control of the parties which impacts or delays the project. Force majeure includes issues such as unusually severe weather, labor strikes, natural disasters, or governmental actions/changes in law that negatively impact the work. Typically, force majeure is not considered to be a compensable delay, meaning neither party is entitled to compensation as a result of the impact of the force majeure event. The recent Gulf Coast hurricanes have raised some interesting and complex issues associated with defining force majeure. Typically, force majeure contract clauses include language that defines the force majeure event, including notice requirements and the terms of the schedule extension. Events such as unusually severe weather or a labor strike have clear start and end dates. It gets more complicated ...

In the construction industry, the ability to manage change can determine the success or failure of a project’s objectives. The failure to recognize and promptly manage change frequently costs the parties involved money and time. Establishing a change order management process using either contractual change order requirements or a firm’s proprietary system increases the effectiveness of progress reporting, labor productivity evaluation, work scheduling, and other elements of project change. The following steps provide a streamlined approach to resolving project changes in a more cost and time efficient manner: Evaluate the contract Identify the change properly and in a timely manner Provide timely notification to internal and external parties Effectively document the change Prepare the change request Resolve the change request Implementing these steps at the first sign of a change can help the parties to spend less money and exert ...

Introduction This year, exceptionally high construction material price increases have caused problems for the construction industry. A major factor is the current economic and construction boom occurring in China. China’s rapid growth and tremendous construction activity are creating shortages in the US and throughout the world. Background Basic economics dictate that, in an open marketplace, prices will rise when demand increases or when supply decreases. Demand is increasing exponentially in China, which is affecting prices worldwide. The increased demand stems from a construction boom resulting from the country’s economic revolution. China is in the midst of the 10th phase of its 50 year plan, which specifies that the construction industry should be promoted, improved, and better managed. Other factors increasing China’s demand for materials include preparations for the 2008 Olympic Games, construction of the Three Gorges Dam, and the construction ...

Most would agree that the earlier a construction dispute, or potential dispute, is addressed, the better the chances of a fair and prompt solution. Undisputed facts may be available at the time of occurrence, facts that often become muddied with time and emotions. But acting promptly is not enough in itself. All potential disputes must be accurately and fully documented as they occur - not reconstructed with hindsight based solely on project cost overruns. By observing the following simple guidelines, it is possible to keep most construction difficulties from escalating into expensive, drawn-out claims. 1. Planning: An effective project manager should ideally spend more time anticipating potential trouble areas to be avoided, rather than rectifying problems that have already occurred. 2. Recognition: Recognizing a potential dispute situation as it unfolds is the key to avoiding claims or minimizing their impact. ...

Objective Is Prompt Resolution of Change Orders A claim is an unresolved change order. Fortunately, a change order upon which all parties agree does not become a claim. Change orders that are resolved fairly and quickly benefit both the owner and the contractor by avoiding costly and time-consuming dispute resolution processes such as mediation, arbitration, and/or litigation. Prompt resolution of change orders is essential as this would typically minimize the total project cost to an owner, as well as minimize project delays and disruptions. Change is a normal part of the construction process and typically increases project costs and delays completion. Frequently, contractors submit change orders and owners readily pay for the changes they desire. Other times, however, due to budgetary or other constraints, while the change can be made, additional compensation or more time to complete the work cannot ...

A claim is an unresolved change order. Conversely, a change order that is agreed upon and processed does not become a claim. Change order situations that are resolved knowledgeably, fairly, and promptly will benefit both the owner and the contractor. Federal government studies have shown that early settlement of change order problems minimizes cost to owners. Likewise, contractors benefit by avoiding disruption to their project schedule and cash flow. Know and Use the Contract In a change order situation, the contractor's rights arise from the contract. A contractor's request must be consistent with the contract, or it will likely be denied. Courts can circumvent or overturn contract language, "exculpatory" clauses in particular, but such cases are the exception rather than the rule. Successful management of change orders is based upon knowledge of the contract. Project representatives of the owner, contractor, ...

Contracts, which are intended to eliminate problems, can be the open doorway to disputes and claims. Contracts that are one-sided promote dispute resolution through litigation. Bias in contract language and interpretation leads to increased costs for all parties. The following article suggests ways in which owners and contractors can work toward equitable contracting. Disruptions or Disputes Are Expensive to Both Owners and Contractors Construction contracts are drafted to allocate responsibilities, risks, and remedies between the separate parties. This allocation is based upon the simple fact that someone must be responsible and someone must pay for all elements of the project under that contract. In theory, when changes or unforeseen difficulties arise on a construction project, the allocation of risks established by the construction contract will clearly identify the party who is to pay. Thus, in the case of an owner's ...