Providing Expert Solutions For Projects Worldwide

Providing Expert Solutions For Projects Worldwide

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By: Robert McCue

What Standard? Under Whose Care?

Can a Designer or Owner shift responsibility for design errors and omissions by requiring an enhanced effort for construction coordination drawings by contractors?

To answer this question we will recount an example project that was bid as Design-Bid-Build where the fundamental element of the dispute was design defects with regard to spatial arrangement and sizing of system features.

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Real Risk Management – Read the Contract

Construction is as timeless as the pyramids. As a result, the most common construction risks have already been identified and allocated in the terms and conditions of standard form contracts. These are published by a multitude of professional associations such as the Construction Management Association of America (CMAA) and the American Institute of Architects (AIA). This article discusses the practical aspects of risk management and how to convert a potential problem to work to your advantage.

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Home Office Overhead (HOOH)

Most of those working in the construction contract claims business are familiar with 1960 decision by the Armed Services Board of Contract Appeals (ASBCA) in the Eichleay Corporation Case which recognized a contractor’s right to recover unabsorbed home office overhead for owner caused delays and work stoppages.

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Risk Reduction with Effective Critical Path Method (CPM) Schedules

The purpose of the Critical Path Method (CPM) schedule (A scheduling technique whose order and duration of a sequence of task activities directly affect the completion date of a project)is to assist in the cost effective management of the project, anticipate problem areas, and allow the project team to mitigate the impact of unforeseen conditions. What a tool! Without this tool, the project management team is simply reacting to a crisis of the moment and their hurried reaction may exacerbate an already difficult project by doing harm in the response to the disaster of the moment.

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Benchmarking – The Early Path to Success

The benchmarking process is one where a project’s general scope using key metrics is compared to other similar projects. This general metric/scope includes such items as total gross square feet, net square feet, rentable square feet, net-to-gross ratio, number of occupants, the number of particular spaces (i.e. number of rooms in a hotel), general configuration (footprint and/or number of stories), location of project, and timeframe. If this initial comparison doesn’t illuminate a projects cost and/or schedule similarities or peculiarities, then one must delve deeper into the project scope to determine any or all differences. This means the stakeholders must understand the projects detailed scope parameters such as type of structure, assumed number of interior spaces, the level of finishes and specialties, the vertical transportation needs, the requirements of the mechanical and electrical systems, and site specific differences (roads, utilities, parking, etc.). Once this type of comparison is completed, a proposed facility should be fully benchmarked against its peers.

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Shipyards: Dealing with Disruption Claims

Shipyards that are building or repairing ships operate in a very complicated marketplace where costs are carefully monitored. Often claims are submitted requesting additional costs above the stated contract amount because problems beyond the shipyard’s control resulted in disruption of their as-planned flow of work. All too often, the alleged problems follow a pattern that becomes apparent when analyzing such claims. Common allegations of disruption include excessive owner changes, delays in approving changes, late responses to inquiries and problems, defective design, late or defective information or equipment supplied by the owner, and over-inspection. Such allegations form the basis for requests for equitable adjustments, claims, and lawsuits. However, many claims overlook problems that may be the responsibility of the shipyard such as underbidding the costs, rework due to poor performance, management and planning inadequacies, detail design errors, procurement problems and labor difficulties.

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