Amal Kabalan, LEED A.P.
Consulting Engineer

The purpose of this article is to test the accuracy of a solar system model. The model predicts the energy that a solar system can generate in a certain location based on insolation data and shading. It also calculates the savings and the pay-back period based on current state subsidies and federal tax incentives. The model will be tested by comparing the modeled values of a solar system to actual data. The article will start by describing the project and will simulate the energy expected from the solar panels. It will then compare the simulated values with actual recorded values.

Solar System Analysis
The example residence is located near Malvern, Pennsylvania which is 22 miles west of Philadelphia. Due to its proximity to Philadelphia, it is reasonable to consider that it has the same latitude, longitude and weather conditions to that of Philadelphia for the purpose of the analysis. Latitude is 39.88 and longitude 75.25. Elevation is 6 meters. Figure 1 shows the location of the house (B) in correspondence to Philadelphia (A). The house has south and north exposures. The orientation is shown in Figure 2.

E. Mitchell Swann, P.E., of MDCSystems® & James W. Haile Jr., C.P.M., of JWH & Associates

Over the past 9 – 12 months or so many parts of the world have been rocked by unforeseen events – "black swans" – which have called into question some of the ideas or principals we've centered much of our business planning around.  Most notable of these in my mind is the Tohoku Japan earthquake and tsunami and the resulting Fukushima Nuclear Plant meltdown.   One of the things that Tohoku did was take out a significant swath of Japan's specialty automotive parts industry as the earthquake and tsunami affected regions were noted for being a hub for auto parts manufacturing for both Japanese and global car companies and those parts manufacturers were off line.  What this means is that their link in the supply chains of an important global industry was cut.  In the aftermath, many manufacturers have re-evaluated their supply chain strategies and are considering a broader diversity of suppliers both in number and regions. Many are also looking at the potential impact of 'just in time' production strategies and their supplier matrix.  Last year MDC published in its Advisor an article written by James Haile on the importance of having a robust supply chain and how to consider the various aspects of same.  In light of the Tohoku earthquake and how it put a glaring spotlight on the sensitivity of global economic productivity to what are local or regional impacts, MDC felt that it might benefit our readers to re-publish that article.  Nothing teaches like experience and the Japanese earthquake, tsunami and power plant meltdown provided a very teachable moment (more like 6 months of moments) on the impact of black swans and the value of systems-based thinking. 

Stephen M. Rymal, P.E., Esq.
MDCSystems®
Consulting Engineer

In the construction industry, there are several alternative dispute resolution (ADR) methodologies designed to provide a means to resolve disputes without resorting to formal litigation in court.  Some projects set up dispute resolution boards (DRBs) to address disputes in real time before the parties harden their positions and carve them into stone.  The advantage of DRBs is that they meet regularly with the parties to recognize and address disputes at their earliest stage when the inherent risks can be truly estimated, appreciated, and shared. 

E. Mitchell Swann
MDCSystems®
Consulting Engineer

Yup, yet another "sustainability" article.  It seems that this subject just won't die.  No, it won't.  But organizations that don't deal with the subject just might experience that result. 

If you haven't been keeping up on it, sustainability is about a lot more than eating nuts and berries, wearing wool sweaters and wearing sensible shoes.  It's about survival.   That may sound rather stark – harsh even.   But sustainability doesn't have to be and if you think through it, it shouldn't be.  You can survive at many levels – from "just barely" to "high on the hog".  One is undesirable; the other is, well...unsustainable.  So if you want your 'going concern' to continue going you need to consider how best to position and prepare yourself for a changing world.

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

If you are seeing a rise in problem projects and difficult work-outs, take steps now to inoculate your project team for success and profitability.  Basic PMBOK training is certainly necessary but not entirely sufficient to ensure success in today's fast-paced project environment.

Your team should be alert for the following warning signs of impending project trouble:

Date: 1/12/2011 to 1/15/2011
Location: Walt Disney World Swan Hotel - Orlando, FL
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Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

MDCSystems® has been providing Forensic Project Management (FPM®) services for over forty years for industrial, transportation and institutional capital projects. Using this extensive knowledge base, MDC®, develops and conducts seminars for the public and private sectors on many topics including the topics of Complexity and Systems Thinking, Sustainability, CPM scheduling, Claims Avoidance and Green Buildings.

Stephen M. Rymal, P.E., Esq.
MDCSystems®
Consulting Engineer

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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Donald R. Keer, P.E., Esq.
MDCSystems®
Consulting Engineer

G. Peter Vander Heide, AIA
MDCSystems®
Architect

MDCSystems® has performed building exterior envelope investigations for over forty years on all types of residential, commercial and industrial buildings. Some of these investigations have included unique aspects of work concerning:

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

MDCSystems® has been providing Forensic Project Management (FPM®) services for over forty years for industrial, transportation and institutional capital projects. Using this extensive knowledge base, MDC®, develops and conducts seminars for the public and private sectors on many topics including the topic of Complexity and Systems Thinking.

Stephen M. Rymal, P.E., Esq.
MDCSystems®
Consulting Engineer

"No damage for delay" clauses continue to divide the country and the courts on their application and interpretation. Although owners and prime contractors insist on enforceability, the net result typically shifts the risk onto the party least likely to negotiate fair limits, to control events on the jobsite and absorb the ultimate cost. Nevertheless, these clauses are found in most construction contracts in some form or another.

E. Mitchell Swann
MDCSystems®
Consulting Engineer

In recent years there has been increased discussion on the risk aspects of green or ‘high performance' buildings and how the industry might address those risks. I gave my first presentation on the subject at a joint CIBSE/ASHRAE conference in September 2003 in Edinburgh, Scotland. While final case law and court decisions regarding green buildings are still limited at the time of this writing, prudent practice would recommend that designers, contractors and owners consider the potential risks, arrive at some appropriate factors or strategies to address those risks and act accordingly.

James W. Haile Jr.
C.P.M., of JWH & Associates
April 2010

Over the last several years, supply management professionals have been spending a majority of their time in creating, implementing and managing Business Continuity Planning (BCP) for critical products, materials and services. BCP is a strategic management process that focuses on insuring continuity of supply. The main objective is to identify and minimize or eliminate business interruptions in the event of a catastrophic event or major incidents occurring within the supply chain that can lead to adverse consequences for your business. Ten to twenty years ago, supply disruptions were caused by major snow storms, truck breakdowns, labor strikes, fire or explosions, electrical outages, machine breakdowns or even a truck driver making an unscheduled social visit.
In today’s global business environment, business supply disruptions have greatly expanded in scope. They now include and are not limited to the following:

Donald R. Keer, P.E., Esq.
MDCSystems®
Consulting Engineer

On March 22, 2010 the United Nations celebrated World Water Day by choosing Clean Water for a Healthy World as its theme. With continuous pressure being put on populations to use water wisely, attorneys in the construction industry are seeing issues arise that were not present two decades ago. Water treatment is a unique industry with its own problems.

Donald R. Keer
MDCSystems®
Consulting Engineer

As companies strive to improve energy consumption, promote environmental responsibility and improve the use of sustainable fuel sources to either generate revenues or improve their bottom lines the risks are not always in the determination of capital budgets, project scheduling or execution but in the gaps between technology unit operations. Renewable energy facilities can have a dozen or more process unit operations, each with proven technologies yet at the unit interfaces the process can break down leading to reduced efficiencies, higher than expected start-up costs and lost profits.

Peter L. Mansmann, Esq.
Precise, Inc.

120,000 emails, 9 months. I recently counted the number of emails I either sent or received in a single day. I was surprised at the number: 67. If you multiply that by a 10 person operation, over the course of a 9 month project, you have a total of over 120,000 emails sent and received during that time period. Add onto this Excel files, electronic schedules, digital photos, drawings, etc… and you have quite a large data set. The construction industry today, like most businesses, has entered an age where a staggering amount of electronic data, files and emails are created during the course of a project. Managing this amount of information can be a challenge in the course of everyday business. If litigation results from the project, this large body of electronic information can create an expensive problem. 

E. Mitchell Swann, P.E., LEED AP
MDCSystems®
Consulting Engineer

The Growing Importance of Energy Modeling

As a strong component of the sustainability initiative in buildings, energy use is rightfully taking its place as a leading metric in evaluating a building’s performance. Further emphasizing the importance of performance measurement is the expected roll out of an industry wide “Building Energy Performance” label which is intended to provide an objective comparison of energy use between buildings. Rating systems like Energy Star along with model energy codes look at both predictive energy use models and actual usage as crucial to determining a building’s true performance and rating. The USGBC’s newly issued LEED v3.0 rating system requires the initial certification, recertification and by extension the possibility of decertification of LEED buildings to be tied closely to comparisons of modeled and measured energy use over time.

Robert C. McCue, P.E., Consulting Engineer
Stephen M. Rymal, P.E., Esq., Consulting Engineer
MDCSystems®

Critical Path Method (CPM) schedules and formalized methods of analyzing schedule impacts started to enter mainstream construction management practice in the early 1980’s. At that time, the industry recognized a need to accurately and scientifically measure schedule delays and conversely the affects of acceleration in real time during construction and also retrospectively after the work was completed. The ability to determine which party ultimately bore responsibility for schedule delays became the main focus on many projects as the assessment of liquidated damages or granting compensable time extensions became critically important to both owners and contractors. Just as the Rosetta Stone provided scholars with a means to translate Egyptian hieroglyphics into Greek text, Time Impact Analysis (TIA®) provides users with the means to translate Critical Path Method (CPM) activities into understandable schedule impacts.

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

Recently, MDC® made the jump from Primavera P3 (version 3.1) to P6. However, the landing was a little rough- initially, erroneous information was received from a Primavera representative and then outside IT consultants had to be brought in to resolve issues with the server installation. If the installation experience is any indicator, it seems likely that P6 will require more IT overhead on an ongoing basis. This is in addition to the learning curve for the new features and capabilities of P6.

Robert C. McCue, P.E., Consulting Engineer
Robert Kennedy, P.E., Former Consulting Engineer
MDCSystems®

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.

E. Mitchell Swann, P.E., LEED AP
MDCSystems®
Consulting Engineer

Green is going away. Not the color, so your kid’s next box of Crayola crayons is safe. Not cash, dough, moolah or whatever other shorthand for US dollar bills you use despite all the stories predicting its demise throughout the years. Within 5 to 7 years the term ‘Green’ used to describe buildings, processes or industries will, like Monty Python’s dead parrot, “cease to be”. This is not because the issues that have given rise to the current wave of Green building will have gone, been solved or no longer matter but almost due to the exact opposite being the case. Green or sustainable buildings have emerged in part because of and as a response to ‘not Green’ buildings.

Amal Kabalan, LEED A.P.
MDCSystems®
Consulting Engineer

Engineering and Financial Analysis

In the article “Pennsylvania Solar Energy Rebate on Hold: How Consumers Can Still Save Energy” published in the February 2009 edition of the MDCAdvisor®, the steps that homeowners can take in order to reduce their energy consumption were outlined. This article discusses a case study that shows the effect of implementing two of the mentioned suggestions namely: increased attic insulation and powered, thermostatically controlled roof ventilation. Moreover, since the Pennsylvania Solar Energy Rebate program has been funded, a detailed analysis of costs and benefits of installing a solar power system on a residential house will be outlined and whether such a project is a viable option in light of all the federal and state incentives will be discussed.

Selwin Briggs
MDCSystems®
Former Consultant

The Advanced Energy Design Guide was developed to provide contractors and designers with a simple approach to exceed energy savings of ANSI/ASHRAE/IESNA Standard 90.1-1999 by 30%. Without resorting to time consuming analysis, the guide offers a means for construction professionals to provide owners with more value through a combination of optimized process and proven design practice. Written for office buildings no greater than 20,000 square feet, the guide is meant as a supplement to the 90.1 standard, with an outline that reads more like a textbook than code specification. The energy saving goals and means are broken down by building component; envelope, lighting, HVAC, service water heating, and more. Hour-based energy analysis software verified the 30% savings in energy. This guide provides detailed tables, climate zone-specific examples, and stepwise methodology.

Daniel J. Sporer
MDCSystems®
Consultant

You are a month and a half into construction of a planned one year project. It’s a new client and if you do well, you are in line to construct his future projects. However, the Engineers’ drawings don’t quite match the existing site conditions; there is already an inordinate amount of Requests for Information (RFIs), and the Client is very involved with your construction means and methods. No change orders have been written because 1: You “worked-around” the site layout problems; 2: There is still time to resolve the unanswered RFIs and 3: The finish milestone on the project has not been affected because you used float in the schedule. In any event, you don’t want to “nickel and dime” the new client.

Amal Kabalan
MDCSystems®
Former Consulting Engineer

How Consumers Can Still Save Energy

Last July Pennsylvania state officials announced the $100 million consumer and small business solar energy rebate program -- part of a $650 million Alternative Energy Investment Fund -- when it was signed into law. Recently the residential solar energy tax rebate program was put off. Given the current credit market conditions, it was deemed a “bad time” to float the government bonds needed to fund the $100 million program. “Anything that is tied to Commonwealth Financing Authority ... bond issue is on hold because of the Wall Street financial meltdown,'' said John Nikoloff, a principal with Energy Resources Group of Harrisburg, who has been following the program. Much of the program, including a solar energy rebate that was promoted as paying for up to 35 percent of the cost of installation of solar panels, was to be funded through Pennsylvania bond issue.

Amal Kabalan
MDCSystems®
Former Consulting Engineer

Today there is a lot of dialogue about 'being green', 'energy efficiency', and 'carbon footprints'. One of the main promises of campaigning politicians is investing in renewable energy technology. Every other commercial on TV or in a magazine speaks about green energy. Solar power is a major component of the renewable energy mix. By now, most people know that solar energy is a pollution free technology; it has the potential to reduce your carbon footprint and provide clean energy for future generations. In 2010 state imposed rate caps on electricity are set to expire, and utilities are positioning themselves for massive rate increases in Pennsylvania. Before deregulation, Pennsylvanians paid 15 percent more for their electricity than the national average. With current caps those customers are paying 2 percent less than the average. Amid all these promises and buzz one would think that it is time to invest in solar energy.

E. Mitchell Swann, P.E., LEED A.P.
MDCSystems®
Consulting Engineer

A day doesn’t go by without hearing of the next new green building project in almost all sectors - from major owners to the one-off office park on the highway. Everybody wants to be ‘in,’ but it is important to understand what one is getting into before one is deep into it. Not recognizing the landscape can lead to problems, misunderstandings, and claims. A common thread in the analysis of construction claims is a comparison of ‘the work done’ by one participant with what a ‘comparable’ practitioner would do on a similar project. This is commonly referred to as “custom and practice,” or the Standard of Care.

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Thomas Hundertmark, Andre Olinto do Valle Silva, and Jeff A. Shulman
June 2008

E. Mitchell Swann, P.E.
MDCSystems®
Consulting Engineer

Mold cases have become almost as prolific in the legal world as the little fuzzy devils themselves in the real world. Mold is a hot topic and claims associated with mold, mildew and related IAQ issues including EIFS leaks and failures have multiplied at an exponential rate. When faced with a mold claim, there are some basic steps that should be taken before dispatching the chlorine bleach strike force. You must keep in mind that mold is ubiquitous in the environment – it is the types and concentration levels that are key. The extent to which any given person will react negatively to a mold is extremely variable as well.

Jeff Yick, Esq.
Zetlin & De Chiara LLP

A no-damage-for-delay clause attempts to contractually bar recovery by a contractor or subcontractor in the event project delays result in damages or extra costs. A sample no-damage­-for-delay clause is as follows:

The Contractor agrees to make no monetary claim for delays, interferences or hindrances of any kind in the performance of this Contract occasioned by any act or omission to act of the authority of any of its Representatives and agrees that any such claim shall be fully compensated for by an extension of time to complete performance of the work.

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

Document discovery is to be anticipated and disliked on every construction litigation effort. By their nature, construction projects are paper and electronic data generation machines. How can the litigation team quickly and efficiently navigate through the voluminous and redundant files while collecting the most important documents?

E. Mitchell Swann, P.E., LEED A.P.
MDCSystems®
Consulting Engineer

The Importance of Systems Thinking and Integration in Project Delivery

Recently the global marketplace has been buffeted about by news of the recall of children’s toys by several major manufacturers and by the collapse of the subprime lending market including its investment derivatives and related impacts on credit and capital markets worldwide. These items might seem completely unrelated to each other, not your typical project management or construction topic. Try this; think about each scenario as a portrait of a system and consider the impact on a project if the system components are misaligned.

The World’s First “Green” Semiconductor Manufacturing Facility

The construction world has been abuzz with green homes, green condos and green cars aplenty this year, but little attention has been paid to some of the more esoteric projects whose impact per square foot can be enormous. Texas Instruments (TI) recently completed the first LEED certified semiconductor manufacturing facility (wafer fab) in the world.

E. Mitchell Swann, P.E., LEED A.P.
MDCSystems®
Consulting Engineer

In our last edition of the MDCAdvisor® we talked about BIM (Building Information Modeling) Systems and the impact of that technology on the way projects are done and the way team members relate to each other. We are going to climb the tree a bit higher to see what changes in the landscape make BIM possible - beyond really neat computers.

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Anil Verma and Serge Lambermont
June 2007

This is the second Quarter, 2007 Edition of the MDCAdvisor®. Spring has sprung in fits throughout much of the East Coast. Weather was 70 ºF on April 2nd and 30ºF by April 8th.

Much like the weather, there are issues afoot in the building industry which are moving in a herky jerky fashion but seem to be moving toward an inevitable conclusion. These are the issues of greenhouse gases and sustainability, and some sort of rational response to same. While the political world is still a bit topsy-turvy with debate on the subject, the building industry has been keen to push forward on a number of fronts – some driven by climate change and others driven by a desire to deliver better buildings for their owners and occupants. Unless you have been living in a cave (which actually would be pretty 'green') you have heard of the LEED® Green Building Rating SystemTM from the US Green Building Council and 'green' buildings.

Stephen M. Rymal, P.E., Esq.
MDCSystems®
Consulting Engineer

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.

E. Mitchell Swann, P.E., LEED A.P.
MDCSystems®
Consulting Engineer

Anyone who has read Thomas Friedman’s “The World Is Flat” might glean an idea of where this article is going right away. If you haven’t read the book, it is a good one. About 2 years ago MDCSystems® presented at the London Construction Superconference on some of the benefits, challenges and issue associated with the use of 3D and 4D modeling technologies in the design, documentation and delivery of capital projects. Since that time, there have been even more developments – not just in the nature of the technology, but also in the level of accessibility or breadth of application. This expanded modeling regimen has come to be called Building Information Modeling or BIM.

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Robert N. Kennedy, P.E.
MDCSystems®
Former Consulting Engineer

Leigh Erin Schmeltz, Esq.
October 2006

As demonstrated by the popularity of CBS's television show CSI: Crime Scene Investigation, the intriguing field of forensic science is capturing the attention of many across the nation. Beyond entertainment and education, however, forensics plays a very real and crucial role in civil investigations, using technology to investigate and establish facts in the civil courts. Evidence that illustrates wrongdoing, negligence and malfeasance through photographs, detailed reports, and testing can mean the difference between an adverse judgment and a complete discharge from liability. Every detail can help tell a story. Whether the detail is a stress fracture of an improperly driven pile, an e-mail or a letter, the challenge is to preserve the evidence for later interpretation and examination. The intentional or negligent destruction or significant alteration of such evidence, or the failure to preserve property for another's use as evidence, in pending or future litigation, is called spoliation [Black's Law Dictionary (8th ed. 2004)].

Ronald F. Parisi, P.E.
Former MDC® Project Director
August 2002

Owners involved in ongoing construction projects are virtually unanimous in recognizing the need to minimize the number and amount of change orders as a way to keep the project costs within budget. In viewing change orders with only this in mind, however, owners may tend to overlook the benefits that the change order process offers to owners. The primary benefits afforded by the change order process are that it allows owners the flexibility to respond quickly, to capitalize upon opportunities and to mitigate problems — both of which frequently arise during the course of construction.

A journey of one thousand miles begins with the first step. However, any journey carries with it some element of risk and possible pitfalls along the way. To better your chances of reaching your desired destination, it is important that the first step be a step in the right direction. Design is often the first major step in executing any project. As that ‘first step’, design is a key component of a project’s overall risk potential. Following is a discussion of some risk elements in the design process.

Interview with Joe Gionfriddo, Global Construction Process Owner of Proctor & Gamble

MDC®’s Mitchell Swann met with Joe Gionfriddo at this year’s McGraw-Hill Global Construction Summit in Beijing, China in April 2006.  Mr. Gionfriddo, the Global Construction manager – Corporate Engineering at P&G, was a part of a Panel Program entitled "What Do Global Owners Need?"  which featured speakers form a number of  global owners.  We thought his comments and viewpoints were very insightful and would be of value to our Advisor readers. Below is a short interview we conducted with Joe Gionfriddo.

In previous editions of the MDCAdvisor®, our contributors have addressed risk issues relative to budgeting and cost estimating as well as overall risk considerations. A key contributor to almost all of the potential project risk scenarios is the conception, development and execution of the design process for the project.

E. Mitchell Swann, P.E.
MDCSystems®
Consulting Engineer

A hot topic in the world of ADR (Alternative Dispute Resolution) is the extent to which ‘neutrals’ should be qualified and what type of qualifications they should have. Often, the first reaction is that the neutral should have legal training as their predominant skill and some experience with the subject matter of the case. As part of the program at the American Bar Association’s ADR Section Meeting in Los Angeles in April 2005, MDCSystems®, along with the other contributors to this article, discussed the use of technical experts as neutrals in ADR proceedings. Below is a summary of the key issues, ideas and opinions addressed and presented by the panel. The panelists come from varied backgrounds but all have participated in ADR proceedings in one form or another.

Using Project Management Modeling Tools to Quantify, Analyze and Reduce Exposure to Risk

Some project histories are very complex and traditional schedule and damage analysis methods are not able to quantify the impacts of events that have occurred over the life of the project. In these situations MDC® has relied upon more sophisticated mathematical and system based models to attribute impacts to particular events. The usual methods of determining and reducing risk on construction projects include schedule forecast, cost forecasts and change review analysis performed by the project team. However, sometimes these techniques do not allow for an overview that properly adds the effects of many individual events. On these occasions the project team needs more powerful and sophisticated tools that can include multiple project factors including resource availability, site conditions, environmental factors and productivity levels for both planned and actual conditions on the project to date, all factors that cannot be completely comprehended by the project manager without the aid of analysis.

John P. Sieminski, Esquire
Burns, White & Hickton, LLC
December 2005

Information Explosion

The world is going digital and the business world is no exception. It is estimated that over 90% of new information is created on an electronic device in digital form. Of that electronic information, it is also estimated that approximately 30% is created, used, maintained, stored or destroyed without ever being printed to paper. The construction industry is no exception to this trend. The industry has embraced the use and exchange of information that, fifty years ago, would invariably have been created and used in the traditional form of paper drawings, specifications, letters, memos, and other traditional forms. For the reasons discussed below, electronic mail is a form of digital information that has achieved particular prominence and deserves special attention. In addition, the sheer volume of information created in business and non-business settings is staggering. Researchers at the University of California at Berkeley estimated, for the year 2003, that five exabytes of new information were created and that the amount of new information is growing each year. (One exabyte is 1,000,000,000,000,000,000 bytes OR 1018 bytes.)

Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

Risk and risk sharing means different things to different people. It may not be possible to eliminate all risk in undertaking capital projects. Owners will attempt to shift risk onto contractors through contract provisions, while contractors will attempt to share risk among the subcontractors and suppliers. Nevertheless some risk remains for all and cannot be eliminated. However, it is possible to recognize and limit risk for the overall project by implementing effective planning and execution strategies during the conceptual stage of the project.

Robert N. Kennedy
MDCSystems®
Former Consulting Engineer

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.

Daniel J. Sporer
MDCSystems®
Consultant

On a large multi-million dollar project, it shows up in the cost reports. On a smaller project, the schedule may start to show specific activity schedule slippage. The same estimator developed the bid, the project scope has not changed and your most trusted foreman says he has excellent crews. You might be experiencing labor inefficiencies and probably don’t know it. The cost reports and schedules might tell you that it occurred, but it will require additional data / analysis to determine why it has occurred and who has caused it to prove entitlement and to calculate your recovery costs.

Donald R. Keer, P.E., Esq.
MDCSystems®
Consulting Engineer

The pressure is growing on local municipalities to consider privatization of their water and wastewater systems. Both the EPA and the Bush Administration favor privatization as a way for local municipalities to meet ever tightening regulations. These systems are critical to public health and economic development. Despite the critical nature of these systems maintenance and upgrades have lagged as the quality standards have increased.

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E. Mitchell Swann, P.E.
MDCSystems®
Consulting Engineer

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Robert C. McCue, P.E.
MDCSystems®
Consulting Engineer

How can a large, well-funded capital project fail to achieve its technical, cost and performance goals and why is this still a common outcome? These projects are typically undertaken by teams of personnel from the Owner, Architect and Engineer firms and Contractors. How can such a collection of talent, carefully selected based upon experience and references, fail to deliver? The answer lies in part in the inherent instability1 in the contractual structure of the participants which results in incentives/disincentives to proactively solve problems and engage in CYA activities. Systems Thinking provides a new way to understand and thereby avoid these problems.

James M. McKay, AIA, P.E.
Former MDC® Project Manager
August 2002

Construction is, to a great extent, a paper business. In addition to a completed building project, an end result of the construction process is reams of documents. From initial project concept through completion, an extensive paper trail is generated.

Francis J. Brennan, P.E.
August 2002

A construction project in default is an emotionally charged situation, with many parties exposed and a lot of money at risk. The owner’s use of the facility will be delayed. The contractor’s work on the project and perhaps years in business may come to an end. The designer’s envisioned project is on hold. The surety faces an uncertain exposure.

Michael C. Loulakis, Esquire, Wickwire Gavin, P.C.
(Originally printed in Legal Trends)

Under “pay-if-paid” clauses a subcontractor is not entitled to payment if the owner fails to pay the general contractor, regardless of whether the subcontractor was at fault. General contractors use these clauses to assign to their subcontractors the risk of owner nonpayment.

Design professionals can play an important role in properly setting the course for the construction project, especially in minimizing the likelihood of claims and disputes. For example, not only can the architect serve as the master builder, but also as the master of dispute prevention and resolution.

The primary goal in construction recordkeeping is to manage crucial information to facilitate decision-making. A secondary goal is to document key aspects of the project to provide an audit trail or comply with legal or regulatory documentation requirements. Frequently project participants lose sight of these two important goals; and resort to “wall-papering” the project office with reams of useless documents.

Contracts for the construction of new ships have many key differences from contracts for ship repair. The most obvious difference concerns the type of work (new versus repair) but other important differences exist concerning the nature and extent of changes, scheduling, engineering and contract claims. Attorneys and others involved in contract administration and dispute resolution need to understand these important differences.

When faced with a default on their projects, many owners have unrealistic expectations concerning the surety’s obligations under the performance bond. Owners feel frustrated when the surety does not aggressively step in to complete the work. However, under most performance bonds, if the contractor/principal is in default, the surety may discharge its obligations by any one of the following alternatives: (1) finance the contractor/principal to complete the work; (2) obtain a new contractor to complete the work under a direct contract with the owner/obligee; (3) complete the work with a new contractor under a contract with the surety; (4) permit or require the owner/obligee to obtain a new contractor; and (5) do nothing and wait for the owner to take action against the bond. As discussed in the lead article on page 1, deciding which option to exercise requires prudent management decisions often based upon reliable, accurate, and expeditious investigations by an experienced consultant.

October 2000

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.

John E. Osborn and Eric L. Guhring
Originally printed in ©2000 The Metropolitan Corporate Counsel, Inc., Volume 8, No. 4, April 2000

Corporate owners and tenants who build in urban centers such as New York City are an "at risk" group. Getting everything "on line" quickly is expensive. Difficulties encountered during a failure in design or construction can be catastrophic if practical solutions are not developed promptly to get things back on track.

John E. Osborn
Originally printed in ©2000 The Metropolitan Corporate Counsel, Inc., Volume 8, No. 2, February 2000

Our law firm’s practice concentrates in representing commercial and residential property owners on construction and environmental law matters. Our practice also includes advising clients on selecting architects, engineers, consultants and contractors, developing the bid process and drafting and negotiating construction and environmental contracts.

In addition to helping our clients obtain the best price under the best contract terms, we are increasingly asked by clients who are property owners to “check out” the financial stability and integrity track record of contractors, design professionals and other participants in the construction process.

John E. Osborn and Eric L. Guhring
Originally printed in The Metropolitan Corporate Counsel, October 1999

Cost effectiveness and success in the resolution of construction disputes is determined by a recipe. The recipe is different for each dispute because the characteristics and ingredients of each construction project and the participants and their quality vary widely. It is clear that the quality of inhouse counsel significantly affects the cost and success of the dispute resolution.

John E. Osborn
Originally printed in The Metropolitan Corporate Counsel, April 1999

When legislation passed Congress 15 years ago, requiring schools to be inspected for asbestos, a new industry was born. Surveying the nation’s schools was a big task, performed in the public eye. This article looks at the evolution of trends and public perception relating to asbestos abatement in management, abatement methods, pricing, competition, health risk, legal liability, and court precedent. Before a property is purchased or renovated, an evaluation of asbestos risk is essential. With advance planning and practical strategies, the asbestos detriment can be turned into a benefit: discounts in the purchase price of commercial real estate is common when asbestos is present, if you know when to ask for those discounts. The same theory applies to the long term lease. Significant real estate tax roll-backs through use of the tax certiorari process can be worth millions when asbestos is present.