In this edition:
- The Seven Deadly Sins of Construction Projects that Regurarly Lead to Claims (and How to Avoid Them)
- MDC’s® McCue Presenting at PSPE Boot Camp East, King of Prussia, PA
- ABA Forum on the Construction Industry 2013 Annual Meeting, Dana Point, CA , April 25-27, 2013
The Seven Deadly Sins of a Construction Project that Regularly Lead to Claims (And How to Avoid Them)
By Michelle N. Delehanty, PE, PMP. MDCSystems® Consulting Engineer
From a project’s inception, an owner will typically have a vision of how they imagine their project will end. A ribbon cutting on a bright sunny day, surrounded by contractors, architects, and engineers alike all happy with the project’s outcome, on time and under budget, with motivation to continue on to additional shining successes in the future. Typically, this vision begins to fade as reality sets in, perhaps delays occur and cost issues come rolling in. In actuality, as long as the project closes out with no lingering disputes or potential claims, most parties will feel they succeeded and come out of the project in one piece.
In order to strive for the former and end with the latter, there are a few pitfalls that must be avoided along the way. The project team should make every effort to circumvent these 7 deadly sins of a construction project which commonly lead to disputes and possibly claims.
1. Excessive Requesting or Denial of Change Orders (Greed)
Any project, even the seeming perfectly designed ones, will have change orders. It is an inevitable fact of construction. How the parties handle the change orders will affect whether or not the project will end with unresolved disputes leading to claims. If an owner rejects all change order requests outright, the contractor will respond with more requests, incomplete work, and, at the end of the project, claims. If a contractor is “nickel and diming” the owner for every little thing, the owner will be more resistant to approve large ticket legitimate changes leading to claims at the end of the job.
To curb greed of excessive change orders from both sides, the owner should first ensure that there is some contingency in the contract for scope changes, design errors & omissions, and unforeseen conditions. Change orders submitted by the contractor should be reviewed on a regular basis and any approvals needed should be made prior to the affected work being complete. Agreements should be made whether they are fixed price or T&M. The owner should recognize that there will be a need for change orders and should reasonably approve those necessary. Conversely, the contractor should also have a built-in contingency in their own budget for minor items they may have missed at bid time, but legitimately own so that they are not overwhelming the owner with petty things; therefore making it more likely to get their valid change orders approved with little or no fuss.
2. Owner – Induced Scope Creep (Gluttony)
You find some extra money in the budget as you begin to let your contracts. Enthused by this discovery, you realize you’ll now be able to upgrade to the state-of-the-art ornate elevators that you previously value-engineered out. To go with that, you add to the building’s structure in order to fit the new elevator cabs and adjust the power requirements as well. Pretty soon, you’re dipping into the contingency to upgrade the millwork in the elevator lobbies so that they coordinate with the cabs. Over time, this scope creep will lead to delays, budget problems, and ultimately claims.
MDC’s® McCue Presenting at PSPE Boot Camp East, King of Prussia, PA
April 5 – 7, 2013
MDCSystems’® Robert C. McCue, PE, will be presenting at the Pennsylvania Society of Professional Engineers Boot Camp East, April 5-7. PDH Boot Camps East and West, designed by the Pennsylvania Society of Professional Engineers Education Committee, will allow Licensed Engineers to gain up to 8 PDH per day, or 24 total, in one location.
Mr. McCue’s presentations will include the following:
- Forensic Engineering I & II – This two hour presentation will focus on engineering failures and examine them by reference to case studies and recent events. Systems Thinking concepts will be explained and used to understand the nature of the failure and provide a path to avoiding future similar failures.
- Forensic Project Management I & II – This two hour presentation will use case studies from MDC’s experience to develop and explain the concept of Complexity and understand how it emerges on projects and how in many cases is the primary cause of project failure.
More information about PSPE’s Boot Camps.
Detailed information about Mr. McCue’s experience and credentials.