Last week, I was selected as a Top 20 Under 40 professional by McGraw Hill’s South Central Construction magazine. (…Thanks @SCConstruction…I’m humbled…) In an exchange of emails, one of the editors asked me to identify some of the challenges for the construction industry in 2011 and how contractors should manage and deal with those challenges.
I am no prophet, but here are my thoughts. As a construction lawyer, I would say the greatest challenge for the construction industry is how to best manage current economic risks into project design, development and performance. There has been a lot of litigation over the past few years largely attributable to economic factors, whether the issue has been the fallout from the loss of construction financing or an overwhelming increase in lien claims.
In the future, public contracting will continue to see growth, but I think we will also see more bid protests stemming from increased competition, as well as more claims asserted by contractors and suppliers. Another area of growth will be sustainability and green building, where parties will need to be prepared for new legal pitfalls, such as the LEED certification process or energy performance issues.
The best way to manage and deal with the economic challenges is to … prepare for them! That means, taking assessment of your problem projects that occurred over the past few years and identify some of the pitfalls. If your contract did not contain certain protections (such as an audit provision), then you may want to pull your contracts for the new year and review them. If disputes arose because your personnel did not take appropriate precautions (such as securing guaranties and adequate financial security), then you may want to schedule a "refresher" lunch with your contract administration staff. Whatever the challenge, use your past experiences, learn from them, and prepare to succeed in the future.
Happy New Year to all … now let’s get to work!