I will admit it.  I am open-minded.  I will try anything (…well, almost anything…) at least once.  So, a few years ago when ConsensusDOCS hit the market, I was happy to take the construction documents for a spin … and I was even happier to learn that ConsensusDOCS offered a metered account that allowed me access to all of the documents and pay for only the final product.

Rather than wait 10 years for a set of standard form revisions like another construction industry group (…rhymes with Bay-Why-Bay…), this week the folks at ConsensusDOCS released new and updated contract documents to respond to changed economic conditions, new technologies, and green building goals.  According to Brian Perlberg, Executive Director of ConsensusDOCS, “Today’s construction industry looks almost nothing like it did 2007. The practical expertise of an expanded coalition effort brought new ideas and actively listened to outside feedback to make the best standard contracts even better.”

Some highlights of this "review, edit and revise" process include:

  • Retention of the project-first philosophy mission that put Owners in an active rather than passive role in the construction process;
  • Incorporation of English writing style that provides clearer contract interpretation and project administration (…Bryan Garner is celebrating big time…);
  • Promotion of promoting collaboration, communication and integration;
  • Incorporation of Building information modeling (BIM) and green building goals as specific callouts into the agreements; and
  • Creation of two new documents, including a Standard Purchase Agreement  and a new insurance exhibit for the Subsubcontract agreement.

I have only test-driven the ConsensusDOCS on a few projects, but I am a fan.  Have you used them?  What are your thoughts?

A few months ago, I did a webinar on project documentation.  At the end of the webinar, one of the participants asked, Are digital signatures as good as hard copy signatures?

I addressed this exact question in a feature article that I wrote for ABC’s Construction Executive magazine on the paperless construction project.  In the end, the question raises issues involving both contract formation and evidentiary proof.

As to contract formation, some commentators have found a distinction between an electronic signature and a digital signature.  However, the real issue depends on whether the parties manifested an intent to be bound by the contract provisions.  If it can be shown that the digital marking … whether by affixing an image of a signature, typing the name of the party on the signature line, or clicking an "I accept the terms of the agreement" button … then it is likely that the signature will form a valid and enforceable contract.

The next question involves one of proof: Is an electronic document more likely to prove a claim than a hard copy document?  The courts respond differently.  One appeals court in Montana has held that an email was sufficient to support a finding of increased costs for a change order, while another court in North Carolina concluded that an email promising additional work was not an enforceable contract for purposes determining whether a change order was valid.  A case in Florida demonstrates that an electronically faxed release was not the same as the original document because one party demanded the original to be provided.

An electronic document can be the basis of a contract. A digital photograph can be used to demonstrate installed quantities. An electronic schedule (and its logic ties) can be used to impeach a witness. Ultimately, the form of the document may not have as great an impact as the intended purpose of the document.

I recently discovered that eight out of ten of the top key word searches on this site over the past few months included variations of the following words: construction, iPad, technology and apps.  The searches were referred primarily to a blog post I did about my favorite apps for the construction industry.  Construction apps are more than just fodder for technology and construction bloggers … they are being used regularly by some as project management tools.

According to an article by the Tennessean last week,  "[t]he most important tool if you’re building or remodeling a house is no longer a hammer or a saw; it’s a home computer, iPad, smartphone or other electronic device." The article explains how contractors, designers and owners are collaborating on the project to achieve success:

Builders and homeowners now use computers and handheld electronic devices to instantly share information about the progress of construction projects. To-do lists, schedules, change orders and reports of each milestone are posted on a password-protected website, where they’re just a click of a mouse or a tap of a touch-screen away. . . . . Thanks to technology, homeowners no longer have to spend hours waiting for a contractor who misunderstood the schedule or wondering whether a project is going as planned.

The technology solution featured in the article was Basecamp, an online collaborative project management solution used by many different small businesses.  Although I have not used Basecamp, it appears that the software is not specifically geared towards the construction industry.  Examples of collaborative software solutions for the construction industry include: Prolog, e-builder, PMWeb, Paskr, and many others.

There are all different types of solutions for your project management needs.  The key here is to understand that although one particular software "can" be used on your project, it "may not" be the best solution for your residential, commercial or industrial needs.  In other words, you may not need a track hoe when a shovel will suffice … or you may need a boom lift when the ladder won’t reach.  

Image: willc2

Today’s guest post is by fellow Stites attorney Bob Goodrich, Jr., who has been designated by the American Bankruptcy Board of Certification and the State of Tennessee as a specialist in business bankruptcy. For more then 25 years, Bob has represented creditors, creditors’ committees, landlords, and other interested parties in bankruptcy and insolvency related matters in state and federal courts. If you have questions, you can contact Bob by email or phone at (615) 782-2231.

Bankruptcy lawyers are often asked to “bankruptcy proof” a transaction, and they often explain that an agreement not to file bankruptcy or under which property is forfeited or a contract terminated by a bankruptcy filing is likely unenforceable. There are, however, bankruptcy proofing tactics which have some degree of success, as illustrated by In re DB Capital Holdings, LLC, BAP No. CO-10-046, Bankr. No. 10-23242 (10th Cir. BAP December 6, 2010).

In this case the Debtor was a Colorado LLC that owned a condominium project, encumbered by a mortgage loan in favor of WestLB AG (“WestLB”). The Debtor’s manager attempted to put it into bankruptcy. The Debtor’s operating agreement originally did not expressly empower the manager to file bankruptcy for the LLC and stated that the manager must cease operating as manager “upon dissolution or bankruptcy,” necessitating a change in management if a bankruptcy were filed. The LLC agreement also prohibited the manager from doing any act that would make it impossible to carry on the ordinary business of the LLC. Citing previous authority, the bankruptcy court and the appellate court agreed that filing a bankruptcy prevented the LLC from carrying on the ordinary course of business. Both courts found that the manager was not authorized to place the LLC in bankruptcy. Additionally, an amendment to the LLC agreement, inserted after some negotiations with WestLB, expressly prohibited the filing of a bankruptcy. The court found no evidence of coercion but found it did not need to opine on that issue because it concluded the LLC was not eligible for bankruptcy under the original LLC agreement.

The case is a reminder that an entity’s ability to act, including its power to file bankruptcy, is based on state law and the authorizing documents that empower the entity to act. To the extent that such authorization is not present, the entity cannot file bankruptcy, but it can be placed into bankruptcy involuntarily by its creditors. Also, so long as the members vote to change the LLC agreement, it can be amended to empower the filing of a bankruptcy.  If, however, the requisite voting is not there, no amendment can be made. Lenders sometimes control a vote or votes so that the requisite votes cannot be obtained to empower the entity to file bankruptcy, but these arrangements sometimes raise breach of fiduciary duty issues with respect to the holder of the vote who is acting at the direction of the lender.

In a recent article that I wrote for ABC’s Construction Executive magazine, I shared some experiences and lessons learned from a paperless project.  The construction industry needs to consider that “paperless” involves more than simply a different form of documentation, but also a debate about whether the benefits of a paperless endeavor outweigh the upfront investment costs and the potential risks.

Indeed, the courts have struggled with electronic discovery challenges for years. Workable solutions can help parties manage the production of millions of pages of electronic documents. In the end, however, the same common-sense approaches to document management on a paper project can help a contractor deal with similar challenges on a paperless project.

To continue reading the article, please visit Construction Executive.

In what has been unofficially called LEED 2012, the U.S. Green Building Council (USGBC) opened the first public comment period from November 8, 2010 to January 14, 2011 for the next version of the LEED rating system.  Yes, that means the first public comment period closes this Friday.

According to the USGBC’s LEED Rating Development page, the "next version of LEED will be an update and expansion of the technical content from LEED 2009. Your comments help to ensure that LEED continues to be at the vanguard of innovative design construction and operation of buildings and communities. It is expected to be released in late 2012."  A second public comment period is scheduled for July 1 through August 15, 2011.

I have not digested all of the new draft, but there are some noteworthy changes.  First, the LEED 2009 has 9 prerequisites and 49 credits, while the new draft has 15 prerequisites and 49 credits.  Second, there are now 10 different categories in the new draft, as opposed to 7 categories in the prior versions.  The three new categories, as well as some changes and additions to the existing categories, are explained in more detail below:

CATEGORY DESCRIPTION
Integrated Process (IP) This new category is intended to support and encourage project team integration required by a LEED project and to streamline the application and certification process. In addition to the LEED AP being involved in the project, there must be two individuals representing primary disciplines on the project who are LEED APs or Green Associates.
Location and Transportation (LT) This new category consists of credits from the old Sustainable Sites category that relate to the location of the project.  It also includes provisions such as a bicycle storage prerequisite, a reduced automobile use credit, a new parking reduction credit (that replaces the old parking capacity credit), and a walkable streets credit (taken from LEED Neighborhood Development).
Sustainable Sites (SS) Language has been added to clarify Brownfield Redevelopment to require actual remediation of the site to meet local, state or federal cleanup standards.  Other revisions are recommended to the Protect or Restore Habitat and the Open Space credits.  The two stormwater credits from LEED 2009 have been rolled into one credit called Rainwater Management. The requirements for Light Pollution Reduction include a new calculation method.
Water Efficiency (WE)

Although a couple credits are renamed, much of the requirements are unchanged.  The new Landscape Water Use Reduction prerequisite applies to projects with a minimum of 1,000 square feet of exterior vegetated surface area and applies to all irrigation water, regardless of source. Another new Appliance and Process Water Use Reduction prerequisite seeks to reduce the burden on water supply and wastewater systems by increasing the water efficiency of appliances and water-consuming processes.  Finally, there is a new credit for Cooling Tower Makeup Water, which seeks to conserve water used for cooling tower makeup while controlling microbes and corrosion in the water system.
Energy and Atmosphere (EA) There are some wording changes and revisions to threshold requirements throughout this category. Notably, refrigerant management prerequisites for all rating systems have been eliminated. The Minimum Energy Performance prerequisite changes how energy costs and savings are calculated, while the Optimize Energy Performance credit changes some of its metrics and requires that modeling be used in design as opposed to performance compliance. Finally, a new credit for Demand Response is intended to reduce regional carbon emissions and improve optimization of electric generation, transmission and distribution resources.
Materials and Resources (MR) Some of the wording of the provisions in this category have changed, but most of the requirements remain the same as in the LEED 2009 provisions.  Recycled Content is now a prerequisite and also has changes to its credit requirements. Construction and Demolition Waste Management Planning is another new prerequisite. Finally, one new credit is available for Whole Building Reuse, which focuses on historic preservation or reuse of abandoned or blighted buildings.
Indoor Environmental Quality (EQ) The most notable change in this category transforms the Construction IAQ Management Plan into a prerequisite.  Low Emitting Interiors is a new credit that addresses the material concentrations of contaminates.  The interior is now split into five systems (floors, ceilings, walls, insulation and furniture) for credit calculations.  Also, the Daylight and Quality Views credits have major revisions. Finally, a credit for Acoustic Performance under LEED-Schools is now available for LEED-New Construction.
 Performance (PF)  This category has a new prerequisite for Water Metering and Reporting, which intends to promote water efficiency by providing accurate consumption data to building managers. Notably, there is a another new prerequisite for Building-Level Energy Metering, which is set up to meter, track and share building-level energy resource use. On such way is to participate in the USGBC’s Building Performance Partnership for a five year period. The Fundamental Commissioning and Verification prerequisite adds some major commissioning agent tasks from EA category.  Finally, there are some additional provisions to address the verification provisions of LEED 2009 under the new Reconcile Projected and Actual Energy Performance credit, the intent of which is to provide for the ongoing accountability of the building energy consumption over time.
 Innovation (IN) Most changes to the Innovation credit involve changes in wording, such as dropping the "design" from its title and other provisions.  For LEED-Schools, the project can now achieve up to 4 points for innovation.
Regional Priority (RP) The Regional Priority credits, which are identified by regional councils and chapters, now include priorities social equity and public health.  A database of these credits is available on the USGBC website.

Image: suttonhoo

When asked about potential cost overruns on the Music City Center almost year ago, the Center’s representative Larry Atema stated bluntly, "There aren’t going to be any."  True to that commitment, Anne Paine of the Tennessean reported this past weekend that the Center’s "green roof has grown less green."

According to the article, two pieces of the Center’s green roof have been cut from the design to stay within the project’s $585 million budget.  The roof is approximately 14.5 acres and, even with the reduction, the green portion will comprise 178,000 square feet or 28% of the entire roof. 

Green roof benefits. The Center is committed to (and as required by Metro Codes "required to") attain LEED Silver Certification.  For the Music City Center, the proposed green roof’s benefits include: (1) stormwater capture and water retention for irrigation use and toilet flushing; (2) decreased energy costs from thermal insulation; and (3) improvement of the climate environment and clean air.

A path to LEED certification.  Ultimately, the proposed green roof at the Music City Center can help the property obtain over a dozen LEED credits, including credits for reduced site disturbance, landscape design that reduces urban heat islands, storm water management, water efficient landscaping, innovative wastewater technologies and innovation in design.

Green roof risks.  The Music City Center may prove to be a great case study for the benefits and risks of a green roof.   Some of the risks associated with a green roof may include: (1) failure to attain the energy efficiency levels claimed by the installation of a green roof; (2) failure to achieve the claimed number of LEED credits that are proposed for certification; (3) mold or other environmental hazards as a result of poor installation and maintenance of a green roof; or (4) a roof collapse resulting from a green roof that was not properly constructed, installed or maintained.

According to Holly McCall, an authority spokeswoman, no estimates are available on what the savings might be with the revised or the originally conceived green roof.

Image: Daniel Pink

 

If you’ve read a newspaper, scrolled through a blog, or watched the television over the past 48 hours, you should know about the miracle story of Ted Williams.  Dubbed "the homeless man with a velvety voice," Williams was discovered on the streets of Ohio looking for work.  Already he has received some lucrative offers.

As of this morning, Williams recorded his first commercial voice-over with Kraft Foods and he has been offered a job by the NBA’s Cleveland Cavaliers.  His golden voice is being pursued by NFL Films and others for possible work.

What can you learn from this streets-to-stardom story?  First, I will admit it … I am a sap.  As I watched the interview on the Today Show with Williams and his 90-year-old mother, my eyes welled up.  What a reunion!  Then my wife walked into the room, saw my red eyes, and I told her the truth:  "Man, my allergies are really acting up this morning!"

All kidding aside, one of the greatest lessons for executives is to embrace a sense of urgency in your business development efforts.  As reported by the Tennessean, the Cavaliers did not know much about Williams, but they were moved by his ordeal.  "When you know something’s right, you just have to launch,"  Cavalier’s marketing executive Tracy Marek said. "One of the big things that we talk about here, with our organization, is how important urgency is — when you see something that feels good and seems right."

Times are difficult in this economy.  The construction industry continues to see very slow growth.  It’s important to trust your instincts, try new approaches, and use the tools available to you to increase business.  Perhaps your next project is right around the corner if you are willing to embrace urgency and explore new opportunities.

As many of you know, I am involved in the ABA Forum on the Construction Industry, which is the largest organization of construction lawyers in the United States and abroad.  The mid-winter meeting is coming up on January 20, 2011 in New York City.  The one-day conference focus is “Do You Think it’s Alright? Pushing the ADR Envelope.” You can register online here.

Don’t know much about the Forum?  Never been to a Forum conference?  Don’t think it is worth your time or money?  Ask me, What do you get out of the Forum, Matt?  Go ahead, ask me!  I will tell you:

  1. An opportunity to take your practice to the next level.  Although I had been a member of this ABA group since I graduated from law school, I did not get involved for the first 8 years of my career.  Yep, I paid annual dues and did not go to one single conference. Call it an expensive newsletter subscription!  Then, in 2006 one of my partners challenged me to get involved or get out.  That decision four years ago was one of the catalysts to take my practice to the next level.  I made commitment to attend at least one conference a year, establish relationships within the industry, and get involved in the Forum’s work.  In the years since, I’ve had tremendous speaking and writing opportunities.
  2. An opportunity to meet and work with the top construction lawyers in the nation. Once I jumped into the Forum’s activities, primarily by joining one of its twelve divisions, I began to meet many of the “construction lawyer greats” who I had read about in various construction publications (like construction-writing-guru Patrick O’Connor) or who acted as an arbitrator in multi-million dollar disputes (like dispute-arbitrating-Superman Adrian Bastianelli). I am honored to have worked with some of the top construction lawyers who I have met through the Forum.
  3. An opportunity to contribute to the construction industry.  Contrary to what my wife thinks, we do a lot more than travel, eat and drink at Forum events.  The first year I got involved in the Forum, I volunteered to coordinate and help publish Division 10’s Construction Law Update, which was a compilation of case law and legislation affecting the construction industry.  That first year we had contributions from 35 states.  Fast forward to 2009-2010, and we had all 50 states, plus Puerto Rico, plus an update on environmental and federal legislation affecting the construction industry.  Below are copies you can download.

 

Download Construction Law Update 2006

 

Download Construction Law Update 2007

 

Download Construction Law Update 2008

 

Download Construction Law Update 2009

 

For the non-attorneys, thanks for your indulgence in reading this post.  Perhaps you can review what’s been happening in your state over the past few years on the construction legal front.

For the attorneys, now is the time to get involved.  Make the decision to get out of your comfort zone and meet some great construction lawyers and consultants by attending a Forum meeting, by joining a division, or by putting your name into the hat as an author or speaker.  You can even contribute to the 2010 Construction Law Update by sending me an email.  And don’t forget, the Forum is Twitter (@ABAConstruction) and LinkedIn.

Since I only had a few minutes to review my RSS feed this morning, I skipped over hundreds of headlines.  But the following words caught my attention: "New federal program helps defray cost of adopting Building Information Modeling."  I thought someone finally got it right in our Congress!  But, alas, when I clicked through the hyperlink, I learned it was a federal program in Canada.

Lessons from the North

The Canadian program.  According to the Daily Commercial News and Construction Record, the National Research Council Canada is providing financial support to qualified small and medium-sized Canadian companies under its industrial research assistance program for BIM investment. Eligible expenses include in-house salaries and consultant costs that cannot be passed on to clients. Up to 75 per cent of project costs can be funded, with a maximum of $50,000.

A spokesperson with the Canadian program confirmed what we all know (i.e., that implementation of BIM is a large investment for some companies).  According to the spokesperson, "They find it difficult, especially in uncertain economic times, to commit to the long-term costs associated with the intense learning process.”

What’s happening in America?  According to a McGraw Hill report last summer, half the industry is behind BIM technology. We also know that over the past couple of years many states like Texas and Wisconsin are requiring BIM on certain public projects.  At the Federal level, GSA has been a leader in implementing BIM technology on a number of projects. 

So, the real question is whether there is going to be some investment dollars to help small businesses make the transition?  Are you aware of any such programs in the United States?

Image: jacob earl