Yesterday, the Design Build Institute of America (DBIA) released three position statements that were approved during the April 19, 2010 meeting of its Board of Directors. According to its website, DBIA promotes the value of design-build project delivery systems and teaches the effective integration of design and construction services.  DBIA’s position statements on these issues include the following:

Best Value Selection

  • DBIA recommends that the basis for evaluating "best value" design-build proposals should be "clearly articulated by the owner in the request for proposals" and "used in making the award."
  • Specific evaluation criteria should allow design-builders who are competing for the award to provide proposals that maximize benefits and optimize solutions to the owner’s needs.

Qualifications in Selection of a Design-Builder

  • DBIA recommends that the predominant factor in the selection criteria should be the design-build team’s qualifications rather than the proposed bid, estimate or price charged.
  • According to DBIA experiences, the lowest initial contract price does not necessarily equate to the best value to the owner.

Integrated Project Delivery (IDP)

  • IDP refers broadly to an approach in which key participants collaborate on the project from inception to completion.
  • DBIA "actively" promotes integrated project delivery principles.
  • Although the IPD multi-party model seeks to achieve effective project integration, DBIA believes that most owners will find traditional design-build to be a more flexible and practical option.

The full text of the DBIA position statements as approved by its Board can be found on its "Position Statements" website.

Many of you have seen the devastation on the news about families all over Middle Tennesse who have displaced from their homes. Two of the groups that have received little to no attention in the media are the homeless and lower income populations throughout Nashville. Tent City has been destroyed and these people have lost everything. The mobile home park across the street from the Fairgrounds (where two elderly people died) has been completely wiped out.

A number of homeless groups and ministries have set up an emergency center at Woodbine Presbyterian (the corner of Nolensville and Thompson Lane) for these people to come eat, get a shower and some clean clothes.  We are in need of the following items:

  • Tents
  • Sleeping bags and blankets
  • Toiletries (soap, toothpaste, tooth brushes, deodrant)
  • Towels (wash clothes, hand towels, bathing towels)
  • Bottle water and juice
  • Snacks (jerkey, nuts, dried fruit, crackers, etc.)
  • Gift cards (restaurant, food, phone, Walmart, etc.)

If you are local and can help with any of the above items, please let me know.  Please pass on my contact information to your friends and family. Thanks.

Whenever a 100-page legislative or legal report is released by an agency, association or group of individuals, the best place to go in the document is the Summary or Findings sections.  So, yesterdary, when the USGBC, AIA, SMACNA and other groups issued its 93-pager entitled Using Executive Authority to Achieve Greener Buildings: A Guide for Policymakers to Enhance Sustainability and Efficiency in Multifamily Housing and Commercial Buildngs, I flipped straight to that place in the document.

The report presents a number of options that the Administration can do right now … without seeking any new funds or authority from Congress … to enhance energy efficiency and sustainability of buildings.  As noted in the Executive Summary, some of the most promising options with the largest reach include:

  • Reforming appraisal and underwriting practices at Fannie Mae and Freddie Mac;
  • “Greening” federal banking regulations;
  • Promoting flexible FHA insurance products;
  • Integrating energy efficiency and sustainability criteria into competitive grants and funding;
  • Strengthening minimum property standards for federal housing and economic development programs to reflect energy efficiency and sustainability standards;
  • Improving performance standards applicable to federal buildings and leases;
  • Refining guidance applicable to the energy efficient commercial buildings tax deduction and the national historic preservation tax credit;
  • Using SBA funding to support small business energy efficiency investments; and
  • Streamlining Title 17 loan guarantees to make them suitable for buildings.

What do these options mean for private developers and contractors? As a preliminary matter, it is interesting to see the semi-diverse group of associations (including the USGBC, AIA, BOMA and SMANCA) who support stronger building codes, appliance standards, building labeling, and requirements and incentives for increased energy efficiency. 

I think the real significance of the report for the "green construction" industry is the identification of programs that can spur jobs, investment and development, while at the same time working toward energy efficiency:

All told, the programs identified in this report have the potential to directly provide or facilitate over $72 billion in funding or loan guarantees,2 and can leverage hundreds of billions of dollars in private investment through instruments such as mortgage insurance and regulation of the real estate lending market. 

According to the contributors of the report, even a fraction of this funding can have an impact on availability of green construction projects, which directly affects investment and jobs.

In the weeks leading up to the ABA Forum on the Construction Industry’s annual meeting in Austin, Texas, a number of construction attorneys and I were feverishly reviewing submissions for Division 10’s annual Construction Law Update.  The document is a compilation of cases and legislation affecting the construction industry.  The updates are provided throughout the year by attorneys all over the country.  This year, Division 10 is pleased to report that we received updates from 51 jurisdictions, as well as a number of Federal laws and regulations.

The following are examples of the types of information that you will find in the Construction Law Update: Cases and Legislation Affecting the Construction Industry (2009-2010):

  • In Holcim (US), Inc. v. Ohio Casualty Ins. Co., __ So.2d __ (Ala. Nov. 13, 2009), in responding to a certified question from the Eleventh Circuit Court of Appeals, the Alabama Supreme Court took the opportunity to discuss the current state of Alabama law on indemnification. The case arose from a construction site injury to the employee of a genera! contractor which had agreed to indemnify the owner. The Court repeated the principle that Alabama law permits parties to enter into valid indemnity agreements allowing indemnitees to recover indemnity even for claims resulting solely from the negligence of the indemnitee. Moreover, as a new matter, the Court held that parties may validly agree to an indemnity agreement based upon proportional fault, even though Alabama common law does not permit contribution among joint tortfeasors
  • Ark. Code Ann. § 18-44-113, Assignment of Liens. Previously, assignments of liens were not enforceable against a property owner unless the owner had actual notice of the assignment. The statute was amended to state that the owner shall be considered to have actual notice if, within thirty (30) days of an assignment, a copy of the assignment is hand-delivered to the owner, mailed to the owner (as evidenced by a return receipt signed by the addressee, or a returned envelope showing a refusal of delivery or that the item was unclaimed), or delivered by any other means that provides written, third-party verification of delivery at any place where the owner maintains an office, conducts business, or resides.
  • In Weydert Homes, Inc. v. Kammes, 2009 WL 3153041, No. 2-08-0768 (2nd Dist. September 30, 2009) the court ruled that a contractor’s sworn statement pursuant to Section 5 of the Mechanics Lien Act, which was not notarized, rendered that contractor’s claim for lien unenforceable.

There are updates from all over the country.  In addition, we have included references to recent federal regulations and administrative rulings that affect the construction industry. If you would like a copy of the Construction Law Update, please send me an email.

2009 Update

2010 Update

I am in Austin, Texas this week attending the ABA Forum on the Construction Industry’s annual meeting.  One of the ways that I got more involved in the Forum was participating in the activities of one of the twelve divisions.  I am a member of Division 10: Legislation and Environment, which helps assemble information regarding case law and legislation affecting the construction industry, including environmental trends. 

Austin's First LEED Platinum Home

On Thursday morning, our division will host a breakfast with a presentation by LaVerne Williams, who designed Tonalacalli, Austin’s very first LEED Platinum home in Austin. You can check out the project at: www.firstaustinleedhome.com.  Some of the features of the home include:

  • Official First Certified LEED® Platinum Project in Austin; 
  • Official First Certified LEED® Home in Austin; 
  • Five-Star level rating (Austin Green Building Program’s highest possible rating)
  • Intentionally designed for Passive Sustainability… i.e., to have the ability to naturally maintain relatively comfortable livable conditions for the occupants during times when there may not be power or water or food available from off-site sources; 
  • Green building features include rainwater harvesting; solar water-heating; high-efficiency HVAC system; sustainable site development; and environmentally preferred product use.

In addition, the project was awarded 3 additional Innovation Design credits beyond the maximum of 8 credits available in the program.  If you are in Austin this week, then stop by the Division 10 breakfast on Friday morning at 8:00-9:30 a.m.  Hope to see you there.

Folllow @matthewdevries on TwitterTweet … Tweet … Tweet!  No, I am not cat-calling or whistling at you.  I am tweeting from the ABA Forum on the Construction Industry’s annual meeting in Austin, Texas.  The program chairs have set up a Twitter account for the conference.  You can follow @forumaustin or search the hashtag #forumaustin.  If you want to follow my Tweets, you can do so at @matthewdevries.  Also, make sure to send me an email or message if you want to meet up.  And now, to the program schedule:

The Age of Turbulence: Managing Money Issues in Construction

  1. From Project Concept to Funding: Where Do You Get the Money?
  2. Shaking hte Money Tree: Funding Our Way Out of the Infrastructure Crisis
  3. The Inside and Out of Public Private Partnerships
  4. Foreign Exchange: The 10 Commandments for Successful Execution of International EPC Projects
  5. Accounting for Construction Lawyers
  6. Realizing “Value” from Value Engineering: Costs, Benefits and Legal Issues
  7. Damages Beyond the Contract: Tort and Statutory Liabilty for Architects, Engineers and Contractors
  8. The AACE Recommended Practice for Forensic Schedule Analysis
  9. Pursuing Payment: Damned if You; Damned if You Don’t
  10. Walking the High Wire While Juggling: Strategies to Manage Litigation Costs and Meet Client Expectations
  11. Law and Life Series: Making the Business Case for Diversity in the Practice of Constructoin Law
  12. Consequential Damages in the Current Economic Climate: A Guide to Recovery and Avoidance
  13. Pre- and Post-Judgment Collection Remedies: Show Me the Money!
  14. When to Terminate the Client: It’s An Ethical Question

That’s a packed schedule for three days.  Let me know if there is a specific session you want me to attend.  I will be your proxy and do a special post on Friday.

 

Today’s post is by Craig Mangum, a fellow construction attorney with Smith Cashion & Orr.  Craig has an undergraduate degree from Boston College and a law degree from Florida State.  He also worked with the Construction Industry Licensing Board at the Florida Department of Business and Professional Regulation.

A bill to raise the building and permits fees currently charged by the City of Nashville is headed for its third and final reading on Tuesday, April 20, 2010.  According to Terry Cobb, the Department of Codes and Building Safety Director, the increase is necessary to achieve “full cost recovery for construction related services." (pdf) 

The Department of Codes commissioned a private company, Maximus, to perform a study of whether the fees charged by Nashville were appropriate and in line with other jurisdictions. The study showed that a 30% increase in fees is necessary to achieve “full cost recovery.”

Interestingly, the Department of Codes provided a comparison of fees charged by 14 peer communities. The comparison demonstrated that Nashville already has some of the highest fees for the selected cities and that the proposed fees would send Nashville to nearly the top of the list. (Fee Survey .pdf).  Indeed, some of the proposed fees are three and four times the amounts charged by cities such as Knoxville, Louisville, and Austin.

Maximus stated in its fee analysis that:

Admittedly, comparisons can help Metro leaders understand the market environment to help make market-based or political decisions, but such comparisons do not reveal any objective information or identify the true relationship of the fees to costs to help make cost-based decisions. (Code Analysis .pdf)

According to the third-party company, these figures can be misleading and that a more in-depth analysis would be necessary to truly compare the fees charged by the fourteen cities.

However, a closer look at the numbers by any layperson demonstrates that the already high fees in Nashville may reach even greater heights.  If the Department of Codes is going to commission another study, perhaps it would be more beneficial to see if building codes departments in other cities operate more efficiently.  In other words, Nashville may be able to reduce the costs and thereby forego any increase in fees. Perhaps these other peer cities just do it better.

The Obama administration is scheduled to issue a final rule today that allows federal agencies to require public contractors to use public labor agreements (PLA) on large public construction projects. PLAs are collective bargaining agreements that establish the terms and conditions of employment for a specific construction project.  They have been used on private jobs, as well as state and local projects, including the construction of schools, hospitals, roads, bridges, power plants and airports.  The rule was first issued as Executive Order 13502 (pdf) "Use of Project Labor Agreements for Federal Construction Projects." The final rule due out today implements the Executive Order. 

What are the benefits of PLAs? According to Jared Bernstein, a White House economist who writes at the Middle Class Task Force Blog, PLAs provide "structure and stability" to large construction projects:

PLAs also help ensure compliance with laws and regulations governing workplace safety and health, equal employment opportunity and labor and employment standards. The coordination achieved through PLAs can significantly enhance the economy and efficiency of Federal Construction projects.

Bernstein reported that as of last summer, 21 out of 25 major Department of Energy construction projects were (or slated to be) covered by PLAs.

Sounds good for the construction industry, right?  Not according to a number of critics, including Rep. John Kline (R-MN), the U.S. House Education and Labor Committee’s senior Republican member, who warned that the new rule "will reduce competition and drive up costs for taxpayers."  Kline pointed to the U.S. Department of Labor’s decision last year to cancel a Job Corps Center construction project in New Hampshire as evidence of the dangers PLAs pose to federal job creation and project efficiency. The New Hampshire project was canceled after a local contractor raised a legal challenge to the project’s PLA requirement, arguing it was discriminatory and would disqualify most contractors in the state.

Other critics, such as the Workforce Fairness Institute, suggest that the rule forces small businesses "to adhere to costly and non-competitive schemes, [which] will only result in lost jobs."  According to Katie Packer, executive director of WFI, “[e]nding fair and open bidding for federal contract work will disqualify employers from competing and increase the costs of projects just as our nation’s debt skyrockets."

Finally, groups like the Associated General Contractors of America flatly oppose any government mandated labor agreement, primarily because they negatively impact small companies, non-union companies, and disadvantaged businesses who frequently become excluded from contracting opportunities by such agreements.

With the release of the new iPad this past weekend, there is no better time than now to share some of my favorite applications for the construction industry.  Of course, these would probably look better on a brand new iPad (… Hint, hint, wifey dear … Who am I kidding? She doesn’t read this junk …), but you can definitely find them on my iPod Touch. 

Favorite iPad Apps

In no particular order, here are some of my favorites applications:

  • The new AEC Info iPhone App provides architectural, engineering and construction content through an easy-to-use reader.  You can find content separated in categories for News, Green, Marketing, and Law.  You can view the articles through the application or through Safari.  You can also share articles via email or Twitter with a simple click.  There are numerous content providers, including: Best Practices Construction Law,  Engineering News Record, and AGC Smartbrief.
  • gUnit by Axonic Labs is a must-have conversion tool for those dummies like me who went to law school rather than engineering school.  gUnit helps convert the following unit categories: Area, Energy, Temperature, Time, Length, Weight, Speed, Pressure, Power and Volume.
  • Although I have not used it, Carpenter’s Helper comes highly recommended if you need a construction calculator that can perform normal, unit and roof calculations.  The Professional version contains memory bank and conversion features not available on the Lite version.
  • In our multi-cultural society, what project worksite exists without an array of languages.  Wanna invite your staff to lunch for a meeting, but don’t know how to say it in Spanish? Try the Free Translator: … Vamos a comer y hablar sobre el trabajo.  Don’t have an iPhone, then try Mike Brittain’s Mobile Translator that will work on any mobile device.
  • The iHandy Carpenter is just a fun tool for a construction executive or lawyer, although it is probably more useful for the guy out in the field needing a level, a plumb bob, a ruler, or a protractor.
  • And finally, take a look at the LEED Green Associate Practice Exam & Flash Cards.  I used the earlier version produced by greenexamprep.com to study for (and pass) the new construction v. 2.2 LEED AP test in June 2009.  This one gets the same reviews and has some really good information.

Update:  Right after I published this post, I saw an article in ConstructionWEEKonline.com that featured a new construction app called goBIM, which was designed by Ian Keough, a senior technical designer at international engineering consultancy Buro Happold.  The application supposedly allows the user to view BIM on iPhones and iPads and, thus, in remote locations including on site.  I have not reviewed it yet, but I will let you know my thoughts later.

What are some of your favorite iPhone and iPad applications? 

My children have been mad at Mother Nature over the past month.  One day … jeans, turtle necks and jackets.  The next day … shorts and flip-flops.  At least in the South we have not had to deal with 30 inches of snow like on the East Coast.  That kind of weather can cripple a construction project and cause months of delay to the schedule.

Weather Delays on Construction Project

As Spring approaches, how do you address the impact of unusually severe weather?  Traditionally, the parties’ construction contract will dictate who bears the risk of loss in these types of situations.  Here are some general rules:

  • The contractor is usually entitled to additional contract time, but not additional compensation for weather delays.  The AIA contract documents provide that "if adverse weather conditions are the basis for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction."  The ConsensusDOCs provide that "if the Contractor is delayed at any time in the commencement or progress of the Work by any cause beyond the control of the Contractor, the Contractor shall be entitled to an equitable extension of the Contract Time. Examples of causes beyond the control of the Contractor include, but are not limited to, the following: … adverse weather conditions not reasonably anticipated …"
  • Delays must be attributable to "unusually severe" weather or weather "not reasonably anticipated."  Of course, by its very nature, such a claim will be factually driven. The contractor should be prepared to establish this by reasonable documentation, such as weather data from the National Oceanic and Atmospheric Administration.
  • Weather analysis should be geographically limited.  Having moved from Washington, D.C. to Nashville in 2006, I can appreciate this point.  The entire Middle Tennessee closes down, including the government and schools, at the slightest hint of snow (…exaggerated slightly …), but it takes 30 inches in D.C. to paralyze the roads and commuters.  The point is that "unusually severe weather" on a Nashville construction site may be different than a site in the nation’s capitol.
  • The delays must actually impact the schedule.  While you may think that down-time due to weather should automatically entitle the contractor to a time extension, it will depend largely on the contract provision addressing weather delays. You will have to determine whether the inclement weather affected material delivery, access to the site, safety measures, etc.

As with most other issues involving time and money, the parties’ contract will determine what happens when Mother Nature refuses to cooperate with your construction schedule.