Comparing Contracts: A Review of the AIA 201 and ConsensusDocs - Part I
March 22, 2018 —
Michael Sams and Amanda Cox – Construction Executive, A publication of Associated Builders and Contractors. All Rights Reserved.Here’s a helpful comparison of and analysis of some important contract sections in the
AIA 201 (2007 and 2017 versions) and
ConsensusDocs (2014 and 2017 versions). While not intended to be all inclusive, this summary comparison of the contract documents will run as a three-part series. Part I covers Financial Assurances, Design Risk, Project Management and Contract Administration. Part II will cover Schedule/Time, Consequential Damages/LDs, Claims and Disputes/ADR. Part III will cover Insurance and Indemnification and Payment.
FINANCIAL ASSURANCES
- What assurances are there that the owner can pay for the project?
- The Contractor should have the right to request and obtain proof that the Owner has funding sufficient to pay for the Work. The provision should also provide that the Contractor may terminate the Contract if the Owner refuses to allow a review of funding documents, or should the Contractor reasonably determine that the Owner does not have sufficient funds to pay for the Work.
Relevant Sections:
- A201 2007 Section 2.2.1; 2017 Section 2.2.1-2.2.2 A201
- 2014 & 2017 ConsensusDocs 200: Section 4.2
AIA:
- Section 2.2.1 A201 2007 & 2017: Both editions require the Owner, upon Contractor’s written request, to provide, “reasonable evidence that the Owner has made financial arrangements to fulfill the Owner’s obligations under the Contract.” Thereafter, the Contractor may only request such evidence if (1) the Owner fails to make payments; (2) a change in the Work materially changes the Contract Sum; or (3) the Contractor identifies in writing a reasonable concern regarding the Owner’s ability to make payment when due. If the Owner does not comply, the Contractor may stop work.
- Additionally, A201 2017 Section 2.2.2 awards costs to the Contractor for demobilization and remobilization.
Reprinted courtesy of
Michael Sams , Kenney & Sams and
Amanda Cox, Kenney & Sams
Mr. Sams may be contacted at mpsams@KandSlegal.com
Ms. Cox may be contacted at ajcox@KandSlegal.com
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Trump Signs $2-Trillion Stimulus Bill for COVID-19 Emergency
April 06, 2020 —
Tom Ichniowski - Engineering News-RecordPresident Donald Trump has signed the massive measure approved by Congress aimed at helping laid-off workers, financially strapped companies and a stressed health care system as a result of the coronavirus outbreak.
Final congressional action came on March 27, when the House passed the bill by voice vote. President Trump signed it a short time later.
Tom Ichniowski, Engineering News-Record
Mr. Ichniowski may be contacted at ichniowskit@enr.com
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How VR and AR Will Help in Remote Expert Assistance
June 10, 2019 —
Aarni Heiskanen - AEC BusinessThe speed and quality of maintenance and repair are critical in the modern, technology-packed built environment. Consequently, these were considered in an experimental project that tested how remote expert assistance using VR and AR technologies could help improve the productivity of field service.
I’m in a hall overlooking white mountain tops. It’s snowing. In front of me stands an avatar that explains to me what we can do together in this virtual space. He jumps away but I can still hear his voice from behind me. He fetches a chair and hands it to me. I grab it and inspect it. The next moment, a video starts playing on the wall. Later, my host shows me how to draw in three dimensions, how to make sticky notes, how to share a PC desktop, and how to use other collaboration tools.
This experience took place at FAKE Production, a Helsinki-based digital image, animation, and VR/AR studio. With VR glasses and hand-held controllers, I had tried out Glue, their universal collaboration platform. This is a soon-to-be-released service that you can use with VR/AR gear and on mobile and desktop devices.
Glue is also one of the solutions tested in an experimental project called Expert assistance using VR and AR glasses. In this project, Sovelto, a Finnish educational company, wanted to explore the possibilities of using VR and AR solutions for field service. Over ten organizations took part in the project, which received funding from KIRA-digi, the national built environment digitalization program.
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Aarni Heiskanen, AEC BusinessMr. Heiskanen may be contacted at
aec-business@aepartners.fi
False Implied Certifications in Making Payment Requests: What We Can Learn from Lance Armstrong
January 20, 2020 —
Brian S. Wood & Alex Gorelik - ConsensusDocsIn April 2018, the Department of Justice announced a $5M settlement reached in its lawsuit against former professional cyclist, Lance Armstrong. While the fallout from Armstrong’s latently-admitted use of performance-enhancing drugs (“PEDs”) was well-publicized, including lost sponsorship deals, stripped Tour de France titles, and damage to his reputation, few were aware of Armstrong’s exposure to liability and criminal culpability for false claims against the government. The DOJ’s announcement reminded Armstrong and the rest of us of the golden rule of dealing with the government: honesty is the best policy. The corollary to that rule is that dishonesty is costly.
Armstrong’s liability stemmed from false statements (denying the use of PEDs) he made, directly and through team members and other representatives, to U.S. Postal Service (“USPS”) representatives and to the public. USPS was the primary sponsor of the grand tour cycling team led by Armstrong. The government alleged in the lawsuit that Armstrong’s false statements were made to induce USPS to renew and increase its sponsorship fees, in violation of the False Claims Act.
The Statute
Enacted in 1863, the False Claims Act (“FCA”) was originally aimed at stopping and deterring frauds perpetrated by contractors against the government during the Civil War. Congress amended the FCA in the years since its enactment, but its primary focus and target have remained those who present or directly induce the submission of false or fraudulent claims. The current FCA imposes penalties on anyone who knowingly presents “a false or fraudulent claim for payment or approval” to the federal Government. A “claim” now includes direct requests to the Government for payment, as well as reimbursement requests made to the recipients of federal funds under federal benefits programs (such as Medicare). Thirty-one states, the District of Columbia, and Puerto Rico have also enacted laws imposing penalties for false claims against state agencies and their subdivisions, with most of these laws modelled after the federal FCA.
Reprinted courtesy of
Brian S. Wood, Smith, Currie & Hancock, LLP and
Alex Gorelik, Smith, Currie & Hancock, LLP
Mr. Wood may be contacted at bswood@smithcurrie.com
Mr. Gorelik may be contacted at agorelik@smithcurrie.com
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Enforceability Of Subcontract “Pay-When-Paid” Provisions – An Important Update
June 15, 2020 —
Patrick McNamara - Porter Law GroupA California Court of Appeals opinion published earlier this month brings a change to payment bond claims brought by unpaid subcontractors and suppliers. The decision (Crosno Construction, Inc. v. Travelers Casualty and Surety Company of America) places limitations on a payment bond surety’s ability to rely on subcontract “pay-when-paid” language, stating that a payment provision typically found in subcontracts is contrary to the “reasonable time” statutory requirement and will not be enforced. This represents a major shift in California construction payment bond claim rights.
Plaintiff Crosno Construction, Inc. (“Crosno) was a subcontractor to general contractor Clark Brothers (“Clark”), who was principal on a public works payment bond issued by Travelers. The owner was a public agency district (“District.”) Crosno had completed most of its subcontract work when a dispute between District and Clark arose, causing the project to stop. Crosno then sought payment through a payment bond claim against Travelers. Travelers denied the claim, relying on the subcontract’s payment provisions and asserting the defense that it had no obligation to pay on the bond claim because the litigation between Clark and the District had not yet reached its conclusion.
Subcontract. The subcontract between Clark and Crosno contained a “pay-when-paid” provision stating that Clark would pay Crosno within a reasonable time after receiving payment from the District. In defining “a reasonable time,” the subcontract language provided that the time for payment “in no event shall be less than the time [Clark] and [Crosno] require to pursue to conclusion their legal remedies against [District] or other responsible party to obtain payment.”
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Patrick McNamara, Porter Law GroupMr. McNamara may be contacted at
pmcnamara@porterlaw.com
Williams v. Athletic Field: Hugely Important Lien Case Argued Before Supreme Court
June 17, 2011 —
Douglas Reiser, Builders Council BlogWell, it finally made it. The most important Washington lien case of recent memory was argued in front of the Washington Supreme Court on Tuesday, June 14, 2011. So, what should we all expect?
As I was reading through my RSS feeds this afternoon ? I was stopped dead in my tracks. Williams v . Athletic Field, the Division II case that has been a frequent topic here on Builders Counsel, has finally been argued before the Supreme Court. All of you who have been anxiously awaiting this day, you can check out the Supreme Court submissions by following this link.
The Williams case has been the center of attention for construction lawyers and construction organizations over the past year. Some have called for complete lien law reform, others have tried to patch a hole in the law. Now, we can expect a ruling from the highest court in the state. That ruling will have a major impact on whether the Legislature feels compelled to change lien law.
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Reprinted courtesy of Douglas Reiser of Reiser Legal LLC. Mr. Reiser can be contacted at info@reiserlegal.com
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Partner Jonathan R. Harwood Obtained Summary Judgment in a Coverage Action Arising out of a Claim for Personal Injury
December 22, 2019 —
Jonathan R. Harwood - Traub Lieberman PerspectivesOn August 16, 2019, Traub Lieberman partner obtained summary judgment in a declaratory judgment action involving a claim for coverage for a personal injury action involving injuries suffered on a construction site. The plaintiff in the underlying action was performing excavation in a basement of a building in Manhattan so the owner could install a pool. During the course of the excavation plaintiff fell 13 feet from a plank, into the excavated pit, suffering serious injuries. Traub Lieberman’s client issued a CGL policy to the building owner and the insured sought coverage for the suit under that policy. The insurer denied coverage based on an endorsement to the policy that stated the insured could only contract directly with a specified general contractor. The plaintiff was an employee of a subcontractor and the insurer believed the insured had contracted directly with that unapproved subcontractor. The insured denied it had done, contending the subcontractor had been hired by the general contractor identified in the endorsement.
Reprinted courtesy of
Jonathan R. Harwood, Traub Lieberman
Mr. Harwood may be contacted at jharwood@tlsslaw.com
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Meet the Forum's In-House Counsel: RACHEL CLANCY
November 16, 2023 —
Jessica Knox - The Dispute ResolverCompany: Lobar, Inc.
Email: rachel.clancy@lobar.com
Website: www.lobar.com
College: York College of Pennsylvania (Bachelor of Science in Marketing, 2001)
Graduate School: Florida Institute of Technology (MBA in Acquisition and Contract Management, 2004)
Law School: Penn State University, Dickinson School of Law (JD 2007)
States Where Company Operates/Does Business: Headquarters are in Dillsburg, PA; construction projects located in Pennsylvania, Maryland, New York, and West Virginia
Q: Describe your background and the path you took to becoming in-house counsel.
A: Before law school, I spent three years as a Contract Specialist writing construction contracts for the Department of Defense, Naval Facilities Command in New Jersey. I had no idea I'd eventually find my way back to construction. After law school, I spent five years in the business department of a local law firm handling corporate formations, a variety of commercial contracts, and learning some real estate law. After another four years in-house with a data and marketing company in Harrisburg, I accepted my current position with Lobar, where I've been for the last seven years.
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Jessica Knox, Stinson LLPMs. Knox may be contacted at
jessica.knox@stinson.com