There are many times when a general contractor finds itself in a situation where contractual provisions put it in inconsistent positions against the owner and one of its subcontractors. By protecting itself with proper contract provisions, the general contractor can limit its exposure to a subcontractor in the event there is a dispute between the general contractor and the owner concerning the same subject matter as the dispute between the general contractor and the subcontractor.    

A common, yet frequently overlooked, cause of increased project and construction costs occurs when there is a conflict or inconsistency between the terms of the prime contract and subcontract. In an effort to avoid conflicting or inconsistent contractual terms, general contractors often attempt to bind its subcontractors to certain key terms set forth in the prime contract, such as terms concerning payment, procedures for seeking payment for extra work, damages and dispute resolution.  

Federal agencies have conducted many studies in the past five decades to collect data regarding labor industry productivity. Although labor output overall has continually increased, especially in manufacturing, productivity in construction has steadily declined beginning as far back as the 1960s. A study by Stanford University Civil and Environmental Engineering Research Professor Emeritus Paul Teicholz found that the U.S. construction industry’s labor output has been experiencing declining productivity at a rate of roughly 0.32 percent per year from 1964 to 2012. 

Not surprisingly, there are a range of theories for the cause behind the decline in productivity. Some studies reveal there is a lack of consistent engagement between construction project stakeholders, which has made the flow of information uneven, causing chaos. Others indicate that drawn-out contracts and lengthy legal processes prohibit productivity across construction organizations. The Mechanical Contractors Association of America (MCAA) list, “Impacting Factors on Construction Crew Productivity,” outlines the factors affecting labor productivity including mobilization (time wasted moving from job to job) and tools (insufficient quality of equipment).

Building enclosure commissioning (BECx) is a relatively new practice and is classified as a sub-discipline under the overall commissioning process. Following the success of traditional MEP commissioning, BECx has begun to define its own identity in part through standards such as ASTM E2813-12e1 and guidelines such as ASTM E2947-14. It is a comprehensive process that starts in design and continues beyond substantial completion to verify the performance of the enclosure against the owner’s project requirements and basis of design. 

Discipline-Specific Commissioning

For many years, whole building commissioning included a select list of systems – such as mechanical, electrical, plumbing, and controls – and BECx was a high-dollar service reserved for the elite institutes and high-performance critical projects. Since then, BECx has evolved from an afterthought to an “add alternate,” and in the near future it will be fundamental to the whole building commissioning process. 

Arbitration is an increasingly popular form of dispute resolution in the construction sector, and many standard contracts these days require its use in lieu of litigation. However, last November, the American Arbitration Association (AAA) and the International Centre for Dispute Resolution enacted the Optional Appellate Arbitration Rules, which now permit parties to obtain appellate review of arbitration awards. Simply put, these new rules remove the finality aspect of arbitration, which is what makes the process so appealing.

An arbitration award can typically only be set aside under extremely narrow circumstances involving corruption, fraud or misconduct or where the arbitrators exceeded their powers. But now, under the new rules, review of arbitration awards is permitted by an AAA appellate panel in situations involving alleged “material and prejudicial” errors of law and/or “clearly erroneous” determinations of fact. In other words, the door swings open wider when it comes to questioning the outcome of the arbitration. 

What happens when a new generation of workers collides with an antiquated existing office inventory? A new office development cycle is born, triggering extensive opportunities for the construction and design communities. 

Driven by demand from the  technology, advertising, media and information technology (TAMI) sector, companies are seeking modern workplaces aimed to target and attract young millennial talent and reinforce their brand, culture, productivity and morale. This proves challenging when much of the existing office inventory was designed for another generation of users whose different work habits and priorities shaped the design features of the traditional office space. To meet the needs of the growing segment of TAMI tenants, renovations to older buildings are skyrocketing, generating a surge of new construction projects and a need for creative design, modernized building systems and cutting-edge technology upgrades. To seize on the increased design and construction opportunities resulting from this growing need to update commercial office space, it is important to understand both the existing market and the needs of the new tenants driving these projects.

Modular construction – the assembly of prefabricated modules into a final structure – has been in use the U.S. since at least the early 1900s. Lately, however, the interest in going modular has increased due to pressure on the construction market to produce structures faster and cheaper. The potential advantages of modular construction include increased quality control, shortened schedule, labor savings, material cost savings and improved site safety. However,  modular construction also presents unique legal and regulatory issues.

Which Codes Apply?

First and foremost, applicable construction and safety codes must be considered. Some state agencies have long accounted for modular builds. For example, Florida adopted the Manufactured Building Act in 1979, which describes inspection criteria to be implemented at the manufacturing stage. In contrast, the New York City construction code does not include a specific section on modular construction. Instead, the New York City Department of Buildings (DOB) has established temporary guidelines that interpret the existing code for application to modular construction. Owners and builders should be aware of potential uncertainties in the application of code provisions to modular work and should contract around potential delays and other impacts that may result. The same applies to safety codes. For example, if building modules requires work in “confined spaces” as defined under Occupational Safety and Health Administration (OSHA) regulations, employers must comply with the appropriate permitting procedures and establish training programs and facilities to control potential hazards. 

The construction world is just starting to explore the commercial use of drones – or unmanned aerial vehicles (UAVs). These are smaller aircraft that are often controlled by an operator on the ground and can stay aloft for many hours. Previously, UAVs were used to enhance public safety, support agriculture, help the environment, monitor the climate and mitigate disasters. 

As drone use continues to evolve, the Federal Aviation Administration (FAA) has allocated $63.4 billion for the modernization of the country’s air traffic control systems, as well as an expansion of airspace. Additionally, The FAA forecasts that the number of commercial drones could reach 7,500, and other reports estimate the number could be as high as 20,000 by 2020.

Managing supply chains in the construction industry can be very challenging. Roadblocks have a tendency to develop throughout the chain, which leads to higher project costs, wasted materials and a lower quality of the completed structure. But these pain points can be avoided by making certain choices in logistical planning.

Responsible sourcing is continually becoming more achievable, thanks to new sustainable materials and technologies. This focus not only improves the building process, but also the overall end product. From choosing building materials sourced in innovative ways to reducing carbon in the transport of those materials, there are many facets of supply chains that can be improved.

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