11
BUSINESS NEWS BLACK CONSTRUCTION-TUTOR PERINI JOINT VENTURE AWARDED $38.3 MILLION P-324 9TH ENGINEERING SUPPORT BATTALION HEADQUARTERS PROJECT IN GUAM Tutor Perini Corporation, a leading civil, building and specialty construction company, announced that it, in a joint venture with its subsidiary, Black Construction Corporation, has been awarded a contract by the Naval Facilities
Engineering Systems Command, Pacific District, for the P-324 9th Engineering Support Battalion Headquarters Project at Marine Corps Base Guam. The scope of work includes constructing low- rise facilities to support the 3rd Marine Expeditionary Force, 9th Engineering Support Battalion. Buildings will feature reinforced concrete structural frame walls, floor, roof and a concrete shallow foundation system. The administration
building will include the battalion/ squadron headquarters and company/ battery headquarters, and will provide private and open offices, meeting rooms and miscellaneous support spaces. Work is expected to begin in the first quarter of 2025 with substantial completion anticipated in November 2026. The contract value will be added to the Company’s backlog in the third quarter of 2024.
A COMMON ERROR: MISTAKEN IDENTITIES. Frequently, these contracts misname the parties or reflect a complete lack of understanding of the construction process and the roles of those involved. For example, one recent contract between an engineer and owner, correctly described the engineer one time in the contract. Yet, afterward incorrectly referred to them as “architect.” In many cases, both architects and engineers are referred to as “contractors” and their professional services as “work.” Although lawyers have been educated to use precise language, the mischaracterization of the parties on the project can be particularly harmful – and costly – should a claim arise. Fact finders have a difficult enough time figuring out the roles and responsibilities on a project without having to navigate imprecise contract language. One trial involving delays and extras on a project that centered on a misunderstanding about an alternate paving detail resulted in a hung jury. Afterward, one of the jurors commented that they “thought the engineer could have paved earlier.” Construction is complex; it’s important to avoid making it even more difficult for someone outside the industry to understand by agreeing to ambiguous contractual language. What’s even more frustrating is when a prime design professional has already agreed to a bad contract and chooses to pass along all the unreasonable terms to a consultant. The design community should stand together to make sure their roles are understood and appreciated, which is why timely and precise communication with everyone involved in a project is critical to avoid any misunderstanding. Of course, it’s easy to blame the lawyers who draft and modify these contracts with onerous terms, misidentified parties, warranties, uninsurable standard of care definitions, liquidated damages, time is of the essence clauses, and prevailing party clauses. Certainly, they are the ones drafting the contracts and telling their clients the terms are “reasonable.” So, much of the responsibility for this situation rests with them. While it may be their job to try to shift as much of the responsibility as possible away from their client to others, the fact is without insurance coverage to back up that transfer or exposure they truly are not doing their clients a service. STARTING OFF ON THE RIGHT FOOT. It’s important to begin any new relationship based on mutual understanding, honesty,
and fairness. It may be helpful to get clients and their lawyers in a room together during the negotiation process to have civil discourse about the contracts. That can help get all parties started on the right foot. Designers can take a lesson from other professionals. Lawyers, medical doctors, accountants, and various other professionals also provide professional services. And they do so without telling their clients they are better than others, will advise or treat you perfectly, and without providing any guarantees. Indeed, professionals in all disciplines are expected to meet the standard of care for their industry, in other words not to practice their profession negligently. Under no circumstances would a lawyer guarantee a win in court, or any other type of outcome for that matter because they understand their professional liability coverage would not respond. Similarly, a lawyer would not agree to be referred to as a medical doctor or an accountant. Thus, in negotiating with current or prospective clients, try to appeal to fairness; appeal to coverage being in place should there be a problem on the project; appeal to whatever you can to make sure you are treated appropriately. If design firms communicate with each other, as well as with their clients, perhaps as an industry we can move back toward standard contracts. These contracts have been previously negotiated and agreed upon as being fair. Without a doubt, this approach is safer and far better for your business than being bullied into contracts that don’t reflect either the designer’s role or appropriate risk and responsibility. Although lawyers may represent an initial obstacle to fair dealing in these matters, the design community exacerbates the problem by agreeing to unreasonable contracts without objection. One of the more common arguments used to pressure designers during negotiation is that other firms will agree to the terms. Let’s try to make that argument more difficult by pushing back against confusing, unfair, and uninsurable terms. Lauren Martin is a risk manager and claims specialist at Ames & Gough. She can be reached at lmartin@amesgough.com.
THE ZWEIG LETTER OCTOBER 21, 2024, ISSUE 1558
Made with FlippingBook flipbook maker