ECA Newsletter 6-26-17
John’s Soapbox
Sword Rattling
As many of us are aware, the project that Bay Cities tackled in Healdsburg has some of the worst soils conditions of any area in Sonoma County. Add to that the wettest winter in the history of Sonoma County and mix in tight quarters and lots of traffic control constraints, and you have a recipe for a project that is going to be finished later than expected.
In a recent Healdsburg Tribune article, the City spokesperson is seemingly trying to present, judge, and sentence the Contractor all at once. Click here for the article-
At $1,000/day Liquidated Damages, being a year past the anticipated finish date indicates there will be great difficulty in amicably working out who owes what to whom. Most of us Contractors have had one or more jobs like this that just seem to suck the life right out of your crews, your relationship with your bonding company, and with your shareholders too. Although Bay Cities is not an ECA member, I don’t wish a conflict like this seems likely to be on anybody!
I have neither reviewed the Healdsburg Contract Docs, nor held extensive interviews with anybody closely associated with the project, but I have had several of these types of project when I was a contractor. Sometimes the conflict or dispute is unavoidable, sometimes it is avoidable. I always sought to avoid the dispute if possible. But in reading this article on Bay Cities and Healdsburg, I thought it might be best to use my soapbox for my opinionated “rant”.
I always got the absolutely best outcome in any disputed delay or performance claims by doing the following:
- Being brutally honest about the causation of the time delay. We had a schedule to begin with, and trust me on this one, you are not going to get the City or Municipality to just hand you delay days if the delay was caused by a bad schedule to begin with, or a bad plan, or delays caused by anticipating you could do things in the wet months that are unrealistic. You have to ascertain if you are being delayed by your own failure, or if the owner has somehow not performed their duty and that has put your work into the rainy season or into an out and out delay. If it is your fault-FIX IT. Let the Owner know your plan to fix it by submitting your “crashed” schedule and then do not wait for the Owner to approve the schedule. It is ultimately going to be you spending the money, so “own it”.
- If you find the owner has caused the delay, you need to document and prepare the extra work backup to withstand court scrutiny. Too many times we tried to be the “nice guys” and give the owner a break by sharing in the costs and not spending the dollars to properly prepare a Claim. You are far better off “building your binder” and making sure you are including all that you are entitled to. If the owner directs you to do something that is not in the Contract, you say “yes sir, I will get that done for you” but you also make sure the owner knows, in writing, that you consider his/her request to be extra work and you may be entitled to additional compensation. “Stack” them up and you can always “horsetrade” at the end of the project. It doesn’t have to be adversarial. You are just doing your job and accommodating the owner’s requests.
- Never, ever, stop work. Stopping for a few hours is ok, but never demobilize and suspend the work. That is really bad for your pocketbook!
- If the job had subcontractors and suppliers involved, you need to make sure you wrote good subcontract agreements and purchase orders and tied them to reasonable performance timelines that they themselves have agreed to at bid time. If they were supposed to get submittals in to you within 4 weeks, and they take longer, put your foot down. You never know if the Owner is going to change their mind about that scope of work and you want to make sure the Sub or Supplier doesn’t use up all the “float” by you not demanding that the Project owns the float.
- Finally, do not hide the extra costs. Give them to the Owner as soon as you can. Be transparent. Be honest. Get what you deserve. And remember-if the delay was your fault, fix it. Do not be the “sword rattler”.
That’s All Folks!
John
