On February 26, 2015, Roy Cooper of Arcadis and I reprised our popular Workshop for the University of Hartford’s Construction Institute, “Managing Legal Exposures.” One of the slides in our presentation quotes a wise jurist on the subject of construction project scheduling:
Except in the middle of a battlefield, nowhere must men coordinate the movement of other men and all materials in the midst of such chaos and with such limited certainty of present facts and future occurrences as in a huge construction project…Even the most painstaking planning frequently turns out to be mere conjecture, and accommodation to changes must necessarily be of the rough, quick and hoc sort, analogous to ever changing commands on the battlefield.
Blake Constr.Co. v. C.J. Coakley Co., 431 A.2d 569 (D.C. App. 1981).
Of course, the stakes on even the largest construction projects are not nearly as significant as those on the battlefield. That said, nothing creates as much exposure to a construction project team as the failure to manage and promptly address scheduling changes. Similar to the battlefield, the one thing that can be anticipated is the unanticipated. Those who are successful are those prepared for the unexpected.
Risk mitigation for project delays can and should be addressed as early as the selection of the project team, and in the preparation of the contract documents. The following should be considered long before the “chaos” of construction:
- Selection of Project Team and Project Delivery. On more complex projects, team up the construction and design professionals early. This serves two purposes. First, it establishes prior to “boots hitting the ground” whether the team is made of problem solvers or problem makers. If there are issues with one or both team members, it is better to make adjustments early. Secondly, the construction team can better assist the design team with long lead items, constructability issues, value management and other potential scheduling factors well before they become a problem.
- Strong Reporting. Create protocols early for the level of detail in reporting. The Contractor should provide a template of its daily and monthly reports prior to the start of construction for owner and design team input. Good reporting leads to addressing potential scheduling issues earlier. Nothing creates conflict more than the disclosure of an issue after it is too late to be addressed.
- A Clear Definition of What is “Unexpected.” The parties may wish to consider what constitutes an event giving rise to delay. This may sound counter-intuitive, but parties can contractually agree upon what is not contemplated. If weather is to be an issue, the parties may wish to define “abnormal weather” and what weather conditions are not contemplated in the original pricing. Parties can also factor the impact of labor issues, escalation, and delays by government authorities. A good “force majeure” clause will not only address what constitutes circumstances beyond the parties control, but how to address those circumstances should they arise, and what is recoverable if a delay is caused by unforeseen events.
- Proactive Meetings (not e-mails or letters) to Address Changed Circumstances. All of us are accustomed to communicating through e-mail and text. While these are useful tools, there is no substitute for regular face-to-face meetings among all stakeholders. Create a contractual provision requiring that all members of the project team meet regularly to address changed circumstances and create constructive solutions. Deferring changes to the end of the project invariably leads to conflict.
- A Fair and Efficient Claims Procedure. Much like war, conflict among stakeholders is inevitable on construction projects. Addressing the protocols on how to deal with conflict is much easier before a dispute arises. Create a step by step procedure that leads to expedited and cost effective dispute resolution. As an initial step, remove those closest from the circumstances that led to the dispute, since they likely have an emotional attachment that can taint their ability to reach a fair resolution. If possible, agree before the project starts on a third party neutral whom the stakeholders trust to offer his or her own guidance on a resolution. Nobody wins if the parties are in court years after the project was completed.
Much as in war, the most effective way to control chaos and calamity on a construction project is to be prepared for those conditions in advance.. Project teams are well advised to define potential project concerns up front, and to create the appropriate mechanisms to address the unexpected well before battle.