Schinnerer's RM Blog - construction tag

Gazing into the Future

Tue, 01 May 2012 12:39:00 GMT

“It’s alive, it’s ALIVE.” No, we’re not talking about Frankenstein monsters. We’re talking about the possible next generation of buildings. The SmartPlanet blog recently ran a piece on the future life of buildings and how these buildings will be loaded with sensors that automatically adjust to the environment around them. The Media-ITC building will use “a nitrogen based fog and smart temperature sensors that collect information about the outside environment." The sensors will cause cushions to "adjust, inflate, deflate, and become opaque.” These sensors are only part of a network that monitors the entire building, making it function like it has a living skin. This particular building is only one of many new designs using cutting-edge technology and construction techniques to bring buildings into a modern urban environment.

Architectural Billings Point to a Recovery

Tue, 13 Mar 2012 11:53:00 GMT

Design professionals take heed; it may be that the economy is headed towards a recovery. For the third straight month, the Architectural Billings Index indicated that U.S. construction activity was headed towards a recovery. The Architectural Billings Index was 50.9 in January and a measure over 50 marks expansion; forecasting U.S. construction spending 9 to 12 months ahead. AIA Chief Economist Kermit Baker noted that the encouraging indicators are reflected in most regions of the country and across major construction sectors.

AIA's Stalled Projects Database

Tue, 28 Feb 2012 12:50:00 GMT

Unless you’ve dropped out of society for awhile, you’ve no doubt heard about the ongoing stagnation of the construction market. Projects have either stalled or are abandoned at the drawing table, and thousands upon thousands of workers are still unemployed. According to AGC, while the employment rate for construction workers recently hit a two-year high, overall the construction industry’s unemployment rate is roughly double the national rate for all other markets.

Instead of requesting lawmakers to invest federal and state money on infrastructure projects, the AIA launched a stalled projects database in an attempt to match private and public investment money with projects in dire need of cash infusions. Design professionals can register projects they have worked on that have stalled and tell potential investors about the project. In turn, investors can sign up and tell design professionals about the types of investments they make. The database enables both sides to find matches that make sense. As of January 19, a little more than two months after initial launch, the database had 36 projects registered with a combined worth of more than $1.2 billion.

Finding financing for these projects could have a profound impact on the construction job market. As noted in one of the AIA’s press releases:

According to a study by George Mason University economist Stephen J. Fuller, each $1 million in new construction spending supports 28.5 full-time, year-round-equivalent jobs. If each of the projects listed in the database obtained financing, according to this equation, 28,500 jobs could be created nationwide.

It’s easy to see why this database could prove to be an important part of rebuilding the weakened economy.

New Resource Guide from AIA

Wed, 20 Apr 2011 12:45:00 GMT

In 2007, the AIA published standard owner-architect agreements that required the architect to communicate with the project owner on sustainable design alternatives. While this raised the requirements placed on architects and, mostly likely, the expectations of their clients who signed AIA standard contracts, there was a significant lack of guidance for architects on the contractual considerations unique to sustainable design and construction.

Into this void the ConsensusDOCS coalition introduced its Green Building Addendum that defined the goals, set out the expectations, and structured a delivery mechanism for green or high-performance projects by parsing out the roles of the owner, design firm, and constructor of a project.

Now, the AIA has announced that it will release AIA Document D503-2011, Guide for Sustainable Projects, including Agreement Amendments and Supplementary Conditions, which is meant to assist users of AIA documents by providing model language that can be used to amend or supplement key AIA contract documents for use in these types of projects.

According to the AIA, the guide will address the current state of sustainable design and construction, discussing issues and concepts, including:

Certification systems, codes, and legislation affecting sustainable design and construction projects;
Risks and responsibilities faced by project owners, contractors, and architects on sustainable design and construction projects; and
Recommendations for model language to assist the architect in developing a scope of services and to assist all project participants in appropriately allocating risks and responsibilities.

The AIA will not be selling the guide as part of its contract documents system; it will be available as a free download at www.aia.org/sustainableprojectsguide following its introduction in May at the AIA’s annual convention.

Construction Defect Claims Addressed in Recent Court Cases

Wed, 02 Feb 2011 13:33:00 GMT

In construction defect cases it is often difficult to determine what damages were caused by negligent design and what damages were caused by faulty construction. Design professionals have coverage under a professional liability policy for damages caused by their negligent acts, errors, and omissions. Traditionally, damages caused by contractors have been covered by the contractor’s comprehensive general liability (CGL) policy. Although CGL policies excluded damage to the contractor’s “work product,” it covered damages to other property that resulted from the contractor’s faulty work. For example, a poorly constructed roof might result in water damage to the contents of a warehouse. The CGL policy would not pay to repair the roof but would pay for the damage to the contents. Several recent cases, however, may change an insurance company’s obligation to pay for these “other” damages. If the courts hold that these damages are not covered by the contractor’s CGL insurance, contractors may have to pay these claims out of their company’s personal assets. This could result in design professionals becoming bigger targets with “deeper pockets” due to the availability of their professional liability insurance policies.

These cases have caused the courts to address the issue of whether or not construction defect claims constitute an “occurrence” under a CGL policy. In Crossman Communities of North Carolina, Inc. vs. Harleysville Mutual Insurance Co. the Supreme Court of South Carolina found that an “occurrence” is an accident that occurs by chance with unintended and harmful results. The court ruled that there was no “occurrence” when a contractor’s faulty workmanship on a condominium project resulted in water intrusion because the water intrusion and ensuing damage were foreseeable consequences of the faulty workmanship and therefore not covered under the contractor’s CGL policy.

However, a similar case in Colorado was overturned by the state legislature.

A recent case in Hawaii (Group Builders, Inc and Tradewind Insurance Company, LTD vs. Admiral Insurance Company and National Interstate Insurance Company) also held that construction defect claims do not constitute an “occurrence” under a CGL policy. Interestingly, however, the majority of insurance carriers in Hawaii have not been denying coverage to contractors. There is speculation that the carriers are doing this so that the state legislature does not become as involved as it did in Colorado.

More than ever, design professionals should use sound risk management practices when selecting new projects—especially condo projects. Design professionals should insist upon providing full construction phase services and should urge developers to retain contractors using qualifications-based selection procedures.

It will be interesting to see if the courts in other states follow suit.