David Scotti was asked to present at the ACBA’s presentation on Managing Manufactured System Risk in Construction Law.
This program included a one-hour roundtable discussion between David and other seasoned construction litigators, relating to appropriate risk allocation for manufactured systems that are specified in construction projects.
Click below to view David’s presentation, Growing Pains – Risks Associated with Growing a Company.
The AIA A201 General Conditions of the Contract for Construction (“A201”) is one of the most commonly used contract documents in the construction industry. It was first published in 1911 and the most recent version published in 2017 is the seventeenth edition. The A201 helped establish most of the general terms between the Architect, the Owner, the Contractor and Subcontractors. The A201 is generally used together with other AIA Form Contracts which together comprise the terms of the contract.
In reviewing the A201, you will not find a Force Majeure Clause or even the term “Force Majeure.” Force Majeure Clauses are used to allocate risk and address the concept of delay caused by events that are considered beyond a party’s control. Typical force majeure clauses provide that unexpected events such as natural disasters, terrorism, wars or other “acts of God” excuse a party’s non-performance of a contractual obligation. Force majeure clauses are intended to provide some level of relief from the negative effects of force majeure events, such as business interruption and supply chain disruption. Pennsylvania courts have required that the force majeure event must have been beyond the party’s control and not due to any fault or negligence of the non-performing party.
David is pleased to announce that he has recently been appointed to the Board of Directors of the Boys & Girls Club of Western Pennsylvania (BGCWPA).
The Boys & Girls of Western Pennsylvania is the largest and most comprehensive after school and summer camp provider in both Allegheny and Somerset counties. The BGCWPA serves several thousand youth between the ages of 4-18; 70% of their members qualify for free or reduced lunch programs. The goal of the BGCWPA is to provide every young person with the essential tools needed for a successful and bright future by doing whatever it takes to activate and advance their potential.
“I am so proud to have been provided with this opportunity to work with young men and women, and to contribute as best I can to their future development.
For more information about BGCWPA, please visit their website at www.bgcwpa.org.
As the full title states, it provides annotated analysis and comparison of the industry form contract documents. It serves as an invaluable resource offering topic-by-topic comparison of the forms of agreements from the AIA, the EJCDC, and ConsensusDOCS.
David is the Chairman of the Publication Committee for the FOCL and served as an editor of this latest edition.
Most construction lawyers are familiar with the American Institute of Architects (AIA), Engineers Joint Contract Documents Committee (EJCDC) forms of agreements, and the ConsensusDOCS forms. Now completely revised based upon the latest editions of these form contracts, this invaluable resource offers a topic-by-topic comparison of these forms by providing:
An easy-reference guide to how the AIA, ConsensusDOCS and EJCDC forms treat the most significant issues in owner/contractor/subcontractor and owner/design professional agreements
Proposed alternative language for situations where the form contract approach may not provide the best solution
List comparing the most significant provisions from each of these forms (on the CD-ROM)
Each chapter is organized by a topic that is addressed in each of the AIA, ConsensusDOCS and EJCDC owner/contractor/subcontractor or owner/design professional agreements. Chapters are then broken down into three sections. The first section provides general background about the topic, identifying in summary format the critical issues involved with that particular topic. The second section describes the relevant contract provisions in the form contracts that address the topic and compares them to one another. The final section provides alternative clauses for the practitioner to consider in addressing the topic at hand.
Consistent with the goals of the Forum’s Publication Committee, THE Construction Contracts Book (3rd Ed) is a concise, focused and practice-oriented book that should be on every construction lawyer’s bookshelf.
Scotti Law Group recently recovered $1.5 Million for a Pipeline Contractor who had performed construction work on a 70-mile long, 30-inch diameter natural gas pipeline that traversed three counties in eastern Ohio. The prime contractor was unable to pay its creditors, including the Pipeline Contractor. Scotti Law Group promptly prepared and filed a detailed payment bond claim on behalf of the Pipeline Contractor against the prime contractor’s bonding company.
The bonding company began to review the bond claim and asserted that it had 60 days to respond. With the time limits for mechanics’ liens due to expire within a few weeks, Scotti Law Group filed mechanics’ liens against the pipeline easements and the underlying fee simple property interests at seven locations along the pipeline where the Pipeline Contractor had performed its work. All property owners, the pipeline owner, the prime contractor and the bonding company were notified of the mechanics’ lien filings.
When the bonding company recognized that the Pipeline Contractor’s lien rights had been preserved, there was no advantage for the bonding company to delay payment. Within days, payment in the full amount of $1.5 Million was released by the bonding company to the Pipeline Contractor.
Bonding companies delay payments due to contractors by requiring that very detailed bond claim forms be completed and submitted along with substantial supporting documentation. Bonding companies further delay payment by questioning payment applications, change orders and other claim documentation. Contractors must be cautious when pursuing bond claims to make sure that their mechanics’ lien rights do not expire while bonding companies deliberate over when or whether they will release payment.
If payment from a bonding company is needed, contact the attorneys at Scotti Law Group for prompt, quality legal advice
Sometimes the law struggles to keep pace with the ever-changing needs and demands of the people. As a result, some very old and very puzzling laws are still technically in effect. Dozens of top-ten lists have been written on the most humorous of these laws—like a law in Florida about what parking fees apply to an elephant tethered to a parking meter—but in Pennsylvania one particular law can have a big impact on your next construction project.
The Separations Act of 1913 dictates that public construction projects of $4,000 or more must use separate contracts for services like plumbing or electrical work. Pennsylvania is one of only three states with a law like this, and since the contract requirements for public projects do not extend to private projects, The Separations Act of 1913 has generated quite a bit of controversy.
Speaking with John Baer of Philly.com, our very own David Scotti argued that this law increases project costs, saying, “If this was economically smart, you’d see the private sector doing it.”
And according to Baer, other industry insiders support this analysis, suggesting that public construction costs 10 percent more because of the law.
In Pennsylvania, when public Owners want to build, the Separations Act, 71 P.S. 1618, requires them to use a multiple-prime project delivery system and each of these prime construction contracts must be competitively bid. This paper will not focus on whether Pennsylvania’s Separation Act should be changed; just like Geico Insurance commercial, “Everyone knows that.” Instead, this paper will assume that for the immediate future this law will remain in place, just as it has for the past one hundred years. Consequently, Public Owners need to manage their multiple prime construction projects the best way possible. This paper will address how this required project delivery system works, its limitations and will identify some key considerations in trying to improve project performance on a multiple-prime project.
Companies must become more risk aware. Companies need to assess a project’s potential risk and to be decisive in either avoiding or managing that risk.
As the economy worsens, there is less work available and the competition for that work is increased. This combination of less available work and heightened competition reduces both a company’s volume of work and the profit margins for that work. In order to compete for available work, companies are forced to accept more risk for less potential profit, i.e, companies are forced to risk their financial well being by taking on more risk.
Companies are taking jobs with less profit in them from the start. This leaves companies with a much smaller margin of error for each project. What makes it worse is that there is less potential to make up for a loss on the next job. Also, companies have limited credit available to cover shortfalls. The safety net is shrinking. There is less lubricant in the machine. People are losing their sense of humor.
The contract documents establish the rules and framework for the design and construction of the project. Based on previous projects and conflicts, experienced construction practitioners have their own forms and, as importantly, opinions on what should typically be included in Owner-Contractor, Owner-Architect and Contractor-Subcontractor agreements.
Even skilled practitioners, however, must alter or modify the contract documents to meet the needs of the specific project in order to avoid omissions or conflicts that could adversely affect both the client and the project. This presentation will focus on the principal issues a practitioner should address in tailoring design and construction contracts to a project and, specifically, the needs of the client.