Construction Articles

Several years ago, on a late evening flight to Dallas, we touched down in El Paso to drop off and take on passengers. The seat next to me had been left vacant by the deplaning passenger who sat next to me from San Diego, but was quickly filled by a clean cut young man in his late 20s with a white crew neck t-shirt, a brown leather bomber jacket, wire rimmed aviator glasses and hair cut “high and tight.”

Design-Build has become a very popular project delivery method for both the private and public sectors within the construction industry. As a modernized take on the “master builder” model that has served mankind for millennia, the contract creates a single entity that is responsible for the work on the project and with which the owner communicates.

If the Empire State Building took less than 14 months to construct back in the 1930s, why does it often take years to build a custom home?

An attorney friend of mine recently told me a disturbing story about an elderly couple who had been forced out of their home. No, this was not a story about their lost fortunes in Enron. Rather, it was a story about their nightmare involving a toxic black mold known as stachybotrys.

Construction is a complex process involving many parties, each with their own interests, all working to build a one-of-a-kind product on a unique and ever-changing job site, usually with the added constraints of limited time and dollars. So, it is inevitable that problems will arise throughout this process. It’s the nature of the beast. It is little wonder that most people in our industry consider themselves problem-solvers.

For the most part, what has been easy to develop in California has already been developed. In the next wave of post-recession residential construction, large subdivision development of massive amounts of single-family detached product are giving way to high-density mixed-use in-fill projects in urban and previously developed areas. With the shift in product type, there is a shift in construction type. Construction in the next cycle will predominantly be made up of significantly more complex steel and/or concrete structures with much more complex building systems designed for mixed use applications and incorporating new technologies in building components.

The State of California is very serious about enforcement of license laws. As most contractors know, there is no right of collection and money already collected may have to be paid back for work performed without a license. This is common knowledge and the vast majority of licensed contractors large and small think that this provision of the Business and Professions Code has nothing to do with their daily business.

One thing that has certainly changed over the 30 years that I have been providing expert witness analysis and testimony on construction disputes has been the size of the files we work with. The unit of measure for case documents has evolved from the Banker’s Box to the Gigabyte—truckloads of yesterday’s Banker Boxes if printed out.

Insurance adjusters work for the insurance company and are responsible for preparing an estimate of the cost of repair or replacement of the insured’s property loss. Not all adjusters are bad; however, following a major loss event like a major earthquake or wildfire, they may be over-stretched or just plain in over their head.

Getting an education in the intricacies of managing a complex construction project can be a very expensive process, especially when those lessons come from living through the challenges of looking out for your own money. The process of building your dream home can be very creative, exciting and fulfilling, or it can also seem like a never ending nightmare that bleeds you dry both emotionally and financially.

Several years ago, we took a deep, introspective look at our construction consulting firm and began to identify what role empathy played in our business success. There seemed to be a distinct difference of approach between our construction managers who consistently performed well, and those who didn’t. The construction managers who seemed to get “it” had very successful projects. Those who didn’t get “it” had problematic projects that never seemed to run smoothly.

Back in 2011, we saw an interesting trend and based on that, we projected that a significant decrease in defects litigation was just ahead. About 50% of the construction labor force had lost their jobs in the Great Recession, but the defects world was still very active litigating the boom.

The old adage that “Time is Money” has never been truer than as it relates to the development and construction of revenue producing properties. Between the Owner’s debt service expense on loans of tens of millions of dollars, lost revenue, and contractor’s time related costs, the cost per day can be tens of thousands of dollars.

A penny saved is a penny earned. And a process for finding and preventing wasted dollars on major construction contracts is worth its weight in gold. It’s called construction auditing.