This program is intended for construction professionals who have negotiated construction contracts and left without understanding what happened or who have spent too much time managing a project where the contract negotiations contributed to or caused the problems. It is intended to give a familiarity with the basics of the process, the level of preparation required and the reasons why for each. It is also intended to give practical advice and insight into the art and attitude of contract negotiation.
This basic course will provide a roadmap to follow when reviewing construction contracts of all kinds. It will explore the various relationships of the parties, the types of contracts and how the fees of each participant might be structured. Key clauses for review and negotiation will be discussed and compared with similar competing clauses. An attendee can expect exposure to a wide assortment of other significant bodies of law impacting most operations within the construction industry.
- Define the parameters of the project
- Discuss various laws applicable to construction projects
- Initial contract review
- Understanding the negotiation process
- Ethical considerations
- The attendee will be able to discuss various laws applicable to construction projects.
- The attendee will be able to identify and analyze critical terms.
- The attendee will be able to review the negotiation process.
8:30 a.m. - 9:30 a.m.
I. Define The Parameters Of The Project
A. Construction Type: We will explore the legal differences between new build/remodeling, residential/commercial and public versus private projects.
B. Parties: Analyze the various parties to a construction project and their competing legal relationships.
C. Fee: Explore fee relationships and the risk borne by each.
D. Scope Of Work: We will evaluate how time, labor, material and equipment are estimated and managed during a project.
9:30 a.m. - 9:40 a.m.
9:40 a.m. - 10:40 a.m.
II. Changes To Scope Of Work
A. Explore the impacts to various parties when the time, material, labor or equipment for a project is changed after the contract is awarded.
10:40 a.m. - 12:00 p.m.
III. Discuss Various Laws Applicable To
A. Explore ancillary state law requirements governing construction projects including licensing/registration, building codes, lien laws and consumer protection laws.
12:00 p.m. - 1:00 p.m.
Lunch (On Your Own)
1:00 p.m. - 2:40 p.m.
IV. Initial Contract Review
A. Identify And Analyze Critical Terms
1. Fee/Price And Payment Terms
2. Scope Of Work /Scope Of Services/Terms Of Reference
3. Time For Performance/Project Schedule
4. Charges For Contractor Changes (Value Engineering Or Cost Saving Changes)
5. Site Inspection vs. Observation
6. Shop Drawings/Submittals
7. As-Built Drawings
8. Delays/Cost Overruns
9. Limitation Of Liability/ Indemnification/Insurance Requirements
B. Prioritize Risk Allocation Issues
1. Fee vs. Scope Of Work
2. Which Terms Are The Deal Breakers?
3. Which Terms Are Negotiable?
4. Which Terms Are Less Critical?
2:40 p.m. - 2:50 p.m.
2:50 p.m. - 4:00 p.m.
V. Understanding The Negotiation
A. Who Must You Talk To?
1. Levels Of Authority
2. Business Terms vs. Legal Terms
B. What About The Paperwork?
1. Redline Versions
2. Keeping Track Of Changes
1. Real Deadlines vs. Self- Imposed Deadlines
2. Letters Of Intent
3. Final Contract/Document
4. One Or Several ‘Final' Document Execution
D. The Negotiation Process
a. Create A Constructive Climate
b. Convey A Professional Demeanor
c. Offer Clear, Practical, Common Sense Positions
d. Prioritize Issues And Underlying Interests
e. Adopt A Win/Win Approach (Know The Difference Between Negotiating A Contract vs. A Dispute Settlement)
b. Offer Over-Reaching Terms
c. Treat All Issues The Same
d. Adopt A Win/Lose Approach
e. Reject Alternate Terms Out Of Hand
3. Know Whether And When To Walk Away Or Close The Deal
4:00 p.m. - 4:30 p.m.
VI. Ethical Considerations
A. When Is Ethical Also Legal?
B. When Is Ethical Not Illegal?