Disruption

Project Management – Single Asset Owners

March 4, 2011 By George T McLaughlin PMP CCM

This post discusses unique project planning and management challenges associated with projects that are owned by single asset owners. Examples include power plants, large commercial facilities and process plants. These assets tend to be project financed using the single asset as collateral. The financing typically relies on revenue generated from operation of the asset. Hence, delays in achieving revenue generating status can be extremely problematic. Our conclusions and recommendations are based on decades of experience with many such projects.

Introduction

Revenue generating facilities (e.g. power plants, chemical process facilities) are sometimes owned by a standalone entity. The design, engineering, procurement, construction, commissioning, startup and turnover of these plants and facilities can be particularly challenging for both owners and contractors. The planning, scheduling and execution of these requires attention to some unique and compelling factors. [Read more…]

Filed Under: Projects Tagged With: Construction Contract Delay, Disruption, Large and Complex Projects, Project Financing, Project Management of Large and Complex Projects, Project Planning, Single Asset Owners

Contract Notice and Recognition (Part 4)

March 3, 2011 By George T McLaughlin PMP CCM

This is the fourth post in a series regarding Construction Contract Notice and Recognition.

This post addresses backcharges. The subject does not have a broad applicability; but is very troublesome to subcontractors and vendors. This discussion is focused on notice.

Simply, backcharges (or backcharge) is a term of art or a term of the trade to describe an assessment of money from one contract party to another. Typically, this is done by a prime or general contractor to a subcontractor, supplier, vendor or other subordinate party. Unfortunately, this is often done unilaterally and without explicit contractual coverage. Further, the timing of these backcharges is not favorable to the recipient and can lead to pressure to engage in deal making or compromises in order to receive final payment. [Read more…]

Filed Under: Projects Tagged With: Claim Recognition, Construction Contract Backcharges, Construction Contract Claims, Construction Contract Crosscharges, Construction Contract Notice, Construction Subcontractors, Contract Change, Disruption, Impact, Productivity, Variance

Contract Notice and Recognition (Part 3)

February 28, 2011 By George T McLaughlin PMP CCM

This is the third post in a series regarding Construction Contract Notice and Recognition.

Initial questions regarding compliance with contract notice provisions can be answered in a straightforward manner. Yes, of course it is best practice to comply with these important provisions. This point is clearly stated in the following comments within LinkedIn Construction Law Group Discussion regarding notice.

Emily Monastiriotis • Cases like Education 4 Ayrshire Limited -v- South Ayrshire Council (which is subject to Scots law) illustrate the importance of issuing contractual notices particularly when such requirements are conditions precedent. As a lawyer my tendency is to think that clients ought to err on the side of caution and issue notices when any issue arises that may trigger any of the provisions of the contract. I accept and recognise that such notices may not be well received by the Employer but I think it is better to protect your rights rather than lose them because of a simple administrative failure to issue a requisite notice.

A Google search of notice of contract claims yielded some comments at HALBERSTADT CURLEY website. The blogger states that there are three key components associated with contract claim notice: [Read more…]

Filed Under: Projects Tagged With: Claim Recognition, Construction Contract Claims, Construction Contract Notice, Contract Change, Delay, Disruption, Impact, Productivity, Scope Change, Variance

Contract Notice and Recognition (Part 2)
LinkedIn Group: Contract Risk Management — Construction Industry Discussion: Methods of Ensuring Compliance

February 23, 2011 By George T McLaughlin PMP CCM

This recent Discussion was initiated by me, George McLaughlin. I posed the following question:

What methods or procedures are most effective to ensure compliance with contract Notice requirements (if any)?

Most contracts contain Notice requirements of various sorts. Notice regarding variations / changed work can be reasonably straightforward. Notice regarding delay (by others) and disruption (by others) can be considerably more challenging. Of course, the challenges include form or method of notice as well as the onset of recognition of the delay or disruption. Another complication is the acceptability of constructive notice under applicable law. Please present some views on this topic. [Read more…]

Filed Under: Projects Tagged With: Construction Contract Claim, Contract Change, Contract Notice, Delay, Disruption, Scope Change, Variance

Contract Notice and Recognition (Part 1)

February 16, 2011 By George T McLaughlin PMP CCM

Most major Engineer Procure Construct [EPC], Lump Sum Turnkey [LSTK] and Construction contracts contain requirements or provisions for Notice. Simplistically, notice is the act of informing another party to the contract that an important event has (has not) occurred. These events tend to be related to negative consequences.

In this discussion, I will use two key references:

Delay and Disruption in Construction Contracts, Keith Pickavance (link)
Construction Delay Claims, Bramble and Callahan (link)

Bramble introduces the subject as follows (focus is on delay): [Read more…]

Filed Under: Claims, Projects Tagged With: Bramble and Callahan, Change, Commencement of Notice Period, Contract Notice, Delay, Disruption, Keith Pickavance, Notice Implementation Approaches, Notice Requirements, Period of Notice, Provisions for Notice, Variance