Note on First-Party and Third-Party Spoliation of Evidence Claims
October 30, 2018 —
David Adelstein - Florida Construction Legal UpdatesIn an earlier posting, I talked about spoliation of evidence. This posting discussed first-party spoliation of evidence which is where a party in a lawsuit has destroyed or lost potentially important documents or evidence. This type of spoliation of evidence does not give rise to an affirmative claim, but could be addressed by the trial court imposing sanctions or giving the devastating adverse inference jury instruction.
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David Adelstein, Kirwin NorrisMr. Adelstein may be contacted at
dma@kirwinnorris.com
Mediation v. Arbitration, Both Private Dispute Resolution but Very Different Sorts
January 24, 2018 —
Christopher G. Hill - Construction Law MusingsI often get calls from clients, potential construction clients, and other construction and business professionals with questions about arbitration or
mediation clauses in the contracts that they are reviewing or drafting. When I get these calls, it often becomes clear that, understandably, there is some confusion as to what each of these alternate dispute resolution processes entails. I thought I’d put together a quick primer on what each is and their differences.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
3 Common Cash Flow Issues That Plague The Construction Industry
August 20, 2019 —
Patrick Hogan, HandleThe construction industry has its fair share of serious cash flow problems. The nature of the industry with long periods between billing and collection, the unpredictability of some business factors, and even the day-to-day decisions of stakeholders have a huge effect on cash reserves.
So how can you protect your business from these cash flow problems? Having a greater awareness of the most common cash flow problems is the key to maintaining your financial stability. Here are some of the top cash flow issues that construction companies need to watch out for.
1. Uncontrolled business growth
The growth of a business as a cash flow problem sounds unintuitive. It is supposed to be a positive thing. So how could it hurt your construction business? When it goes out of control.
During the growth phase, the company will need to expand its operations to meet the increasing demand. This means renting a larger office space, hiring more staff, and buying more inventory, all of which can burn through the company’s cash quickly. The more substantial the level of your growth is, the more your cash flow is affected.
Growth is a good thing, but it is important to be aware of the pitfalls that you could encounter that can lead to cash flow problems. If you are dealing with a volatile growth instead of a stable one, you have to think twice before expanding your operations. A quarter with a large number of construction project deals does not guarantee the same happening in a subsequent quarter.
2. Change of scope or scope creep
The scope, or the statement of work, is the foundation that guides a construction project from start to finish. It specifies all the deliverables needed by the project as agreed by all stakeholders. When the existing requirements are altered, new features are added, or project goals are changed uncontrollably, what happens is scope creep and it can hurt a company’s cash flow.
Construction projects can take a long time before they are finished. A lot of factors can result in changes in the scope. There may be changes in the market strategy, market demand, and other unpredictable variables that make changes in the project requirements a necessity. These changes build up and the project may shift away from what was intended, causing delays, loss of quality, and the rise of planned costs.
One way to prevent scope creep from affecting cash flow significantly is charging a fee for variations of the scope of work. However, having a solid and clear scope baseline is still the best way to combat scope creep. Reminding clients of what you signed up for by referring to the baseline is a good strategy to deal with pushy clients.
3. Payment delays and nonpayment
As previously mentioned, the construction industry tends to have a lengthy period between sending an invoice and collecting payments. And if you are too passive in your collection, clients are more likely to extend pay periods and delay paying you.
Unexpected delays in payment and other payment issues can have a devastating effect on companies that have little to no cash reserves. Without a cash cushion to fall back on, payment issues can threaten the existence of the business itself. If you are unable to manage your receivables, you will not have enough cash to pay the bills, pay employees, and fund your growth.
Payment delays and nonpayment can happen for several reasons. They can be simple like mistakes in the invoicing or the person needed to approve the invoice is unavailable. More serious reasons like a client unsatisfied with your service or, worse, trying to scam you are also possibilities. For these reasons, it is crucial to communicate with clients properly and see if you can agree with a payment structure or pursue legal action.
The construction industry operates slightly differently from other industries. Different projects produce different cash flow issues and require different strategies. By being aware of the top cash flow problems that can hurt your construction business, you will be better equipped in dealing with them in case they happen.
About the Author:
Patrick Hogan is the CEO of Handle, where they build software that helps contractors, subcontractors, and material suppliers secure their lien rights and get paid faster by automating the collection process for unpaid construction invoices. Read the court decisionRead the full story...Reprinted courtesy of
Patrick Hogan, CEO, Handle
Contractors with Ties to Trustees Reaped Benefits from LA Community College Modernization Program
March 03, 2011 —
Gale Holland, Michael Finnegan and Doug Smith, Los Angeles TimesIn the latest installment of the “Billions To Spend” series of investigative reports focused on construction defects, management, and cost issues relevant to LACC’s Community College Modernization Projects, the LA Times examines the costs associated with the various layers of construction management and benefits that accrued to contractors with ties to LACC trustees.
The reporting by the Times is seemingly critical of the project’s utilization of “body shops” an industry term for companies that function as employers of record. The article segment published today cites a number of circumstances wherein their utilization appears to have escalated costs substantially.
“To gauge the cost of the staffing system, The Times reviewed thousands of pages of financial records from April 2007, when URS began managing the program, to July 2010. Reporters identified two dozen contractors serving as conduits for pay and benefits for employees they did not supervise.
At least 230 people were employed in this manner, at a total cost of about $40 million, the records show.
Approximately $18 million of the total was paid to the employees, according to the Times analysis. The remaining $22 million went to profit and overhead for contractors, the records indicate.
For employees on its own payroll, the district says that medical and other benefits increase compensation costs 40% above base salaries. So if the district had employed its construction staff directly, the total cost for the period studied would have been $25 million instead of $40 million, a savings of $15 million, The Times calculated.”
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BHA Has a Nice Swing
May 03, 2018 —
Beverley BevenFlorez-CDJ STAFFBert L. Howe & Associates, Inc., (BHA) raises thousands of dollars each year with their Sink a Putt for Charity campaign. This year, participant’s efforts on the green will help benefit three cancer fighting institutions that are dedicated to treating and eradicating children’s cancer: Hawaii’s Children’s Cancer Foundation, St. Jude Children’s Research Hospital, and Shriners Hospital for Children. As in the past, attendees can participate for free in the BHA golf challenge and win a $25 Amazon gift card, and for every successful putt made, BHA will make a $25 cash donation in the golfer’s name to be distributed equally between each worthy organization.
While at the booth, don’t forget to test out BHA’s industry leading data collection and inspection analysis systems. BHA’s data collection process includes video overviews as well as next-day viewing of inspection data via their secured BHA Client Access Portal. Discover meaningful cost improvements that translate to reduced billing while providing superior accuracy and credibility. Also learn about BHA’s expanding market presence and full range of services in Texas, Florida, and across the Southeast United States.
Attendees can also enter to win Dodger baseball tickets! Other BHA giveaways include LED flashlights, tape measures, multi-tools and stress balls.
For more information on these worthwhile charities or to make a donation directly, please visit their websites:
Hawaii’s Children’s Cancer Foundation ,
St. Jude Children’s Research Hospital, and
Shriners Hospital for Children.
Read the full story, Bert L. Howe & Associates, Inc....
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Corps Spells Out Billions in Infrastructure Act Allocations
February 14, 2022 —
Tom Ichniowski - Engineering News-RecordThe Army Corps of Engineers has
released a detailed project-by-project breakdown outlining how it plans to spend the 2022 portion of the $17.1-billion infusion provided for its civil works program in the Infrastructure Investment and Jobs Act (IIJA).
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Tom Ichniowski, Engineering News-Record
Mr. Ichniowski may be contacted at ichniowskit@enr.com
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Dave McLain named Barrister’s Best Construction Defects Lawyer for Defendants for 2019
January 20, 2020 —
David M. McLain – Colorado Construction LitigationThe attorneys and staff at Higgins, Hopkins, McLain & Roswell are proud to announce that Law Week Colorado named Founding Member Dave McLain as the 2019 People’s Choice for Best Construction Defects Lawyer for Defendants. According to the publication:
Law Week Colorado asked its readership to weigh in on the best attorneys in just about every practice area we could think of. We received hundreds of responses and sifted through the votes for each category to determine the “People’s Choice” winner – the top attorney in each practice area according to other attorneys. And then we handed it to the “Barrister” (the hive mind of Law Week staff, supplemented by public votes and a healthy dose of additional research) to determine the Barrister’s Choice.
In recognizing Mr. McLain this year, Law Week Colorado stated:
Previously appearing in Law Week’s 2015 Barrister’s Best issue [in which he was recognized as the Barrister’s Choice as Best Construction Defects Lawyer for Defendants], David McLain participates in numerous speaking engagements on construction defects claims and is seen as a leader in the field. His extensive experience over the last two decades of practice speaks for itself.
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David McLain, Higgins, Hopkins, McLain & RoswellMr. McLain may be contacted at
mclain@hhmrlaw.com
Crane Firm Pulled Off NYC Projects Following Multiple Incidents
October 07, 2019 —
Jeff Rubenstone - Engineering News-RecordFollowing a partial crane collapse at a site on Manhattan’s Lower East Side and a fatality in April on a jobsite in lower Manhattan, the New York City Dept. of Buildings announced on Aug. 12 that it is suspending United Crane & Rigging’s work on 21 construction sites across the city.
Jeff Rubenstone, Engineering News-Record
Mr. Rubenstone may be contacted at rubenstonej@enr.com
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