TEN TIPS FOR A SUCCESSFUL WALA FACILITY RENOVATION OR CONSTRUCTION
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1 TEN TIPS FOR A SUCCESSFUL WALA FACILITY RENOVATION OR CONSTRUCTION March 22, 2012, 10:00 AM Presented By Roy E. Wagner, Esq. von Briesen & Roper, s.c. Chair Construction Law Section 411 East Wisconsin Avenue, Suite 700 Milwaukee, WI Direct Mobile rwagner@vonbriesen.com
2 Roy E. Wagner direct: (414) cellular: (414) fax: (414) East Wisconsin Avenue, Suite 700 Milwaukee, WI Roy serves as the Chair of the Construction Law and Litigation Section at von Briesen & Roper, s.c. and has been practicing law for over 30 years. The largest segment of his business practice relates to construction matters including assisting owners, design professionals, contractors and developers in facilitating their projects and solving their legal disputes. He utilizes mediation, arbitration and litigation as appropriate to finalize dispute resolutions and has acted as both arbitrator and mediator. Roy is a member of the American Bar Association and the State Bar of Wisconsin including the Litigation and Construction and Public Contract Law Sections. He just completed serving his second term as Chairman ( ) of the Board of Directors of the Construction and Public Contract Law Section of the State Bar and continues as Past Chair and Director. He lectures regularly to lawyer and trade groups on construction practices. Roy is featured in the December 2006 issue of The Wisconsin Law Journal as one of the Top Construction Lawyers in Wisconsin. Since 2008, Roy has been recognized as a Super Lawyer in Construction Litigation. In 2009, Roy received the Charles Dunn Author Award from the State Bar of Wisconsin for an article that was published in Wisconsin Lawyer magazine titled Mediating Complex Construction Claims. Sampling of Recent Presentations: Chair/Moderator for What To Do If How to Navigate Typical and Unique Issues Facing a Construction Project, State Bar of Wisconsin, January Negotiation, Mediation and Arbitration, Guest Lecturer, UW Law School, 2009-present Chair/Moderator for Building Green: Risks and Rewards, State Bar of Wisconsin, January, 2010 Ten Legal Tips for Renovating and Expansion, Building Owners Management Association and International Facility Managers Association (Wisconsin), October, 2009 Reducing Risk, Developing Facility System for Condominium Associations, Annual Conference of Community Association Institute Wisconsin, March, 2009 Chair/Moderator for Wisconsin s Mega Projects: Successes and Challenges, State Bar of Wisconsin, November, 2008 Construction/Purchasing Issues for School Districts and their Facility Managers, Midwest Facility Masters Conference, October, 2008 Program Chair and Presenter of Construction Law Basics for the Business Lawyer, Corporate Practice Institute, December, 2007 Construction Contracts for School Projects, WASBO Facilities Manager Certification Program New School Planning, Design and Construction Series, May, 2007 Owner s Construction Program: Asking the Right Questions, IFMA Southeast Wisconsin Chapter, October, 2006
3 TEN TIPS FOR A SUCCESSFUL WALA FACILITY RENOVATION OR CONSTRUCTION PROJECT March 22, 2012, 10:00 AM Presented By Roy E. Wagner, Esq. von Briesen & Roper, s.c. Chair Construction Law Section 411 East Wisconsin Avenue, Suite 700 Milwaukee, WI Direct Mobile rwagner@vonbriesen.com This presentation is prepared to provide information for the subject matter covered. It is presented in conjunction with an oral presentation. This outline should not be utilized as a subject or in lieu of legal services in specific situations. If legal advice or other expert assistance is required, the services of an attorney should be sought. This presentation is owned and copyrighted by the program presenter and may not be reproduced without the express written permission of the presenter. Milwaukee Madison Racine Mequon 411 East Wisconsin Avenue Suite 700 Milwaukee, WI What Will We Cover Today What is the Problem Outline a Program System for Owners Ten Tips for WALA Facility Purchases Building Defects (if we have time) What is the Problem for Owners? WALA Executives have facility and maintenance needs Service needs like landscape and snow removal Identify critical need, i.e., new roof or HVAC or plant addition/replacement Work with contractor on price and quality Need now becomes critical too small facility or leaks Contract presented at last minute So what is wrong??? 1
4 So What is the Problem and How Could It Impact WALA Executives? Mold in Building Cavities Asphalt Repairs Construction Problem So What is the Problem and How Could It Impact Facility? Roof replacement Envelope Problems Foundation cracks So What is the Problem and How Could It Impact WALA Executives? Contractor Bankruptcy Contractor is friend (less leverage) 2
5 So What is the Problem and How Could It Impact WALA Building Owner? Contractor Poor Work Contractor Accident Contractor No Insurance Inside Your Folder Power Point Outline Checklist Article Ten Tips for Renovation Why Should We Listen To Wagner? 34 Years Practicing Law now Chair of Construction Law Section at von Briesen & Roper Director and Past Chair Construction & Public Contract Law Section, State Bar of Wisconsin Represents Contractors, Design Professionals and Facility Owners Acted as Mediator and Arbitrator in Construction Disputes Represented Many Contractors/Owners/Districts in Litigation/Lawsuits big and small 3
6 TIP #1: Assemble the Correct Team Assess whether have sufficient knowledge about construction process Or if need to employ professionals for advice Assess in-house expertise for determining project delivery method finding qualified architect/engineer, contractor or construction manager If no expertise, hire independent construction consultant TIP #1: Assemble the Correct Team Consider adding a construction advocate to your team Not someone who will be performing the work Owner s Representative Owner s Project Manager Design Professional who is just paid for his advice not work Understand Legal Issues Early Consult with a lawyer with significant facility and construction experience to alert you to the many construction legal issues Insurance Broker TIP #2: Early Planning Many projects linger until they reach a crisis stage Construction projects should be planned months or years in advance to avoid poor or more expensive results 4
7 TIP #2: Early Planning TIP #2: Early Planning Use an RFP (Request for Proposal) to assemble your team and all facility purchases: Design Professional Contractor Budget Project delivery method Business terms Insurance requirements, etc. TIP #3: Contract Evaluation Do you have your own Contract or Service Agreement If so attach to RFP If not.... 5
8 TIP #3: Contract Evaluation Ask for your Contractor s template early As part of RFP Do not wait until committed to single contractor choice While you have leverage (MONEY!) Have your construction-experienced lawyer review If the Contractor will not budge on key terms Be prepared to select another or draft your own WALA Library of Purchasing/Contract Forms Sample Purchasing Forms can be previewed with vendor Weed out unwilling or Unqualified Construction Contracts are separate TIP #4: Consider Performance and Payment Bond Most government contracts require the Contractor to post a Payment and Performance Bond Risk of contract non-performance and non-payment to suppliers and subcontractors Liens filed by unpaid suppliers can blow your budget if you must pay twice 6
9 TIP #4: Consider Performance and Payment Bond Extra cost to obtain the bond... Is it worth it? Learning if your Contractor is bondable may be important TIP #5: Evaluate Your Insurance You should check with your insurance broker Evaluate your insurance limits for Casualty loss limits Business interruption Loss of documents/information if there is a construction project casualty Evaluate whether you need a Builder s Risk policy TIP #6: Evaluate Insurance of Construction Team Evaluate the insurance of your design professionals Architects and Engineers Errors & Omissions Coverage (Malpractice) Claims Made Coverage 7
10 TIP #6: Evaluate Contractor s Insurance Contractor/subcontractors Require specified insurance coverage in your RFP Define how much coverage Define type CGL, Completed Operations, etc. Obtaining adequate limits and coverage The difference between a properly insured project and financial ruin TIP #6: Evaluate Contractor s Insurance Contract should require that you be listed as an additional insured AI endorsement Benefit is you tie in indemnification Direct claim against contractor s insurance if loss Precise contract language required Must specify correct AI endorsement TIP #7: Certificates of Insurance Program Understand what Certificates of Insurance (COI) are What they show What they do not Many Owners have misplaced reliance COI are of limited value and routinely are not examined for accuracy A COI Process should be created and monitored 8
11 Certificate of Insurance Does it Protect You? Certificate of Insurance Evidence of Insurance No guarantee of coverage Need training to review COI Many fail to read or understand COI Inaccurate COI can leave Owners exposed to uninsured risk Certificate of Insurance Program Requires System Mandates compliance One person review Annual renewal and verification Avoids... TIP #8: Understand Key Contract Terms Indemnification Termination Fault vs. Convenience Warranty Recent Cases Dispute Resolutions - ADR Retainage Substantial Completion Change Order Process Responsibility For Consequential Damages Waive? Completion Penalty/Incentives Waiver of Consequential Damages 9
12 TIP #9: Construction Administration Prompt decisions by WALA Executives on Selections, changes or requests for information (RFI) Owners will increase their job responsibility by 10-40% An Owner s Representative and your construction lawyer can reduce the work load/risk TIP #9: Construction Administration Owner s failures/omissions may create claims Don t respond to RFI Fail to make timely decisions Fail to pay timely or justify nonpayment Respond to Change Orders Inaction may cost WALA owner $ TIP #9: Construction Administration Money does not get paid out too quickly to insure performance Consider whether you want equal, monthly, or installments based on completion milestones Assign your Project Representative to inspect the work before it s paid Collect your lien waivers at payment 10
13 TIP #9: Construction Administration WALA Owners Need to Develop Systems System approach reduces risk and unanswered questions System approach increases using business leverage System approach can be applied to all levels of purchasing and contracting Vendor Agreement Worksheet Important Internal Questions Insures Procedures Followed Makes You Analyze TIP #10: Project Close-Out Review retainage Review outstanding project issues (punch list) Maintain adequate business leverage Consult construction attorney to determine if there is need to follow specific procedures to protect owner s position if disputes 11
14 TIP #10: Project Close-Out Obtain consent from bonding companies for final payment Obtain as-built drawings from architect depending on project delivery method, architect will receive as-built drawings from contractor/construction manager and create final set of drawings Warranties (transfer to owner) Is There A Checklist Available? Do you want to hear about: What to do if you have building defect? 12
15 What If Your Facility Has A Significant Building Problem Leaky Windows Building Envelope Leaking Roof Problems Original Construction Issues What If Your Facility Has Significant Facility Problem What is wrong and why? Contact Experienced Construction Lawyer Analyze Type of Claim Analyze Deadlines (Statute of Limitations) for filing claims Analyze amount of damages to assess whether it is worth it claim Ability to Pay for Repair and Claim Evaluate if have a Contractor Claim What If Your Facility Has Significant Building Defect Problem Immediately Assess Problem with Design Professional (Architect/Engineer) to see how bad it is. Call Contractor to help??? Contractors make money finding problems. Can you trust contractor advice? Design Professional has license. Design Professional should have (but check) has malpractice insurance If suspect have contractor/architect claim, Important to have Attorney hire Investigative Professional 13
16 Milwaukee Madison Racine Mequon 411 East Wisconsin Avenue Suite 700 Milwaukee, WI Thank You WALA! Presented By Roy E. Wagner, Esq. von Briesen & Roper, s.c. Chair Construction Law Section 411 East Wisconsin Avenue, Suite 700 Milwaukee, WI Direct Mobile This presentation is prepared to provide information for the subject matter covered. It is presented in conjunction with an oral presentation. This outline should not be utilized as a subject or in lieu of legal services in specific situations. If legal advice or other expert assistance is required, the services of an attorney should be sought. This presentation is owned and copyrighted by the program presenter and may not be reproduced without the express written permission of the presenter. Milwaukee Madison Racine Mequon 411 East Wisconsin Avenue Suite 700 Milwaukee, WI
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