We decided to expand our plant to meet the needs of a major international customer. This is a game changer for us. We MUST have the expansion completed within 10 months in order to meet the client’s demands or WE LOSE THE DEAL. We are about to sign off on a construction contract. What can we do to assure that contractor finishes on time.
Dear Hot Seat,
Congrats on the opportunity to get the work. A commitment to a single customer for a major expansion is in the high risk “bet the company” territory. Remember this: Delays in construction are the norm, not the exception. Before taking one more step, make sure your contractor is sophisticated and can demonstrate experience in time sensitive work and a proven track record. If you don’t select wisely, you may well tube it!
These are a few common tips that may help minimize some of your risk, hold the contractor’s feet to the fire and keep you from getting smoked:
- Set forth and strictly enforce clear interim milestones.
- Invest heavily on administering to the schedule with little tolerance for deviations.
- Include a clause providing a financial incentive for early completion of all phases.
- Require overtime and extra workers be employed if the project falls behind.
- Include a liquidated damages clause with significant damages assessed per day.
- Eliminate “no damages for delay” provisions.
- Make sure the Contractor has the same rights against its subcontractors through flow down provisions.
- Hire an Owner’s Rep… perhaps nick-named “Bulldog,” and give Bulldog a lot of authority!
Good luck, Hot. We hope you don’t get burned!
John Swansinger is the author and founder of YouDig and is a partner in Buckingham, Doolittle & Burrough, LLC‘s real estate and construction practice group. He works with contractors, developers and construction owners on construction law issues including construction contracts, commercial agreements, construction litigation, subcontractor issues, insurance liability, breach of contract and more. He can be reached at email@example.com or 216.615.7356.
YouDig is an online resource that connects the construction community with vital issues affecting the industry and is a component of the business law firm Buckingham, Doolittle & Burroughs, LLC that is specifically geared toward construction.