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1. A client negotiated a design-build contract with a joint venture (JV) general contractor and architect for the design and construction of a $100 million

1. A client negotiated a design-build contract with a joint venture (JV) general contractor and architect for the design and construction of a $100 million chemical manufacturing facility. The project was constructed within a reasonable time frame and for a fair price. The quality of the work was acceptable and there were not any time-loss safety incidents. The architects and the contractors joint venture was dissolved immediately after substantial completion was achieved and they had received their retention. In only six months after completion, the owner had achieved 90% of potential production output and sales were higher than anticipated. About that time, several employees be feeling ill and several citizens living nearby and working outside the facility filed a claim due to unacceptable odors coming from the plant. The government shut the plant down. It was discovered that there was a major design error in the mechanical exhaust system and it would cost the owner $10 million to redesign and repair, and maybe 10 times this in lost revenue. There would eventually be personnel claims as well due to illness. The owner took the designer to arbitration and won. The owner separately took the contractor to arbitration and won on the basis that the general should have known that the design was in error. Should the owner be allowed to pursue the two parties separately or only the JV? Was the general at fault? Shouldnt the owner have had some responsibility in this? The city approved the plans what sort of liability do they have? What types of insurance will come into play here? Does this mean the design-build procurement approach is flawed? What sorts of checks and balances are required of the design for a design-build project?

2. This contractor conducted considerable research before submitting their negotiated proposal to the owner and architect teams. The GC proposed management and supervisory individuals that were both familiar to the reviewers and had relevant project and location experience. The market was very busy. After award and contract execution, the GC systematically changed out all four members of the team who were proposed and participated during preconstruction. Each change was explained and apologized for. Can they do this contractually? Is this ethical? Is this bait and switch customary on negotiated projects? Who loses when new team members are brought on board? When might it be to either the contractors or the owners advantage to bring on new individual team members?

3. Some owners will contract with multiple general contractors on the same site. This scenario is sometimes referred to as multiple primes or five primes. Some owners will also employ specialty subcontractors directly. What sort of risks and coordination issues is an owner assuming by not placing all of the work on one site under one GC? Does this save or cost the owner money? Do these sorts of multiple contracts also place risks on the contractors or designers? Does this also provide for contracting opportunities for the contractors? When might this not only be an acceptable delivery method for the project owner, but a preferred one?

4. This relatively new yet very ambitious general construction project manager (PM) was given an assignment for a repeat industrial client. The project was bid lump sum at $50 million by a staff estimator. It was the largest lump sum project ever undertaken by the GC at that time. There was a $1,000,000 bid error. The officer in charge (OIC) directed the PM to get every change order possible. The PM was not to worry about the possibility of future work with the client. During the one year of construction, the PM lost his project engineer and was not allowed to replace him with any experienced help. He had to hire from outside. He also did not receive any home office supervisory help. The OIC would meet him for lunch once a month at a remote site. Why did the OIC distance himself? Why assign this project to a new PM? The PM worked seven days a week sacrificing health and family time to bring the project back into the black. The project was ultimately brought in with a clear fee of $600,000, but relations had been damaged; the GC did not get to work with the client again. Later in the PMs career with other contractors, he was not welcomed back on this clients site. The PM did what he was asked to do, didnt he? He was successful, wasnt he? Did the PM make any errors? What would you have done?

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