The AGC Contracts & Construction Law page recently added significant new content. Among these updates is a new dispute resolution and mitigation subpage featuring a recent paper by Christoper Brasco of Watt, Tieder LLP entitled Mediation Uncompromised. The paper emphasizes the importance of selecting the right mediator and understanding negotiation paradigms and styles. This article summarizes the mediation best practices outlined in the paper.

There are four main project delivery methods in construction: design-bid-build, design-build, construction management at-risk (CM@R), and integrated project delivery (IPD). ConsensusDocs is providing an April 4th Webinar on Construction Project Delivery Meth0ds 101 that will explain how the contracts you sign ultimately determine project delivery methodology. Register here. Choosing the right project delivery method for your project is a fundamental decision for success. All registrants will receive a recording of the webinar.

AGC Smartbrief recently wrote a story addressing project delivery methods that featured the ConsensusDocs’ design-build and construction management at-risk standard contracts with the following:

The 2024 AGC/FMI Study highlights key risks in the construction industry. Based on responses from AGC's in-house risk managers workgroup (collected Dec. 2023 – Jan. 2024), the top concerns include labor shortages, design issues, changes in insurance terms and costs, project delays or cancellations, and changes in contract language. However, one of the most alarming trends highlighted by the study is the uptick in subcontractor defaults. Seventy percent of respondents are seeing an increase in subcontractor defaults compared to one year ago, with nearly half reporting firsthand experience of project disruptions due to subcontractor defaults. Root causes behind subcontractor distress include financial instability, lack of skilled labor, and quality issues -- especially affecting electrical, plumbing, and concrete trades. In response, construction risk managers are enhancing subcontractor prequalification measures, including more thorough financial and staffing evaluations, seeking out new subcontractors, and increasing review frequency.

Change can be difficult. Newly added guidance available from the AGC Contract Documents Forum helps members navigate change in design-build construction contracts and beyond.

ConsensusDocs is about to publish an updated standard ConsensusDocs 235 Owner/Constructor Standard Agreement. The ConsensusDocs 235 provides a short form standard prime contract. Construction work payment is based upon cost-of-the-work plus a fee. This type of “cost/plus” contract increased in popularity amid the post-pandemic breakout price uncertainty that led to price escalation and supply chain disruptions that were highlighted in this article. The ConsensusDocs 235 cost/plus agreement does not include a guaranteed maximum price (GMP) (as compared to the ConsensusDocs 230). The ConsensusDocs 235 is a great choice for projects that want greater collaboration and transparency by avoiding the potential hard edge of a GMP.

Progressive Design Build (PDB) differs from traditional design-build and has grown in popularity, especially for bigger projects. PDB allows an Owner to quickly select a design-builder based upon qualifications or best value. Design plans progress to completion after award selection. Consequently, the cost for design-builders to compete is significantly less. The project price is fixed when more uncertainties become known. Also, predetermined contractual off-ramps potentially allow the parties to exit the project. This webinar will help you decide if PDB helps balance risk, increase transparency, and reduce budget busts.

ConsensusDocs publishes a monthly construction law newsletter that you can sign up for free at the bottom of this page here. ConsensusDocs compiles the top five most-read articles of the year in January as an interesting way to reflect on the previous year as well as indicate some of the trending topics that lie ahead. For 2023, the most-read articles were:

A takeaway from this year’s Construction Superconference was a growing apprehension regarding the risk associated with design-build projects, especially for large mega projects. In four key sessions, concerns surfaced about the project delivery method’s efficacy in fairly allocating risk. Concerns about risk in design-build have previously been reported in ENR. The debate continues over how to share risk and reward among all the parties to the construction process. Amidst these concerns, progressive design-build emerged as a promising variation to the traditional design-build approach. Progressive design-build emphasizes a qualifications-based selection to expedite decision-making and reduce costs. This article explores the pivotal discussions at the Construction Superconference, revealing the industry's quest for a more balanced and efficient approach to risk allocation in design-build projects.

Together, AGC of America and its Illinois Chapters have achieved a major breakthrough as to commercial general liability insurance (CGL) coverage for construction defects under Illinois law. The Illinois Supreme Court issued its opinion in Acuity v. M/I Homes of Chicago, LLC, Docket No. 129087 on Nov. 30, 2023. The case involved CGL coverage for construction defects resulting in water damage to a townhome project. In that context, the Supreme Court clarified the law to agree with many state supreme courts that such property damage is an “occurrence” in Illinois. The Supreme Court’s clarification is extremely favorable to the construction industry and was supported by an amici curiae brief sponsored by AGC of America, National Association of Home Builders, American Subcontractors Association and local chapters in Illinois.