Protecting Your Business

Words: John SwindalWords: John Swindal
The Swindal Group (www.swindalgroup.com) is a full-service construction consulting company providing specialty contractors with practical advice on contract formation, contract review, contract revision, contract negotiation, litigation strategy, document review, general business planning, strategic planning, and contract management strategies. John B. Swindal (jbswindal@swindalgroup.com) is the Managing Director of the Swindal Group.
I hope that everyone is enjoying a great start to the year. I am certain that by the time the calendar turns from March to April and the spring season is in full swing that all of us signed some contracts with schedule obligations that we did not necessarily agree with or totally understand. That is why this month I wanted to take a look at a couple of examples of typical schedule obligation language in Subcontracts. A common tactic employed by upstream entities is to simply reference a “Schedule” throughout the contract without actually explaining the contents or obligations of the schedule. Oftentimes, the Subcontract will allow the Contractor to “direct the progress of the work as Contractor sees fit, amend the schedule at the sole direction of the Contractor and order the Subcontractor to prosecute one portion of the Work in preference to another at its sole discretion.” All of this language (and other similar language) removes a masonry contractor’s power to meaningfully schedule, adjust manpower, or plan a project to maximize efficiency and, ultimately, profit. One of the most useful ways for a masonry contractor in this context is to attempt to define the “Schedule” on its terms. An effort to define “Schedule” as “the mutually agreed upon and from time to time amended after meaningful participation by both parties schedule” can at least start a dialogue with the contractor. It is often instructive to remind the Contractor that no one prospers when a mason contractor remains on the project longer than anticipated. A masonry contractor also needs to recognize the difference between “cooperation” and “coordination” of other trades. This language is often inserted into the schedule portion of a contract but it needs special attention. The first thing to determine is contract delivery mechanism on the project (construction manager, construction manager at-risk, general contractor, Sub acting as prime contractor, etc.) as it will dictate whether a masonry contractor can request revision from “coordinate” other trades rather than “cooperate with other trades.” As a subcontractor on a traditional general contract or construction manager at risk project, a masonry contractor should not agree to “coordinate” the work of other trades unless the masonry contractor contemplated (and adequately priced in its bid) the supervisor and project management commitment for the coordination. This could include coordination drawings, coordinating window openings with glazing contractor, coordinating roof / masonry interface, coordinating MEP openings in CMU walls, etc. We all know that it is important to work with the other trades but coordinating the work of other trades without a true contractual relationship can be prickly. As mentioned in the January issue, sometimes business circumstances force masonry contractors to take jobs without any revision to a contract. If you find yourself in a position where you sign a contract without revision or careful review, make sure you familiarize yourself with the contents of the schedule portion of the contract. Without careful review of the schedule paragraph(s) it is possible to find your forces working overtime at your own expense, your forces supplemented by others at your own expense, or even a termination of your contract. As with any other contractual commitment whether revised or not, the schedule clause(s) must be understood and managed to ensure project success.

(Nothing contained in this article is intended to convey, constitute or be construed as legal advice.)

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