Related Links: Efforts To Restart Libyan Projects Land SNC-Lavalin in Controversy SNC-Lavalin says it is investigating $35 million in payments that were improperly made and recorded.The payments were made in the fourth quarter of 2011 and "were documented to construction projects to which they did not relate," the company said Feb. 28."The company is working with its external auditors and legal advisors to resolve all issues relating to the investigation," SNC-Lavalin said.The company also said that it has recorded greater-than-expected losses on its Libyan projects, which were stopped by the Libyan civil war, and that the firm's overall financial performance
Is it possible to save on costly "e-discovery"? Some attorneys are testing ways to head off runaway legal costs of construction lawsuits, including contract clauses ruling out e-mails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that litigants receive from their own attorney.Propelled by the explosive growth of e-mail, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. The recession hasn't cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the
The A.M. Best Co. sharply lowered to "weak" from "excellent" First Sealord Surety's credit rating, and the surety's apparent financial troubles have created problems for at least one general contractor with a few subs in default.Big sureties such as Travelers and Liberty Mutual have remained profitable through the economic downturn by sticking to tight underwriting standards. First Sealord, based in Villanova, Pa., serves contractors whose bonded contract value averages $429,000. Surety industry executives predict increasing defaults by small subcontractors in 2012.Sean Murphy, vice president of construction operations for Coastal Construction Group, Miami, says his company has a few subcontractors in
Related Links: Is Trouble at Surety First Sealord a Signal of Trouble Among Small Subcontractors? Before Pennsylvania determined that First Sealord Surety, the small surety shut down by the state on Feb. 8, was a financial wreck, the company fought costly legal battles in different states where it had provided bonds.The state Dept. of Insurance examines licensed companies in the state once every five years and First Sealord got a generally healthy report card from an examination in 2005. It isn't clear if that is the last time the Villanova, Pa.-based surety firm was examined.A.M. Best did not downgrade First
Is it possible to save on costly “e-discovery?”Some attorneys are testing ways to head off runaway legal costs in construction lawsuits, including contract clauses ruling out emails as discoverable evidence.The idea is inviting because one of the biggest risks in a lawsuit is the size of the invoice that arrives from your own attorney.Propelled by the explosive growth of email, litigation costs today run 20% to 30% higher than six years ago, say attorneys and insurance agents. And recession hasn’t cut litigation and may actually provide more incentives for lawsuits, they say.Project team members already understand that the ballooning number
iStockphoto Several construction contractor clients swore affidavits related to their switch to Alliant from Aon. Related Links: Disputed Shift By Insurance Brokers Entangles Contractor Clients A legal struggle between insurance and surety brokerages Aon and Alliant entered a new contentious phase on Jan. 17 as attorneys for both sides clashed in a Manhattan courtroom over e-mailed party invitations. The wrangling over the invitations is the latest episode in a complex battle over the alleged poaching of 60 employees and 100 accounts from Aon by Alliant.Had the party invitations been sent to contractors by a former Aon employee who switched last
Insurance underwriters want 5% to 10% more to renew their accounts, and some lines of coverage and underwriters want or need more, but they can’t get it without risking losing clients, says Jeffrey W. Cavignac, a San Diego-based broker. “Fortunately for those who buy insurance, the industry’s robust surplus is keeping rates on preferred accounts from increasing,” he says.The frequently mentioned prospect of a hard insurance market, characterized by higher prices and stricter underwriting, has not yet materialized.That’s one of the main ideas conveyed by Cavignac & Associates in its forecast for insurance markets in 2012. As Cavignac sees it, insurance rates
Related Links: Download the McGraw-Hill Construction Risk Report Companies and owners that have been involved in a project valued at the $100 million mark are keenly aware of risk management, but they carry it out in different ways, says a new report on the subject by McGraw-Hill Construction Research & Analytics.The report was based on telephone surveys of risk-related personnel at 12 A-E firms, 12 general contractors and construction managers, and 11 owners of infrastructure.Changes during design and construction, scope creep, budget and cost overruns, delayed approvals, and problems with safety and site conditions account for most of the risks.
ENR Art Dept. In CPM scheduling, sharing dominates but it hasn't proven to be the perfect solution yet. ENR Art Dept. Is Owning Float an Absurdity? Options and Motives Cited by Contractors and Construction Managers in Project Scheduling Decisions. William A Manginelli and his colleagues at Trauner Consulting Services say that manipulating or gaming the amount of float in a critical-path method schedule is difficult and perilous for contractors. But contractors and construction managers suggest that many of the decisions about how float is treated in contracts and the strategies used in preventing disputes over delays are based on worries
