Learn how to tailor construction management agreements to mitigate project issues and deliver successful projects.
Large-scale construction projects present a myriad of issues that developers need to effectively navigate. To mitigate these issues and deliver successful projects, developers need to tailor their construction management agreements. These agreements need to establish objective requirements governing construction manager's performance, clear and agreed-upon allocations of risk between the developer and construction manager, both pre-GMP and post-GMP, and straightforward mechanisms for dealing with project issues when they arise. To that end, this presentation analyzes the problems developers face and how the construction management agreement can be structured to anticipate likely issues and preemptively mitigate risk. Through objective provisions in the agreement, the parties can clearly define their rights and obligations and avoid unnecessary disputes during the project. The construction management agreement can also be designed to align the parties' interests and incentivize the construction manager's performance to meet certain developer objectives.
Learning Objectives
- You will be able to discuss how to structure contractual provisions to anticipate such issues and clearly define risk allocation (from the developer's perspective).
- You will be able to explain methods to align the developer's and construction manager's interests during the project, which can mitigate both parties' damages when unexpected issues arise during construction.
- You will be able to identify several issues that are likely to arise during a large-scale construction project and how those issues impact a developer's goals and objectives.
- You will be able to recognize common disputes that arise during GMP projects and strategies to address and mitigate the impact of such disputes.
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Why Lorman?
Over 38 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Background: Basic Components of a GMP Contract
- CM's Compensation (Including a No-GMP Discount on Fee)
- Procurement Process, Open Book
- Timing of the GMP, Developer's Option to Accept/Reject
- Risk Allocation Pre-GMP and Post-GMP, Including Schedule Risk
- Excusable Delays and Contingency
- Notice Provisions and Monthly Lien Waivers
Post-CMA Pitfalls
- Procuring the Work (Subcontract Terms Matter)
- GMP Qualifications and Assumptions (Qualifications on Scope and Cost)
- Obligation to Perform Notwithstanding a Delay - With Teeth
- Expedited Mediation for Efficient Dispute Resolution
- Interim Change Orders for Funding Purposes Only
The Close Out Process and Developer's Audit Rights
- Negotiating Close-Out - Defining CM's Responsibilities and Owner's Rights
- Developer's Audit Rights - Resolving Disputes Concerning Allowable Costs and Non-Allowable Costs
Incentivizing Performance
- Incentive Fees - Which Outcomes Does the Developer Want to Incentivize?
- Contingency and Shared Savings
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Why Lorman?
Over 38 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on December 21, 2022.
Call 1-866-352-9540 for further credit information.
- AK CLE 1.0
- Alaska attorneys may receive 1.0 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
- AL CLE 1.1
- This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.1 hours credit.
- Arizona CLE 1.0
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.0 hours toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 1.0
- Lorman Education Services is a State Bar of California approved MCLE sponsor and this course qualifies for 1.0 CLE hours of participatory credit.
- GA CLE 1.0
- This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.0 CLE hours.
- MO CLE 1.3
- This course qualifies for self-study CLE credit in Missouri.
- NM CLE 1.0
- This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.0 hours of credit.
- VT CLE 1.0
- This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.0 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
- WA CLE 1.0
- This program has been approved by the Washington State Board of Continuing Legal Education for 1.0 hours of A/V credit under the Law & Legal Procedure category.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 38 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Nicholas M. David
Troutman Pepper Hamilton Sanders, LLP
Nicholas David
- Represents owners and developers in both transactional and litigation matters in the construction law area
- Practice includes prominent corporate and institutional owners and developers, as well as real estate and hospitality industry companies, that turn to Troutman Pepper for guidance on some of the largest commercial, residential and mixed-use projects
- Drafts and negotiates a full range of development, design, and construction agreements, including construction management agreements (with GMPs) on projects of all sizes, from boutique luxury condominiums to the largest, most complex demolition and vertical construction tower projects – and everything in between
- Super Lawyers: New York - Rising Star in Construction (2014, 2016-2020)
Kevin P. Wallace
Troutman Pepper Hamilton Sanders, LLP
Kevin Wallace
- Represents real estate developers on all legal issues related to major construction projects, including contract negotiation, counseling on issues that arise during construction, resolution of claims, and the prosecution or defense of litigation
- Chambers USA: Construction, New York (2022)
- Best Lawyers in America®: Construction Law (2023)
- Represented the developer of a New York City megaproject that is the largest private real estate development in the United States, including (i) negotiating various contracts, (ii) resolving numerous claims and disputes with government entities, design professionals, construction managers, and trade contractors concerning different projects and towers within the overall development, and (iii) litigating four state court actions and several arbitrations
- Represented the developer of a new airport terminal, including the negotiation of the lease with the Port Authority of New York and New Jersey, the construction agreement with the design-builder, and various related agreements
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Why Lorman?
Over 38 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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