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Grammar Matters in Contracts

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Construction Science


About 15 years ago I sat in a meeting room in San Francisco filled with quite a few people arguing about grammar. There were other reasons for arguing, given that it was a major construction claim. But there was one element of the claim that depended on grammar. This was a high-rise building. The contract included an intermediate milestone that stated, to the effect: "Contractor shall complete work up to the 8th floor by (date)."

The intermediate milestone had liquidated damages associated with the date, which is of course why anyone cared all that much. The owner argued that the milestone date included the 8th floor. The contractor believed the milestone only covered up to the bottom of the 8th floor, which is to say it included the 7th floor but not the 8th floor.

Then one of the (many) attorneys in the room asked for my opinion. Simple. My mom was an English major and I knew exactly what she should would have said. To avoid any misunderstanding, the contract should have read:

"Contractor shall complete work up to and including the 8th floor by (date)."

That was easy, right? But all too often we write things that are actually a bit ambiguous. Not intentionally, of course, but it happens. A lot. While construction contracts (and contracts in general) contain a lot of boilerplate language that presumably has been vetted, the sentence containing the intermediate milestone was clearly a one-off.

I think about this a lot because every day I see examples. In Primavera P6 Professional, the Data Date defaults to 12 am. The significance? If the time of day is left "as is", then progress should not be recorded on the day of the Data Date. The time of day can be modified, but it is something I have to keep in mind. Progress on the Data Date belongs to the next update.

For the same reason, I dislike the Must Finish By date in P6. It defaults to 12 am. If this date represents the contractual finish date of the project, it means we will be considered "late" if we work at all on that day. Better to use a constraint on the last activity in the schedule; activity constraints adopt the calendar assigned to the activity.

Better yet, Primavera P6 has an activity constraint that is perfect for the last activity in the schedule:

Finish On or Before

My mom would approve! No ambiguity in that statement. Primavera P6 has several other constraints as well, but this one is my favorite. I could be more than satisfied with just this one constraint in a typical schedule.

How we describe an activity in a schedule matters as well. The scheduling specifications may require a verb in the description. Most of us probably use a verb already without really thinking about it, but consider that an activity described as "storm sewer piping" could be referring to procuring the material, removing the material, or installing the material.

(To avoid any confusion I have always placed procurement activities in a separate part of the schedule, but even today I see procurement activities next to field activities).

Yes, some of this is pretty minor. Until you have a group of people sitting in a room arguing over grammar!




The Origin of Time is of the Essence

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“Time is of the essence.” We see that phrase so often in construction contracts that we hardly give it a second thought. The origin of this phrase, however, is quite interesting. Indeed, it was the greatest construction project ever achieved in the United States: the transcontinental railroad. The project was deemed “impossible” at the time yet several larger-than-life individuals bet their personal fortunes that it could be done.

Perhaps even more audacious was to start such a monumental project while the Civil War was also underway. But you could argue that the Civil War made the transcontinental railroad possible. Southern States wanted a route along the thirty-second parallel line – i.e. within their territories. The North, not surprisingly, favored a more northerly route along the forty-second parallel. When the Southern States declared their independence, the North was free to pursue the route they favored.

The Pacific Railroad Act of 1862 provided a funding mechanism for the transcontinental railroad. It also created two of the largest companies in the United States that until then did not even exist: the Union Pacific Railroad and the Central Pacific Railroad. Neither company was paid directly to build the railroad; instead land grants and Government bonds were earned for each 20-mile segment of track laid. The railroad companies would then sell the bonds and land to raise capital.

The Union Pacific started west from Omaha (the western terminus of existing railroads at the time) while the Central Pacific started east from Sacramento, CA. Even so, the Government would not say where the tracks should meet and avoided making this decision for several more years. As a result, the transcontinental railroad became a race, as the company that built the most track would reap the most rewards.

My wife and I live in the Sacramento area, but we also own property in Truckee, which sits 6,000 feet higher in the Sierra Nevada mountains. Riding the train today we are following for the most part the original route. Right before Truckee we pass near the original Summit Tunnel, more than 1,600 feet long and carved out of solid granite by the Central Pacific using nothing more than hand tools, black powder and (occasionally) nitroglycerin.

Historian Stephen Ambrose described it this way in his book, Nothing Like it in the World:

“There was only room for gangs of three men. One would hold the rock drill against the granite, while the other two would swing eighteen-pound sledgehammers to hit the back end of the drill. Of all the backbreaking labor that went into the building of the CP and the UP, of all the dangers inherent in the work, this was the worst.

The drills lost their edge to the granite and had to be replaced frequently. The CP soon learned to order its drills in hundred-ton lots. The man holding the drill had to be steady or he would get hit by the sledgehammer. The man swinging the sledgehammer had to have muscles like steel. When the hole was at last big enough for the black powder, the crew would fill it, set a fuse, yell as loud as they could while running out of the range of the blast, and hope. Sometimes the fuse worked, sometimes it didn’t.”


The amount of black powder being used – up to 300 kegs per day – was not economical, “for the simple reason that the workers were told that time, not money, was of the essence.”


Even so, progress was often limited to six to twelve inches per day. To speed up construction, the Central Pacific began worked from four directions. They worked from the east side of the mountain as well as the west, and dug a shaft at the top of the mountain to start working east and west from inside the mountain.

Elsewhere, track was laid on frozen ground if necessary. The Union Pacific used wet cottonwood ties in many locations because it was the only wood available. Trestle bridges replaced more time-consuming embankments. It was understood that much of the track would have to be rebuilt within a few years. Given the choice of building it well or building it fast, Stephen Ambrose estimates that 90% of Americans would have voted to build it fast.

Towards the very end both railroads a competition developed over which railroad could lay the most track in one day. The Central Pacific won, laying 10 miles of track in one day – a feat that has not been equaled since. Mind you this was all done with horses, wagons and manpower. It was estimated that each of the eight track layers lifted 125 tons of steel that day. They laid 240 feet of track every 75 seconds.

The transcontinental railroad even changed our perception of time. Prior to its construction, local communities set their own time. But the railroad companies needed a “standard time” in order to publish schedules. Thus, the United States was split into four time zones. And for the first time in thousands of years, man could travel at a pace faster than a horse. The technology of the locomotive, combined with manpower, conquered space and time.

The Consummate General Contractor

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Don PepoonSeveral years ago I referred to my father as the consummate general contractor in a submission to Engineering News-Record. When he saw the article he initially thought I was making fun of him until my mother – the English Major – explained to him what “consummate” means. In case you are like my dad, it means “being of the highest or most extreme degree”.

Dad started his career in the early 1950s as a civil engineer working for Black & Veatch in Kansas City, MO. Today, Black & Veatch has over 8,000 employees but in those days the firm was small enough to know everyone working there. A few years later he moved to Paola, Kansas to work for a building contractor but quickly realized his employer was not exactly the most knowledgeable contractor, even in southeast Kansas!

But two gentlemen who owned a civil construction company in Paola were impressed enough with my father to help him launch a new building construction firm. They called the firm Triangle Builders because there were three partners but my dad was solely responsible for running the company on a day-to-day basis. In the 1970s he bought out his partners with plans to pass on his company to his three sons.

There are a lot of reasons why my dad deserves such high praise as a general contractor but the best story starts in Fort Scott, KS. In 1965 the National Park Service provided funding to the City of Fort Scott to rebuild its historic frontier fort. This fort was originally constructed around 1850 when Kansas was still a territory of the United States. In the late 1960s my dad submitted a bid for the first building to be reconstructed.

My father was a very precise estimator who left nothing to chance. If he recognized a risk he would figure out a way to quantify (i.e. price) the risk in his bid. And historic Fort Scott presented a lot of risks. Dad had never rebuilt anything historic before. The stone used in the construction had to be sourced locally and any exposed construction had to use the type of joinery available in the mid 1850s. Triangle Builders had built larger projects but perhaps nothing as complex as this reconstruction.

When the bids were opened Triangle Builders was the low bidder by a significant margin. The City of Fort Scott was so concerned about the bid disparity that they made an unprecedented offer: Triangle Builders could withdraw its bid with no ramifications. As many of you know, contractors typically must submit a 10% bid bond with their bids to guarantee they will not try to withdraw their bids. And this project likewise required a bid bond.

My dad went back and checked his estimate again to make sure there were no mistakes. Satisfied that his bid was solid, he signed a contract with the City of Fort Scott. Triangle Builders had an excellent superintendent on the project and my dad monitored the project closely from his end. When the project was over my dad realized he had made more profit than expected.

This is where the story should end. Triangle Builders took a risk by signing a contract that even the project’s owner thought was ill-advised. Certainly the City of Fort Scott would not have known how much profit my dad made on the project, and had Triangle Builders lost money on the project well, too bad. But here is what my dad did: he mailed a check to the City of Fort Scott for what he thought was the excess profit on the project.

When I was a kid I sometimes received used presents on Christmas because my parents had everything wrapped up in their construction company and the early years were a struggle. And here my dad is giving back money to the City of Fort Scott that rightfully belonged to him. But that was not the point and my dad felt better doing what he considered to be the right thing. I have been involved in the construction industry for 31 years and have never heard of any contractor voluntarily sharing profits with the owner.

Dad died on March 8, 2015. I told this story about him at the funeral. I was really struggling with my emotions that day but when I got to the part about my dad sending a check to the City of Fort Scott, everyone started laughing. Classic Don Pepoon! I felt much better after that but he will always be missed. We need more people like him in this world.

 

 

PayPal Buttons Fixed!

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We were notified by a client today (December 17th) that our PayPal buttons were not functioning correctly. The problem is that a certain person at our company who shall remain nameless (ahem…) was trying to remove some of the blank spaces on the Primavera software pages and accidentally deleted part of the PayPal code. As a result, some of the buttons were not connected to the PayPal shopping cart. This problem also occurred at our training website, Primavera Scheduling.

If you tried to place an order during the past few days and had problems please accept our sincere apologies. We hope you will give us another chance to earn your business. And since money sometimes speaks louder than words, we will refund $50 on every software purchase for the rest of 2013. It doesn’t matter if you had tried to place an order or not! And we really don’t care if you have been naughty or nice. Please contact me if you have any questions. Thank you!

 

Welcome to our new website!

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Welcome! We launched our new website on May 29, 2013. Besides adding many new features we wanted our Construction Science website to have a similar theme as our Primavera P6 training website, www.primaverascheduling.com

While the new site has been beta tested several times, please let us know if any links are not working. And look for regular postings regarding the construction industry and tips for solving problems. After all, we have been assisting bulding owners and construction companies for 29 years.