Contracts and Construction: The Importance of Getting It Right
Construction does not always run smoothly, but when it does, it is down to effective planning and detailed contracts. Frank Giunta has been in the construction consulting industry for more than 30 years and this month, he discusses how technology is changing the disputes he sees, and key principles he believes businesses should meet.
What are the particular challenges involved in disputes surrounding construction surveying and the construction process?
The biggest challenge is documentation. Without good documentation and a sound contract, it is difficult to support or dispute a construction claim.
Why is arbitration often the best resolution method for this type of case?
When designed properly, arbitration can be a cost effective and efficient forum for the resolution of disputes and may provide parties a means to have their dispute heard by a trier of fact without the time and cost burden of a formal court trial.
You have aided counsel in numerous large construction projects; what are the biggest concerns you convey to clients in the planning and implementation of such construction projects, in particular regards to avoiding potential disputes?
It all starts with the contract. The detail and thoughtfulness of the contract sets the tone of how the construction process will unfold. From there, strong project controls, protocols, and thorough documentation are key to avoiding or minimising disputes.
In your work in the construction industry, what has been the biggest dispute challenge you have faced? How did you overcome this?
Dealing with diverse international parties and their professional and jurisdictional norms can present a challenge. What is customary in one country or jurisdiction may not be consistent with the other party or parties. You need to make sure your client understands the law and customs of the contract and views his or her expectations of the merits of the case on that basis.
You also lecture in the US and South America; what key principles do you believe businesses must be aware of?
Prior to undertaking any capital programme, it is absolutely essential that the parties understand the risks of the venture, how to manage or control those risks and which party in the venture is best suited to handle those risks. Once these risks are identified in the beginning they must be managed throughout the project. Your best chance to avoid construction problems is before construction begins. Anyone who embarks on a construction project needs to remember the basic principle that the earlier you detect a problem in the lifecycle of a project, the easier it is to fix. The cost of delays and change orders increase exponentially as a project lifecycle progresses.
Over the past decade, have there been any legal developments that have significantly affected your work in the construction industry?
As consultants we focus on the technical and factual aspects of a project or dispute and leave the legal considerations to the attorneys. However laws pertaining to document discovery, admissibility, and privilege change from jurisdiction to jurisdiction and affect how you do your work. Further, technology has had a tremendous impact over the last decade. New technology has improved project controls with real-time information from the job site. Drones have made job sites safer and information quicker and easier to obtain. BIM has helped with design to construction implementation. As this technology gets incorporated it requires new laws to govern their use.
Is there anything else you would like to add?
HKA recently separated from its parent company Hill International as an independent entity. Hill had a global project management division and as a result the claims consulting practice was in conflict many times. Operating independently is a major advantage for HKA and for our clients. With a singular focus on claims consulting we are free to support a much wider array of clientele. Multi-national stakeholders are now commonplace on major construction projects. Our Panama Canal Expansion project had stakeholders form 42 different countries and some of those stakeholders caused conflict with Hill’s project management group. It is a new error for HKA as the largest claims consultancy in the world with nearly 1,000 consultants worldwide. Without other lines of business within our company, there are far less restriction to support clients of any type, anywhere in the world.
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Frank J. Giunta is a Partner and President of the Americas for HKA, www.hka.com, a global advisory, claims consulting and expert consultancy that employs the largest construction claims team in the world.
Mr. Giunta has more than 30 years of experience in engineering and construction consulting. He has managed complex consulting assignments on behalf of public and private owners, engineers, contractors, insurance and financial institutions. These assignments have involved a wide range of projects which include highways and bridges, dams, power related facilities, water and wastewater treatment, landfills and building construction. He has provided expert testimony in various legal forums on issues including differing site conditions, defective contract documents, adequacy of design, construction defects, schedule delays, productivity evaluations, and cost analysis. He lectures extensively throughout North and South America on matters pertaining to project delivery systems, risk management and dispute avoidance/ resolution.
HKA is the new global brand that unites the former Construction Claims & Consulting Group of Hill International and associated subsidiaries – Binnington Copeland & Associates, Cadogans, Hill-PCI Group, Knowles and McLachlan Lister – following its sale and de-merger from Hill International, Inc.
HKA is now one of the world’s leading providers of advisory, consulting and expert services for the construction, manufacturing, process and technology industries.
We anticipate, investigate and resolve project challenges. HKA understands the pressures associated with delivering successful projects, whatever their size and complexity, wherever in the world. As trusted independent advisers, consultants and experts, HKA finds solutions amid uncertainty, dispute and overrun, and provides the insight that make the best possible outcomes a reality for public and private sector clients worldwide.
Now a privately-owned organisation with management equity, HKA is supported by Bridgepoint Development Capital, part of Bridgepoint, a major international private equity group headquartered in London, UK.
HKA has over 960 professionals operating from more than 40 offices in 21 countries worldwide.