Construction and Infrastructure

There are as many ways to finance a project as there are to build one. The first business question any owner must ask itself is "Where is the money coming from?" The next question for both owners and lenders should be, "How is this project to be delivered: design/build, CM At-Risk, turnkey, traditional GC, multiples primes, etc.?" The answer to the second question is material to the first, as any owner, lender or equity participant must know where the risks lie, and successful delivery is the largest risk. Our lawyers are familiar with the nuances of various project delivery methods, and are frequently called on to help project owners structure, from a contractual standpoint, the project delivery system that best suits a particular project. Once decided, we provide guidance on the terms of the agreement(s) governing that delivery method, both design and construction. Working with the Firm's Real Estate, Corporate and Public Finance Groups, we are able to counsel owners and developers on the terms of financial arrangements. Our lender clients rely on us to review the terms of prospective design and construction agreements to assure that the risks are allocated correctly and that the owner/borrower is not exposed to such an extent that the lender's interest in it would be threatened.

In recent years, as the Construction Industry as a whole has embraced sustainability and green building concepts, our Construction attorneys have kept abreast of Industry developments. Five McCarter attorneys have passed the rigorous Leadership in Energy and Environmental Design (LEED) exam to become LEED accredited professionals or LEED AP's. The LEED AP designation demonstrates a comprehensive understanding of Green Building principles and practices as embodied in the LEED Building Rating System developed by the U.S. Green Building Council, which is now in wide-spread use throughout the U.S. and abroad. By combining this new Green Building knowledge with their in-depth understanding of Construction law and Industry practices, our attorneys are able to draft and negotiate design and construction contracts that accurately and fairly reflect the Green Building obligations of each party; assist clients with Green Building problems that arise during construction or in connection with the LEED Certification, and address claims that develop out of the Green Building process.

An insurance policy is the last thing anyone wants to read. So most people don't.  That approach is fine so long as no problems occur, but it is a unique construction project and a unique industry participant who avoids all problems.  The multi-layered structure of most projects and the efforts of all involved to shift risk away from themselves leads to a complex, interlocking (or mutually opposing) set of insurance policies.  Contract language can require things that insurers don't or won't provide, or can sometimes negate coverage entirely.  It is vital that insurance in fact provides the coverage desired and is not compromised by contract requirements.  Our construction lawyers know from experience where the problems lie within contract documents and are familiar with judicial decisions interpreting policies and contracts. In addition, our attorneys regularly interact on highly technical questions of insurance law with attorneys from the firm's large and experienced Insurance Coverage Practice Group.

We regularly guide clients through the entire building process, advising on contract  administration problems and procedures, including Change Orders, Additional Services, Events of Default and, where necessary, termination. Clients discern significant value in having, on their project teams, someone who has prior experience in dealing with the business, technical and legal concerns affecting the project.

The Construction Practice Group, often in concert with our Bankruptcy and Creditors' Rights Group, can provide a coordinated resource for parties involved in troubled construction projects.  A troubled project is one in which a key participant – such as the owner or contractor – is unable or unwilling to continue its contract obligations due to insolvency, bankruptcy or another financial reason, causing a material default.  A construction project affected by such a default  is jeopardized and often fails entirely, leaving the remaining parties to sort out their conflicting rights and liabilities.

When a key project participant cannot or will not perform, but has yet to file for bankruptcy, our attorneys can step in to assist in analyzing and developing strategies for completing the project.  Our advice may involve:

• Termination
• Assumption or rejection of subcontracts
• Taking possession of materials and equipment on site
• Liens and lien claims
• Retainage/contract balances
• Sureties and lenders - including negotiation of workouts and enforcement of bond and loan documents
• Securing the work site

In the event that a key participant files a petition in bankruptcy, our attorneys can assist with:

• Stay relief, including enforcement or defense of mechanics' liens
• Claims against payment and performance bonds
• Trust fund litigation, including the enforcement of construction trust fund statutes in bankruptcy to secure payment for subcontractors and suppliers
• Enforcing and litigating competing priorities for unpaid contract balances and retainage
• Preference litigation
• Executory contracts, including negotiating the assumption or rejection of construction contracts by a trustee or debtor-in-possession as "executory contracts" under the Bankruptcy Code
• Lien avoidance and setoff
• Enforcement of arbitration provisions, including removing dispute resolution from the Bankruptcy Court

We handle every kind of construction dispute for our owner and contractor clients. Our attorneys achieve business goals for clients in such areas as:

• Delay, acceleration and disruption claims
• Contract and specification scope disputes
• Construction cost accounting
  Subsurface and other changed conditions claims
• Defective and non-conforming work

Among our many recent engagements, we have represented:

• A major civil contractor, in disputes with surety and steel fabricators over the completion of a $120 million drawbridge project
• A university with more than $18 million in damage to its library building due to design and construction defects
• A state Department of Transportation, in a $70 million dispute involving a bridge rehabilitation project
• An engineering firm, following the structural collapse of a bridge it designed. Implementing a pre-litigation strategy, we arranged for the engineering firm to provide assistance to the National Transportation Safety Board, which led to discussions with the owner and eventual settlement
• The owners/developers of various shopping malls and "big box" retail centers in litigation with contractors and design firms
  Government agencies in arbitration and litigation of contractor delay and disruption claims seeking over $50 Million, on Boston's Central Artery/Tunnel Project, in state trial and appellate courts
• A construction manager in a successful $4 Million claim for wrongful constructive termination of its contract and non-payment of millions of dollars in costs and fees on a major private mixed-use development project
• A construction manager in a successful $1.5 Million claim for payment of costs arising from delay and disruption on a large academic building on a private university campus

Our attorneys are skilled in the use of Alternative Dispute Resolution to achieve creative, quick and cost-effective results. The Group includes leaders of the ADR community and has proven extremely successful in developing ADR processes for specific clients and for the industry as a whole. Our facility with ADR techniques is vital in achieving the best litigation outcome while serving the client's business interests.

One of the most misunderstood relationships in the law is the tri-party relationship among a contractor, its surety and the owner. The rights and duties of surety, primary obligor and obligee are governed by highly technical common law, as well as increasingly complex bond language. Our lawyers know the world of surety and have worked within it for years. Some have been in-house claims counsel for major surety companies, others have served on the boards of suretyship professional organizations. We appreciate the risks held by surety and contractor, including the business relationship and underwriting decisions that drive them.

We have arbitrated and litigated many matters arising from defective design construction of residential, academic and commercial public and private buildings, as well as bridges, water treatment plants, highway tunnels, energy facilities, garages, and virtually any type of structure or infrastructure imagined. Because many of our lawyers are engineers or have years of experience with design and construction we can quickly grasp the technical issues involved and make the right decisions on which resources, both internal and external, to apply. Clients can waste many months and many dollars while their lawyers learn their way around a project and come to grips with the technical reasons for failure. We achieve successful results due to our combination of technical knowledge and legal experience.