The Construction Advantage – Issue 6

In our sixth issue of The Construction Advantage, we provide you with an all New England edition, focusing on the increased employment in the construction sector in ME, a large court award related to the Big Dig, and the accolades for ME General. We hope that this newsletter has been helpful and informative to you so far in 2014. Please feel free to let any of us know if there are specific issues that you want us to cover in the future.Finally, we wish you and yours a happy Fourth of July.

Local Construction Increases Personal Income In ME
By Asha Echeverria

As the Associated Press reported on June 24, 2014, personal income for ME residents has increased 5% during the first quarter of 2014 even though as a state, ME is in the last third of all states in personal income. Although nationally the first quarter in 2014 saw an 8% increase in personal income, the increase in ME was slightly behind that figure. The bright spot is that construction was the largest contributor to ME’s increase in personal income during this quarter. Additionally, as of last month, the country had gained back all of the jobs that had been lost in the Great Recession. This information,  particularly involving the construction sector, bears well for ME’s future as construction has continued to improve and ME has added back construction jobs that were lost during the recession.

Joint Venture Involving Tutor Perini Succeeds in Legal Dispute
By Meredith Eilers

More proof that the Big Dig continues to live! A joint venture involving Tutor Perini Corporation, named Perini Kiewit Cashman, has completed a long-running dispute with the Massachusetts Department of Transportation involving the Central Artery Tunnel Big Dig project in Boston. The joint venture had advanced a number of claims for both additional time and compensation for work that had been ongoing in excess of the past 15 years. A Dispute Review Board consisting of three experts in construction issued several interim awards and in the end awarded the joint venture an award that with accrued interest now exceeds $80 million. The Massachusetts Superior Court recently affirmed the decision of the Dispute Review Board.

The estimated cost of the Big Dig project was over $14 billion and took in excess of 15 years to complete, concluding in 2007. While litigation obviously drags on in many cases, this outcome demonstrates that sometimes the wait in a litigation case is ultimately worth it and sometimes large awards are justified for extra time and costs on a construction project. While the Big Dig was obviously a one-of-a-kind project, many construction claims concern either additional time, additional cost, or both, and they are the types of claims that the attorneys at Bernstein Shur handle on a regular basis for existing and new clients.

The New ME General Hospital – The Gold Standard in ME
By Mike Bosse

Construction lawyers like me are used to encountering construction projects gone bad, and sometimes, headed directly toward litigation. In this column, I wanted to focus on a large-scale recent project in ME that was an enormous success: the new ME General hospital. I will highlight two of the features that made this project stand out among others, and the importance of the success of this large scale health care facility for the state going forward.

Most people know that this project was a massive one, covering over half a million square feet with almost 200 patient rooms. It contains a helipad, a large meeting space, and 10 operating rooms. It also was the largest construction project the state of ME has ever seen, and thus was an obvious challenge on the front end. Despite the massive nature of the project, however, the state should be proud that the vast majority of construction participants on the project – 97 percent – were companies that reside in the state, who went on to successfully build a beautiful and environmentally sustainable health care facility.

There were two major distinctions about this project that everyone in the industry should know. First, the project used a delivery system called Integrated Project Delivery (IPD). IPD forces all of the project participants to work together, instead of the traditional design / bid / build process where the architect designs the project, the owner agrees to the design, and then the contractor and subcontractors construct the building. IPD forces teamwork because (just as the name says) it forces the project delivery to be integrated between the project participants from the inception of the design. Everyone on the project shares information in a much more transparent fashion, and therefore they also share in the rewards and risks of coming in under or over budget.

Second, ME General reported just this past month that it achieved Gold LEED status for the hospital, the first such award for a health care facility in ME. LEED, which stands for Leadership in Energy and Environmental Design, requires that very tight standards for sustainability be achieved in order for a project to be awarded the designation. Points are awarded for different sustainability measures, and the hospital achieved enough points for the coveted gold status. Among the features at ME General that got it to the finish line are interior motion lighting that turns on and off when people enter and depart a room, efficient use of heating and cooling systems, and a storm water system that recovers rainwater for use in the building and in retention ponds.

ME has not seen many projects on a scale this large. But the success of the project demonstrates that ME construction companies can embrace new forms of project delivery to complete a large-scale project that is environmentally sustainable for the future. Particularly in the health care sector, with increased need for projects because of our aging population nationally and in ME, we can expect to see more cutting edge health care construction in the years to come. The ME General project demonstrates that the design professionals and contractors in ME are ready to build as many high-end health care facilities as the state needs going forward.