Womble Carlyle Construction Industry Blog

Following the construction industry and related legal topics in the United States.

Tuesday, April 24, 2007

Recap: AGC BIM Conference in Atlanta

According to Mayan astrological calendars, the world will end in December of 2012. [Or is it 2016? I can’t remember.] But one thing seems certain: if so, by the time it does, use of BIM (building information modeling) will be commonplace in the delivery of construction projects.

That was the consensus (or at least the non-Mayan part was) at last Friday’s well-attended BIM conference in Atlanta, sponsored by the Georgia Chapter of the Associated General Contractors of America (“AGC”). It seemed obvious to those attending that the BIM debate has now moved past the question of “if BIM will be used for most projects.” It is now focused on the date on which that will happen. By a show of hands, the great majority of the audience seemed certain that that would occur within three to ten years.

Three excellent speakers cut through what could have been a fog of acronyms and software industry jargon to provide a program that was both practical and “inspirational.” Read more...

Monday, April 23, 2007

Let's Not Forget Low-Tech in a High Tech World

The Special Projects Office of the United Nations (UN), Fergus Gleeson, has reported in the Irish Engineers Journal, vol. 58:01 January/February 2004, that for countries whose infrastructure has been damaged by war, "labour-based technology is appropriate." The concept finds expression in Afghanistan under the National Emergency Employment Programme. Through this program, construction technologies are "those founded on indigenous knowledge, skills and materials, thereby allowing a maximum of the project fund to be retained within the project area." This policy of labour based appropriate technology (LBAT) is coupled with "social targeting," a process that allows a society's most vulnerable groups located in the project's area to benefit from the work. In Afghanistan, those target populations include disabled, female heads of households, women in poverty, nomadic people who have suffered catastrophic losses, ex-combatants and elderly. These constituencies are typically excluded from such construction projects, which has the effect of enhancing their vulnerability. LBAT can reverse that trend where "design of the actual work methods as well as the infrastructure [allows] these people [to] participate in the works in a manner that is socially acceptable."

An example noted in the article is stone, an abundant resource in Afghanistan. Stone masonry is a well developed skill among the people. So, under a social targeting LBAT model, project design will incorporate stone paved roads to make use of indigenous materials and local expertise. The article highlights the substantial economic benefits that can be realized on a local and regional level, and counters claims that LBAT results in lower quality work: "Simple yet highly effective quality control methods and site control and instruction can be used to ensure that the infrastructure is constructed in accordance with detailed engineering specifications and designs." For more about this interesting approach to construction in countries rebuilding war-torn infrastructure, see here.

This public policy is not profound, but it would seem to have profound impact. It also drives home the simple fact - recognized in the "New Deal" programs - that even a high tech world calls for low tech approaches, especially where social conditions need to be addressed. (This blog entry published by Laura Luger of Womble Carlyle's construction and real estate practice group.)

Thursday, April 19, 2007

Is this better than BIM; or, is it BIM Redux?

Newly noted on April 18,2007 at Innovations Report is an article entitled "Software invention could save construction industry a fortune" in which it is noted that researchers at the University of Teesside are spearheading a revolution which could save the construction industry millions. The effort involves developing their own software tools which harness the power of computer games technology to give planners and builders the ability to rehearse different phases of a major construction project over and over again on a PC screen before building work begins. This can range from putting in the foundations to installing pipework and electrical equipment. The Teesside Professor worked closely with the international project management and construction consultancy, F+G, formerly Faithful and Gould, on the Hull gas receiving project and estimates that about 5-7% could be saved off the £100m-plus project by rehearsing the project using the University’s 4D planning tool (3D + real time). Now he is perfecting the computerised Virtual Construction (VIRCON) site instrument with the help of academic colleagues and F+G’s Stockton-based national planning manger, Ian Mackenzie.

Professor Nashwan Dawood, Director of the University’s Centre for Construction Innovation and Research (CCIR), said: “The software tool can help everyone involved in a major project to go into minute detail of construction activities and look for the most efficient way of tackling a contract. This is particularly important when lots of different trades are working on a multi-million pound project in a tight location and where delays can cost big money.”

It is further noted "[t]he next step is to see if the technology can be used to help cash-flow forecasts and to make the software more interactive and user-friendly."

Ian MacKenzie, at F+G which employs over 2,000 worldwide, said: “We like to be at the leading edge of new developments helping the construction industry to become more efficient. This is a very important tool to help our clients improve on project delivery and save costs."

I am curious who is leading whom in this fascinating area? And, whether coordination of efforts may not be the better part of valor here. (This entry is posted by John Springer of Womble Caryle's construction and real estate development practice group.)

Friday, April 13, 2007

Why don't more people build green?

Several weeks ago one of our readers commented that some in the public and private sector remain skeptical about building green, and asked about their concerns. There are a variety of concerns about building green (more than I can address in a single blog entry), but here are a few of the more common ones:

1. Building green is expense. This includes everything from materials and education to regulatory compliance. While these problems do exist to varying degrees, evidence suggests that these capital costs should be offset by significant operating cost savings over the life of the building. Some in the green building community claim that with proper planning a green building can be built for the same price (or less) than a traditional building.

2. Green buildings take longer to build. This concern may have more to due with the permitting process than actual construction. At the ACI conference, several builders noted that the process of getting green technologies approved was time consuming because building inspection departments were unfamiliar with them. This is due in part to a lack of information about products and systems in the marketplace.

3. There is no financial incentive for developers to build green. The cost benefits of a green building (operating costs, productivity, health) accrue over time to the final owner and tenants of the building, not to the developer. Additional up front costs are born by the developer and cannot be easily passed on to the owner.

4. There is no market for a green building. This goes along with "the public doesn't care" argument. As I noted in my previous entry, builders in the southeast are not seeing a rent premium on green building because of a lack of education (among tenants) about the value of occupying a green space, but this should change in the future. In more progressive, urban areas, a market is starting to form, and owners (and tenants) are seeking green buildings.

5. There is an absence of research on the advantages of green building. This is a big concern. At the conference, an appraiser noted the absence of institutional market research for real estate lenders and investors to evaluate green buildings. There is also an absence of case studies on building performance, long-term studies on the environmental benefit of building green, studies of productivity and health benefits, and an examination of the capital and operating costs of green features.

6. There is confusion in the marketplace. Multiple standards do exist in the market and many are not comparable. This creates market confusion. I suspect this confusion will subside because it appears LEED is becoming the most popular standard.

For additional discussion on benefits and barriers to green building, see Evaluating the Diffusion of Green Building Practices, written by Benjamin Cryer, Jeffrey Felder Rebecca Matthews, Michael Pettigrew and Brian Okrent, MBA candidates at the UCLA Anderson School of Management; see also the Massachusetts Technology Collaborative website on Green Building.

Tuesday, April 10, 2007

County Says Lot Perks, Then Doesn’t, Then Gets Sued

A buyer entered into an offer to purchase lake front property from a seller with a condition that the lot perk for a three bedroom house. Buyer purchased the lot after receiving and relying upon an improvement permit issued by the Montgomery County Health Department after the lot passed a perk test. The buyer also built a boat dock. All good so far.

But wait - a few years later before building the house, buyer decided to change the location of the driveway and applied for a new permit. The Health Department retested the lot, found it failed the perk test, acknowledged a mistake was made and revoked the permit – for the new plan and the old plan.

In Watts v. N.C. Department of Environmental and Natural Resources (Lawyers Weekly 07-07-0385), the Health Department argued that it could not be sued due to the public duty doctrine barring suits against government agencies. In a split decision, the North Carolina Court of Appeals majority ruled that the buyer fits into a “special duty” exception, whereby the government agency breached a duty owed to the buyer individually, rather than to the public at large.

Previously, North Carolina courts limited the “special duty” exception to situations where a government entity makes a promise of protection, fails to protect, and causes injury to an individual as a result. Considering the direct reliance the buyer had in the Health Department’s perk test and improvement permit, and the resulting detriment to the buyer as an individual, it appears the North Carolina Court of Appeals averted an injustice. So all is good again, right? Well, the Court excised a large chunk of the buyer’s damage award as speculative interest damages. And no attorney’s fees or costs. But the moral victory the buyer may keep – as a perk. (Today’s entry posted by Ken Michael of Womble Carlyle’s construction and real estate development practice group).

Monday, April 2, 2007

Green Building Insurance

According to "The Green Behind the Green," an article in the Spring 2007 issue of NAIOP's magazine Development, Fireman's Fund recently launched a new insurance product for green commercial buildings and also non-green buildings whose owners would like to get the advantages of green.

A LEED-certified building is eligible for premium discounts (lower risk factors). If the building is covered by the company's Green Building Replacement program, the insurance will pay for rebuilding to a green certification standard, including rebuilding with sustainable building components. For buildings that are not green certified but are covered by the company's Green Upgrade coverage, the insurance will pay for rebuilding with upgrades that are green, and if the building has suffered a total loss, the insurance will cover a green certifiable rebuild. In addition, Fireman's Fund will pay the costs of applying for green certification by the U.S. Green Building Council and/or the Green Building Initative's Green Globes program.

For those of us who advise owners and developers of commercial real estate, this innovative insurance program seems well worth discussing with our clients.

To read more about the Fireman's Fund Green Building Replacement, Green Upgrade and Commissioning coverages, click here.(Today's entry posted by Karen Carey of Womble Carlyle's construction and real estate development group.)