Construction weekly june 17, 2016

Volume 28, Number 22 • June 17, 2016

Construction Weekly

Practical Tips on Drafting Construction Contracts

By: Milene C. Apanian • Abdulaziz, Grossbart & Rudman

Although some construction projects may be completed on a handshake and do not warrant a complicated and lengthy written contract, it is better to have a written agreement because an agreement establishes the obligation of the parties and helps avoid misunderstandings.

A successful construction project starts with having the right contract executed by the parties involved. A well draftedcontract clearly identi-fies the duties of the parties, allocates risk between the players, and curtails unnecessary disputes during and after the construction is done. A construction contract must address a wide range of issues; a comprehensive study of construction contracts is not possible here, however, below are some practical suggestions regarding negotiating and drafting a construction contract.

Negotiating The Contract:Construction contracts are typically the result of negotiations by the parties executing it1. To successfully negotiate your contract, make sure you are negotiating with the decision maker and that the person has the authority to enter into a contract with you. Additionally, start with providing a copy of your “form contract” (with the boilerplate language) as the basis for initiating discussion. If you do not currently have a “form contract,” invest the time to come up with a typical or “form contract” you can alter and use on your future projects. While negotiating, if revisions are made to the contract, keep track of the various drafts and changes just in case a dispute arises. Also, in order to be credible during negotiations, be familiar with the proposed contract and understand the legal significance of the suggested terms, conditions, and various provisions. If you do not understand any portion of a proposed contract, get professional help before you execute the document. While negotiating the contract, identify and understand your priorities, let go of insignificant issues and do not argue over them. Be flexible, creative and willing to negotiate the terms. Most importantly, do not start the construction before there is an agreement regarding all of the terms and all parties have signed the contract. Once the work starts, your bargaining power diminishes.

Drafting The Contract:Choose The Right Contract: One size does not fit all when it comes to construction contracts. Evaluate the project andcreate a contract that works for the project. Is it a commercial or residential project? Is it a small, short term, simple job or a complex con-struction job? Do you want a Stipulated Sum/Fixed Price, a Cost + Fee, a Cost + Fee Guaranteed Max, or a Time & Material contract? All these issues must be considered and addressed when drafting the contract.

In order to save time and money, you can choose to start with a construction industry form contract generated by aconstruction trade association. The benefit of using industry forms is that courts in different states have already interpreted the meaning of the various contract provisions and the outcome during a court dispute will be more predictable than if a custom contract is used. However, since trade associations routinely revise the form contracts to reflect industry changes and requirements, make sure you use an updated and current version, not an outdated form contract. Additionally, in choosing a form contracts, understand which trade association drafted the contract because some form contracts may allocate or shift risks and duties with undesirable results for contractors.

When drafting your contract remember not to cut and paste from other form contracts and from contracts used by colleagues or competitors because you may violate copyright laws and may unintentionally pick up provisions that have adverse consequenc-es for you.

Coordinate The Contract Documents: A typical construction contract usually has several components. Clearly reference andincorporate into your contract all the components, including the agreement (which has the signatures of the parties), theconstruction plans, the general conditions, the special conditions or the specifications, any exhibits, building codes and continued on page 4

2 • Construction Weekly

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• Membership BBQ Flyer Page 2

• Construction Contracts Aritcle Continued Page1 & 4

• Contractor Connection Page 5

• Classified Page 6

• Weekly Economic Update Page 7

• Projects Out to Bid Page 12

• Prevailing Wage Seminar Flyer Page 13

• Legal Notices Pages 14-15

• Family Day at Six Flags Vallejo Flyer Page 17

• Tail Gate Topic Page 18

• Safety Calendar Page 19

Contents

Construction Weekly • 3


When drafting your contract remember not to cut and paste from other form contracts and from contracts used by colleagues or competitors because you may violate copyright laws and may unintentionally pick up provisions that have adverse consequences for you.

Coordinate The Contract Documents: A typical construction contract usually has several components. Clearly reference and incorporate into your contract all the components, including the agreement (which has the signatures of the parties), the construction plans, the general condi-tions, the special conditions or the specifications, any exhibits, building codes and standard specifications. Before finalizing the agreement, review the different components, identify and resolve any conflicts that may exist between the plans, specifications and the notes. Include lan-guage in your agreement which sets forth the order of precedence or the contract documents and identifies which document governs if a conflict exists between the various parts. 1 Most, if not all, public works contracts are drafted by public agencies and offered as a “take-it or leave-it” basis and contractors have little ability to negotiate the terms.

Typically, specially prepared specifications govern over general specifications, detailed plans govern over general plans, and detailed drawings and notes govern over general drawings and notes.

If other contracts, such as prime contracts, are incorporated into you contract, obtain a copy and review it before your contract is executed. Make sure the terms and conditions incorporated from the prime contract do not conflict with yourcontract or subcontract.

Allocate Risk: Clearly allocate risk and identify the duties of the parties. A few issues to consider are: Who will obtain thebuilding permits, who will pay for them? Who will interface with the governmental entities such as local building departments and design review boards or the neighbors? How will the project proceed in case of unusual weather, labor strikes, material shortages, or natural disasters? What will happen if unforeseen conditions are met on the job such as unanticipated subsurface conditions? Who will pay for the removal of asbestos, mold, hazardous substances and lead paint? Who will obtain insurance for the project?

Identify The Obligations of the Parties: In order to avoid ambiguities and disputes during the project, expressly identify and establish the scope of the work to be performed. Clearly identify exclusions and items you do not intend to include in the contract. For example, expressly exclude asbestos, mold, hazardous substances and lead paint from your contract and require that the owner cleanup such substances or that the owner pay you extra for such work. Also, identify the obligations and duties of the project owner. Avoid accepting responsibility for defects in design documents provided by the owner or the owner’s architect. If you have concerns about the owner’s ability to finance the project, includea provision allowing you to request assurances regarding the owner’s financial arrangements to fulfill the project. Establish a reasonable timeline for the project completion and set a schedule of payments by the owner. Consider including a “Right To Stop Work” provision if the owner fails to timely pay you for the construction work already performed. Additionally, sincechanges and additions are common to construction projects, identify the procedure by which you will be compensated for extras.

Check Local Statutes And Requirements: Some states highly regulate construction contracts. Make sure your contract complies with statutory requirements of your state. For example, in California, a contractor performing a home remodel project must comply with the Home Improve-ment Act which requires that a written contract be signed by the homeowner before any work starts. The statute also regulates what must be addressed in the contract, including a detailed description of the work, identification of the plans and specifications, and exclusions, alternatives and allowances, the contract price and a schedule of payments. The statute also limits the amount of down payment allowed and requires that the owner be given a “Right to Cancel Notice”, along with a “Notice to Owner” warning about mechanic’s liens.

General Considerations: Typically courts will interpret contract ambiguities against the party who drafted the agreement. If you are proposing a custom contract, include language that says each party to the agreement consents to the use of the language and that any contract ambigu-ity shall not be resolved against any party. Additionally, consider including a dispute resolution provision identifying the procedure for resolving conflicts. For example, it is typical for construction contracts to include mediation or arbitration as a dispute mechanism instead of litigation. Also, you may decide to include an attorney’s fees provision allowing the recovery of attorney’s fees for the prevailing party in a dispute.

Additional Tips: •Keep the contract clean, short, and concise: unnecessary, extra words do not necessarily make the contract better• Spend time/get it right: it will save everyone a lot of headache later on, and help avoid lawyers!• Be fair to all parties: an unfair contract will not be enforced by the courts• Finalize the terms of the contract before work starts, and memorialize them in writing. Obtain the signature of all the parties before the con-struction starts. An unsigned contract may be unenforceable.

To conclude, a construction contract should be the roadmap for the construction project. If you have trouble creating the roadmap, chances are, you will have trouble performing the work. If you have questions and/or concerns regarding your construction contract, contact an attorney even as early as when you begin negotiations. With the help of an attorney, you can prepare a well drafted contract and try to anticipate and prevent disputes.


Contractor Connection

2120 28th Street • Sacramento, California 95818 • 916-451-1114 direct • 916-451-1118 fax • [email protected]

CSLB-Sponsored Bill to Show Citations on All Licenses Moves On

The Assembly Business and Profession Committee yester-day unanimously approved a Contractors State License Board-sponsored bill, SB 1209 (Morrell). This measure, which is on the fast track for passage, would require that citations issued against a licensed contractor follow the contractor if he or she is issued another license.

Under current law, Business and Professions Code (B&P Code) §7124.6 (e)(1) limits disclosure of a citation only to the license subject to a complaint substantiating that citation. Once that citation is disclosed, B&P Code sec-tion 7124.6 does not extend that disclosure to licenses obtained or joined by persons thereafter. Contractors trying to ‘skirt-around the law’ know that if the CSLB is-sues a citation, they can cancel that license and obtain or join a new license not subject to the complaint disclosure affecting the previous license. Thus, persons aware of this limitation are free to operate under a different entity clear of any disclosure action. According to the CSLB, “this eviscerates the purpose of B&P Code §7124.6 disciplin-ary action, which is to provide for consumer protection by reporting the activities subjecting individual contractors to discipline.”

This bill, which would take effect on January 1, 2017, requires that citations be disclosed from the date of issu-ance and for five years after the date of compliance if no additional disciplinary actions have been filed against the licensee during the five-year period. If additional disci-plinary actions were filed against the licensee during the five-year period, all disciplinary actions are required to be disclosed for as long as the most recent disciplinary action is subject to disclosure under the section. At the end of the specified time period, those citations will no longerbe disclosed. (BPC Section 7124.6 (e)(1))

This measure requires that accusations that result in suspension, stayed suspension, or stayed revocation of the contractor’s license be disclosed from the date the ac-cusation is filed and for seven years after the accusation has been settled, including the terms and conditions of probation if no additional disciplinary actions have been filed against the licensee during the seven-year period. If additional disciplinary actions were filed against the licensee during the seven-year period, all disciplinary ac-tions will be posted for as long as the most recent disci-plinary action is subject to disclosure under this section. At the end of the specified time period, those accusations will no longer be disclosed. (BPC Section 7124.6 (e)(2)).

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Project ManagerProactive, competitive construction professional Project Manager / Construction Estimator experienced in all levels of residential, com-mercial, light commercial and industrial projects including heating, ven-tilation & air conditioning, sheet metal, electrical, plumbing, foundation, carpentry, landscaping, solar, civil, architectural and structural design per all related code requirements. Contact Mark at 209-474-3894.

Summer Position: Carpentry & Concrete WorkMy name is Andrew Cumpian and I am finishing my first year as a Construction Management major at Cal Poly San Luis Obispo. I have a considerable amount of experience with carpentry and also concrete work as well and am currently in search of a summer job in the con-struction field. I also have office experience from working as a Product Design Consultant for a multimillion dollar wine cellar company and have a vast amount of Microsoft office and Auto CAD experience as well. Please contact me at [email protected] or on my cell at 209.684.2825.

Project EngineerOn-site project engineer needed for construction project in Jamestown, 28 months. Ability to read plans and specifications, coordinate with on-site project superintendent and construction manager. Responsible for daily activities, process RFI’s, sub-mittals and general correspondence. Construction experience preferred, computer Excel and Word mandatory. Salary TBD. Send resume to [email protected]

Construction TeacherThe San Joaquin County Office of Education has an opening for a Construction Teacher at Building Futures Academy Charter School. For more information about this position please visit http://www.sjcoe.org/jobs.aspx

Many Positions Open at DiedeDiede Construction, Inc. located in Lodi, CA is currently recruiting qualified individuals for the following positions: Assistant Project Manager, Bookkeeper, CPA, Superintendent, Carpenters, and Cement Masons. If you would like to join a fun and rewarding team or know someone who may be interested, please apply now by submitting your resume via e-mail to [email protected]

ReceptionistStockton Fence & Material Company has an immediate opening for a Receptionist. This position is responsible for all front desk duties including greeting guests in a warm, friendly and profes-sional manner, answering phones, filing and other assigned duties. A complete job description can be obtained by contacting Amanda at (209) 466-3166.


Employment Opportunities

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Weekly Economic Update provided by Dennis Goldstrand

For disclosure information contact Dennis Goldstrand at (209) 472-7000. 2800 West March Lane, Suite 326 • Stockton, CA 95219

www.goldstrand.com • [email protected]

MC-06132016

Dennis J. Goldstrand Presents:

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE“Early to bed and early to rise makes a man healthy, wealthy, and wise.” - Ben Franklin WEEKLY TIP Millennials should not fall for the myth that you need to carry a lot of consumer debt to build a good credit score. A positive payment history can be established while carrying relatively little debt.

WEEKLY RIDDLE At the sound of it, you may dream, dance, laugh, weep, or even stamp your feet. What is it?

Last week’s riddle:Three feet have I, yet not a single leg. What am I?

Last week’s answer:A yardstick.

June 13, 2016

A LITTLE LESS OPTIMISM IN EARLY JUNE On Friday, the University of Michigan’s initial June survey of consumer sentiment showed a slight retreat, with the index coming in at 94.3 versus its final May mark of 94.7. The survey’s chief economist, Richard Curtin, noted “consumers rated their current financial situation at the best levels since the 2007 cyclical peak largely due to wage gains” and also had “record low inflation expectations.” On the downside, consumers felt the economy was stronger a year ago.1

YELLEN OFFERS NO HINT OF SPRING RATE HIKE Speaking in Philadelphia last week, Federal Reserve chair Janet Yellen said she felt “the current stance of monetary policy is generally appropriate,” adding “at the same time, I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run.” Investors interpreted her comments as a sign that the possibility of a June interest rate increase was very remote.2

BORROWING BECOMES CHEAPER FOR HOMEOWNERS The average interest rate on a conventional home loan fell to 3.60% in Freddie Mac’s June 9 Primary Mortgage Market Survey. A week earlier, the average interest rate for a 30-year FRM was at 3.66%; a year ago, it was at 4.04%.3

BREXIT FEARS REIN IN BULLS Concerns about the United Kingdom leaving the European Union sent bond yields falling worldwide late last week and hampered stocks, ending a 4-week win streak for the S&P 500. The 5-day performances: DJIA, +0.33% to 17,865.34; S&P, -0.15% to 2,096.07; NASDAQ, -0.97% to 4,894.55. Oil settled at $49.07 on the NYMEX Friday; gold, at a 3-week high of $1,275.90 on the COMEX.4,5

THIS WEEK: Nothing major is scheduled on Monday. May retail sales figures arrive Tuesday, plus Q1 results from Bob Evans. Wednesday, the Fed concludes a policy meeting (with a press conference to follow); the May Producer Price Index is released; and Jabil Circuit and Progressive present earnings. Thursday, the May Consumer Price Index appears, along with a new initial claims report and earnings from Kroger, Oracle, Red Hat, and Rite Aid. The Census Bureau releases its report on May groundbreaking and building permits on Friday.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG

DJIA +2.53 -0.75 +9.90 +6.40 NASDAQ -2.25 -3.59 +17.03 +12.92 S&P 500 +2.55 -0.43 +12.98 +6.74

REAL YIELD 6/10 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO

10 YR TIPS 0.12% 0.63% 0.79% 2.45%Sources: wsj.com, bigcharts.com, treasury.gov - 6/10/165,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.

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Projects Out to Bid Today

Viewing the Statewide Plan Room section of the Building News is reserved for Members of the Builders’ Exchange of Stockton.

Local construction information and plans areavailable in the online planroom, plus:

• City/County Notices • Mandatory Meetings/Job Walks • Projects Out to Bid • New Projects • Bid Results

For instructions on accessing the plan room please call 209-478-1000.

Not a Member? Additional BES member benefits include: • Worker’s Comp Insurance • Group Health Insurance • Safety Training & Eduducational Seminars • Scholarship Program • Notarization on Construction Documents • Social Networking - Golf Tournaments, Bocci, BBQ, Crab Feed • And Many More!

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Class Information: California’s prevailing wage law and the types of work and projects that are covered, including ready mix concrete hauling. In addition, attendees will learn how to read and interpret prevailing wage determinations, including scopes of work and travel and subsistence provisions. The class will also focus on public works contractor registration requirements; recordkeeping requirements, including eCPR; apprenticeship compliance; prevailing wage enforcement; and new skilled and trained workforce requirements on certain jobs.

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LEGALNoticesP (209) 599-8895 F (209) 599-6530 • PO Box 554 Ripon CA 95366

NOTICE OF COMPLETION Recordation Completion Date Owner Name Date Contractor Name Property Address 05/30/16 No Recorded Notices of Completion 05/31/16 Clifford C Lenzi 05/18/16 Lenzi Const 400 Howard St, Lodi CPG River Island Communities LLC 05/25/16 DeNova Homes Inc 1229 Darrow Dr, Lthrp CPG River Island Communities LLC 05/25/16 DeNova Homes Inc 1264 Academy Dr, Lthrp Meritage Homes of Calif Inc 05/27/16 2322 Mathar Dr, Mtca Meritage Homes of Calif Inc 05/25/16 2333 Azevedo Ave, Mtca Pulte Home Corp 05/27/16 1570 Chestnut Hill Dr, Mtca Rose Park LLC 05/24/16 DBF 2767 Round Tree Wy, Mtca TRI Pointe Homes Inc 05/27/16 1036 Dutton Dr, Mtn Hse TRI Pointe Homes Inc 05/27/16 1054 Dutton Dr, Mtn Hse TRI Pointe Homes Inc 05/26/16 447 Ventana Ave, Trcy WL Investors LP 05/27/16 3031 Celebration Dr, Lodi06/01/16 County of San Joaquin 05/17/16 Otto Const Inc New Admin Bldg Human Services Agency TI Meritage Homes of Calif Inc 05/27/16 949 Emigrant St, Mtca Pulte Home Corp 05/31/16 1544 Chestnut Hill Dr, Mtca WL Investors LP 05/03/16 251 Windrush Wy, Lodi06/02/16 Brookfield Windrift LLC 05/27/16 980 Park Place Ct, Lthrp County of San Joaquin 06/01/16 Mark Scott Const Inc Sheriffs Honor Farm JKL Barracks Lighting Upgrades Crivello Estates LP 05/16/16 Raymus Const Inc 984 Granite Ln, Mtca Pulte Home Corp 05/31/16 1456 Chestnut Hill Dr, Mtca Pulte Home Corp 06/01/16 1487 Chestnut Hill Dr, Mtca River Island Communities LLC 05/31/16 DeNova Homes Inc 1296 Academy Dr, Lthrp Rose Park LLC 05/23/16 DBF 2773 Reserve St, Mtca06/03/16 CalAtlantic Group Inc 06/02/16 2531 Coloma Ln, Trcy Manteca 93 LP 06/02/16 950 W Woodward Ave, Mtca Meritage Homes of Calif Inc 05/27/16 2379 Azevedo Ave, Mtca Pulte Home Corp 06/02/16 3262 Overland Ln, Trcy Pulte Home Corp 06/02/16 3282 Overland Ln, Trcy Richmond American Homes of 05/27/16 1054 S Atwood Ct, Mtn Hse Maryland Inc WL Investors LP 06/02/16 259 Windrush Wy, Lodi Woodside 05N LP 05/27/16 1175 S Olson Ave, Mtn Hse


MECHANICS LIENS Date Lien Recorded Owner Name Amount Claimant Name Property Address 06/01/16 Allen & Zorayda Lao $30,141 Dinwiddie Hines Const 1362 Green Ridge Dr, Stkn

LIEN RELEASES Date Recorded Owner Name Claimant Name Property Address 06/02/16 Elbert M Thompson Amos Const 23 W Vine St, Stkn

LEGALNoticesP (209) 599-8895 F (209) 599-6530 • PO Box 554 Ripon CA 95366

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Construction Weekly •17

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builders’ safety services!Aerial Platform Safety

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This information does not supercede local, State, or Federal regulations.

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Jobsites are not always at ground level. Sometimes, workers need to use aerial platforms, aerial ladders, articulating boom platforms, vertical towers, or ladder trucks to reach their work. All work has hazards and risks involved in it, but when you work at an elevated height, extra training and attention to safety proce-dures is a necessity.

In order to work safely with aerial platforms, get training on the operating procedures for your job site and task. Get specialized training on each aerial lift model you will use. Know the risks and hazards involved with aerial work, including your own risk of falling and the hazard of dropping objects on to coworkers below. Learn to tether your tools and equipment and ensure that coworkers underneath the platform are wearing hard hats.

Formal inspections and maintenance of aerial platforms should be scheduled based on the environment and how often the ma-chine is used. Before performing maintenance on an aerial plat-form, lower it to the full down position. Switch all of the controls to the off position. Apply the brakes and/or use chock blocks. Lock out the power and bleed the hydraulic lines. Never modify or alter your aerial platform without written permission from the manu-facturer because changes could alter the structure and stability. Never operate the aerial platform from a scaffold, trailer, or boat without written permission from the manufacturer.

In addition to regular inspections and maintenance, inspect the platform each time before you use it. Look for proper function of the controls. Make sure that the emergency lowering mechanism works. Watch for wear and tear. Check for proper fluid levels and no leaks. Never use equipment if it is not working properly. Tag it out of service until it can be repaired.

When you are planning your work, first ensure that the platform is appropriate to the task. Make sure that loads are within the capacity limit and are stowed properly for stability. Always use the outriggers and stabilizers required for the aerial platform and check for uneven surfaces and debris in the work area. Look for overhead obstruc-tions and electrical lines. Avoid using aerial platforms outside in bad weather and high winds. Don’t use an aerial platform if it has to be stabilized against another building or object. Never use your aerial platform as a crane.

Before working on an aerial platform, put on the appropriate fall protection gear. Consider a fall limiter so that you do not fall too far off of the platform. Make sure that guardrails are installed and ac-cess gates are closed before you raise the platform. Keep both feet on the platform at all times and do not reach too far out. Do not use lumber or ladders to get additional height on the platform. Do not step on guardrails or gate rungs and do not climb out of the platform for any reason. If you will travel with the aerial platform, go slowly in order to watch for overhead hazards and people down below.

Construction Weekly •19

builders’ safety services!

builders’ safety services!

CLASS DATE TIME

Membership Orientation August 2nd 12 - 1:30 pm

Prevailing Wage Seminar August 17th 9 - 11:30 am

Mechanic Lien Seminar 201 September 7th 8:30 - 11:30 am

First Aid/CPR November 9th 8 am - 12 pm

BUILDERS’ EXCHANGEOF STOCKTON

7500 West Lane • Stockton, CA 95210

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