Hopefully you had a great holiday break and are now back to work refreshed and ready to seize new opportunities in 2019. Many of our clients take time early in the year to review their body of contract templates to evaluate a refresh or, in certain circumstances, a major overhaul. The following are suggestions to consider in evaluating your current contracts for use in the coming year.

Update Contracts for Changes in the Law

Federal, state and local lawmakers enact and revise laws and regulations affecting construction on a regular basis. Similarly, federal and state court decisions throughout the year may impact the way your contracts will be interpreted and enforced in the event of a dispute. If you have not updated your contracts recently to account for changes in the law, you should consider doing so.

Create a Family of Templates with Consistent Legal Terms

Does your business use separate forms for one-off projects versus multiple projects? Do you use different forms for consultants, subcontractors and suppliers? Do different divisions of your company each prefer their own templates? Do the legal terms and conditions of these contracts align with one another? If not, you may have trouble administering multiple forms with different vendors on a single project. Think of the headache caused by inconsistent claim and dispute resolution procedures across multiple contracts on a single project.

Many clients have benefitted from a review of the range of contract forms used throughout the business and the development of standardized legal terms and conditions that will apply to, for example, a single project contract, a master contract for use with task orders, a consultant contract, and a materials or equipment purchase order. By simplifying and standardizing terms for use with multiple vendors, you have greater comfort that the same vendor on multiple projects, and multiple vendors on the same project, are subject to a uniform and consistent set of terms for administration, claims avoidance and mitigation, and other uses.

Create a State Addendum for Use of Contracts Across Multiple States

Do you do business in multiple states? Do your contracts reflect that different state laws impact key terms such as prompt payment, pay if paid, liens, indemnity, and dispute resolution? A contract written for use in one state may not necessarily be suitable in multiple states. Or, do you have a different form for each state? Consistent with our suggestion above, it may be more efficient to create a template for use across multiple states, with a state addendum revising only those terms that are specific to that state. The balance of the contract terms will be consistent from state to state.

Are You Ready for New Delivery Models?

Are your present delivery models holding you back? Are you comfortable only in the traditional design-bid-build? Many projects, public and private, commercial and residential, are now being delivered as design-build, in which the owner holds a single contract with the design-build entity to be responsible for both design and construction, and the designer, or constructor, as applicable, is a subcontractor to the design-build lead. Many leading construction industry organizations publish recommended templates for design-build delivery, including the Design Build Institute of America, American Institute of Architects and ConsensusDocs. These forms have notable differences in both form and substance, so consultation is appropriate as to which may best suit your needs. All are negotiable and editable as manuscript forms, provided appropriate steps are taken to copy and use these in accordance with their respective copyrights.

Beyond design-build, more and more project teams are electing to enter into contracts for integrated project delivery, in which the owner, architect, significant design consultants, contractor or construction manager, and major trade subcontractors enter into a single multi-party contract for the sharing of risk and rewards unlike anything found in traditional project delivery. As with design-build, certain construction industry organizations such as AIA and ConsensusDocs have published template contracts for integrated project delivery, but these should be considered as mere starting points for the negotiation of the contract terms most appropriate for the needs of your team and project.

As the development of public private-partnerships (P3s) increases, more work is needed on the contracts and risk allocation for those projects. ConsensusDocs, for example, recently released a standard form of agreement for operations and maintenance services, which can be combined with a design-build contract to provide for a design-build-operate-maintain delivery.

If your current forms don’t enable you to chase and perform work using these delivery methods, now is a great time to get educated on the pros and cons of expanding your delivery models and the contracts suitable for such models.

Are You Ready for New Technologies and Techniques?

Do you use Building Information Modeling in your project? Does your contract address the specific concerns of use of BIM? How about lean or green building principles? ConsensusDocs has template addenda for all of these.

We are also seeing more and more projects incorporating modular construction. Incorporation of modular construction raises Uniform Commercial Code and other products-type legal concerns not typically addressed in depth in construction contracts. To the extent modular construction will be a significant component of your existing or anticipated business in 2019, the contracts need to appropriately address these issues to protect you from unreasonable exposure.

Will you use drones in your business, or will drones be used by others on your projects? There are numerous considerations as to the use of drones that are not presently captured in traditional design and construction contracts. If you use drones, your legal team should have significant experience in drone technology and this quickly emerging area of law, including its interface in construction to help you develop contract language and documents to take advantage of best practices.

With all your other New Year’s resolutions, make a resolution to review and refresh your contracts for 2019 to position your business for success. Don’t hesitate to contact anyone on our team, or your experienced construction counsel, for further details and guidance.