| This year is about questioning the assumptions on which the construction industry manages its business affairs, says construction law guru Barry LePatner of LePatner & Associates, who's involved in some high-profile projects like WLIW's studio renovation and expansion, WNET's new studio in Lincoln Center, the Dream Hotel in Chelsea, and litigation on a project in the Theater District. |
| "For too many years we've accepted doctrines that dictate how we build, how we design, how we set budgets, and how all cost overruns must be paid for by the owner because 'this is the way we have always done it,'" he says. We've been sold on the benefits of fast-track projects, the illusion of guaranteed maximum price contracts, and an assured flow of funding, he adds. But lenders will no longer automatically permit a project to move forward with only 10% equity or provide mezz loans to bail out a construction contract on a GMP basis, and therefore owners, he warns, should not start bidding work without complete construction drawings and certainty about final cost. |
| Barry with firm partners Ron Feingold and Henry Korn. He says the construction industry is notoriously inefficient, costing the U.S. more than $120B annually. And more: The industry needs to shed outdated and inefficient means and methods, and retaining skilled ombudsmen and project managers who permit only those who reveal their true costs to work on their projects. In return, contractors should be entitled to make a fair profit for capable performance of their work. |
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