“It’s required us to get more disciplined about subcontractor prequalification in areas that do introduce some new technology or some new method,” Thompson added.

Speaking from an owner’s perspective on quality, John Foudray wondered how one manages the quality of the various contractors and designers brought together on a project. “That’s an inherent problem with condo properties,” said Thompson. “You have 500 potential lawsuits, not one.”

 

Design-Build

Cherafat asked his colleagues how the emergence of design-build is seen by the surety industry. Said Patrick Pribyl, “The experience has been very favorable.” After some initial reluctance, Pribyl observed that the surety world has evolved into being fairly comfortable for the right client on a design-build basis.

“If you pick the right team and you have the right subcontractor,” affirmed Cherafat, “the risk goes down.”

Dennis Thompson took a different tack, asking Mike McClure as an “owner” how he judges the often seriously disparate packages assembled by design teams.

“I think as far as the city is concerned,” said McClure, “the process has worked well for us.” He did acknowledge, however, that the city could afford to tighten up on the programming and the expectations to reduce disparities in bidding.

“Are you bringing back more of a commodity approach?” asked Greg Nook.

“You have to have that fine line,” said McClure. His goal is to avoid being so prescriptive that the process discourages creativity.

Greg Nook argued that projects over the years have become more and more complex both in design and the execution. “I think it speaks to a much more highly integrated process of design and construction which is probably why you’re hav-ing better experiences with design-build,” he said to McClure.

Cherafat described two types of design-build. One he called “the parking garage mentality,” in which the owner gets all the space he can for the lowest price. The second he called “the Johnson County sunset philosophy,” which features innovation and creativity and which ultimately benefits the owner the most.

 

Litigation

The question was raised, with just a bit of a wink, as to what were the “growth areas” in litigation this year?

“Project personnel say the darnedest things,” answered Roy Bash of Shughart Thomson & Kilroy in the same spirit, “and they tend to put it in email.” As Bash noted, the electronic document has created not only a greater number of documents for litigation, but also the occasional smoking gun. This has increased costs dramatically. He cited cases that involved as many as 500,000 emails. “It’s not particular to our industry,” he said to his colleagues, “but it’s something that you need to focus on.”

Bash was asked whether people ought not communicate electronically unless they absolutely have to. “I would recommend that people communicate in a smart way,” Bash answered with discretion.

“We do talk about project risk,” affirmed Jack Nix, “and it’s not just with email but other correspondence also. Roy is right, there is a yellow flag out there.”

“A lot of times,” added Patrick Pribyl, “my clients that prevail the most in litigation are the ones that have the best documentation.”

“It’s not just volume,” agreed Bash. “It’s the quality of what you have to say.”

As to areas of concern, Bash noted that litigation arising from condominiums has become “a cottage industry.” Although he was not aware of any “classic condo litigation” going on in the Kansas City market, the number of units coming online here made him confident that Kansas City would soon experience the phenomenon.

One of the questions Grover Simpson posed for Bash was whether there had been any initiatives in the industry to try to promote better “right to cure” or “right to repair legislation” in various states, primarily in the residential sector.

“The right to cure statutes, in my opinion,” said Bash, “really don’t have enough teeth in them.” He described them as merely a “low hurdle” to be stepped over before one can file a lawsuit.