Beals Hubbard, PLC is a full service business, commercial, and corporate law firm representing clients in business planning, transactions, and litigation. The firm's construction practice group focuses on serving construction clients on the various issues associated with construction transactions and litigation. The firm guides clients through all phases of the construction process.

Beals Hubbard routinely assists clients with the following matters:

• Contract Drafting and Negotiation
• Contract Risk Analysis
• Bid Proposal Review
• Construction Lien Issues
• Change Order Request Preparation and Review
• Pursuit and Defense of Claims
• Joint-Venture Formation
• Litigation (including all forms of alternative dispute resolution)
• Employment Matters and Labor Relations
• Real Estate and Land Use Issues

In addition to the above matters, Beals Hubbard also works with clients in a support capacity throughout the construction process.  Beals Hubbard fills the role of "General Counsel" for many construction firms who do not have the need for a full-time in-house attorney.  Project Managers, Executives, and other personnel routinely call Beals Hubbard for advice on matters that arise on a daily basis.  Beals Hubbard works with project personnel to solve small disputes when they arise - before they become large, costly, and time consuming matters.

Recently, Beals Hubbard has been increasing its focus on the legal issues surrounding federally funded construction projects.  The federal government has exponentially increased construction funding over the past three years.  Federally funded construction projects require strict compliance with a multitude of laws, codes, rules, and other enforcement mechanisms.  Beals Hubbard has assisted several clients with the negotiation and drafting of federal joint venture agreements and teaming agreements, as well as the formation of entities that meet the strict requirements for small business, veteran, and minority set-aside programs.  Beals Hubbard has become an expert in the area of federally funded construction projects and is well suited to advise its clients through all phases of federally funded construction projects.

Beals Hubbard offers flexible fee structures that meet the needs of any size entity.  Beals Hubbard routinely utilizes alternative fee structures and develops hybrid fee structures that are custom designed to meet the needs of an individual client.

Recent Successes

1. Facilitation of Multimillion Dollar Settlement.

On behalf of its client, a general contractor, Beals Hubbard, PLC successfully facilitated a multi-million dollar out-of court settlement between an owner, program manager, general contractor, and two key sub-contractors and suppliers.  The underlying dispute centered on cost overruns and defective products involved in the construction of two energy centers.  Beals Hubbard, PLC facilitated dialogue between the engineers and technical leads of each entity in an effort to promote a better understanding of each party's position; such dialogue also ensured effective use of time and money. Once all positions were presented, analyzed, and questioned, the attorneys representing each party crafted a unique settlement agreement based on a combination of fixed payments and percentage based contributions to be made over time.

The successful outcome of this dispute yields three important lessons.  First, detailed terms and conditions must be incorporated into each contract and purchase order.  Standard boilerplate terms and conditions simply will not suffice.  Because of differing state laws and issues related to the uniform commercial code, terms and conditions must include enforceable jurisdiction and choice of law provisions.  In this case, we used a forum selection clause as leverage during negotiations.  The sub-contractor recognized that it would have had to defend a lawsuit in Michigan if the parties didn't reach a settlement, which would have been much more costly than defending a lawsuit in the sub-contractor's home state.

The second lesson learned from this dispute is that a written dispute protocol must be followed.  The protocol should include certain steps parties must go through to resolve disputes that arise during and after a construction project.  Carefully crafted dispute protocols also include cooling off periods as well as staggered steps and time intervals for submitting and analyzing claims.

Lastly, the successful outcome of this dispute reminded all parties involved of the importance of considering time and money constraints when pursuing or defending a construction related claim.  Often, when a dispute arises, the parties in disagreement race to the court house where litigation commences, the parties expend significant sums of money on attorney fees and related costs, and in the end, the party with the deepest pockets comes out on top.  With the proper procedures in place, and the adherence to such procedures, time and money constraints become less significant and have a smaller influence of the dispute's outcome.

2. Successful Negotiation of Complex Joint Venture Agreement.

Beals Hubbard, PLC represented a local contractor in negotiations with a national construction manager for the creating of a joint-venture and pursuit of a large-scale construction project.  The potential joint venture's target project was a highly sophisticated energy facility.  The project required knowledge and expertise in the design and implementation of specialized energy-efficient steam production equipment. The project's scope, however, was beyond the bonding capacity of Beals Hubbard, PLC's client. The client recognized the limitation, and reached out to the national construction manager and proposed the idea of "teaming up" to pursue the project. The discussion soon centered on a joint venture agreement whereby the parties would create a new entity that would exist solely for the purpose of pursuing and constructing the particular project.  The parties successfully negotiated a joint venture agreement that would govern the parties' relationship and the operation of the new entity. The joint venture agreement was favorable to both parties, allowing the local construction company to pursue a project whose size was out its bonding capacity while allowing the national construction manager to enter into a new geographical market and diversify its project portfolio.

Joint venture agreements come in a variety of shapes and sizes.  In negotiating a joint venture agreement, it is imperative that the parties document how the parties will interact with one another, who will be responsible for what portion of the project, and, most importantly, what decision-making authority each party will have. It is also important to specify whether the joint venture is created to pursue a single project, a single type of project, or a variety of projects. Joint venture agreements are an excellent way for contractors to team up with one another and pursue projects that they would otherwise be unable to pursue individually.

3. Resolution of Multi-Million Dollar Sub-Contractor Claims.

Beals Hubbard, PLC represented a general contractor who was sued by several sub-contractors for failure to pay under the sub-contracts.  The general contractor had an oral agreement with the owner, but the parties had not executed the written prime contract.  The general contractor moved forward with the Project based on the oral representations of the owner and entered into the respective Subcontracts.  The general contractor and sub-contractors provided construction services.

The owner failed to pay the general contractor, declaring that there was no prime contract, and accordingly the general contractor did not pay the sub-contractors.  The sub-contractors sued the owner and the general contractor for several million dollars and filed their respective claims of lien against the property.  The general contractor sued the owner and filed its claim of lien, which also covered the sub-contractors' claims.

The general contractor argued first that there was an oral agreement with the owner, which required that the payments be made, and second that the sub-contractors were subject to "paid when paid" clauses.  The case was successfully resolved through the efforts of the general contractor to work with all the parties to facilitate payments by the owner directly to the sub-contractors for services provided, which limited the general contractor's exposure to the sub-contractors.  This case underscores the importance of the use of "paid when paid" clauses as well as obtaining a signed written prime contract with appropriate pass through provisions prior to commencing construction services.

4. Review of General Contractor's Existing Internal Contracting Procedures and Implementation of New Forms and Procedures.

A local general contractor recently engaged Beals Hubbard, PLC to review its internal contracting procedures and recommend revisions to the system necessary to create a "best practices model". Beals Hubbard, PLC reviewed both the  documents that the general contractor used, which relied heavily on AIA boilerplate forms, as well as the decision making process that the individuals issuing the purchase orders and sub-contracts went through each time a purchase order or sub-contract was issued. During the review, Beals Hubbard, PLC recognized not only several deficiencies in the documents that the general contractor was using, but also that there were critical steps key individuals were failing to take when issuing sub-contracts and purchase orders. Beals Hubbard, PLC drafted new documents for the general contractor to use in place of the standard AIA forms. While AIA forms can be useful, the forms are not drafted in favor of any particular contractor (general contractor vs. sub-contractor vs. supplier). In fact, AIA forms tend to favor architects and consultants. The newly drafted forms allow the contractor to better allocate risk to its sub-contractors and suppliers, as well as deter sub-contractors and suppliers from filing frivolous claims against the general contractor.

In addition to drafting new documents, Beals Hubbard, PLC also sat down with the key individuals who were primarily responsible for issuing sub-contracts and purchase orders.  Beals Hubbard, PLC led the key employees through a best practices decision-making process. The discussion included how to best determine which terms and conditions, as well as which sub-contract forms, were issued in certain hypothetical situations and scenarios. The discussion capped off a successful engagement and provided a valuable training opportunity for several of the general contractor's key employees. This successful engagement shows how critical it is to not only have proper documents in place, but also for key individuals to have the requisite knowledge and expertise necessary to make informed decisions on a case-by-case basis.