CONSTRUCTION LAW

CNST 406

EXAMINATION NO. 1:  Chapters 1-6

Instructions:    This is an open-book, open-note examination.  Please provide your best answer to the questions below.  Your grade will be based upon your ability to “spot issues” and to analyze the situation in order to arrive at a credible answer to the questions posed.  Be concise and to the point.  Use good grammar, sentence construction and spelling.  Brevity is appreciated, but please provide a complete answer.

References:

Fact Situation

Lectures Regarding Risk Management and Ethics

Chapters 1-6 of the Text

Fact Situation:

With reference to the Fact Situation regarding the pedestrian bridge collapse at AIU, please take on the role of Senior Construction Manager for Munilla Construction Management (“MCM”).  You have obtained a Request for Proposals from the University to provide design/build services for a project, contemplated by the University to be a pedestrian bridge crossing Tamiami Trail at Southwest 109th Avenue.  The purpose of the bridge is to link the main campus on the west side of Tamiami Trail with residential units on the east side of Tamiami Trail.

The projected project budget is $20 million, as will be funded by a Transportation Investment Generating Economic Recovery grant (TIGER) from the United States Department of Transportation.

MCM has no in-house design capability, nor does it self-perform work and has always performed as a Construction Manager at Risk, holding subcontracts with lower tier subcontractors and vendors.

You received a phone call this morning from one of your friends who is a professional engineer at FIGG Bridge Engineers, who’s also seen the Request for Proposals.  He’s asked you if MCM would be interested in teaming up with FIGG to be the design-builder for the Project, and to submit a joint proposal.  The idea is of interest to you and MCM management, because MCM doesn’t do any design.  Your boss suggests you pursue the matter with FIGG to see what they propose.

Before talking with FIGG, you do some research on how MCM should affiliate with FIGG for making the proposal and doing the design/build should the proposal be accepted by the University.

QUESTIONS (80 Total Points)

Assuming you go forward with forming a relationship with FIGG to be the Design/Builder for the Project

  1. Would you form a Limited Liability Company with MCM and FIGG being Members?

If so, please identify the risks MCM would be exposed to if FIGG was a member of the LLC and defaulted on its responsibilities.

  1. Would you form a Joint Venture with MCM being Partners? (20 Points)

If so, please identify the risks MCM would be exposed to if FIGG was a Joint Venture Partner and defaulted on its responsibilities.

  1. Would you engage FIGG as a subcontractor to MCM for the purpose of designing the Bridge?

If so, identify the risks MCM would be exposed to if FIGG was a subcontractor to MCM and defaulted on its responsibilities.

  1. If, during your discussion with FIGG, FIGG told you that it was considering a revolutionary, new design, never used or built before, that was based on a “fauz cable- stay tower” and a modular, accelerated post tensioned structural concrete assembly method (“ABC”) promoted by the University, what risks would MCM be exposed to and what precautions would you take to limit MCM’s exposure?  (20 Points)

EXTRA CREDIT (10 Points)

  1. If you had word from the street, that on prior projects, other owners had experienced difficulties with FIGG bridge designs resulting from “innovative” design techniques employed by FIGG, what action(s) would you take to limit MCM’s risk exposure?