Kegler Brown Construction Law Newsletter September 13, 2019
The last decade has represented an evolution of Ohio’s contract delivery system on public works, from “hard bid” by multiple prime contractors to “best value selection” of construction managers at risk, or design-builders. This evolution has resulted in a more subjective selection process and placed the subcontractors actually performing the work one tier further away from the owner and payment.
Many believe that the replacement of the old fashioned multiple prime contractor (i.e., MEP contractors) model in favor of one general contractor or construction manager has reduced “finger-pointing” and claims involving coordination of the work, but has also increased the cost of work on bid day by adding another level of overhead.
Reasonable minds can disagree as to whether the change increases or decreases overall construction cost, but many public owners favor the change as they can deal with a single source or contractor rather than administrating multiple prime contractors.
The net result has been an evolution of construction contracts and delivery methods that are only now being tested in Ohio courts.
Meanwhile, construction employment is nearing record lows with 88% of construction firms in Ohio reporting difficulty filling positions. This labor shortage has put pressure on overly optimistic construction schedules, as contractors struggle to meet completion dates and stressed construction budgets.