How Project Advisory Is Becoming An Essential Service For Commercial Construction Projects

A construction project is behind schedule and the general contractor gets fired halfway through, leaving the owner struggling to make up for lost time. A multifamily building floods and damages the entire building, leading to dozens of insurance claims. 

Complicated commercial real estate issues like these happen every day, and they can be made even more complicated when the issue of who is to be held responsible is unresolved. 

SOCOTEC, an architectural, engineering, life safety and advisory consulting firm, understands the important role that project advisory plays in helping resolve these issues as quickly and fairly as possible. 

“The key components of our project advisory team are dispute resolutions and delay and causation analyses,” SOCOTEC Project Advisory Manager Richard Maher said. “We work with our clients throughout the project lifecycle, whether it’s pre-construction, during the project itself or when the project closes out.”

The project preparation or pre-construction stage involves short and long-term planning, risk identification and mitigation as well as scheduling and cash flow budgeting, Maher said. During the project, SOCOTEC’s team monitors progress, reviews contracts for compliance and crafts status reports for stakeholders, general contractors and subcontractors. After the project is completed, the team can help with dispute resolution, litigation analysis and tracking any final payments to/from vendors and subcontractors, he said. 

SOCOTEC Director of Project Advisory Ben Barrett said there’s a common thread throughout these three stages: Root cause analysis and reasonableness assessments. 

“A client will come to us and we need to figure out which of these three stages their project falls under, so we know exactly how to help them,” Barrett said. “Regardless of the issue at hand, it’s important to find the root cause so we can see who’s liable, what happened and how to move forward and quantify damages if need be.”

Often, the team is brought in to set up project controls and establish a delivery timeline and budgetary measures before problems have the chance to occur. This is particularly important in a time when owners may be experiencing tighter project constraints than usual. SOCOTEC relies heavily on the expertise of its members to predict what areas of the project may experience difficulties and how to monitor them for a successful outcome, Barrett said. 

For resolving claims and disputes, it can get a little more nuanced. 

“When people think about claims and damages, they automatically think about it in terms of dollar amount,” Barrett said. “That’s only one piece of the puzzle, though.”

Uncovering the driving factors behind the claims is essential for determining reasonable compensation, he said. Following the client’s priorities and helping to maintain relationships among all parties involved are also crucial steps to evaluating construction claims and resolving on-the-job disputes.

“It's less about coming up with a number and more about understanding the situation, because a lot of times our client may not know what they need, they just know that they have this claim and they need to deal with it,” Maher said. 

The SOCOTEC advisory team was brought in on two projects last year where construction claims needed to be mitigated. This was no easy task, Maher said.

A private museum on the East Coast was in the middle of construction when the construction manager was terminated, leaving the owner to scramble to bring in another manager to finish the job, Barrett said. The owner was looking to recoup some of the costs as the project had fallen behind schedule and over budget. 

“We evaluated the previous manager’s execution of the project, including their administrative duties and quality control measures,” Barrett said. “We uncovered that the project was being mismanaged and standard operating procedures weren’t followed correctly.”

From here, the team conducted an in-depth root cause analysis to determine if the monetary compensation the owner was requesting was within reason. In this case, the owner was requesting more than what the claim was valued at. Having those tough conversations where the actual compensation may be less than what the client is looking for requires precision and expertise, Maher said. 

The other project the advisory team worked on involved a few more moving parts, Barrett said. 

A fire had engulfed a high-rise residential building, resulting in extensive smoke and soot damage. This cost claim matter was made complicated by not only the owner of the high-rise itself, but the many tenants involved, as well as their insurers. As a result, SOCOTEC was brought in to perform reasonableness assessments as well as root cause analysis for liability determination.

“This was a huge claim because it involved so many parties and a large amount of money,” Barrett said. “We really had to take a deep dive and break this claim down into relevant pieces. Communication was key on this project.”

Ultimately, SOCOTEC successfully helped the client settle this claim. Litigation on a matter this size would have resulted in massive costs and been extensively time-consuming for all involved.

“We act as the ‘conductors of the orchestra,’” Maher said. “Clients come to us when they need clarity, and we leverage our breadth and depth of engineers and expertise across all disciplines to achieve our client’s goal as efficiently and effectively as possible.”

This article was produced in collaboration between SOCOTEC and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.