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Thursday, October 29, 2009

A Dilemna: Contractor Walk Off


Are the bonding capacity and the contractual bonding provisions a strong deterrent for a contractor “Walk Off”?

Some may think that a substantial retainage to the contractor’s monthly requisition for payment is the answer. Others believe that a strong legal team working closely with the surety/insurance provider, would be the answer.

But it seems there is no clean cut solution to the problem, since the contractor, with initial honest and well-intended goals to complete the project, due to certain circumstances, is forced to declare bankruptcy or similar.

Fairness and openness at the time of contract negotiation between the Owner, Contractor, Surety Company, Insurance Company, Legal Teams, and Owner Consultants, may not be “The Complete Solution,” but it is most assuredly a step on the right direction.

And then. It's integral not to neglect the “Fairness Factor” when it relates to the actual construction of the project.

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