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Construction

Construction

Many successful small businesses decide to expand their operations either by purchasing, leasing, or building a new facility. In some instances, the business in question relocates its entire operation to the new facility. In other cases, the business may use the new facility to house excess inventory, maintain equipment, relieve office overcrowding, or open a new store.

For those companies that decide to expand via new construction, the experience can be an unsettling one, full of uncertainties. In fact, relatively few start-up businesses choose construction as their mode of entry due to the higher costs associated with it and the greater length of time involved from the breaking ground stage to the day when the establishment opens its doors for business. Established small- and mid-sized businesses are likely to be in a better position financially to launch a new construction project. Such firms have a proven track recordwhich can help them with financingand already-productive operations that bring in revenue that can be used to defray the costs of construction.

A full assessment of the advantages and disadvantages of new construction should be undertaken before any decision is made to build new. Designing and building a new facility has the advantage of providing a company with exactly the space and arrangements to meet its needs. The obvious disadvantages are the delay in occupancy while land acquisition, design work, and building are going on, and the cost of overruns, common in large projects. Oversight responsibilities are essential but can also be very time consuming and distract from the primary business of a company.

Certainly, there are risks associated with construction. But for small- and mid-sized business owners that choose this method of expansion and/or growthand plan wisely before, during, and after the construction phaseit can also mark the beginning of a bright new chapter in the company's history. A well-designed and built property can allow a company to generate additional revenue, reduce expenses, and/or increase efficiency.

SECURING A BUILDING CONTRACTOR

Some sources of potential building contractors include professional association databases, referrals from architects or fellow small business owners, and a competitive bidding process. "It is important to find a contractor that can build in your specific industry, whether it's a restaurant, health care facility, industrial plant, or technology center," Amanda Strickland wrote in the Dallas Business Journal. "Contractors tend to have niches."

A small business owner seeking to secure a good building contractor should concentrate on three factors:

  • The contractor's reputation in the community.
  • The financial condition of the contractor.
  • The status of currently uncompleted jobs by the contractor.

There are many warning signs to watch for when assessing potential contractors. Is the contractor known for subcontracting out large percentages of the total construction work? Does the contractor have a history of clashes with subcontractors? How long has the contractor done business in the area? What percentage of jobs does she complete on schedule? Does his previous work experience adequately match the sort of renovation or construction that your company needs? Does the contractor have a backlog of projects that could hurt her ability to meet your timetable? What sort of references can he provide? The answers to all of these questions can be either reassuring or cause for further investigation. In either case, the key is to make sure that you ask them.

One way in which small business owners can learn the answers to some of these questions is by requiring bidding contractors to submit a surety bond, which is basically a three-party contract between the contractor, the project owner, and the underwriting surety company. Surety companies will make an extensive review of the construction company before issuing such a bond. In addition, if the contractor signs the bond, he is basically guaranteeing his ability to complete the project on which he is bidding.

MONITORING THE CONSTRUCTION PROCESS

After the bidding process is completed and the building contract awarded, the successful contractor should be asked to provide a performance bond. Such a bond guarantees that the project's contractual provisions will be carried out. In addition, a payment bond should be secured which certifies that suppliers and subcontractors will be paid. Ensuring that the contractor and all of his subcontractors have adequate insurance (workers' compensation, general and umbrella liability, equipment, builders' risk, etc.) to address problems is another key to attaining peace of mind for the small business owner. Finally, the project owner needs to make sure that he or she continuously monitors the performance of the contractor.

see also Buying an Existing Business; Comprehensive Environmental Response Cleanup and Liability Act

BIBLIOGRAPHY

Bolles, Dennis. Building Project Management Centers of Excellence. AMACOM Division of the American Management Association, April 2002.

Campbell, Melissa. "10 Steps Towards Getting the Right Contractor." Alaska Business Monthly. August 2002.

Lorenz, Daniel E. "Reduce Construction Risk with Management Systems." Memphis Business Journal. 20 October 2000.

Strickland, Amanda. "Choosing the Right Contractor for Your Project." Dallas Business Journal. 7 April 2000.

                                Hillstrom, Northern Lights

                                  updated by Magee, ECDI

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Construction

CONSTRUCTION

The process by which the meaning of an ambiguous provision of a statute, written document, or oral agreement is determined.

A judge usually makes a construction of an unclear term in a document at issue in a case that involves a dispute as to its legal significance. The judge examines the circumstances surrounding the provision, laws, other writings, verbal agreements dealing with the same subject matter, and the probable purpose of the unclear phrase in order to conclude the proper meaning of such words. Once the judge has done so, the court will enforce the words as construed. However, for language that is plain and clear, there cannot be a construction.

When ambiguous language is given its exact and technical meaning, and no other equitable considerations or reasonable implications are made, there has been a strict or literal construction of the unclear term.

A liberal or equitable construction permits a term to be reasonably and fairly evaluated so as to implement the object and purpose for which the document is designed. This does not mean that the words will be strained beyond their natural or customary meanings.

A rule of construction is a principle that either governs the effect of the ascertained intention of a document or agreement containing an ambiguous term or establishes what a court should do if the intention is neither express nor implied.A regular pattern of decisions concerning the application of a particular provision of a statute is a rule of construction that governs how the text is to be applied in similar cases.

The constitutionality of an ambiguous statute is a question of law and a matter of construction within the province of the court. The meaning of the language of the statute must be determined in light of its objectives, purposes, and practical effect as a whole. If a statute is so ambiguous that a judge cannot make a reasonable construction of its disputed provisions, and a reasonable person could not determine from reading it what the law orders or prohibits, it is void for vagueness because it violates the guarantee of due process of law.

Some states have codified terms that had in the past been subject to repeated judicial construction. The need for court proceedings to determine the real meaning of some terms has been eliminated by enactment of statutes that give specific meanings—such as specifying that "calendar day" means a twenty-four hour period starting on midnight of one date and ending midnight of the next day.

cross-references

Canons of Construction; Judicial Action.

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construction

con·struc·tion / kənˈstrəkshən/ • n. the building of something, typically a large structure: a skyscraper under construction. ∎  such activity considered as an industry. ∎  the style or method used in the building of something: the mill is of brick construction. ∎  a building or other structure. ∎  the creation or formation of an abstract entity: language plays a large part in our construction of reality. ∎  an interpretation or explanation: you could put an honest construction upon their conduct. ∎  Gram. the arrangement of words according to syntactical rules: sentence construction. DERIVATIVES: con·struc·tion·al / -shənl/ adj. con·struc·tion·al·ly / -shənl-ē/ adv.

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Construction

Construction

A. JOHNSON & COMPANY H.B.

BARRATT DEVELOPMENTS PLC

BECHTEL GROUP, INC.

BILFINGER & BERGER BAU A.G.

BOUYGUES

DILLINGHAM CORPORATION

FAIRCLOUGH CONSTRUCTION GROUP PLC

FLUOR CORPORATION

JOHN BROWN PLC

JOHN LAING PLC

KAJIMA CORPORATION

KUMAGAI GUMI COMPANY, LTD.

LINDE A.G.

MELLON-STUART COMPANY

OHBAYASHI CORPORATION

THE PENINSULAR & ORIENTAL STEAM NAVIGATION COMPANY (BOVIS DIVISION)

TAYLOR WOODROW PLC

WOOD HALL TRUST PLC

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construction

constructionashen, fashion, passion, ration •abstraction, action, attraction, benefaction, compaction, contraction, counteraction, diffraction, enaction, exaction, extraction, faction, fraction, interaction, liquefaction, malefaction, petrifaction, proaction, protraction, putrefaction, redaction, retroaction, satisfaction, stupefaction, subtraction, traction, transaction, tumefaction, vitrifaction •expansion, mansion, scansion, stanchion •sanction •caption, contraption •harshen, Martian •cession, discretion, freshen, session •abjection, affection, circumspection, collection, complexion, confection, connection, convection, correction, defection, deflection, dejection, detection, direction, ejection, election, erection, genuflection, imperfection, infection, inflection, injection, inspection, insurrection, interconnection, interjection, intersection, introspection, lection, misdirection, objection, perfection, predilection, projection, protection, refection, reflection, rejection, resurrection, retrospection, section, selection, subjection, transection, vivisection •exemption, pre-emption, redemption •abstention, apprehension, ascension, attention, circumvention, comprehension, condescension, contention, contravention, convention, declension, detention, dimension, dissension, extension, gentian, hypertension, hypotension, intention, intervention, invention, mention, misapprehension, obtention, pension, prehension, prevention, recension, retention, subvention, supervention, suspension, tension •conception, contraception, deception, exception, inception, interception, misconception, perception, reception •Übermenschen • subsection •ablation, aeration, agnation, Alsatian, Amerasian, Asian, aviation, cetacean, citation, conation, creation, Croatian, crustacean, curation, Dalmatian, delation, dilation, donation, duration, elation, fixation, Galatian, gyration, Haitian, halation, Horatian, ideation, illation, lavation, legation, libation, location, lunation, mutation, natation, nation, negation, notation, nutation, oblation, oration, ovation, potation, relation, rogation, rotation, Sarmatian, sedation, Serbo-Croatian, station, taxation, Thracian, vacation, vexation, vocation, zonation •accretion, Capetian, completion, concretion, deletion, depletion, Diocletian, excretion, Grecian, Helvetian, repletion, Rhodesian, secretion, suppletion, Tahitian, venetian •academician, addition, aesthetician (US esthetician), ambition, audition, beautician, clinician, coition, cosmetician, diagnostician, dialectician, dietitian, Domitian, edition, electrician, emission, fission, fruition, Hermitian, ignition, linguistician, logician, magician, mathematician, Mauritian, mechanician, metaphysician, mission, monition, mortician, munition, musician, obstetrician, omission, optician, paediatrician (US pediatrician), patrician, petition, Phoenician, physician, politician, position, rhetorician, sedition, statistician, suspicion, tactician, technician, theoretician, Titian, tuition, volition •addiction, affliction, benediction, constriction, conviction, crucifixion, depiction, dereliction, diction, eviction, fiction, friction, infliction, interdiction, jurisdiction, malediction, restriction, transfixion, valediction •distinction, extinction, intinction •ascription, circumscription, conscription, decryption, description, Egyptian, encryption, inscription, misdescription, prescription, subscription, superscription, transcription •proscription •concoction, decoction •adoption, option •abortion, apportion, caution, contortion, distortion, extortion, portion, proportion, retortion, torsion •auction •absorption, sorption •commotion, devotion, emotion, groschen, Laotian, locomotion, lotion, motion, notion, Nova Scotian, ocean, potion, promotion •ablution, absolution, allocution, attribution, circumlocution, circumvolution, Confucian, constitution, contribution, convolution, counter-revolution, destitution, dilution, diminution, distribution, electrocution, elocution, evolution, execution, institution, interlocution, irresolution, Lilliputian, locution, perlocution, persecution, pollution, prosecution, prostitution, restitution, retribution, Rosicrucian, solution, substitution, volution •cushion • resumption • München •pincushion •Belorussian, Prussian, Russian •abduction, conduction, construction, deduction, destruction, eduction, effluxion, induction, instruction, introduction, misconstruction, obstruction, production, reduction, ruction, seduction, suction, underproduction •avulsion, compulsion, convulsion, emulsion, expulsion, impulsion, propulsion, repulsion, revulsion •assumption, consumption, gumption, presumption •luncheon, scuncheon, truncheon •compunction, conjunction, dysfunction, expunction, function, junction, malfunction, multifunction, unction •abruption, corruption, disruption, eruption, interruption •T-junction • liposuction •animadversion, aspersion, assertion, aversion, Cistercian, coercion, conversion, desertion, disconcertion, dispersion, diversion, emersion, excursion, exertion, extroversion, immersion, incursion, insertion, interspersion, introversion, Persian, perversion, submersion, subversion, tertian, version •excerption

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