This article was written for the Engineering News-Record and first appeared here.

From grand designs to opening day, stadium construction projects present a captivating blend of high-profile opportunities and significant challenges and risks. Navigating this complex landscape is not easy, but when managed properly, the potential rewards, both in terms of reputation and finances, can make it a gamble worth taking. While each stadium project is different, some of the more common risks include:

1. Securing adequate labor, materials and equipment based on the size of the project;
2. Logistical concerns regarding the concurrent performance of multiple trade scopes on a single site;
3. Protection of work in place from weather due to the large footprint of the stadium project;
4. Cash flow issues caused by protracted change order processing, conflicting and/or onerous payment requirements from project financing entities, and reimbursement of considerable
monthly general condition costs; and
5. Meeting the schedule requirements for the project.

Although these issues are present on any construction project, they are exponentially more impactful on stadium projects due to their sheer enormity and the significance of completing by “opening day.” Missing opening day can have catastrophic consequences. Therefore, the contractor is often responsible for overcoming any delays that may occur on the project including compensable delays such as incomplete, late or revised design and delays in processing submittals, and excusable delays such as weather impacts.

While the owner may be willing to extend additional compensation to accelerate, in many cases, extending the schedule beyond a certain point is not a viable option. For this reason, the contractor is exposed to significant liquidated damages in the event the adjusted schedule completion is not met.

In order to address these issues, it’s imperative that contractors intensely scrutinize and negotiate the contract terms, and employ appropriate risk transfers by, among other things, establishing a generous contingency, negotiating an expedited dispute resolution process and securing a comprehensive insurance and bonding program.

For more information, please contact Gregory A. Eichorn.