Project Management

1. Case 3-1 Riverside Condos
Risk Distribution and Dispute Resolutions
姜礼粼
Kang Yerin
L163300301

2. “Risk is inherent in construction. Adroit
practitioners know how to manage risk.”

3. PART 01
Introduction

4. • The condominium tower in Louisville was designed to
attract empty nesters back to the central city.
• Good views were afforded.
• Financing, including land acquisition, was completely
private.
01Introduction

5. • Design – bid – build delivery system
• To complete the construction by budget of owner who proposed, the
designer and the owner agreed to use cheaper and minimal materials.
So that the designer proposed single-wythe brick wall construction
which costs less. During the bidding system, the contractor had
concern that this wall construction would not be strong enough to
resist leakage from outside and the design was not suitable for its
environment, but the designer and owner did not stop the
construction process.
02Introduction

6. • But the leakage has occurred soon after completion of the
construction.
• The water was penetrating the single wythe of brick veneer and
moving down the inner side of the brick.
• When the water is gather at the bottom of the cavity between
brick and sheathing, it was gradually flowing all the way of living
space through sheathing, insulation, and interior plasterboard.
• This is considered as a building failure.
03Introduction

7. • Length – 136 ft
• Width – 82.42 ft
• Height – 10 ft each floor
• Additional 1 foot brick wall
• Total area of brick wall – 48885.2 ft2
04Introduction

8. PART 02
Discussions

9. 01• Use moisture-resistant wall materials
• Rubber mold epoxy polyamide adhesive or latex hydraulic cement
• Plywood sheathing
• Covering and coating for water-resistant
Discussion Are there better types of wall construction for excluding
water? What are they, and what are their pros and cons?

10. 01• Stone cladding wall construction
 Durable
 High level of insulation
 Water resistance
 Easy to maintain long-term
 Can trap moisture behind the
material if poorly installed
 Time-consuming installation
Discussion Are there better types of wall construction for excluding
water? What are they, and what are their pros and cons?

11. 02• Find another contractor to fix this problem
• Through investigation
• Negotiation
• Mediation
• Arbitration
• Legal action
Discussion If a contractor refuses to rectify such problems,
what are the owner’s options?

12. 03• Supporting the weight of the brick
• Transferring the weight to the main structure of the building
• Ledge angles should be placed every floor
• They are bolted to the midpoint of the slab
Discussion What is the purpose of ledge angles?
How frequently should they be placed?

13. PART 03
Assignments

14. 01Assignments
Details of envelope structure

15. 02• Improper choosing of materials
• Inadequate or improperly placed flashing
• Inadequate or improperly placed weep holes
• Partial filling of the cavity with mortar droppings, thus clogging
weep holes
• Improper tying of brick to studs, allowing inordinate flexure of the
brick and leading to joint failure
• Combinations of the above
Assignments
Possibilities of causing the leakage

16. 03• Completely replace brick wall and replaced damage sheathings
• Provide silicone sealant to prevent moisture penetration.
• Remove lower courses of brick at each level while properly
bracing upper courses.
• Clean the cavity
• Replace sheathing and flashing, and then replace brick with
proper weeping.
• Install additional layer of brick
Assignments
Plan of approaching to rectify the problem

17. 04Assignments
Estimation of cost
Cost Quantity Total cost
Direct cost Silicone sealant $9/ft2
48885.2ft2
$439,967
Indirect cost
Site utilities,
facilities, and
staff salaries
15% of direct
cost
- $65,995
General
overhead
5% of direct cost - $21,998
• Estimation cost of silicone sealant:
$2.5 ~ 9
• Total cost = direct cost + indirect
cost = $527,960

18. 04• Brick wall : $6.45 ~ 12.65 /ft2
• Mortar : $250 - $450/ 1000 ft2
• Labor : $40 /hour
• Labor installation productivity : 42 ft2/hour
• Labor removal productivity : 12 ft3/hour
• Brick wall thickness : 0.3 ft
• Supplies (including corrosion resistant fasteners, flashing and
exterior grade caulking, weather stripping and sealants) : $0.4 /ft2
Assignments
Estimation of cost

19. 04 Cost Quantity Total cost
Direct cost
Brick wall $12 / ft2 48885.2ft2
$586,622
Mortar $400/1000 ft2 48885.2ft2 $19,554
Labor (installation) $40 /hour
896 hrs
(4 months)
$35,840
Labor (removal) $40 /hour
448 hrs
(2 months)
$17,920
Supplies $0.4 /ft2 48885.2ft2 $19,554
Indirect cost
Site utilities, facilities,
and staffs salaries
15% of direct
cost
- $101,923.5
General overhead 5% of direct cost - $5096.2
Assignments
Estimation of cost
• Total cost = direct cost +
indirect cost = $786,509.7

20. 05• Through forensic investigation, single-wythe wall is not enough to
withstand serious rains and storms. As mentioned before, there
was proposed plan to install additional brick layer that provides
double-wythe brick wall to be stronger and more durable.
• When the contractor issued the cause of the problem during
bidding process, the designer and the owner were refused to fix
the problem. Hence, liability should be covered by the owner and
the designer. Liability will be covered by among three parties, the
owner, insurance, and the designer.
Assignments
Determine how the cost of the remedy will be afforded.

21. 06• The design firm will be covered by professional liability insurance.
The estimated insurance cost plan approximately like this:
• Average Errors and Omissions Insurance cost: $2,700 / year
• Median Errors and Omissions Insurance cost: $2,000 / year
• These estimates are based on a policy with these followings:
• $5,000 deductible.
• $1 million per occurrence coverage limit
• Based on the estimated insurance plan of the design firm, the
design firm can’t be covered the whole liability due to $1 million
per occurrence coverage limit. Thus, the liability will be covered
by both the owner and the designer firm.
Assignments
Determine how the loss is covered

22. 07• Negotiation
• Open discussion
• first effort conducted to solve a dispute
• idea to reach a solution that is optimal for both
• Mediation
• a third party, the mediator, assists the parties to negotiate a settlement
• mediators work with parties in private settings, helping them to arrive at
mutually agreeable decisions.
• In mediation, decisions are ultimately made by the parties themselves
Assignments
Resolution procedure with a series of possible steps

23. 07• Arbitration
• regarded as a simplified version of a trial, with less-involved rules of
evidence and procedure.
• the arbitrator hears evidence and makes a decision
• Litigation
• Taking legal action
• Litigation refers to the resolution of disputes through the court system.
Assignments
Resolution procedure with a series of possible steps

24. 08
negotiation
Settlement
achieved
execution
of plan
mediation
settlement
achieved
execution
of plan
arbitration
settlement
achieved
execution
of plan
litigation
Assignments
“Decision tree” showing dispute resolution options
success
fail success
success
fail
fail

25. 09• Since the designer was so confident that the design was good
enough to resist difficulties and the owner was willing to take risks
to save money, the owner could not rightfully pursue for this case.
Assignments
Determine if the owner could rightfully pursue such.

26. PART 04
Summary

27. 01• From thorough evaluation of this case, some problems have to be
fixed and replaced by another repair works. A forensic
investigation indicated the problem that design of single-wythe
wall construction was not sufficient to resist serious rains and
storms. A plan to rectify the problem is that repairing sheathing
properly placed and double-wythe brick wall construction will be
applied by repair works. To ensure the safety, silicone sealant will
be utilized to prevent leakage from water seeping in. This plan
would cost $1,317,469.7 , covered by the owner and the designer.
Summary
Conclusion

28. Thank you