The presentation of the Crane & Rigging Group Tower Crane Committee at the 2019 Crane & Rigging Workshop.

1. CRANE & RIGGING
GROUP
TOWER CRANE
COMMITTEE
September18, 2019

2. COMMITTEE MEMBERS
Peter Juhren, Chair
Dennis Bates
Michael Battaini
Bill Carbeau
Jennifer Gabel
JR Moran
Bill Smith
Andy Steinberg
Henry Volante
Robert Weiss

3. AGENDA
Dennis Bates presiding
1. Welcome and Introductions
2. Approve April 2019 Minutes
3. Follow Up: Tower Crane Signage
4. Presentation: Contract Considerations
5. KHL Tower Cranes North America
Conference
6. Presentation: 425 Park Avenue
7. New Business/Other
8. The next meeting of the Tower Crane
Committee will be in conjunction with
SC&RA’s 2020 January Board & Committee
Meetings, January 8-11, at the Sheraton
Hacienda Del Mar in Cabo, Mexico.
Adjourn

4. Frank Bardonaro
Maxim Crane Works, Inc.
Crane Industry
Contract Issues
Pitfalls of signing contractor’s documents and
potential for back-charges

5. Bare Rental Issues
◼ In the case of a“Bare Rental”, Rental Companies should always strive to bare rent equipment on their standard bare rental
agreements. In some instance’s the customer will insist that a rental Company use the customer’s“bare rental agreement”which
may only be a purchase order or a subcontract agreement or worse. The owner of the equipment (the rental company) should
NOT sign the“lessee’s”contract. Rental Companies should make sure to insert language into the agreement to address the
following issues:
◼ Operation Of The Equipment: Equipment should be operated, inspected, maintained and repaired only by experienced,
competent persons under Customer's supervision and control and that the equipment shall be operated in a safe and lawful
manner at all times, and in accordance with the manufacturer’s operator’s manual, OSHA rules and ANSI standards.
◼ Inspection, Maintenance, Repairs And Record Keeping Requirements: Customer shall effect and bear the expense of all
necessary inspections, maintenance, adjustments and repairs required by the Equipment operator’s manual and by law, and shall
maintain the equipment at Customer’s expense in good working condition.
◼ Damage To Equipment: Customer shall notify Crane Company of any damage to the equipment within twenty-four (24) hours
from the date of the damage. All repairs to the equipment occasioned by damage during the rental term shall be at the expense
of Customer (excluding those caused by the negligence of Crane Company or a latent equipment defect).
◼ Accidents: Customer shall notify Crane Company of any accident involving personal injury and/or property damage arising
from the transportation, possession, use, maintenance or repair of the Equipment within twenty-four (24) hours from the
date of the accident.
Can we walk into a Hertz or Avis car rental and tell them we won’t sign their contracts?

6. Bare Rental Insurance
How is it possible that we can be back-charged for 1 day of downtime worth more than the monthly rate?
◼ Insurance: Customer, at its expense, shall take out, carry and maintain the following insurance during the term
of the Agreement:
a. Comprehensive General Liability
b. Automobile Liability Coverage,
c. Inland Marine All Risk Coverage, (Physical Damage Insurance)
d. Umbrella Liability
e. Worker's Compensation
◼ The Crane Company should be granted additional insured status and waivers of subrogation on all applicable policies.
The Customer should also name the Crane Company as a Loss Payee on the inland marine (property) policy.
◼ Indemnity: The Customer should agree to indemnify, defend and hold harmless the Crane Company for all losses and
claims that arise during the course of the bare rental of equipment.

7. Operated Rentals – Price and Payment Terms
Crane Companies should make sure the following issues are identified and addressed within their Customer’s agreement.
◼ Make sure the price accurately reflects the what amounts will be billed such as hourly rates, overages, freight,
assembly, disassembly and any other ancillary charges.
◼ Make sure that Customer understands/agrees that taxes or any separately negotiated items are not included in the
contract“price.”
◼ Identify if there are any“Paid if Paid”or“Paid when Paid”clauses.
◼ Watch for the Customer’s right to withhold payment due back-charge or off-set.
◼ Identify if there will be any retention withheld, if so, make sure the release point for the retention is clearly stated.
◼ Identify if Customer is asking Crane Company to waive its lien rights.
◼ Why should we accept retainage?
Crane Rental companies are generally NOT subcontractors!

8. Operated Rentals – Warranty and Delay Damages
◼ The Customer will often give themselves the right to back-charge or to otherwise hold the Crane Company responsible
for the consequences of equipment failure or any other Crane Company action or inaction that could cause a project
delay or remove the project from its critical path.
◼ The Customer will often have the Crane Company agree that they will be responsible for special damages including
punitive, liquidated, and consequential damages.
◼ The Crane Company MUST eliminate their exposure to any special damages or back charges by doing one of the
following:
◼ Clearly stating that they have no liability for special damages or back charges
◼ Putting a monetary cap on their exposure for special damages or back charges that cannot exceed the daily rental
value
◼ Giving themselves a grace period to get the equipment back up and running before special damages or back
charges are assessed.
Do we get to charge for delayed start dates and early termination?

9. Operated Rentals – Warranty and Delay Damages (cont.)
◼ EXAMPLE OF CUSTOMER LANGUAGE: “Crane Company shall be liable for any damages for delay
sustained by Customer caused directly or indirectly by Crane Company; including, but not limited to,
damages, liquidated or otherwise, for which Customer is liable to a Prime Party or other person or entity.
Crane Company agrees that Customer is entitled to recover the following liquidated damages from Crane
Company in the event of delay that Crane Company causes, directly or indirectly, by not completing its
work by the time specified for completion: the greater of (i) the sum of <<$1,000.00>> for each and every
day of delay or (b) the aggregate amount of liquidated damages, penalties and other monetary sums that
Customer is required to pay to anyone else because of Crane Company r’s failure to complete the Work by
the deadline for completion of the Work. Crane Company agrees that the amount of liquidated damages
stated in this paragraph is a reasonable estimate of the damages that Crane Company will suffer in the
event that Crane Company fails to complete the Work on time and that those damages are difficult to
estimate at this time.”
Do we get to charge for delayed start dates and early termination?

10. Operated Rentals – Indemnity, Hold Harmless and Duty to Defend
◼ Customer’s will usually ask the Crane Company to indemnify, defend and hold the Customer harmless for any and all issues,
claims and accidents. The Customer’s standard language is generally VERY broad and can include having the Crane Company
indemnify the Customer for the Customer’s own actions or negligence.
◼ Crane Companies should try to limit their indemnity, defense and hold harmless obligations to issues, claims and accidents that
are caused by their performance of the work, or the performance of their subcontractors.
◼ Crane companies should exclude any indemnity, defense and hold harmless obligations for any issues, claims, or accidents that
are caused by the Customer, any of Customer’s other subcontractors, or any other unrelated 3rd party for whom Crane Company is
not responsible.
◼ EXAMPLE OF CUSTOMER LANGUAGE: “Crane Company shall defend, indemnify, and hold harmless Customer and its surety, the
Owner, the Prime Contractor, other subcontractors and suppliers for the Project, any of these parties’ respective employees, agents or
consultants, and any other entities that Customer is required to defend and indemnify pursuant to the Prime Contract Documents
(collectively, the “Indemnitees”) from and against any claim, damage, expense, cost, or liability, including attorneys’ fees and legal
expenses (collectively, “Indemnified Claims”) attributable to bodily injury, personal injury, sickness, disease, or death, or damage to or
destruction of property (including loss of use thereof) arising out of, resulting in any way from or occurring in connection with the
performance of the Work by Crane Company, its sub-subcontractors and suppliers, or their agents, servants, or employees.”
We should not fall into the same exposure as that of a sub-contractor.
We are “borrowed servants” or vendors.

11. Operated Rentals – Insurance
◼ Customer agreements will generally require the Crane Company to name the Customer, and potentially
other entities (usually owners, lenders, the general contractor, etc.) as additional insureds and grant waivers
of subrogation on all of the Crane Companies applicable insurance policies.
◼ Crane Company’s should limit the additional insured status, and their waiver of subrogation obligations, to
their Customer, the General Contractor, and any other upper tier parties. The Crane Company should make
sure they are not granting these coverages to other subcontractors or unrelated lower tier entities. Further,
the Crane company should make sure they are limiting additional insured status and granting waivers of
subrogation only for accidents and claims that are caused by the performance of their scope of work.
Protect your interests!

12. Operated Rentals – Default/Termination
◼ Customer agreements generally provide default and/or termination provisions that can give the Customer
the right to back-charge the Crane Company and/or to take their equipment if the Crane Company triggers
a default or termination provision within an agreement. They can also require the Crane Company to pay
for any costs for another crane company or contractor to come in and complete the Crane Company’s scope
of work.
◼ Crane Companies should add language to the agreement that clarifies that the Customer can never take
possession of their equipment without executing the Crane Company’s standard bare rental agreement.
◼ Crane Companies should also add language that requires the Customer to give them written notice of any
potential default and then gives the Crane Company a period of time to remedy any default before the
Default or Termination clauses are triggered.
◼ Finally, if the Crane Company is required to pay the cost of any other crane company or contractor to
complete the Crane Company’s scope of work that language should be inserted to clarify that they are only
responsible for the actual cost to complete the work and not any mark-up or overhead and profit added by
the Customer.
Read the fine print!

13. Operated Rentals – Default/Termination (cont.)
◼ EXAMPLE OF CUSTOMER LANGUAGE: “If any of the following occur, Customer may, at its option, at any time
terminate this Agreement and any or all Work Orders in the event of Crane Company’s default: (a) if Crane
Company at any time shall refuse or neglect to supply sufficient properly skilled workmen, or materials or
equipment of the proper quality and quantity, (b) if Crane Company fails
in any respect to prosecute work under any Work Order issued and accepted hereunder with promptness and
diligence, (c) if any action or omission of Subcontractor causes the stoppage or interference with the work of
Customer, other subcontractors or a General Contractor, (d) if Crane Company fails in performance of any of the
covenants contained in the applicable Prime Agreement or other Contract Documents, or (e) if Crane Company is
unable to meet its debts as they mature. Thereafter, Customer may take possession of the materials and
equipment of Crane Company related to the terminated Work Order, and through Customer or others provide
labor, equipment and materials to prosecute and complete the work on such terms and conditions as shall be
deemed necessary. Customer shall deduct the cost thereof, including without restriction all charges, expenses,
losses, costs, damages, and attorney’s fees, incurred as a result of Crane Company’s failure to perform, from any
money then due or thereafter to become due to Crane Company under this Agreement or any Work Order.”
Read the fine print!

14. Be Aware of Contingency Based 3rd Party Audits!
◼Many larger customers today are relying on“claw-back”audits as profit
centers
◼Special purpose contractors are hired on contingency fee basis to look back
2-3 years to find discrepancies in billing
◼This is a“one-way”audit that contractually requires supplier to refund any
“findings”to customer but
not to off-set or refund any“under-billing”
◼Formula’s designed only to find for customer

15. AGENDA
Dennis Bates presiding
1. Welcome and Introductions
2. Approve April 2019 Minutes
3. Follow Up: Tower Crane Signage
4. Presentation: Contract Considerations
5. KHL Tower Cranes North America
Conference
6. Presentation: 425 Park Avenue
7. New Business/Other
8. The next meeting of the Tower Crane
Committee will be in conjunction with
SC&RA’s 2020 January Board & Committee
Meetings, January 8-11, at the Sheraton
Hacienda Del Mar in Cabo, Mexico.
Adjourn

16. Organized by
June 22-23, 2020
Marriott Biscayne Bay
Miami, Florida
www.khl-tcna.com
Exclusive Event Partner:

17. AGENDA
Dennis Bates presiding
1. Welcome and Introductions
2. Approve April 2019 Minutes
3. Follow Up: Tower Crane Signage
4. Presentation: Contract Considerations
5. KHL Tower Cranes North America
Conference
6. Presentation: 425 Park Avenue
7. New Business/Other
8. The next meeting of the Tower Crane
Committee will be in conjunction with
SC&RA’s 2020 January Board & Committee
Meetings, January 8-11, at the Sheraton
Hacienda Del Mar in Cabo, Mexico.
Adjourn

18. Robert C. Doerr, P.E.
Vice President,
A.J. McNulty & Co., Inc.

77. THANK YOU
FOR YOUR
ATTENTION!

78. AGENDA
Dennis Bates presiding
1. Welcome and Introductions
2. Approve April 2019 Minutes
3. Follow Up: Tower Crane Signage
4. Presentation: Contract Considerations
5. KHL Tower Cranes North America
Conference
6. Presentation: 425 Park Avenue
7. New Business/Other
8. The next meeting of the Tower Crane
Committee will be in conjunction with
SC&RA’s 2020 January Board & Committee
Meetings, January 8-11, at the Sheraton
Hacienda Del Mar in Cabo, Mexico.
Adjourn