What now?
By Edmund S. Tijerina
Even two
months after the Big Blue collapse, there still isn't a timetable
as to when all contractors will be able to return to work. As
a result, most subcontractors don't know the full extent of the
damages they will incur.
Business
survival rests with contractors' ability to make their claims
and get out and find more 
work
in the meantime, accountants and construction attorneys say.
If subs haven't done so already, they need to file at least their
intent to file a claim as soon as possible.
"Sometimes
you need to make your claim immediately," said Daniel J.
Miske, an attorney with Milwaukee-based Petrie & Stocking S.C.
"File notice to make a claim. Every-thing else is dependent
on that."
The notice
begins the process of making a claim, which, in the case of Miller
Park, could take a long time. Those who do not file a notice
risk not being able to make a claim.
"The
contractor is obligated to mitigate damages," said Dennis
Bersch, president of Bersch Accounting in Milwaukee. "What's
the damage for the delay and what's it going to cost to finish
it?"
Check and double
check
For most
subcontractors, the answers to both questions are still uncertain.
Company executives don't know when work will resume and many
haven't had a chance to determine how much work needs to be shored
up or redone due to the delay.
"I'm
very worried about what it will do to my business," said
one subcontractor. "I have a small business and this affects
me very much. We really don't know yet when we're going back
to work."
Subcontractors
should have already begun the process of recovering damages.
"First
of all, they need to read their contract," Miske said. "Then
they need to read their contract again to make sure they read
it thoroughly."
Contracts
make provisions for which losses can be included in claims and
what might be specifically excluded. "What does everybody
have for rights," Bersch said. "Do they allow for litigation?
There are all sorts of different contract rights, depending on
what tier of the work you're on. What tier are you on and what
are your rights? It's all in the contract."
Write it down
Subs must
document everything they've lost. Ideally, the contract, records
of work performed, and correspondence with the general contractor
are already organized and can be readily turned over to an accountant
or lawyer who can help determine losses. Otherwise, those who
are not as well organized need to gather their records quickly.
Pictures
- either still or video - of the work performed should be taken
as soon as possible after the accident. The most complete record
would include photos of the work before the accident, more pictures
right after the accident, and even more when workers are back
on the job, Bersch said.
A successful
claim begins by describing how the accident has disrupted business,
Miske said.
"They
should be laying out what they had scheduled until April 2001,
and what they now have scheduled until 2001, and figure out how
many problems they will encounter from pushing back the work
on Miller Park," he explained.
These
"consequential damages" result from the harm contractors
suffer as a result of project delays. Not all contracts, however,
allow for consequential damages.
"There's
the impact of (delays from the accident) on other business,"
Bersch said. "Having equipment ready, people available.
You may have to reschedule employees."
If the
accident-related delays cause contractors to lose money, they
also may have grounds to terminate their contracts, Bersch and
Miske said.
"You
have to know what contract said in first place," Bersch
said. "You have to have some idea of where you wanted your
work to be. Have to have some idea of what it will take to get
out of the situation." In the end, figuring out how to survive
a business disaster depends on organization and preparation.
Legal remedies
"There
are so many potential scenarios for how this could work out,"
Bersch said. "Claims for damages have to be provable and
quantifiable. They have to be delivered to a jury. And they have
to be within the confines of the law."
If the
records don't exist, contractors still have alternatives. "We
may get involved in what we term as 'forensic accounting,' which
involves reconstructing records from other information that is
available," Bersch said.
"It's
much more expensive to recreate records than it is to use records
that were already available."
If the
delay by itself wasn't enough, a new labor contract is expected
to be negotiated next summer, adding a new layer of costs and
complexity to the project, which was originally scheduled to
be finished in time for the beginning of baseball season next
year.
Said Miske:
"It's going to be a very expensive mess."
