Joint Ventures

1. Joint Ventures Adrian L. Bastianelli, III Paul C. Monte Michael C. Zisa

2. Presenters Adrian Bastianelli is the co-managing partner of P&A's Washington, DC office. Paul Monte is the co-managing partner in P&A's New York office. Mike Zisa is a partner in P&A's Washington, DC office.

3. Joint Ventures Generally • Definition • Advantages of Using a Joint Venture • Liability of Joint Venture Partners • Joint and Several • Liability Between Joint Venture Partners • Teaming Agreements vs. Joint Venture Agreements 

4. Types of Joint Ventures Percentage Based Line Item Joint Venture JV that Subcontracts to a Partner Design-Build Joint Venture “Silent” Joint Venture Small Disadvantaged Business Joint Ventures Pre-Bid Joint Venture Agreements

5. General Provisions Name Members Purpose Bank Accounts Licensing Duration of Joint Venture Ownership Interests

6. Form of Joint Venture • Partnership • Consortium • Single Purpose Entity • LLC • Corporation

7. Capitalization Bidding Costs Initial Capital Contributions Additional Capital Contributions Failure to Meet Cash Calls Third Party Financing

8. Profits Definition of Profits Costs Chargeable to Joint Venture Repayment of Capital Contributions Timing of Distribution Books and Records

9. Management • Managing Partner • Removal or Change of Managing Partner • Liability of Managing Partner • Management Committee • Problems with 50/50 Vote • Day to Day Operations • Project Manager • Access to Information • Audit

10. Subcontracting • Choice of Subs • Subcontracting to a Joint Venture Partner • Payment • How and When • Retention • Payroll • Insurance • Subcontracting Where Joint Venture Is a DBE

11. Manpower and Equipment • Who Provides Manpower and Equipment • Skilled Labor • JV Partner Owned Equipment • Who Provides Supervision • Choice of Project Management and Field Supt. • Accounting for Supervision and Equipment • Agreed Rates • Tracking of Equipment Usage

12. Default of a Joint Venture Partner • Types of Default • Breach of a Specific Joint Venture Term • Failure to Meet a Capital Call • Failure to Provide Resources • Failure to Timely Perform • Other types of default • Failure to Meet Standard of Care • Breach of Implied Duty of Good Faith and Fair Dealing • Failure to Disclose • Remedies for Default • Notice • Right to Cure • Consequences of Default

13. Withdrawal or Dissolution Rare in Construction Joint Ventures Notice to Owner, Subcontractors, and Surety Continuing Liability of the Withdrawing Partner

14. Insurance • Who Provides • Subrogation Rights • Coverage • General Liability • Workers’ Comp • Equipment • Builder’s Risk or Completed Operations • E&O

15. Bonding • Underwriting Considerations • Review of All participants of the Joint Venture • Review of Joint Venture Agreement • "Angel Deals" • Additional Consideration for Certain Federal Programs • Limited Number of Joint Venture Contracts • Statutory Requirements for Joint Venture • Consequences for Noncompliance

16. Bonding • Indemnity Requirements • Indemnity Agreement • Joint and Several liability • Issuing Bonds to a JV • Get the Name Right • Potential Conflicts for Sureties & Bond Producers • Claims • Losses • Business disputes

17. Disputes Between the Partners • Disputes Between the Joint Venture and Third Parties Should be Addressed in the Joint Venture Agreement • Cooperate With Each Other • How Decisions Regarding Prosecution of the Claims Will Be Made • Disputes Between Joint Venture Partners • Day to Day Decisions • Interpretation of the Agreement • Defaults • Special Defenses • Gross Negligence or Fraud • Limitations of Liability

18. Dispute Resolution Between the Partners • Types of Decision Making • Day-to-Day Operational Decisions – Project Manager • Normal Course of Business Decisions – Management Committee • Disputes Between the JV Partners • Disputes • Consensual Decision • Tie Breaker Mechanism • Mediation • Arbitration/Litigation

19. Standard Form Agreements AGC AIA Other Most Joint VenturesDon't Use Standard Form Agreements

20. Design-Build Joint Ventures

21. Design-Build Joint Ventures • Designers Role • Pre-Bid • Reliance on Design • Post-Bid • Format • Joint Venture – Partner at Risk • Subcontract

22. Design-Build Joint Ventures • Considerations in Selection of Designer • Experience • Size • Insurance • Designers Often Seek Limits on Liability • Fee Structure • Incentives

23. Design-Build Joint Ventures Design Obligations and Liability Coordinating Design and Construction Delay Licensing Errors and Omissions Insurance Sureties Liability for Design Errors

24. Typical P3 Project Structure

25. Risk Transfer “Maximization” • Political Risk • Downstream Risk Transfer Pressure • Design-Build +++ • Design Build Risk Assumption • Design and Professional Standard of Care Issues • Permits and Approvals • Differing Site Conditions • Utilities • Environmental

26. Owner's Role • ROW • Utilities • Site Conditions • Permits • Time & Scope of Design Review • Conformity with Design Intent • Compliance with Standard Specifications • Nonconformance Reports

27. Warranties and Changes Orders • Warrant Results & Success: • Design & Performance Criteria • Completed Operations • Tests • Limited Change Orders • Impacts by Owner • Changed Conditions • Design Errors & Omissions

28. Your Questions? If you do not have the opportunity to have your question addressed during the seminar, you may contact the presenter directly: Adrian Bastianelli: abastianelli@pecklaw.com Paul Monte: pmonte@pecklaw.com Mike Zisa: mzisa@pecklaw.com