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Tag Archives: Pennsylvania

21 Century Construction Mistakes: Curious Cases in the USA

Construction failures, if not too tragic in their nature, can cause a certain amusement in some quarters. It certainly does seem inexplicable how projects costing millions of dollars can omit a small detail that can potentially ruin everything.

Buildings are usually in the planning process for years and undergo various evaluations and analyses. Many experts are involved in the different elements and stages of design and construction. Then, especially in the cases of buildings with a public service importance, contractors are chosen only after a careful bidding process. The process of planning and constructing a building is also connected with obtaining a range of permits, approvals, evaluations and insurances. These include, among others, that the selected contractors have to get surety bonds with a surety bond agency, guaranteeing the client the execution of their contractual commitment on the project.

And then again, the wonder remains: how a tiny but crucial detail can sometimes be excluded during this elaborate and painstaking planning process? Below are a few idiosyncratic construction mistakes that will make you really ponder this question.

 

David L. Lawrence Convention Center

With about 1.5-million sq. ft. in area, the Pittsburgh David L. Lawrence Convention Center was planned in the late 1990s and was built between 2000 and 2003. However, from the very onset of construction, there were some mistakes. The most serious failure came in 2002 when a truss on the eastern end of the Center collapsed.

During construction, the plan for how to support the 15 steel trusses was changed and was not adapted into the schemes. Thus, the bolts on the 13th truss were fastened with the wrong kind of nuts – with locking nuts of either ½” or 1” thickness instead of with anchoring nuts that were 2” thick. Even the inspection of the trusses did not discover this fault because it did not check for the suitability of the nuts. Eventually the locking nuts could not hold the structure and the truss collapsed, killing a worker and injuring two more. Such a case really makes one think about the smallest details because they can cause a huge failure!

 

Palomar Health Center
Truss 13 of the David L. Lawrence Convention Center
Photo courtesy of Pittsburgh Tribune – Review

Tropicana Casino Parking Garage

The next construction collapse was also caused by a minor oversight during the building of the ten-storey parking garage in Atlantic City, New Jersey. The building site was the expansion of the Tropicana hotel, deliberately reminiscent of the style of Old Havana in Cuba. The $245 million project started in 2002 and was supposed to be finished in 2004. The construction failure in 2003, however, prevented this. As in the case of the David L. Lawrence Convention Center, the initial construction design was changed in the process, leading to the use of more cost-efficient 8’ mats of rebar instead of individual rods of rebar, as well as shallower and bigger beams. This, along with insufficient steel reinforcements in the concrete and appropriate supports during the pouring of concrete, led to the collapse of the building. Four people were found dead and 20 were injured, making it a particularly gruesome accident.

 

Palomar Health Center
The collapse of the Tropicana Casino Parking Garage Photo courtesy of the D’Amato Law Firm

 

Walt Disney Concert Hall

The third example is not precisely a construction failure, as nothing collapsed in the Walt Disney Concert Hall in Los Angeles and nobody was injured. Then again, this is probably the most unlikely mistake because it was executed by the famous architect Frank Gehry, renowned for his eccentric and innovative style and… because of the very nature of the fault. When the rather shiny metal external parts of the construction were completed and exposed to summery sun, it turned out that the reflection of light in the shiny surfaces causes some unexpected problems. It was heating up the neighboring buildings, as well as the sidewalk next to the Hall. The $274-million building had to be sandblasted in order to reduce its glare. Luckily, this had to be done only on 4000 sq. ft. and not on the whole 200,000-square-feet surface of the whole Hall.

 

Palomar Health Center
Walt Disney Concert Hall
Wikimedia Commons

 

Even with the Walt Disney Concert Hall bringing certain lightness in this otherwise grim case history of botched constructions, it seems that meticulousness in the planning and execution of every detail in a construction project is a crucial prerequisite towards its accident-free completion.  It certainly evokes stronger compassion towards construction specialists and contractors.

Pennsylvania Oil & Gas Well Bond

Pennsylvania Oil & Gas Well Bond
Pennsylvania law makers have come up with new legislation affecting owner’s of oil and gas wells. The new law is titled HB 1950 and revamps the surety bond requirements for oil and gas wells. The previous law required a $2,500 bond per well or a $25,000 blanket bond that covers all wells that a permit holder manages within Pennsylvania. HB 1950 states that the bond amounts are calculated by the depth of the well and the amount of wells that the operator manages. The new legislation still allows the operator to obtain individual bonds for each well or a blanket bond to cover all of the operator’s wells. The bond amounts will range from $4K to as high as $500K.

Pennsylvania Real Estate Appraisal Management Company Bond

Real Estate Appraisal Management Company Bond
Real estate appraisal management companies need a surety bond in order to operate legally in Pennsylvania thanks to a new bill. Titled HB 398, the bill requires real estate appraisal management companies to obtain a $20,000 surety bond. The State Board of Certified Real Estate Appraisers is allowed to require a varying bond amount if needed.

Pennsylvania Employer Bond


Employers in the state of Pennsylvania must abide by new rules that were recently put in place. The Pennsylvania Department of Labor and Industry has changed the regulations for the contributions employers make towards employee benefits. Previous regulations stated that the required surety bond amount must be equal to 1% of the employer’s taxable wages paid for employees for the most recent four calendar quarters prior to the employer’s election to make such payments in place of making contributions. The new regulations require the bond to guarantee the compensation of the benefit payments which are calculated by the wages paid during the employer’s period of electing to make payments in place of contributions; the Pennsylvania Department of Labor and Industry will establish the bond amount required.

Pennsylvania Mortgage Broker Bond

PennsylvaniaHB 1654 is a new law that was introduced in the state of Pennsylvania concerning mortgage brokers. The new law requires mortgage lenders, mortgage loan correspondents and mortgage brokers to attain a surety bond in a quantity calculated by the total mortgage loans originated throughout the calendar year that is secured by Pennsylvania residential real estate. Mortgage loan originators are required to attain a surety bond or be covered by the surety bond of their employer. The surety bonds must be from a state licensed surety able to operate business in the Commonwealth.

The new law requires mortgage lenders and mortgage correspondent lenders who hire mortgage originators to acquire a surety bond in the these quantities: $100,000 if the mortgage loans originated are less than $30 million; $200,000 for licensees with loan originations spanning from $30 million to $99,999,999.99; $300,000 for licensees with loan originations spanning from $100 million to $249,999,999.99; and should the licensee have loan originations accumulating to $250 million or greater, then the surety bond must be in the quantity of $500,000.

The present law requires mortgage brokers to acquire a $100,000 surety bond but not if they confirm that they do not permit advance fees, in which case the brokers are excused from the bond stipulation. HB 1654 states that mortgage brokers that employ mortgage originators must attain a surety bond in a quantity calculated by the loans originated. The surety bond amounts would be like so: $50,000 if the sum loan originations are less than $15 million; $75,000 for loan originations spanning from $15 million to $29,999,999.99; $100,000 for loan originations spanning from $30 million to $49,999,999.99; and $150,000 for licensees with mortgage loan originations accumulating more than $50 million in the calendar year.

Similar to other state laws, Pennsylvania excuses organizations and instrumentalities of the federal and state government from its laws concerning the licensure and supervision of banks. HB 1654 qualifies the exclusion from state licensure. Any organization or instrumentality of the federal government or a corporation formed by Congress, such as the Federal National Mortgage Association, the Government National Mortgage Association, the Veterans’ Administration, the Federal Home Loan Mortgage Corporation and the Federal Housing Administration must acquire and sustain equal surety bonds as a state licensed mortgage lender. Should these entities not acquire the surety bond, they are subject to licensures and regulation as banks in the State of Pennsylvania. Identical qualification is added for agencies and instrumentalities of state or local government, the District of Columbia or any grounds of the United States. These entities are excluded from licensure and supervision in Pennsylvania but only if they attain the surety bond required of mortgage lenders.

Mortgage loan originators are normally covered by the surety bond of their state-licensed mortgage lender, correspondent lender or mortgage broker. Should a mortgage originator be employed by a state/federal agency or instrumentality that chooses to be licensed in Pennsylvania instead of attaining the surety bond, then the mortgage loan originator would be obliged to acquire a surety bond in order to be licensed. The surety bond would have to be in these quantities: $25,000 for total loan originations less than $7.5 million; $50,000 for loan originations spanning from $7.5 million to $14,999,999.99; $100,000 for loan originations spanning from $15 million to $29,999,999.99; $200,000 for loan originations spanning from $30 million to $49,999,999.99; and $300,000 if the sum loan originations are $50 million or greater. HB 1654 became active upon enactment.

Pennsylvania Debt Management Service Bond

PennsylvaniaHB 2294, enacted 10/09/2008, adds a new requirement for debt management services to abide by. The new law calls for debt management service companies to be licensed, to acquire a $50,000 bond, and to have proof of liability/fidelity insurance. The bond acquired must be from a surety approved by the Department of Banking and must be licensed in the Commonwealth. The bond will run to the Commonwealth for the aid of consumers who suffered damages from the debt management providers/their agent’s defiance of the new law or the regulations implementing it. The function of the fidelity policy is to cover against any theft, fraud or dishonesty of the provider’s employees, directors or principals.