{"id":826,"date":"2026-04-29T13:57:34","date_gmt":"2026-04-29T17:57:34","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/constructionlaw\/?p=826"},"modified":"2026-04-29T13:57:35","modified_gmt":"2026-04-29T17:57:35","slug":"the-invisible-pile","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/constructionlaw\/2026\/04\/29\/the-invisible-pile\/","title":{"rendered":"The Invisible Pile"},"content":{"rendered":"\n

Five Construction Risks that Rarely Make it onto the Agenda<\/em><\/p>\n\n\n\n

By Owen Newman<\/a><\/p>\n\n\n\n

Every construction GC has three piles on their desk. A speaker at an ethics CLE early in my legal career named them.<\/p>\n\n\n\n

The small one up front: the work they love. The medium one in the corner: the work they tolerate. And the large one accumulating out of sight \u2014 the work they avoid. He called that one the malpractice pile.<\/p>\n\n\n\n

He was right to name it. The work you avoid has a way of coming due. But the image stayed with me for a different reason.<\/p>\n\n\n\n

After eight years of legal practice, and before joining my current firm, I spent six years at Black & Veatch \u2014 in project risk management, as a project manager on a power generation megaproject, and as Regional Director for GCC Power Generation. Across those roles, the avoidance pile, while serious, was never the most dangerous one.<\/p>\n\n\n\n\n\n\n\n

The most dangerous pile is the one you don’t know is there.<\/strong><\/p>\n\n\n\n

Experienced construction GCs are well-attuned to the standard project risk list. Notices, change orders, flow-down clauses, warranties \u2014 these are known quantities. Good contractors track them alongside the broader project risks: safety, schedule, cost, owner and subcontractor relationships. There are protocols. There are R&O logs. There are mitigation strategies. The known pile gets managed.<\/p>\n\n\n\n

The invisible pile is different. It is risk that hasn’t been named yet \u2014 not because the project team is careless, but because the gap between the field and the home office legal function is wide enough that exposure can develop without ever crossing it.<\/p>\n\n\n\n

I saw this from the P&L side. When a project was leaking margin or a schedule was deteriorating, I would ask the project manager why. The answer, more often than not, was some version of the same phrase: “death by a thousand cuts.” The impacts had accumulated \u2014 individually small, collectively serious \u2014 and along the way, trade-offs had been made. Move things forward. Preserve the owner relationship. Manage the immediate problem. The notices, the claims, the escalation to legal: those got deferred. By the time the phrase got used, it was usually too late.<\/p>\n\n\n\n

That is the invisible pile in its natural habitat \u2014 not a single catastrophic failure, but a series of ordinary gaps that accumulated in the space between the people executing the project and the people who would have recognized the legal consequences.<\/p>\n\n\n\n

For most established construction and energy companies, the invisible pile is not the obvious list \u2014 notices, change orders, and flow-downs are known and generally managed. The invisible pile hides in places that neither side of the field-legal divide owns clearly. Here are five.<\/p>\n\n\n\n

1. The Schedule as a Legal Document<\/strong><\/h3>\n\n\n\n


For most established construction and energy companies, the invisible pile is not the obvious list \u2014 notices, change orders, and flow-downs are known and generally managed. The invisible pile hides in places that neither side of the field-legal divide owns clearly. Here are five.<\/p>\n\n\n\n

Legal, almost without exception, stays largely out of the project schedule \u2014 either because schedule management is assumed to be an execution issue the project team is handling, or because the schedule is treated as a technical document, in the same category as design drawings or specifications. Controls professionals build it and update it. Project managers live in it. Owners scrutinize it. Legal does not.<\/p>\n\n\n\n

Which matters, because in litigation the schedule \u2014 the .xer files, the .pdf snapshots, the update sequence, the logic ties and float calculations \u2014 is frequently the critical project document. Causation, concurrency, acceleration, and delay are established or lost in the schedule record. Hundreds of thousands of dollars get spent having that record analyzed by experts. The other side is building its case in those files, often before your legal team is even engaged.<\/p>\n\n\n\n

The field-legal gap exacerbates the issue: schedule decisions with significant legal consequences \u2014 absorbing float, resequencing activities, accepting owner-directed acceleration \u2014 are made by project teams optimizing execution. Activity descriptions get written for operational clarity, not evidentiary value. Resource loading changes in ways that tell a story about productivity nobody intended to tell.<\/p>\n\n\n\n

Legal doesn’t need to get into the weeds during execution. But keeping a finger on the pulse \u2014 monthly project updates, quarterly schedule narratives, a working relationship with the controls manager \u2014 is the difference between a record that supports your position and spending a significant sum trying to explain one that doesn’t.<\/p>\n\n\n\n

2. Cumulative Impact Without a Smoking Gun<\/strong><\/h3>\n\n\n\n

Individual changes get processed. Individual delays get logged. Individual RFIs get answered. What rarely gets tracked \u2014 because no single event triggers it and no single person owns it \u2014 is the aggregate effect of those events on productivity, sequencing, and overall cost.<\/p>\n\n\n\n

Cumulative impact is the most difficult construction claim to prove and the easiest to let accumulate unnoticed. Proving it requires demonstrating that the combined effect of multiple disruptions caused losses greater than the sum of their parts \u2014 that the rhythm of the work was broken in ways that don’t show up cleanly in any individual change order or delay notice. Courts and arbitrators accept the theory. But proof requires contemporaneous evidence that is rarely collected with that purpose in mind.<\/p>\n\n\n\n

The field-legal gap is the direct cause of most cumulative impact failures. Field teams process each disruption as it arrives and move on. Legal doesn’t see the pattern until the project is over and someone is trying to reconstruct it from records that were kept for operational, not evidentiary, purposes. The “death by a thousand cuts” that project managers describe is, in legal terms, a cumulative impact claim \u2014 and by the time the phrase gets used, the evidence that would have supported it has largely dissipated into the noise of execution.<\/p>\n\n\n\n

3. Bonds and Guarantees as a Live Liability<\/strong><\/h3>\n\n\n\n

Performance bonds, advance payment guarantees, parent company guarantees, and on-demand letters of credit are frequently treated as closing-day paperwork and then forgotten. They quietly become among the company’s largest contingent exposures, and a few issues recur until something goes wrong.<\/p>\n\n\n\n

On-demand instruments mean what they say. The beneficiary can call without proving breach, the issuing bank must pay, and the counter-indemnity converts that call into immediate cash out the door \u2014 often before the underlying dispute is articulated. GCs who have not stress-tested the call mechanics and the injunction options in the issuing bank’s jurisdiction tend to learn what they mean only once the project relationship sours and by then, the money is already gone.<\/p>\n\n\n\n

“Extend or pay” provisions create a slow-motion trap. As projects run late, owners demand extensions of bonds and guarantees whose underlying obligations should have expired, and the threat of a call forces the contractor to extend indefinitely. Across a portfolio, balance-sheet capacity is silently consumed. Parent company guarantees given years ago can outlive the corporate structure that issued them, leaving entities on the hook for work they no longer control.<\/p>\n\n\n\n

The field-legal gap compounds these issues: triggering events are identified by field teams focused on the operational problem, while the procedural requirements for managing or defending against the instruments are legal questions the field may not know to ask. A periodic register of every outstanding instrument \u2014 expiry, trigger, governing law, and obligor \u2014 is basic hygiene that a surprising number of contractors lack.<\/p>\n\n\n\n

4. Cybersecurity and BIM as Evidentiary Infrastructure<\/strong><\/h3>\n\n\n\n

Construction has digitized faster than its risk frameworks. Project data \u2014 BIM models, RFIs, submittals, schedule updates, cost reports, daily logs \u2014 now lives in shared cloud platforms built for collaboration and project delivery. The contracts governing that data were written for a different era, and most do a poor job of addressing the legal questions embedded in how the data is managed, who owns it, and what happens when the project relationship breaks down.<\/p>\n\n\n\n

Who owns the BIM model when the owner and contractor are in dispute? Who controls access to the project management platform when the relationship deteriorates? What happens to the data at project closeout? These are legal questions with answers that vary by contract, by platform terms of service, and by applicable law \u2014 and most project teams have never considered them, because the platform was adopted for delivery reasons, not legal ones.<\/p>\n\n\n\n

The field-legal gap is structural here. Field teams adopt collaborative platforms because they work. Legal inherits whatever data governance decisions the field made \u2014 often years earlier, often without any input \u2014 when the dispute arrives. The platform that made the project run smoothly is often the same platform that makes the dispute harder to win.<\/p>\n\n\n\n

5. The Supply Chain as a Legal Exposure<\/strong><\/h3>\n\n\n\n

Steel, aluminum, electrical components, solar modules, batteries, and a growing range of finished assemblies now sit in the crosshairs of sanctions regimes, forced-labor import bans, and tariff regimes that change with limited warning. Procurement teams optimize for cost and lead time, with limited visibility upstream of the tier-one supplier. The legal consequences \u2014 detained shipments, voided warranties, public-procurement debarment, and the cost of resourcing mid-project \u2014 can dwarf the original savings.<\/p>\n\n\n\n

The field-legal gap is acute: these are not questions procurement is routinely asking, and legal is rarely consulted until after purchase orders are placed. The same gap shows up when supply chain disruptions force mid-project material substitutions \u2014 reasonable project management on their face, but substitutions that miss prime-contract specifications generating owner default notices and warranty exposure no one anticipated. A GC who has not mapped regulated-materials exposure across active projects, with contractual representations, audit rights, and termination remedies aligned to it, is carrying risk the business does not know it owns.<\/p>\n\n\n\n

Final Thoughts<\/strong><\/h3>\n\n\n\n

The invisible pile accumulates everything that never made it onto the agenda.<\/p>\n\n\n\n

The speaker with the three-pile framework was talking about attorneys and the work they avoid. He was right: avoidance has a cost, and in a legal practice that cost can be severe.<\/p>\n\n\n\n

But the invisible pile is worse than the avoided pile. The avoided pile, at least, you know exists. You’ve made a choice \u2014 a poor one, perhaps, but a deliberate one.<\/p>\n\n\n\n

The invisible pile has no advocate. Nobody put it on the agenda because nobody knew it was there. It doesn’t appear in the weekly status report. It doesn’t surface in the P&L review. It lives in the gap between the people executing the project and the people who would recognize it as a legal problem \u2014 and it stays there, off the agenda and unnoticed until someone is trying to understand why the dispute is so much harder to resolve than it should be.<\/p>\n\n\n\n

Three things worth doing this quarter, as a starting point: (1) ask your project controls leads for the last three baseline revisions \u2013 read the narratives and ask questions; (2) pull the register of every outstanding bond, letter of credit, and parent company guarantee and confirm expiry dates and triggers; and (3) ask your procurement function which active projects have meaningful exposure to UFLPA-regulated inputs.<\/p>\n\n\n\n

Watch this space \u2014 a follow-up article will go deeper on what to do about each of the five risks above.<\/p>\n","protected":false},"excerpt":{"rendered":"

Five Construction Risks that Rarely Make it onto the Agenda By Owen Newman Every construction GC has three piles on their desk. A speaker at an ethics CLE early in my legal career named them. The small one up front: the work they love. The medium one in the corner: the work they tolerate. And … <\/p>\n

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