Addressing Construction Issues Resulting from a Contractor's Bankruptcy Declaration

A successful private utility project relies on the ability of the Contractor to perform the work on time and within budget. But, when the Contractor declares bankruptcy, where does that leave the owner as well as those impacted by the project? A typical project schedule normally includes some flexibility, but the default of a contract is not a normal factor in a project schedule or a project budget. Construction documents address the termination of the Contractor and the changeover to the Surety, but how do you secure the site for public safety, and prepare the impacted residents for the prolonged construction time? This paper addresses the various construction and design issues faced when a contractor declares bankruptcy, the steps implemented to secure public safety, and the process needed to resolve residential issues. This paper is based on the actual unfortunate events and the lessons learned from such an event.