by Michelle N. Delehanty, PE, PMP
According to the farmer’s almanac, this upcoming winter is predicted to be more severe than last year, which already seems as if it were one for the record books. For many regions throughout the United States, that means a multitude of storms, extreme cold, and potential closings to schools, offices, and, most problematic, construction sites. These closings of construction projects can lead to schedule delays, change order requests, and ultimately claims. In order for a contractor to justify to the owner that there is indeed a weather-related construction delay, they must demonstrate four specific things: (1) that the delay is within the terms of the contract (2) that the activity delayed had a direct effect on the project end date (was on the critical path), (3) the weather event occurred in excess of the “normal” weather for the season, and (4) there is documentation of which specific activities were delayed on each weather occurrence.
Stephen M. Rymal, P.E., Esq.
Most of those working in the construction contract claims business are familiar with 1960 decision by the Armed Services Board of Contract Appeals (ASBCA) in the Eichleay Corporation Case which recognized a contractor’s right to recover unabsorbed home office overhead for owner caused delays and work stoppages.
Stephen M. Rymal, P.E., Esq.
“No damage for delay” clauses continue to divide the country and the courts on their application and interpretation. Although owners and prime contractors insist on enforceability, the net result typically shifts the risk onto the party least likely to negotiate fair limits, to control events on the jobsite and absorb the ultimate cost. Nevertheless, these clauses are found in most construction contracts in some form or another.
Ronald F. Parisi, P.E.
Former MDC® Project Director
Owners involved in ongoing construction projects are virtually unanimous in recognizing the need to minimize the number and amount of change orders as a way to keep the project costs within budget. In viewing change orders with only this in mind, however, owners may tend to overlook the benefits that the change order process offers to owners. The primary benefits afforded by the change order process are that it allows owners the flexibility to respond quickly, to capitalize upon opportunities and to mitigate problems — both of which frequently arise during the course of construction.
On a large multi-million dollar project, it shows up in the cost reports. On a smaller project, the schedule may start to show specific activity schedule slippage. The same estimator developed the bid, the project scope has not changed and your most trusted foreman says he has excellent crews. You might be experiencing labor inefficiencies and probably don’t know it. The cost reports and schedules might tell you that it occurred, but it will require additional data / analysis to determine why it has occurred and who has caused it to prove entitlement and to calculate your recovery costs.
James M. McKay, AIA, P.E.
Former MDC® Project Manager
Construction is, to a great extent, a paper business. In addition to a completed building project, an end result of the construction process is reams of documents. From initial project concept through completion, an extensive paper trail is generated.
Contracts for the construction of new ships have many key differences from contracts for ship repair. The most obvious difference concerns the type of work (new versus repair) but other important differences exist concerning the nature and extent of changes, scheduling, engineering and contract claims. Attorneys and others involved in contract administration and dispute resolution need to understand these important differences.