Presentation on theme: "CARLIN LAW GROUP, APC Grounds for Additional Time and/or Compensation A.Express Changes B.Constructive Changes C.Differing Site Conditions D.Express Suspension."— Presentation transcript:
CARLIN LAW GROUP, APC Grounds for Additional Time and/or Compensation A.Express Changes B.Constructive Changes C.Differing Site Conditions D.Express Suspension of Work E.Constructive Suspension of Work F.Delay G.Acceleration H.Termination for Convenience
CARLIN LAW GROUP, APC Express Changes Should arise by way of a written change directive –If directive is verbal, the Contractor has the obligation to request it be confirmed in writing. Most construction contracts only allow for written change directives. Upon receipt of a change directive, the Contractor should provide a proposed change order (PCO) describing in detail the additional time and costs the Contractor will require. –Caution must be exercised in signing change orders so as not to waive the Contractors right to all costs and time associated therewith.
CARLIN LAW GROUP, APC Constructive Changes Changes are unintended and require the Contractor to perform work beyond whats required or contemplated by the terms of the Contract Documents.
CARLIN LAW GROUP, APC Causes of Constructive Changes A.Defective Contract Documents ie. Errors, omissions, ambiguities, impossible or impractical requirements B.Unreasonable inspection or installation requirements C.Failure to disclose relevant information D.Constructive Acceleration
CARLIN LAW GROUP, APC Prerequisites to Recovery for Constructive Changes A.The Work performed was not included in the original scope of work B.Contractor satisfied all contractual/statutory notice requirements C.Contractor did not volunteer to work under the changed conditions D.Contractor discreetly tracked and quantified its additional costs incurred due to the change
CARLIN LAW GROUP, APC Differing Site Conditions Contracts and/or statutes contain provisions which affect a Contractors ability to recover for unanticipated or hidden physical conditions on a project which differ from those represented in the bidding documents or would be normally anticipated in similar work.
CARLIN LAW GROUP, APC Type I Differing Site Conditions Physical conditions different from those shown or indicated in the Contract Documents at bid time. –Compensation for these conditions is quantified as the difference between what the bid documents indicate and what is actually encountered on the Project. –Examples include: Rock/unforeseen soils conditions Water where none is anticipated Buried surface obstructions where none are anticipated
CARLIN LAW GROUP, APC Type II Differing Site Conditions Conditions which are so unusual or so unpredictable that the Contractor cannot be reasonably expected to have anticipated them at bid time. –Compensation for these conditions is quantified as the difference between what the Contractor reasonably anticipated, based on similar work, and what is actually encountered on the Project. –Examples include: Hazardous or toxic materials Unusual soil conditions Buried obstacles in an area where not expected
CARLIN LAW GROUP, APC Express Suspension of Work Occasionally, an Owner will direct a Contractor to cease work for a period of time. –Usually the Contractor is obligated to comply with the direction, but is entitled to recover the time and costs associated with the stop work order. –A Contractor is not entitled to recover time or costs if the stop work order is issued due to the Contractors own fault or negligence.
CARLIN LAW GROUP, APC Constructive Suspension of Work May be caused by acts or omissions of one party on a construction project which have the effect of unreasonably delaying the Contractors work. –These situations usually arise from unintended tax and often result in an unanticipated delay. –Examples include: Delayed approval of shop drawings Delayed responses to requests for information Delayed issuance of change orders Delayed or obstructed access to work areas Delayed delivery of items/information by the other contracting party
CARLIN LAW GROUP, APC Prerequisites to Recovery for Constructive Suspension of Work Before a Contractor can recover for constructive suspensions of work it must demonstrate the following: 1.Occurrence of a delay 2.Caused by an action or inaction of the other contracting party 3.Delay was not foreseeable by the Contractor 4.All notices required by contract/statute were given by Contractor 5.Contractor incurred additional cost or time due to delay 6.Contractor discreetly tracked and quantified its additional costs incurred due to the delay
CARLIN LAW GROUP, APC Delay Delays on a construction project are classified as follows: –Excusable, non-compensable delay –Excusable, compensable delay –Inexcusable delay –Concurrent delay
CARLIN LAW GROUP, APC Excusable, Non-Compensable Delay Usually caused by a third party or occurrences beyond the control of either the Contractor or Owner. –Examples include: Acts of God, unusual weather, strikes, fires, floods, etc. Contractor is entitled to additional time and relief from liquidated damages, but is not entitled to recover additional costs incurred as a result of the delay.
CARLIN LAW GROUP, APC Excusable, Compensable Delay Caused by the other contracting party or its agents. –Changes to the Work which require additional time are an example of delays which are excusable but for which the Contractor is entitled to additional time and compensation associated with the delay.
CARLIN LAW GROUP, APC Inexcusable Delay Caused solely by the Contractor or its related parties ie. Subcontractors, suppliers, etc. Examples include: –Failure to timely prosecute the Work –Late delivery of information, equipment and/or materials In these instances the Contractor is usually not entitled to additional time or compensation for the delay. –Instead the Contractor is obligated to take such actions and incur such costs as are necessary to recover the lost time or pay the Owner damages for late completion.
CARLIN LAW GROUP, APC Concurrent Delays Situation where two or more delays occur simultaneously and impact the Projects critical path of completion. If the concurrent delays are caused by both contracting parties, neither party is entitled to damages to the extent the delays overlap. –The Contractor is entitled to a time extension but cannot recover any costs associated with the concurrent delay. –The Owner is not permitted to assess damages associated with the Contractors late completion to the extent the Owner has also caused the delay.
CARLIN LAW GROUP, APC Acceleration Situation where a party incurs more costs to complete a construction activity in a shorter time period than originally anticipated. –Classified as express or constructive.
CARLIN LAW GROUP, APC Express Acceleration An instance where one contracting party directs the other contracting party to complete its work in a shorter time than that allowed by their contract. –The party who accelerates is entitled to recover its costs associated therewith so long as the acceleration directive is not issued to recover previous delays for which the party is responsible. A related claim is one for deceleration where one contracting party directs the other to slow down its work and for which compensation associated with the inefficiency is recoverable to the extent it is identifiable and quantified.
CARLIN LAW GROUP, APC Constructive Acceleration Unintended shorting of the time allotted to complete a construction activity. To recover on a claim of constructive acceleration, the Contractor must demonstrate the following: 1.A delay occurred on the Project for which a time extension should have been granted 2.All contractual/statutory notices of the delay in corresponding request for a time extension were properly filed 3.The appropriate time extension was not granted 4.Contractor was required/directed to complete on time or threatened with the imposition of late completion damages 5.Contractor filed a separate notice that it was being constructively accelerated 6.Contractor actually accelerated its operation and incurred additional costs due to the acceleration 7.Contractor discreetly tracked and quantified its additional costs incurred due to the acceleration
CARLIN LAW GROUP, APC Termination for Convenience Many construction contracts contain a clause permitting a party to terminate the contract for its convenience. Absent expressed contractual provisions outlining the costs and profits recoverable due to a termination for convenience, the terminated party is entitled to recover its reasonable costs and profit.