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CVE 4070

Join Prof. Ralph V. Locurcio, PE, next Tuesday in Room 130 for an essential session on construction claims and dispute resolution. We’ll discuss changes, extra work, and how to handle disputes arising from contract breaches. Key topics will include defining claims, common reasons for disputes, and best practices for both owners and contractors when addressing issues. This session will also cover the importance of proper documentation and the steps for resolution, including negotiation and arbitration. Prepare for your upcoming tests with provided study guides and homework assignments.

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CVE 4070

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Presentation Transcript

  1. CVE 4070 Construction Engineering Contract Claims & Disputes Prof. Ralph V. Locurcio, PE

  2. Next Week… • Next week… • Tuesday - all come to room 130 • Changes & Extra work • HW # 5 – Change Order (due Nov 4 & 6) • Study guide for Test #2 • Thursday - Test #2 – room 130

  3. Claims & disputes defined… • A claim or dispute results when one party to a contract fails to comply with the terms of the original agreement, and the second party has suffered a material loss.

  4. Reasons for claims & disputes… • Breach of contract… • Unilateral changes... • Constructive changes…

  5. Five rules of dispute resolution… • The document must be read as a whole…each part has meaning; parts interact with each other • The document will be construed against the drafter…the author has an advantage • The document supersedes all previous discussions…the signed article is considered final; the document speaks for itself… unless it is proven to be unintelligible… then expert witnesses prevail • Specific terms govern over general terms…specific terms are precise; general terms are misleading • The document must be read in the context of the trade…accepted terms prevail

  6. Contract problems… • Protests – a notice from the contractor that he disagrees with a change order or an action taken by the owner. Must be expressed in writing by the contractor, generally within a specified time. • Claim – a formal statement of injury with a request for just compensation. Must be in writing within a specified time.

  7. Response actions by owner… • Discuss the protest or claim with the contractor. • Attempt to resolve the problem. • Respond in writing with result of owner’s review.

  8. Response actions by contractor… • Alert the owner as to potential claim • Follow procedures in contract documents • Owner must have opportunity to correct • Perform disputed work under protest • Exhaust all administrative remedies prior to litigation

  9. Claims involving time… • Compensable… when the owner fails to meet a contract obligation stated or implied in the contract. • Such as approval of shop drawings, RFI, submittals, etc. • Impact on critical path and float governs • Noncompensable… delays caused by the contractor’s actions or those which do not cause additional cost to the contractor. • Examples include poor management, late procurement, etc. • No impact to contract costs

  10. Severe weather claims… • Weather must prevent project work • Must be “abnormal” • Contractor should allow for normal or expected weather delays • Contract documents govern

  11. Acceleration of the work… • May be directed or constructive… • Compensable if owner benefits from the acceleration… and not in original contract. • Not compensable if contractor is behind schedule… and contractor has no viable plan to recover the original schedule completion date…

  12. Termination of the contract… • Convenience of the owner… i.e. project is no longer needed • Must notify contractor asap • Compensate contractor for all reasonable costs & materials • Termination for cause… i.e. contractor’s repeated failure to follow contract provisions • Must have adequate proof and documentation • Very rare • No compensation to contractor

  13. Resolving differences… Order of preferred resolution: • Negotiation… like a change order • Dispute Resolution Board…provided in most standard contract provisions; involved outside panel of experts • Alternate disputes procedures… use of facilitator, mediator, mock court, or any non-legal method • Arbitration… binding or non-binding; requires signed agreement on procedures • Litigation… most time consuming; most expensive; court proceeding in special contracts court

  14. Cost Estimate Solution • Grade your own work • Be sure your name is on the paper

  15. HW#4 Dormitory Estimate

  16. Dormitory Estimate-1

  17. HW#4-Warehouse Estimate

  18. Warehouse Estimate-2

  19. Don’t forget… • Next week… • Tuesday - all come to room 130 • Changes & Extra work • HW # 5 – Change Order (due Nov 4 & 6) • Study guide for Test #2 • Thursday - Test #2 – room 130

  20. Babcock Street Concept - 1

  21. Babcock Street Concept -2

  22. Babcock Street Concept - 1

  23. Babcock Street Concept -2

  24. Using $150/SF…

  25. Using $138/SF

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