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Construction Experts and Claims Consultants Articles List

24 Articles Found

In general terms, force majeure is considered to be “an act of God” or an occurrence outside the control of the parties which impacts or delays the project. Force majeure includes issues such as unusually severe weather, labor strikes, natural disasters, or governmental actions/changes in law that negatively impact the work. Typically, force majeure is not considered to be a compensable delay, meaning neither party is entitled to compensation as a result of the impact of the force majeure event. The recent Gulf Coast hurricanes have raised some interesting and complex issues associated with defining force majeure. Typically, force majeure contract clauses include language that defines the force majeure event, including notice requirements and the terms of the schedule extension. Events such as unusually severe weather or a labor strike have clear start and end dates. It gets more complicated ...

In the construction industry, the ability to manage change can determine the success or failure of a project’s objectives. The failure to recognize and promptly manage change frequently costs the parties involved money and time. Establishing a change order management process using either contractual change order requirements or a firm’s proprietary system increases the effectiveness of progress reporting, labor productivity evaluation, work scheduling, and other elements of project change. The following steps provide a streamlined approach to resolving project changes in a more cost and time efficient manner: Evaluate the contract Identify the change properly and in a timely manner Provide timely notification to internal and external parties Effectively document the change Prepare the change request Resolve the change request Implementing these steps at the first sign of a change can help the parties to spend less money and exert ...

Introduction This year, exceptionally high construction material price increases have caused problems for the construction industry. A major factor is the current economic and construction boom occurring in China. China’s rapid growth and tremendous construction activity are creating shortages in the US and throughout the world. Background Basic economics dictate that, in an open marketplace, prices will rise when demand increases or when supply decreases. Demand is increasing exponentially in China, which is affecting prices worldwide. The increased demand stems from a construction boom resulting from the country’s economic revolution. China is in the midst of the 10th phase of its 50 year plan, which specifies that the construction industry should be promoted, improved, and better managed. Other factors increasing China’s demand for materials include preparations for the 2008 Olympic Games, construction of the Three Gorges Dam, and the construction ...

Contractors frequently experience site conditions differing from those anticipated in their bids. An example would be existing facilities, which are to form part of the contract work, that differ in their location, makeup, or state of repair from information in the bid documents or from what would be apparent to a contractor making a responsible, prebid inspection. If the differing site conditions should have been discovered or anticipated by the contractor and the contractor failed to do so, the chances of receiving additional compensation through a change order are very low. However, if the condition differs from what was indicated in the plans and specifications or what was apparent from inspections, the likelihood of receiving additional compensation for changes in the work can be quite high. Differing site conditions (also known as changed conditions) are frequent sources of dispute between owners ...

Constructive acceleration occurs when a delay takes place beyond a contractor's control, and yet the owner expects the job to be completed by the original contract completion date. A contractor's claim for constructive acceleration should meet the following criteria: The delay is a result of causes that would entitle the contractor to time extension under the contract The contractor requests time extension for the delay in a timely manner, in accordance with the contract The owner fails or refuses to grant a time extension to the contractor The owner requires the contractor to complete the work in accordance with the original schedule or indicates an intention to penalize the contractor for failing to complete the work in accordance with the original contract schedule The contractor then endeavors to accelerate by working additional hours, by committing additional resources, or by other means ...

Changes in the scope of work on a major project are a common occurrence in the construction industry. Contractors are accustomed to directed changes, that is, those changes ordered by the Owner or the Owner's agent under the change order clause of a contract. However, the nature or extent of construction work is often changed without the initiation of a change order. The question of compensation or time extension for this type of change is not as clearly addressed by the contract as are the responsibilities mandated by directed changes. This situation is commonly referred to as constructive change. A constructive change arises when the Owner acts in a manner that has the same effect as if a formal change order were written. If an unwritten change occurs, which would have been enforceable as a directed change under the contract ...

The construction contract is the most critical document in a construction project, because it defines the contractor's scope of work and compensation. It also establishes the responsibilities, liabilities, and warranties of both the contractor and the owner. As such, a contractor must carefully consider the contract language when bidding a job. The construction contract establishes the rules for the entire project, but does not always predict the way the project will be managed. Generally, the contractor's measures for preventing disputes during the bid stage include: Proper and timely performance of the contractor's contractual pre-bid duties, whether explicit or implied. These include site visits, material take-offs, and evaluation of key requirements for the work such as insurance and bonding. Careful reading of the proposed general terms and conditions of the contract and evaluation of risks imposed by these terms and conditions. ...

Liquidated damages (hereafter LDs) for delay can be an emotional topic for owners and contractors, as LDs come into play when the project is delayed and not progressing according to the parties' expectations. LDs signal a troubled project, often leading to rising tensions which unfortunately divert attention and energy away from completing the project as expeditiously and economically as possible. What are LDs for Delay? LDs are commonly defined as when a contractor agrees to pay an Owner a fixed sum, either expressed as a percentage of the contract price or a fixed amount per day of delay in completing agreed upon milestones or project completion dates. The term liquidated implies that the parties have expressly stipulated in the contract the damage amount to be recovered in the event of a delay, regardless of the actual damages incurred by the ...

Most would agree that the earlier a construction dispute, or potential dispute, is addressed, the better the chances of a fair and prompt solution. Undisputed facts may be available at the time of occurrence, facts that often become muddied with time and emotions. But acting promptly is not enough in itself. All potential disputes must be accurately and fully documented as they occur - not reconstructed with hindsight based solely on project cost overruns. By observing the following simple guidelines, it is possible to keep most construction difficulties from escalating into expensive, drawn-out claims. 1. Planning: An effective project manager should ideally spend more time anticipating potential trouble areas to be avoided, rather than rectifying problems that have already occurred. 2. Recognition: Recognizing a potential dispute situation as it unfolds is the key to avoiding claims or minimizing their impact. ...

Chapter One: Introduction There are certain assumptions that both the contractor and the owner possess when entering into a construction contract. These assumptions do not necessarily coincide with one another. The contractor should assume that the scope of work is sufficiently defined, the plans and specifications are complete and accurate, and the owner has fulfilled any requirements necessary to proceed with construction. The Owner, on the other hand, assumes the contractor is qualified to complete the work accurately and on schedule, and the price proposed is the total amount the owner will have to pay for the project. When these assumptions are not fulfilled, a claim usually ensues. Many different approaches exist to administer a construction contract from the position of the owner or the contractor. There are simple ways that will get the job done and there are complicated ...