Volume: 17, Issue: 15 - 08/15/2019
It is becoming axiomatic that a contractor cannot prove owner-caused delay to project completion without critical path method (CPM) scheduling evidence. This was illustrated again in a recent case from the District of Columbia.
The public works contract required the contractor to maintain updated CPM schedules during construction. The contractor failed to do so, updating the schedule only twice over 14 months. The court said contemporaneous updates would have been the contractor’s strongest evidence. But the contractor could also rely on after-the-fact CPM analysis. Unfortunately, the contractor’s scheduling evidence was presented by an employee who did not qualify as a scheduling expert. Read more.
A contractor seeking recovery for extended overhead incurred as a result of owner-caused delay had the burden of proving delay to overall project completion. The contractor offered no contemporaneous CPM schedule updates and no expert analysis of the effect of the delay on the overall project performance period. The contractor’s claim failed for lack of evidence.
It was unclear whether an architectural services agreement calling for a design fee of 2% of construction costs had been abrogated and replaced by a subsequent agreement calling for the architect to receive a condominium unit as his design fee.
Under an unorthodox price adjustment clause in a federal contract, the contractor was fully compensated for the difference between stipulated prices and actual costs. The contractor was not required to absorb the initial portion of the increase, as called for in the standard price adjustment clause.
Volume: 17, Issue: 14 - 07/31/2019
Change orders can be a contentious aspect of construction contracting. The change order process can affect almost every participant in the project – owners, designers, prime contractors, sureties, and subs – and the potential disagreements vary. Often, closely associated with change orders are delay claims and delay damages.
Both topics are illustrated in this issue of Construction Claims Advisor; the first two cases involve change order scenarios. The second of these cases also involves delay damages, as does the third case, which addresses the ongoing controversial subject of when a delay claim can be submitted on a government project. Read more.
The hourly labor rate in a time and materials change order included the contractually stipulated 25% mark-up on direct labor costs. The contractor could not sue the project engineer for the engineer’s administration of the change order process, as the engineer enjoyed design professional privilege when advising the project owner regarding the contractor’s work.
A contractor’s claim for standby costs was not based on a contingent change order that never became part of the contract. The contractor was seeking delay damages under the original construction contract, incurred while awaiting a funding decision of the contingent change order. The public project owner was subject to suit.
When a federal contractor raises excusable delay as a defense to a default termination, the contractor must file a proper delay claim. The claim does not need to be filed prior to the appeal of the default, however. The certified claim may be filed after appeal when the defense is asserted.
Volume: 17, Issue: 13 - 07/16/2019
Construction projects, with their multiple layers of contractual relationships, pose a challenge when there is a major dispute. How does one get all the potentially responsible parties together in the same forum?
The Connecticut Supreme Court recently faced a variation of this problem. A project owner alleged that a prime contractor negligently designed and constructed the structural steel of a commercial building. The prime contract called for binding arbitration of disputes. There were five subcontractors involved in this aspect of the project, but they had no contractual relationship – and no arbitration agreement – with the owner. Read more.
A project owner could have raised claims arising out of subcontractor work during an arbitration proceeding with the prime contractor that was responsible for the subs’ work. Having failed to do so, the owner was barred from suing the subcontractors for negligence.