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Hot v. Cold Suspension: The Test for Compensable Time Extension; Plus Allowable Costs and Coronavirus Considerations

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Hot v. Cold Suspension: The Test for Compensable Time Extension; Plus Allowable Costs and Coronavirus Considerations

 

The contract has been awarded and notice to proceed issued. The contractor has started work. The owner issues a suspension of work directive and the contractor shuts down all or part of its work awaiting the return-to-work order. The contractor believes it is entitled to recover all delay and all time-related delay damages. Is the contractor right? Is the owner on the hook for all delay damages? As Max E. Greenberg commented in 1984 – “It ain’t necessarily so!”

Two Exclusive Bonuses for Attendees: 

Suspension of Work Publication!

Attendees will receive a copy of Jim's 2019 paper -

Suspend Work "...Remain on Standby..." - Three Key Words

Coronavirus Costs: Excel Worksheets/ Checklist

Attendees will be able to download Excel worksheets developed by WPL in collaboration with a certified cost consultant for use in tracking and computing suspension costs related to the Coronavirus.

 

This presentation examines why owners must have a suspension of work clause in their contracts and how these clauses work. It identifies what damages are typically owed when an owner stops all or part of the work and outlines some typical limitations of suspension damages found in many contracts.

Additionally, the program discusses five key court cases decided between 1996 and 2015 that set forth key requirements necessary to collect damages arising from a suspension of work directive. Finally, the webinar offers recommendations on what actions contractors can take to protect the recovery of such damages and why these actions may help owners resolve such claims in the field rather than the courtroom.

 The Coronavirus Considerations

 

  • The Coronavirus is leaving contractors in various states of suspension - from total shutdown to mostly working but with social distancing and worker-protection measures.
     
  • While the question of whether direct time-related suspension costs may be recoverable is not always clear, there also remain issues about partial shutdowns, lost productivity due to social distancing/worker protection and impacts to the contractor's workforce if forced to lose workers, suppliers and subcontractors. 
     
  • Owners may want to help fund suspension costs to keep their projects on track. Depending on the language used, some contract clauses may provide for contractor recovery of suspension costs.
     
  • Either way, it is imperative that the contractor identify and keep meticulous records of all project suspension costs, and at the same time, develop pre-shutdown productivity metrics in order to support lost productivity claims.  Jim already covers some of these issues in his paper and will expand on Coronavirus-related impacts and considerations.


Presentation Objectives:

  • Learn the difference between “cold standby” and “hot standby.”
  • Discover why it is critical for contractors to get the owner’s direction on exactly what they want the contractor to do during the suspension period.
  • Understand how Suspension of Work Clauses work and why they are needed.
  • Explore what damages are recoverable under typical suspension clauses.
  • Learn about limitations on recoverable damages.
  • Be exposed to a series of court cases that have redefined what needs to be proven to recover damages.
  • Be aware of the current 12-point test for recovery of suspension damages.
  • Learn what actions contractors should take to protect their right to collect damages due to an 
    owner-issued suspension of work.
  • And much, much more!

Benefits - This recorded webinar discusses:

  • The two types of suspensions of work.
  • Typical causes of work suspensions.
  • Why an owner needs a Suspension of Work clause in their contract.
  • The operation of the clause.
  • Recoverable damages arising from work suspensions.
  • Limitations on recoverable damages.
  • The erosion of damages caused by recent court decisions.
  • The current tests for suspension of work damages.
  • What actions contractors should take to protect their rights to recover damages.
  • And, how these actions may help owners resolve suspension of work claims in the field, not in the courtroom.
     

This webinar recording features key insights from our knowledgeable construction expert:

James G. Zack, Jr., CCM, CFCC, FAACE, FGPC, FRICS, PMP
Senior Advisor, Ankura Construction Forum™

In addition to his own consulting firm, Jim is Senior Advisor for the Ankura Construction Forum™ – the construction industry’s global resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally.  Formerly, Jim was the founder and Executive Director of the Navigant Construction Forum™.  Previously he served as the Executive Director, Corporate Claims Management, Fluor Corporation; Vice President, PinnacleOne and Executive Director of the PinnacleOne Institute; and Senior Construction Claims Consultant, CH2M HILL, Inc.  With 47 years’ experience, he is a recognized expert in mitigation, analysis and resolution or defense of construction claims.  A Fellow of AACE, the Royal Institution of Chartered Surveyors and the Guild of Project Controls, Mr. Zack is a Certified Forensic Claims Consultant, a Certified Construction Manager and a Project Management Professional, as well as an internationally known author and speaker on construction claims.

Understand how the Coronavirus situation figures into the construction process and learn how you can better manage your contracts and projects during these difficult times. Don't miss out on the must-have information that is presented — sign up today!

Who Will Benefit? This webinar recording is a must for...

  • Owners and owner representatives managing capital improvement projects.
  • Contractor executives, project managers, project sponsors and project controls personnel.
  • Construction managers and design professionals performing services during construction.
  • Attorneys representing owners, contractors, construction managers & design professionals performing services during construction.
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