Construction Claims & Disputes Expert Article

In this article, Civil Engineer and construction expert Michael J. Tuttman explores how the essential questions of “Who, What, Where, When, Why, and How” are as important for construction projects as they are for newspaper stories. They are needed to establish the scope of the work involved, and to estimate its cost. When the unexpected happens, resulting in a construction claim, you also have to know how to deal with the “How About.” 

Construction Claims & Disputes - Expert Article

Who: Scope of Work

Who is responsible for doing the work? This sounds like a direct question but sometimes the answer is unclear and, even worse, sometimes the answer is “nobody.” The owner sets the project’s Scope of Work for the contractor who, in turn, can divide that up, taking some for themselves and assigning other parts to subcontractors, services, and/or suppliers. Sometimes important tasks get lost in the shuffle and, often, this only becomes apparent on the day that some item of work isn’t done. These “lost tasks” can lead to construction claims. Such as:

• A lost item in the Scope of Work which represents an unaccounted-for cost.
• An unplanned-for task that has to be arranged at the last minute and be completed quickly before other work can continue – often at a premium cost.
• A missed item in a Scope of Work that can idle workers and equipment, delaying a project and costing money

What: Project Plans and Specifications

Construction projects vary from the simple to the complex. However, even simple projects can have their challenges. That is why it’s so important to have well devised plans and, on larger projects, complete and detailed specifications. It is incumbent upon the Owner to completely and accurately detail what their project entails in their Plans and Specifications; otherwise, how else can a Contractor furnish an estimate of costs and bid for the work?

Digging a hole, even a big one, is easy – Right? Trick question. The answer is sometimes, but not all the time. In the Plans, the Owner should specify where and how big the hole has to be (length, width and depth). The Contracted will be guided by these Plans and Specifications so it’s in the Owner’s interest that they be as complete as possible.

Conditions affecting the work, such as restrictions on how or where soil can be disposed of, limits on the contractor’s access, restrictions on work hours, or the presence of contaminated material, should be part of the information provided by the Owner via the Plans and Specifications. Whether or not they are intentional, omissions of relevant facts misrepresent the character of work, can affect the cost of a job, and risk a claim.

Where and When: Scheduling

The Owner says when a project can begin and by when it has to be finished, they sometimes even set Milestones by when certain portions of the project need to be complete; however, it’s the Contractor who schedules the work.

A common method of scheduling work activities on a construction project is the Critical Path Method (CPM). When creating a CPM schedule the project is divided up into separate, distinct work activities, or Tasks, each associated with the estimated amount of time necessary to complete it. The Dependencies of each Task to the others is also determined – in the case of our hole, we can’t begin to dig until the ground is cleared. Bearing in mind that certain work activities can be done simultaneously, using their Dependencies, Tasks are linked together, into different Paths, in the order that they will need to be performed. The longest single Path, measured by time, beginning at the start of the project and ending at its completion, becomes the Critical Path. The length of this Critical Path is the minimum amount of time necessary to build the project.

Sometimes a non-critical path will begin as a branch of the Critical Path and all of them will end connected to the Critical. There will usually be more time than is needed to complete the Tasks on non-critical paths, this is referred to as Float; however any additional time taken, on top of what was estimated, to accomplish any Task on the Critical Path will lengthen the time required to complete the project. It’s important to keep in mind that any circumstance that lengthens the Critical Path could result in the Contractor requesting additional time to finish their work and possibly result in a claim.

How: Construction Methods

The Owner’s Plans and Specifications describe what the project involves, sometimes even specifying construction techniques; however, it’s the Contractor who is responsible for determining the manner, or method, in which the work will be accomplished and what will be used to do the work - this is referred to as the Contractor’s Means and Methods. The Plans and Specifications describe our hole, for example, but it’s up to the Contractor to decide whether it will be dug with a shovel or a backhoe. If the hole is larger and deeper than what can be reached from undisturbed ground then it is the Contractor who figures out how to get the needed equipment into the open excavation, during the course of the project, and how it gets out once the hole is completely dug.

Knowledge of Means and Methods is needed to accurately estimate the cost of a construction project, or to analyze a claim.

How About: Claims – Extra Work, Differing Conditions, Time Delay

Various types of unexpected events and conditions have been defined, and procedures to deal with these have been established. These types of situations include Extra Work, Differing Conditions, and Time Delay.

• Claims for Extra Work, sometimes referred to as Work Not Included in Contract, can be divided into two categories. Occasionally, an item is forgotten to be put in the plans. In the case of our hole, the Contractor is told to build a staircase, not in the plans, so the Owner will be able to climb in and out of the hole once it’s finished. Other times an unexpected condition becomes apparent during the course of the work, such as if the Contractor needs to pay for an exterminator to take care of the fire ant colony that was just uncovered while digging the hole. Either way, Extra Work will need to be done, and/or extra expenses will be incurred, before the project can be considered completely finished.
• A claim for Differing Conditions is similar to Extra Work in that it applies to the unexpected; however, it covers situations when conditions found, during the course of work, differ than what is shown in the plans. Often an unexpected, or unknown, situation encountered will be more costly to deal with than the amount that the Contractor bid, ex: the plans say that the hole will be dug entirely in sand and clay but bedrock is found and the Contractor has to blast. A case of Differing Conditions is paid for in a similar manner to Extra Work – either with an Agreed Price or by Force Account.
• Time Delay claims are the least common of the three types being covered here. Many different circumstances can negatively impact a project’s schedule including bad weather, unexpected problems with suppliers, labor disputes and strikes, or natural disasters. In a project with a tight schedule a Contractor can always request an extension of time from the Owner; however, a valid claim for Time Delay can only be based on actions taken, or situations created, by the Owner. Often a Time Delay claim relates to Differing Conditions but could also be made due to some failure that affects the schedule, ex: the Contractor has to stop work because the Owner neglected to get the necessary permit to disturb part of a wetland. Time Delay claims can include costs for labor, idled equipment, and increased payment/rent for facilities needed for a longer than expected time. Time Delay claims are also important in projects where the Contractor will have to pay Assessed Damages, to the Owner, if the project takes longer than the contracted time.

Construction Claim Investigations

Within the context of a Construction Claim or Dispute, Robson Forensic is positioned to provide a thorough and comprehensive investigation by addressing every aspect of the case, from improper procedure to estimates of reasonable costs involved, specialty aspects of construction techniques, and forensic investigation of damages claimed.

For more information, submit an inquiry or contact the author of this article.

Featured Expert

Michael J. Tuttman, P.E.

Civil Engineer, Highway & Bridge Engineering Expert

Michael has more than 25 years of engineering and design experience in a diverse group of civil engineering disciplines including transportation design, heavy construction, design-build projects,… read more.