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Construction Claims - Use the General Conditions
Civil Engineer Plays a Key Role in Resolving Cost and Time Changes
Claims for money or time during a construction project indicate unresolved issues. First attempts to solve issues are assigned to the engineer.
Most construction projects in which the civil engineer is involved require changes during construction. These could be due to:
unanticipated subsurface conditions;
cost-saving suggestions;
owner requested changes;
cost restrictions;
or many other reasons.
When these changes require that the contract price or the contract time be changed, the civil engineer will be required to evaluate the chance and rule on its acceptability.
EJCDC General Conditions Define Claims Terms and Basis
Any construction contract will include a document that defines terms, the relationships between parties of the contract, and the responsibilities of each party. For construction projects that involve civil engineering work, this document is normally called the General Conditions. The one most frequently used for infrastructure type projects is the Standard General Conditions of the Construction Contract, as prepared and published by the Engineers Joint Contract Documents Committee [EJCDC].
The EJCDC is an organization of engineering societies, contractors, and other construction industry organizations that work to prepare construction contract documents that will be fair to all parties and facilitate orderly construction. Many years of legal and construction experience are merged in this document, which is updated about every five years as conditions change.
Article 10 of the EJCDC General Conditions defines how changes in the work are handled, including what happens if a claim occurs. Article 12 describes how contract price and contract times can be changed through a formal change order process. The hope is that changes can easily be worked into the contract by the parties involved, with no disagreement. However, if the parties can’t agree, Paragraph 10.05 describes how claims are to be made and what the engineer’s role is in the process.
First Attempt Should Be to Resolve the Claim
Not all changes that occur during construction are contentious. Many times the resolution is obvious: a price increase or deduction, or days added or deleted from the contract time. These simply require that the specifics of the change be documented in writing and worked into a change order. At other times the change will result in a claim, defined by EJCDC as “a demand or assertion by Owner or Contractor seeking an adjustment of Contract Price or Contract Times, or both, or other relief with respect to the terms of the Contract.”
Most often these will come from the contractor, who believes differing site conditions or some instruction from the engineer or owner has increased contractor’s costs or added to the amount of time needed to complete the work. A cooperative relationship between the owner and the contractor, facilitated by the engineer, will often result in most changes being resolved without a formal claim being made, or in formal claims being resolved without leading to a dispute.
Engineer Must Follow the Contract in Resolving Claims
The EJCDC General Conditions—or other conditions of contract that might be used—provide a procedure that must be followed when either contractor or owner believe there should be a change in contract price or contract time. Figure 1 shows the timeline for making and resolving a claim under the EJCDC documents. This timeline can be summarized as follows.
Day 0: An event occurs, giving rise to a claim
by Day 30: Party making a claim provides notice to engineer.
by Day 60: Party making a claim provides documentation of full claim to engineer.
by Day 90: The other party may respond to the claim request, if they wish.
by Day 120: Engineer must rule on whether the claim is valid.
by Day 150: Last day to invoke dispute resolution.
The engineer must make a written statement either approving or denying the claim. The engineer’s action is binding on both the owner and contractor, unless either wants to disagree with the engineer and decide to invoke dispute resolution provisions of the contract.
Conduct Construction Responsibilities in Anticipation of Claims
Given that changes in the work will occur, and that these changes may be difficult to quantify and resolve, the civil engineer who provides construction phase services, either from the office or at the project site, must complete project responsibilities in anticipation that every decision could result in a claim. Most claims will come from the contractor, not the owner, so engineer must carefully document all contacts with the contractor.
The civil engineer should always be watching for where changes are needed, and should anticipate when any change could be contentious. As stated in the EJCDC General Conditions, “Engineer will not show partiality to Owner or Contractor….” To fulfill this obligation, the engineer must be intimately familiar with the project and what has taken place on the site. Diligence in observing the construction, documentation of all decisions made, familiarity with the contract documents, and common sense are the engineer’s best tools in this regard.
The need to be impartial concerning construction claims is one of the most difficult responsibilities of the civil engineer who is involved with construction.
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