Transcript Design Build Approach - American Society of Civil Engineers

Best Practices on Construction
Projects
January 19, 2007
Presented by the
Claims Avoidance & Resolution Committee
CLAIMS AVOIDANCE AND
RESOLUTION COMMITTEE
• Background
Mission Statement
The Claims Avoidance and Resolution Committee
(CAR) shall establish best practices for claims
avoidance and resolution, act as a clearinghouse to
disseminate information to the construction industry
and serve as an educational resource to CI/ASCE
and others with respect to claims avoidance and
resolution.
Construction Institute
Claims Avoidance and Resolution Committee
Agenda
• Notice Requirements
Ken Haines
GREYHAWK
• Practical Steps to Avoid
Mike Radbill
Urban Engineers, Inc
and Resolve Claims
Construction Institute
Claims Avoidance and Resolution Committee
“CONSTRUCTION IS A DISPUTE
WAITING TO HAPPEN”
Construction Institute
Claims Avoidance and Resolution Committee
Notice Requirements
Protecting Owner and Contractor Interests When
Unanticipated Changes Occur
Construction Institute
Claims Avoidance and Resolution Committee
NOTICE REQUIREMENTS
• Purpose
• Contract Language
• Forms of Notice
• Judicial Interpretation
Construction Institute
Claims Avoidance and Resolution Committee
PURPOSE
• Allow Owner Investigation
• Determine Existence of Changed Conditions
• Develop Strategies to Resolve
• Mitigate Damages
• Monitor Contractor Actual Costs
Construction Institute
Claims Avoidance and Resolution Committee
PURPOSE
Owner has a right to know the extent of his
liabilities before they are incurred. He has a
right to be protected against a contractor
voluntarily going ahead with extra work at his
expense. The Owner also has a right to be
control his liabilities. Therefore, the law requires
his consent be evidenced before he can be
charged for an extra.
- Illinois Appellate Court
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Claims Avoidance and Resolution Committee
PURPOSE
The position of the Contractor must be balanced against the
Owner’s compelling need to be notified of changed
conditions or extra work and oversee the costs of this work.
The notice provisions are not oppressive or unreasonable.
They are dictated by considerations of accountability and
sound fiscal policy. The Owner should not be obligated to
pay for a claim of additional compensation unless given a
reasonable opportunity to ensure there is an accurate
determination of the work and cost. The notice requirements
constitute a reasonable protective measure to both the
Owner and Contractor.
- North Carolina Court of Appeals
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Claims Avoidance and Resolution Committee
CONTRACT LANGUAGE
• AIA – 201 “ 4.3.2 Time Limits on Claims. Claims by
either party must be initiated within 21 days after
occurrence of the event giving rise to such Claim or
within 21 days after the claimant first recognizes the
condition giving rise to the Claim, whichever is later.
Claims must be initiated by written notice to the
Architect and the other party.”
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Claims Avoidance and Resolution Committee
PROJECT IMPACTS REQUIRING
NOTICE
• Delay
• Differing Site Conditions
• Extra Work
• Acceleration
• Any Event Involving an Increase in Contract
Time and Cost
Construction Institute
Claims Avoidance and Resolution Committee
FORMS OF NOTICE
• Written – Send to Designated Individual(s)
• Verbal
• Meeting Minutes
• Schedule Updates
• E-Mail
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Claims Avoidance and Resolution Committee
JUDICIAL ENFORCEMENT
• Federal – Owner’s actual knowledge may excuse
the Contractor’s failure to comply with the contract
notice provisions as it would be redundant. In these
cases, the Owner has not been prejudiced by the
Contractor’s failure to provide notice.
• State/Local – Usually strict enforcement,
particularly on public contracts.
Construction Institute
Claims Avoidance and Resolution Committee
WAIVER
Course of Conduct Modifying the Contract
Examples:
• Accepting Verbal Notice
• Accepting claims with no notice or after the
expiration of the notice period
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Claims Avoidance and Resolution Committee
CONCLUSIONS
• Know the Contract
• Comply with the Notice Provisions
• Timely Resolution and Cost Monitoring
• Seek Legal Counsel When Appropriate
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Claims Avoidance and Resolution Committee
Practical Steps to Avoid and
Resolve Claims
Dan Becker, PE, HDR Inc.
Mike Radbill, PE, F. ASCE, Urban Engineers, Inc.
Construction Institute
Claims Avoidance and Resolution Committee
Practical Steps to Avoid and
Resolve Claims
 Manage proactively — “anticipate”
 Maintain a “team” environment from groundbreaking to
ribbon cutting
 Use alternative means to resolve issues
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• Partnering
• Dispute resolution board
• Mediation
Communicate, communicate, communicate
Construction Institute
Claims Avoidance and Resolution Committee
What Causes Disputes?
Standing firm on your position
without compromise
Construction Institute
Claims Avoidance and Resolution Committee
Change Mindset
A claim is not Litigation!
Construction Institute
Claims Avoidance and Resolution Committee
Partnering and DRBs Require
Commitment
 Commitment from all project participants
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 Contractor
 Design Team
 Construction Management team
 Owner’s Organization
Commitment from all levels of management in
all organizations
Construction Institute
Claims Avoidance and Resolution Committee
Partnering
 What is it?
 How is it used?
 How effective is it?
 Who is using it?
Construction Institute
Claims Avoidance and Resolution Committee
“Partnering is a process that enables
project team members to work together,
as partners, and establish good
communication, develop common
goals, reduce conflict, and solve
problems in ways that deliver mutual
benefits.”
Chapter 24, Partnering, ASCE’s Quality in the Constructed Project, ©2000.
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Claims Avoidance and Resolution Committee
Partnering
 Best Initiated before the start of construction
 Usually an option in the owner’s contract
 Purpose

 Establish common goals
 Establish lines of communications
 Establish process for resolving issues
 Establish a high performance team
Ultimate Goal
 Successful project for everyone
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Claims Avoidance and Resolution Committee
Partnering
Process
Define in
Plans & Specs
Identify
Facilitator
Send out
Agenda
Convene
Initial Session
Document
Agreements
Follow-up Sessions
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Claims Avoidance and Resolution Committee
Finding a Facilitator
 Contact agencies using Partnering;
find out who they use. Try your
DOT.
 Interview facilitators
 Cost ~ $2,500 per day
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Claims Avoidance and Resolution Committee
Partnering Session
Basic Topics
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Team Building
Development of Project Mission Statement
Problem Solving Procedures “rocks in the road”
Dispute Resolution Procedures
Evaluation Procedures
Follow Through Process
Partnering Agreement/Charter
Summary of the Session
Construction Institute
Claims Avoidance and Resolution Committee
Moving the Issue Forward
 If the issue cannot be resolved at the project
level, move it up the ladder.
 Establish that ladder at
the partnering session.
Construction Institute
Claims Avoidance and Resolution Committee
Issue Resolution Model
Goal: Resolve issue at lowest level possible
Field Level
Contractor:
CM:
Foreman
Inspector
Steve Jacobs
Dano Bonifacio
Superintendent
Chief Inspector
Perry Mitchell
Steve Nugent
Project Manager
Construction Mgr
Jon Vander Griend
Doug Grant/Maggie Brown (City PM)
Project Principal
Project Principal
Jay Hueter
Dan Becker/ Jill Marilley (City Engineer)
Contractor:
CM/City:
VP Operations
Sr. Mgmt
Brian Kittleson
Dan Becker/ Paul Haines (City PWD)
Level Five
Mediation
Level One
Contractor:
CM:
Level Two
Contractor:
CM:
Level Three
Contractor:
CM:
Level Four
Construction Institute
Claims Avoidance and Resolution Committee
Who Uses Partnering
 Corps of Engineers
 GSA
 Many State & Local Agencies
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State Departments of Transportation
Cities and Counties throughout the USA
Local Special Districts – Water, Transit, etc.
Colleges and Universities
Construction Institute
Claims Avoidance and Resolution Committee
Dispute Resolution Boards
 What is a DRB?
 How is it used?
 How effective is it?
 Who uses DRBs?
Construction Institute
Claims Avoidance and Resolution Committee
What is a DRB?
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Panel of three experienced & impartial reviewers.
Organized before construction begins
Meets at the jobsite periodically.
Board formation:
• Owner selects a member for approval by the contractor;
• Contractor selects a member for approval by the owner;
• Two members select the third for approval by both parties.
Panel selects its chair for approval by both parties.
Construction Institute
Claims Avoidance and Resolution Committee
DRB Process
Define in the plans
& specs
Select Panel
Periodic Site Visit to review the
Progress of the Work
Construction Institute
Initial Session including
Claims Avoidance and Resolution
Committee
Site Visit
to review the Project
Dispute processed
in accordance w/
contract
requirements
CM Reject
Contractor
Request
Contractor
Review
Accept
Decision
Dispute
Resolved
Reject
Decision
What to Do When a
Dispute Arises
Invoke DRB
Conduct DRB
Hearing
DRB Make
Recommendation
Owner & Contractor
Negotiate Settlement
Per DRB Recommendations
DRBF January 2005
Owner &
Contractor
Review
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Claims Avoidance and Resolution Committee
Initiate Other
Action
(Mediation, Arbitration
Litigation, etc.)
How is It Being Used?
Source: DRBF January 2005
Construction Institute
Source: DRBF January 2005 Claims Avoidance and Resolution Committee
Source: DRBF January 2005
Construction Institute
Claims Avoidance and Resolution Committee
Source: DRBF January 2005
Construction Institute
Claims Avoidance and Resolution Committee
Source: DRBF January 2005
Construction Institute
Claims Avoidance and Resolution Committee
Who Uses DRB’s
Federal, State, and Local Agencies
 GSA
 USPS
 Departments of Transportation
 Cities and Counties
 Local Special Districts – Water, Transit, etc.
 Colleges and Universities
Construction Institute
Claims Avoidance and Resolution Committee
Partnering and DRB Advocates
 Partnering

• AGC
• ASCE
• AIA
• USACE, USPS, GSA
Disputes Resolution Board Foundation
• http://www.drb.org/
Construction Institute
Claims Avoidance and Resolution Committee
Construction Institute
Claims Avoidance and Resolution Committee