THE CAUSES AND EFFECTS OF 111 SOURCES OF DELAY & DISRUPTION DAMAGES

The causes and effects of sources of Delay & Disruptions on construction projects can be mathematically calculated by using the Measured Mile and various studies. In this newsletter, SDC will present 10 causes and effects of sources of Delay & Disruptions and 10 more in future newsletters. The following 10 are stated below

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Win Differing Site Condition Claim by Setting Policy for
Field Superintendent

If a site condition differs from what was in the drawings and specifications or from what you reasonably expected, you’re likely to incur additional costs and delays in completing your work. But even if your contract entitles you to extra money or time if you encounter a Differing Site Condition, simply claiming that you did isn’t enough. You’ll have to prove what the condition was, how it differed from what you expected, and what extra work you had to do. Without proof, your claim will be denied.

It’s often tough, though, to get enough proof for your claim. Your field superintendent must start gathering proof as soon as he encounters a Differing Site Condition. He must also stop any construction that could make it impossible to prove later that a Differing Site Condition existed or what it was.

To ensure that you’ll have the proof you need to win a Differing Site Condition change order or claim, create a policy that lists the steps your field superintendent should take whenever he encounters a differing site condition. To help you implement a policy at your company, we’ve given you a Model Policy that sets out these steps on pg.4 [page 3-4]. You can adapt this policy and give it to your supplier.

Lack of Proof Sinks Claim

Failing to document a differing site condition sank a Maine GC’s Differing Site Condition claim. The GC was reconstructing and repaving asphalt areas for the General Services Administration (GSA). Based on the bid solicitation package, the GC anticipated that the existing asphalt would be four to five inches thick. After starting work, though, the GC discovered that the depth ranged from six to eleven inches. The GC contacted the GSA’s contract officer and told him of the Differing Site Condition, but before the contracting officer came to the site, the GC completed excavation of the asphalt areas. The GC asked for an increase in the contract price, claiming that it had to remove more that twice the amount of the asphalt than had been anticipated and to change its paving method. But the contracting officer denied the request because he didn’t see any areas where the asphalt was deeper than five inches.

The GC appealed to the GSA’s Board of Contract Appeals, but the board denied the GC’s claim. The GC hadn’t proved that it had encountered a Differing Site Condition. It had no record of how much asphalt it had removed [Resource Conservation Corp. v. General Services Administration].

What Policy Should Say

To get the proof you need, set a policy requiring your superintendent to document any Differing Site Condition encountered and any extra work done as a result. Our Model Policy assumes that your super reports to an off-site project manager. You should adapt the policy to suit the chain of command at your company. Here are the steps your super should take:

1) Stop work in area of Differing Site Condition and notify Project Manager.
If your super finds a Differing Site Condition, he should stop work in the area and immediately notify the Project Manager. This will enable the Project Manager to notify the owner of the condition in compliance with your contract’s requirements – needs to be a written notification.

The superintendent should not resume work in the area of the Differing Site Condition until authorized to do so by the Owner. Additional work may wipe out important evidence of the condition.

2) Advise Project Manager if an outside expert is needed.
In many situations, you should have an outside expert evaluate the Differing Site Conditions. If a dispute over the condition arises, an arbitrator or judge will probably believe an independent expert’s evaluation over your super’s or the owner’s evaluation. In your policy, tell the superintendent that when he informs the Project Manager of the Differing Site Condition, he should also say if he thinks an expert is needed.

For example, the Maine GC that lost the asphalt claim might have been successful if he had hired an independent surveyor to draw up a topographic map before the site was disturbed, and then another after the excavation work was completed. These maps would have shown how much asphalt was removed, compared with the amount of asphalt shown on the drawings and in the boring report. The GC would have had some proof that the asphalt was deeper than it should have been.

3) Get owner’s representative to view the condition as soon as possible.
In addition to sending written notification to the owner, get an owner’s representative to view the Differing Site Condition as soon as possible and to help the Project Manager determine if work can resume, per the Owner’s direction.

In your policy, tell the superintendent that when he first tells the Project Manager about the Differing Site Condition, he or the Project Manager should contact the Owner’s on-site rep, if there is one. If the Owner’s rep is off site, the Project Manager should contact the rep.

4) Take photographs of condition and surrounding area.
Instruct your superintendent to take photographs of the Differing Site Condition as soon as he encounters it. This will give you documentation if the owner later description of the condition. Photos are especially important if the Project Manager decides that restarting work quickly is critical and the Owner’s rep can’t get to the site before work restarts, at the Owner’s direction.

Also instruct the superintendent to photograph the work on the Differing Site Condition as it’s being done. This can also help prove the extra work performed due to the Differing Site Condition later on. For example, if different excavation equipment is required because of the Differing Site Condition, you’ll have photos of that equipment in use.

5) Prepare a field report about the condition.
Tell the superintendent to prepare a field report recording all of his field observations. The report should focus on what condition was encountered versus what was shown on the contract documents. It should describe in detail any additional work or work changes that will be required because of the condition. And it should recount any discussions between the superintendent and the Owner’s representative. For instance, if the Owner’s representative agrees that no utility lines are shown on the drawings, the superintendent should write that down.

Also tell the superintendent to try to get the Owner’s rep to read, sign, and date the report. If the Owner’s rep agrees with the evaluation of the site conditions in the report, it will be easier to come to terms on any additional compensation or time needed to complete the work. But even without the rep’s signature, the mere fact that the superintendent prepared the report before the condition was disturbed will be a strong piece of evidence if you end up in arbitration or in court down the road.

6) Use labor and material forms to detail work for Differing Site Condition.
You’ll want the superintendent to fill out labor and materials forms on a daily basis, giving you a breakdown of labor, material, quantities of material removed (e.g., bags of asbestos or cubic yards of soil), and equipment used by your company and your subcontractors to do the work associated with the Differing Site Condition. These labor and material forms can be used later to show how the work was done and to prove that it was different from what was expected. For instance, if you had to remove more fill than expected, these forms would show how many cubic yards of fill were removed.

Also tell the superintendent to get the Owner’s on-site rep, if any, to sign these forms daily. This will give you verification of the work done.

7) Keep accurate, detailed daily reports of all work involving the Differing Site Condition.
Once work resumes, your superintendent should include detailed descriptions of the work related to the Differing Site Condition in his daily reports. Explain to the superintendent that you want more detail in the reports than normal. Like the labor and material forms, this information can help you prove later that work was done differently because of the Differing Site Condition.

8) Prepare letters and field memos about work changes, delays, or problems caused by the Differing Site Condition.
Letters or field memos to the Owners or Subcontractors may be valuable later in proving what the Differing Site Condition was, and why the job took longer, required more labor, and had to be done differently.

As soon as your super discovers a Differing Site Condition, he should set up a separate file for documents concerning that condition. The file should include copies of all photos, field reports, letters and memos, etc.; the originals should be kept in the project file. Having this documentation segregated will save time later on and increase the odds that all relevant documents will be available for making a claim.

9) Give Project Manager all documents when work on the Differing Site Condition is done.
Tell the superintendent to pass on the document file for the Differing Site Condition to the Project Manager as soon as all work related to the Differing Site Condition is done or preferably weekly. The sooner the Project Manager gets the material, the sooner he can put together a request for additional compensation.

Further reading: Strategist, June 1997, pg. 1, “Win Construction Disputes by Systematically Taking Project Photos:; May 1997, pg. 6, “Getting Paid: Prove Extra Work Expenses Easily with Daily ‘Labor and Material’ Form.”

Strategist Sources

Mike DiPrimo, Douglas E. Peterson: Lovett, Silverman & Associates, Inc., 408 Clifton Ave., Clifton NJ 07011; (201) 772-1911.

Joseph E. Manzi: J.E. Manzi & associates, 826 Busse Highway, Park Ridge, IL 60068; (847) 699-5800.