TCEP 055: Working with Changes, Claims, and Disputes on Construction Projects

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In episode 055 of The Civil Engineering Podcast, I talk with Kevin O’Beirne, P.E. about working with changes, claims, and disputes on construction projects. O’Beirne gives some excellent tips in the this episode which will help engineers to acquire a greater success rate with regards to construction projects.

Here are some of the questions asked on working with changes, claims, and disputes on construction projects:

1. What are the basic differences between changes, claims, and disputes on a construction project?
2. Can you explain the typical change order process?
3. How does a project owner or design professional know when a contractor is submitting a claim instead of merely attempting to continue negotiating the associated change order?
4. What are effective ways of handling construction claims for the project’s design professional?
5. Can a formal claim on a construction project be resolved before the parties have retained attorneys and prepared for mediation, litigation, or some other dispute resolution process?
6. As a project manager, what are a couple of things they can do to help reduce the potential for claims?
7. For design professionals, what type of contract language should send off alarm bells for a design professional looking to avoid an unusual level of risk in its construction projects?
8. What’s it like on a project when an issue becomes a claim, and then escalates to a dispute? 

Engineering Quotes

Here are some key points discussed in this episode:

• Changes, claims, and disputes on a construction project is a single issue. The difference between them depends on where it is on its journey on the path.
• A change issue is when the parties, with the help of design professionals, attempt to mutually negotiate an amicable solution to a change in plans. When there is a substantive disagreement between the parties, the issue can escalate to a claim. If the claims resolution process is not successful, then the issue will become a dispute.
• A good solid set of design construction documents is the first step to help reduce the potential for changes and claims. The design should be thorough and complete and been through appropriate internal reviews at the design professional’s office. The scope intended by the owner should be well understood by both the owner and the design professional from the start and there should also be appropriate levels of site investigations done in advance of the project.
• It is the duty of the contractor of the claiming party to be very clear when submitting claims and to include all information that accompanies the claim.
• Clear verbal – and written communications are of utmost importance in resolving a claim. It is also important to understand what is driving the claiming party and the limitations of their authority.
• If you properly and consistently interpret the contract document and have a consistent approach to how you handle construction phase issues, contractors will know how to bid on the project and everything will be a little bit more even-handed.
• Owners that insist on certifying that certain conditions exist for them to terminate the contract, or insist on having an unusual level of obligation to control the contractor’s work, should send off alarm bells for a design professional looking to avoid an unusual level of risk in its construction projects.
• Become familiar with what the standard general conditions are that are in common use for your work.

More details in this episode…

About Kevin O’Beirne, P.E:

Kevin O’Beirne, P.E. is a professional engineer licensed in New York and Pennsylvania with over 29 years of experience designing water and wastewater infrastructure. He is a principal engineer and Manager of Standard Construction Documents at the Buffalo, NY office of Arcadis, a global engineering and built-asset consultancy firm with over 5,000 employees in North America and 30,000 worldwide. Mr. O’Beirne is an active member and Past Chair of the Engineers Joint Contract Documents Committee (EJCDC) and is a Fellow of the Construction Specifications Institute. He has published over 25 articles and papers, and numerous presentations, on the topics of construction documents, capital project implementation, construction contract administration, and related matters. He frequently serves his employer in a QA/QC role and assists in resolving construction claims and related matters.

Sources/References:

NSPE’s Engineers Joint Contract Documents Committee
The Nasional Society of Profesional Engineers Documents
EJCDC Documents
Construction Standards Institute
The American Society of Civil Engineers
The American Council of Engineering Companies
Arcadis
Engineers Joint Contract Documents Committee
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This episode is brought to you by PPI, the leader of civil engineering FE or PE exam preparations. Use promo code CIVIL for 20% discount at PPI2Pass.com/coach.

Books mentioned in this episode:

 The CSI Project Delivery Practice Guide 

The CSI Construction Contract Administration Practice Guide

The CSI Construction Specifications Practice Guide

Please leave your comments or questions in the section below on working with changes, claims, and disputes on construction projects.

To your success,

Christian Knutson, PE, PMP
Engineering Management Institute