Construction Schedules & Delay Claims - General Contractor Claims
Monday, January 23, 2012 at 9:09AM
Jack DiNicola

This is the second in a series of articles on Construction Schedules & Delay Claims.  In this article, we will address delay claims against owners.

As we mentioned in the first installment of this series, delay claims are difficult (and expensive) to prosecute.  Despite the difficulty and expense, the general contractor (and, of course, subcontractors) should follow basic procedures and practices during the project in order to protect and preserve these claims.

The first step at the outset of any construction project is to read the contract.  The Contract will address (1) how the general contractor is to submit the delay claim; (2) what information needs to be provided; (3) when it needs to be submitted; and (4) what the general contractor’s remedies are.  Although provisions impacting delay claims can be found in almost any section of the general contract, liquidated damages and delay claims can generally be found in (1) the Agreement (AIA A101, A133, etc.); and (2) the General Conditions (AIA A201), particularly Articles 4 (Architect), 7 (Changes in the Work), 8 (Time), and 15 (Claims and Disputes).

The general contractor should follow the notice provisions, both in terms of when the notice must be submitted and what information is required to be submitted.  The general contractor should also make sure that the subcontractors are aware of the notice requirements (both the timing and substance of the notice).

Some notice provisions are extremely detailed.  If there is ever a doubt about the impact of an event or an owner change, the general contractor should simply reserve the right to request additional time once the effect upon the schedule is fully understood.  At the time of a delay event, it is impossible to know the exact amount of delay that the general contractor will suffer simply because it is impossible to see into the future.  As long as it complies with the contract, the general contractor should reserve rights to assert delays and, when the general contractor does know the impact, notify the owner.  If the general contractor is required by contract to state the number of days at the time of the initial notice, it is important to make sure that you have requested enough time and reserve rights to more accurately address that particular claim.

General contractors should be careful when executing change orders.  If the general contractor signs a change order that does not provide time or does not reserve time, then the general contractor may be bound to that document and may not get additional time as a result of that change.  When in doubt, the general contractor should write in a reservation of rights to submit for a schedule extension.

While each individual change order may not, by itself, warrant an extension of time, the cumulative effect of multiple change orders may provide a basis for a time extension.  While these type of claims are difficult to prove, if the general contractor encounters a project where there are an inordinate amount of change orders, it is the proper course to reserve the right to request a time extension with each change order.

Aside from contact compliance, there are a few practical issues that assist the fair and reasonable discussion and processing of delay claims:

 

For additional information, please contact Jack DiNicola at DSU.

Article originally appeared on DiNicola Seligson & Upton (http://dsu-law.com/).
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