Best Practices on Construction Projects. January 29, 2008

Transcription

1 Best Practices on Construction Projects Project Management Procedures Request for Information January 29, 2008 Presented by the Claims Avoidance & Resolution Committee 1

2 PROJECT MANAGEMENT PROCEDURES Request for Information (RFIs) 2

3 RFI Best Practices Panel Subcommittee for Project Management Procedures Stephen A. Hess, PE Lawrence M. Lenahan, PE William Scott, PE John Ciccarelli, PE, CCE, PSP 3

4 RFI Background RFI is a communication tool to facilitate resolution of or to clarify design document issues Typically contractor submits and designer responds Clarify a legitimate question concerning the design documents Keep the project moving forward and build the job Can lead to Change Orders Process will vary from project to project Effectively coordinate and manage RFIs Assist documenting the history of the project 4

5 RFI Background (continued) Design / Engineering firms becoming more involved with construction claims (with both Owners and Contractors) Reason - design documents are allegedly: Faulty Ambiguous Inadequate Incomplete Conflicting, etc Claim submitted for acts or omissions of the Design Professional based on RFIs Perceived as providing a methodology to document deficiencies in the contract documents and establish a basis for additional costs and time 5

6 RFI When Used as Basis for Claims (Abuses and Pitfalls) Submitted for a clearly identifiable item that should have been addressed pre-bid Submitted significant number to establish support for claim Design was incomplete / faulty look at the number of RFIs submitted! Submitted numerous and excessive RFIs (at the same time) and overwhelm the designer or Designer / Owner hinders the process and does not provide a decision or respond Delays caused by non-responsive or late replies to RFIs Insufficient response frustrates the Contractor and does not progress the work Provide as specified or It s on the drawings Use RFI to propose alternative construction methods or substitute items (or-equal) 6

7 Claims Based on RFIs Response to RFI will be the basis for the claim Extreme position that the first RFI indicates incomplete design Contractor claims for: Work performed based on response to RFI as a Change Order Additional construction costs Delay damage and off-setting of liquidated damages Owner claims for: Cost for delayed project completion Increased interest and expenses 7

8 Best Practices Develop an RFI protocol/procedure to address: The items that will and will not be accepted as an RFI Information which is on the contract documents will not be addressed in a response Define the documentation and supporting data required Time frame for response Qualify that the response is not a Change Order Does not address construction means and methods or site safety Will not review requests for substitute items as an RFI Discuss the procedure at pre-construction meeting or include as part of the bid documents Discuss RFI issues prior to formal submittal Confirming RFI to confirm previous agreement 8

9 Best Practices (continued) Proactively develop RFIs prior to construction or work in an area Develop an RFI form and require project participants to use it. Form should require: Concise statement of the issue (limit to one issue) Identify the specific plans or specification in question Develop internal procedure for receiving, handling and responding to RFI in a timely manner Single source responsibility Procedure to forward to specialty consultants Communicate when the RFI will be completed Maintain log and track status (monitored by individual in company, but not involved with the project) 9

10 Best Practices (continued) Define the response time Designer will have at least 3 days "The Contracting Officer, acting on behalf of the Owner, will be the initial interpreter of the requirements of the Contract Documents, and in such capacity, will render determinations on the acceptability of the Work. Notices, proposals or other matters relating to the acceptability of the Work or the interpretation of the Contract Documents shall be referred to the Contracting Officer in writing, within twenty (20) days after the Program Manager first recognizes the issue, but in no event more than six (6) months after the occurrence giving rise to the issue, requesting a formal, written determination, which the Contracting Officer will render on behalf of the Owner within a reasonable time." 10

11 Best Practices (continued) During construction must reply timely and appropriately Inform the Owner if an RFI results in a design change, additional costs or delay and document the reason Dislodge complex issues from the RFI process Use subcommittee approach for more complex issues Dislodge resolved RFIs from the process RFI response then moves to Change Order or other Contractual process Prioritize RFIs Need response in: days, weeks, or months 11

12 Claim Scenario Legitimate RFI? RFI submitted for a clearly identifiable item that should have been addressed pre-bid or is on the existing contract documents Are the RFI s legitimate? Check other bidder s bid documents to demonstrate the contractor missed something that others included Should issue be removed from the RFI process and addressed in another forum? 12

13 Claim Scenario Design Incomplete or Faulted Submitted significant number to establish support for a claim that the design was incomplete / faulted Look at the number of RFIs we have submitted! RFI count may or may not indicate an incomplete or late-evolving design Significant increase in RFI submissions late in the project often precedes an oncoming design claim Are the RFIs valid or should be addressed in another forum? Compare RFI with other bidder s bid documents to demonstrate the contractor missed something that others included When were the RFIs submitted relative to work execution? Or relative to the commencement of delay Know the impacts of releasing design documents during construction. 13

14 Sample RFI Distribution Chart Monthly Detail Drawings Issued to Contractor by Designer - The designer issued drawings containing new scope and some changed scope through the life of the project - The RFI's, which were usually sub-contractor items, grew steadilly during the project - the rate actually increased at the end of the prime work period D J F M A M J J A S O N D J F M A M J J A S O N D J F Monthly Detail Drawings Total RFIs 14

15 Claim Scenario Delayed Response Submitted numerous and excessive RFIs (often at the same time) to overwhelm the designer and establish a delay claim caused by late or nonresponsiveness to RFIs Do the RFIs impact critical path activities? Were delays cited contemporaneously? Is there a review time or process specified in the contract? EJCDC Standard General Conditions of the Construction Contract AIA General Conditions Are the RFI s legitimate? 15

16 Example Claim Presentation of RFI Response Time RFI RESPONSE TIME 3-7 Days 15% 8-14 Days 7% More than 14 Days 15% 0-2 Days 18% No Response 45% 16

17 Claim Avoidance - Mitigation Delays caused by incomplete or faulty design Know the Project schedule Manage the RFI process; do not just accept each as valid and necessary RFIs must conform with the intent to clarify contracts and design documents/specifications. Track the receipt and return of RFI submittals take notice immediately of dramatic increases in RFI count and/or response time 17

18 Claim Avoidance - Mitigation Delays caused by late or lack of response Establish procedures, including the RFI submission format, within the Contract or prior to construction Track receipt and return of all RFIs during the project and act to detect trends Know the schedule and prioritize Designer understand the importance of response Contractor pre-planning work and identify conflicts early Do not sit on RFIs - accept and address or reject promptly Ensure that RFIs are complete and do not accept RFIs that fail to conform to submission requirements Clarification of Contract or design documents only 18

19 Litigation / Legal Considerations United States v. Spearin, 248 U.S. at (1918) United States Supreme Court: "if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications." Implied warranty Cumulative effect of changes recognized that inefficiency claim based on disruptive effect of individual compensable changes: Jackson Constr. Co., Inc. v. United States, 62 Fed. CI. 84, (2004) (citing J.A. Jones Constr. Co., ENGBCA Nos. 6348, , B.C.A. (CCH) P31,000, at 153, 107, 2000 WL (2000); McMillin Bros. Constr., Inc., EBCA No ,91-1 BCA P 23,351, at 117,102-05, 1990 WL (1990), aff'd, 949 F.2d 403 (Fed. Cir. 1991); Bechtel Nat'l, Inc., NASA BCA No , 90-1 BCA P 22,549, at 113,177-78, 1989 WL (1989) 19

20 Litigation / Legal Considerations Duty The government has a duty not to act in a way that will hinder or delay the contractor's performance ( refrain from willfully or negligently interfering with a contractor's performance. ). Malone v. United States, 849 F.2d 1441, 1445 (Fed. Cir. 1988), modified, 857 F.2d 787 (1988); SMS Data Prods. Group, Inc. v. United States, 17 Cl. Ct. 1, 6 (1989). For the government to be found liable for delay a plaintiff must demonstrate that the government caused the plaintiff a compensable injury. The government, therefore, is not liable for breach of contract, or causes of action that rely upon "severe defects" in contract drawings, or government hindrance of performance, unless SCBI proves that the alleged defects, changes, or hindrances negatively impacted costs and performance of the contract. Servidone Constr. Corp. v. United States, 931 F.2d 860, 861 (1991); Boyajian v. United States, 191 Ct. Cl. 233, , 423 F.2d 1231, 1235 (1970). 20

21 Litigation / Legal Considerations SOUTHERN COMFORT BUILDERS, INC., Plaintiff, v. UNITED STATES, Defendant. No C; UNITED STATES COURT OF FEDERAL CLAIMS 67 Fed. Cl. 124; 2005 U.S. Claims LEXIS 225; July 29, 2005 SCBI alleges that many of the disruptions caused by the government resulted from NASA's failure to respond to plaintiff's RFIs in a timely manner, which addressed interferences or obstructions encountered by SCBI. In the documents provided to the court, SCBI submitted an RFI log indicating the times within which NASA responded to SCBI's RFIs. Of the RFIs submitted by SCBI, many were answered in about a week's time. Others were responded to more slowly by NASA, including those which resulted in contract change orders. Ruled in favor of the Defendant (two contract modifications had to be paid by defendant, all other claims dismissed. Defendant awarded counter claim). 21

22 Litigation / Legal Considerations CADDELL CONSTRUCTION CO., INC., Plaintiff, v. THE UNITED STATES, Defendant. No C; UNITED STATES COURT OF FEDERAL CLAIMS; 78 Fed. Cl. 406; 2007 U.S; Claims LEXIS 285; September 7, 2007 Defective design resulted in plaintiff issuing large number of RFIs and government failed to promptly and fully answer and as a result plaintiff missed steel fabrication window. Defendant contended RFI process was obstructed as Defendant held onto RFIs from subcontractors and submitted in large batches and that Plaintiff did not demonstrate delay caused by allegedly slow response Ruled in favor of the Defendant based on contractor s duty to coordinate and that the Defendant answered more than one third of the RFIs in less than 30 days and more than 90% in less than 45 days Third party beneficiary status of contractors, Privity, Economic Loss Doctrine, Accepted Work Doctrine 22

23 Recommended Project Management Procedure - RFIs Clearly define and use the RFI process with the designer to seek clarification or interpretation of conflicts, errors, discrepancies or ambiguities in the Contract Documents limit to clarification only Define and document the response time at the project (kick-off) pre-construction meeting. Sample Contract language: 23

24 Recommended Project Management Procedure - RFIs Define the number of copies required (no oral or incomplete RFIs accepted) Review and response to RFIs shall not constitute approval, direction, or procedures for means and methods. Limit each RFI to a single issue Information discernable from the existing documents, or addressing construction means and methods or site safety will not be addressed Designer should designate a specific representative to manage the process 24

25 Recommended Project Management Procedure - RFIs RFI Form should include Chronological number for the RFI (Tracking Mechanism) Date issued Name of person and contractor requesting information Applicable Specification section and page number Applicable drawing number and title Clear statement of the request Remark for any increase in cost or time Designer should review RFI for compliance with protocol and return any non-complying RFIs 25

26 Sample RFI Form 26

27 Sample RFI Form (from Timberline Software) Company Address Company Address

28 Sample RFI Form 28

29 Sample RFI From ConstructWare Software 29

30 Recommended Project Management Procedure - RFIs Upon receipt of RFI, responsible party should Calculate response due date Notify Contractor of date received and when response should be expected Review for compliance with protocol and return any non-complying RFIs Enter RFI into log 30

31 Recommended Project Management Procedure - RFIs RFI log manual or electronic, should include: RFI Number Name of requester and contractor Date of receipt Original response due date Name of RFI reviewer Date forwarded for review Date returned to Contractor Any extension information (date, etc) Summary of response Does response necessitate a change, extra or time extension Other (trade or discipline involved, ) 31

32 Sample RFI Log Transit Project Transit Project 32

33 Sample RFI Log

34 Sample RFI Log From ConstructWare Software 34

35 Recommended Project Management Procedure - RFIs Forward response to Contractor and copy appropriate parties (Owner, CM, Resident Engineer) Contractor can disagree with response and initiate meeting and resolution in another forum RFI is closed 35

36 Recommended Best Practices Designer understand your Contract and the Contractor s Contract provisions with the Owner Use RFIs with owner during design phase Required response time for RFIs and communicate expected response time to contractor Know Contract roles and responsibilities Understand the Project Schedule Does the Contractor s schedule need to or include shop drawing review and other A/E related activities? Monitor and manage RFIs and utilize an RFI log Be prompt with response and/or document why not Don t let paperwork languish! 36

37 Additional References Defending Claims by Owners & Contractors for Damages Arising from RFIs and Approved and Unapproved Change Orders, Seamen, Drew F. and Waggoner, Thomas F., at The 40 th Annual Meeting of Invited Attorneys, EJCDC Standard General Conditions AIA A201 General Conditions American Institute of Steel Construction Code of Standard Practice, Articles and

38 Benefits of Implementing Procedures Facilitates communication Streamlines the RFI process Maintains progress on the project Documents project history Helps mitigate and avoids claims 38

39 Questions? 39