Preparing Construction Claims

Provides tools and techniques required to research and prepare a contractual construction claim

This book guides readers through the techniques and approach for properly preparing a construction contract claim and seeing it through. It teaches them how to gather all the facts in order to present arguments concisely, clearly, and forcefully. It focuses on the practical issues of how to research and present a contract claim—whether it be for additional time, prolongation costs, disruption, or revised rates and prices for work due to some changed circumstance affecting construction.

Aimed at those who need to prepare a claim, but just as helpful to those defending one, Preparing Construction Claims offers chapter coverage on everything about planning and programming—the methods for assessing them, as well as regular and computerized techniques. The book covers time chainage/line of balance; bar charts, common sense evaluation techniques; and relevant clauses that all contracts contain. Readers will learn about standard forms and common deviations and modifications made by employers. They’ll also be taught how to establish the entitlement to make a claim from the contract and then shown what to do next. In addition, the book teaches them what to do when their records are insufficient; how to resolve a dispute; and much more.

• A clear and comprehensive, step-by-step guidebook for researching and preparing contractual construction claims
• Includes worked examples of certain types of claims to help readers comprehend the process
• Beneficial to both sides of a claim—teaching each how they should approach one

Preparing Construction Claims is an essential “how to” manual for contractors, subcontractors, and consultants worldwide dealing with all manner of construction disputes and claims preparation.

STEPHEN C. HALL started work in the Construction Industry in 1967 and has over 50 years' experience on a wide range of projects including Motorways, Suspension Bridges, Cement Factory, Multi-Storey Structures, and Hospitals. He has worked all over the UK from Head Office locations in the Midlands and South East, managing major construction projects from the tender to final account stage. Since 1990, he has specialised exclusively on construction claims, adjudication, and arbitration.

Preface xi

Introduction xv

1 Types of Claims 1

1.1 What Are Claims? 1

1.2 Measurement Claims 2

1.3 Changes to the Character Timing, Quality and Content 3

1.4 Revised Rates and Prices 3

1.5 Access and Possession of the Site 4

1.6 Changes 5

1.6.1 Varied Works 5

1.6.2 Changes to Scope 6

1.6.3 Quality of Materials 6

1.6.4 Design Changes/Increased Scope of Work 7

1.6.5 Value Engineering 9

1.6.6 Preferential Engineering 9

1.6.7 Varied Temporary Works 9

1.6.8 Unforeseen Conditions 10

1.6.9 Contaminated Materials (e.g. Asbestos or Hydrocarbons) 11

1.6.10 Adverse Weather 11

1.6.11 Force Majeure Events 12

1.6.12 Suspension Orders/Stop Work Orders 13

1.6.13 Late Approval/Failure to Approve 13

1.6.14 Late Information/Revised Information 14

1.6.15 Antiquities or Archaeological Discoveries 14

1.6.16 The Prevention Principle 15

1.6.17 Tolerance Creep 15

1.6.18 Utilities and Services 16

1.6.19 Insurance Matters 16

1.6.20 Disruption Claims 16

1.6.21 Mitigation Claims 17

1.6.22 Acceleration Claims 17

1.6.23 Delayed or Wrongful Withholding of Payment by the Employer 18

1.6.24 Termination of the Contract 18

2 Basis of Claims 21

2.1 Contractual Basis 21

2.2 Initial Investigation 21

2.3 Causation and Liability 22

2.4 Review of Contract Clauses 23

3 Contracts 25

3.1 The Construction and Interpretation of Contracts 25

3.1.1 A Note on Ejusdem Generis 27

3.2 Formation of the Contract and Disputed Terms 27

3.2.1 Judicial Implied Terms 27

3.3 Interpretation of Statutes 28

3.4 Standard Forms 28

3.5 Modifications to Standard Forms 28

3.6 Bespoke/Unique Contracts 29

4 Available Documents 31

4.1 Documents Likely to Be Available 31

4.1.1 Tender Information 31

4.1.2 Tender and Final Contract 31

4.1.3 Contract Documents 32

4.1.4 Commencement and Access 32

4.1.5 Contract Records 32

4.1.5.1 Correspondence 32

4.1.5.2 Minutes of Meetings 33

4.1.5.3 Construction Records 33

4.1.5.4 Drawing Registers 34

4.1.6 Approval/Acceptance of Submissions 34

4.1.6.1 Programmes, Method Statements and Temporary Works Designs 34

4.1.6.2 Construction Permits, Inspections and Approvals 34

4.1.6.3 Taking-Over Certificates or Completion Certificates for the Works or Sections of the Works 34

5 Records and Notices 35

5.1 Records 35

5.2 Contemporary Records 37

5.3 Source Data 38

5.3.1 Expenditure 38

5.3.1.1 People 39

5.3.1.2 Plant and Equipment 39

5.3.2 Progress Reports 39

5.4 Other Relevant Evidence 39

5.4.1 Diaries and Other Records 40

5.4.2 Plant and Equipment 40

5.4.3 Other Records 40

5.4.4 Unexpected Events and/or Ground Conditions 41

5.5 Maximising Recovery 41

5.6 Missing Records 41

5.7 Notices 42

5.8 Time Bar Provisions and Timing of Notices 42

5.9 Disclaimers and Reservation of Rights 43

6 Programmes 45

6.1 Planning and Programming Techniques 45

6.1.1 Introduction 45

6.1.1.1 Why Prepare Programmes? 45

6.1.1.2 Methods 45

6.1.1.3 Key Aims 48

6.1.1.4 Main Elements of a Programme 48

6.1.1.5 Choice of Programming Technique 49

6.1.2 Types of Programming Techniques Available 49

6.1.2.1 Hand-Drawn Bar Charts 49

6.1.2.2 Logic-Linked Bar Chart 50

6.1.3 Updating/Monitoring Hand-Drawn Programmes 50

6.1.3.1 Pins and String 50

6.1.3.2 Admirals Ribbons 51

6.1.3.3 Progress Tabulation 51

6.1.3.4 Planned Project Management: Progress Monitoring 51

6.1.3.5 Computer-Based Programmes and Progress Updates 51

6.1.4 Critical Path Analysis 52

6.1.5 Computer-Based Systems 53

6.1.6 Time Location Chart 54

6.1.7 Line of Balance 55

6.1.8 Short-Term Planning 56

6.1.8.1 Daily/Weekly Target Schedule 56

6.1.8.2 Daily Graphical Output Chart 56

6.1.8.3 Pictograms 57

6.1.8.4 What is a Programme? 57

6.1.8.5 What is the Programme’s Contractual Status? 57

6.1.9 Preparing and Monitoring the Programme 59

6.1.9.1 Content 59

6.1.10 Degree of Detail in Programmes 61

6.1.10.1 The Outline or Tender Programme 61

6.1.10.2 The Master or Baseline Programme 61

6.1.10.3 Sectional Completion Programmes or Special ‘Restricted Possession’ Programmes 61

6.1.10.4 Construction or Working Programmes 61

6.1.10.5 Compromise 62

6.1.11 Project Notebook 62

6.1.12 Float in Programmes 62

6.1.13 What is Float? 62

6.1.13.1 Consider the Following as a Simple Definition 62

6.1.14 Types of Float 63

6.1.14.1 Programmed (or Built-in) Float 63

6.1.14.2 Activity Float 64

6.1.14.3 End Float 64

6.1.14.4 Added Duration 64

6.1.14.5 Gained or Generated Float 64

6.1.15 Float: Its Effects and Who Owns It 64

6.1.15.1 Financial Implications of Float 64

6.1.15.2 Ownership 65

6.1.15.3 Problems With Programmes 66

7 Delay Analysis 69

7.1 What is a Delay? 69

7.2 Principles 70

7.3 Validating the Programme 72

7.4 Techniques 74

7.4.1 Concurrent Delay 80

7.5 Methods 81

7.5.1 The Use of As-Built Programmes 84

7.5.2 Collapsed As-Built Analysis 86

7.5.2.1 Example Planned v Collapsed As-Built 87

7.5.3 Computerised Delay Analysis Techniques 89

7.5.4 The Additive Approach/Impacted As-Planned 90

7.5.5 Stage As-Built Addition Method/Time-Slice/Windows Analysis 91

7.5.6 The Deductive Approach 92

7.5.7 Choice of Method 93

7.6 Conversion of Programmes to Alternate Software 93

7.7 Critical Path 94

7.8 Extensions of Time 95

8 Direct Costs of Changes/Variations 99

8.1 Definition 99

8.2 Prolongation Cost/Extended Site Expenditure 100

8.3 Overheads 101

9 Disruption 103

9.1 Definition 103

9.2 Delay and Disruption 103

9.3 Global Claims 105

9.3.1 Cumulative Impact/Ripple Effect 105

9.3.2 John Doyle v Laing 112

9.3.3 Conclusion 116

9.4 Methods 116

9.4.1 Measured Mile 116

9.5 Other Methods 117

9.5.1 Earned Value (EV) Analysis 118

9.5.2 Mathematical Approaches 119

9.5.2.1 Example Where There is a Change Proportion of 30% 121

9.6 Disruption Can Be Separated Under Two Headings 122

9.6.1 Direct Effects 122

9.6.2 Indirect Effects and Cumulative Impact of Events 123

9.7 Typical Claim Heads 123

9.7.1 Out-of-Sequence Working 123

9.7.2 Relocation and Disjointed Working (Site Moves) 125

9.7.3 Manufacturing – Precast Units, Structural Steelwork, Etc. 125

9.7.4 Specialist Plant and Equipment 126

9.7.5 Summary 127

9.7.6 Overlapping of Tasks/Increased Number of Work Areas 127

9.7.7 Crowding 127

9.7.8 Increased Procurement Costs 128

9.7.9 Thickening/Increased Supervision 128

9.7.10 Seasonal Shift 130

9.7.11 Inflation 130

9.7.12 Acceleration 131

9.7.13 Constructive Acceleration and Mitigation 131

10 Presentation 137

10.1 Introduction 137

10.2 Typical List of Contents 139

10.2.1 Executive Summary 139

10.2.2 Introduction 139

10.2.3 Basis of Claim/Contractual Entitlement 140

10.2.4 History of Events 140

10.2.5 Delay Analysis 140

10.2.6 Evaluation 140

10.2.7 Summary/Conclusion 141

10.2.8 Appendices 141

11 Disruption Claim Examples 143

11.1 Disruption 143

11.1.1 Measured Mile 143

11.1.2 Planned Productivity 145

11.1.3 Choice of Baseline/Control Areas 145

11.1.4 Conclusion from the Measured Mile Calculation 147

11.1.5 Disruption Calculations 148

11.1.6 Adjustments to Recorded Man-Days 148

11.1.7 Time-Related Labour Adjustment 148

11.1.8 Assessment of Delays for Varied Works 148

11.1.9 Site Moves/Remobilisation 149

11.1.10 Delay Events 150

11.1.11 Restricted Working Areas 150

11.1.12 Varied Works Instructed 150

11.1.13 Revised Sequence of Works 151

11.1.14 Actual Production Achieved 151

11.1.15 Conclusion 151

11.1.16 Mathematical Model of Disruption 152

11.1.17 Acceleration Costs 153

11.A Disruption Claim Example Schedule refer to 11.1.15 154

12 Prolongation Costs 155

12.1 Prolongation 155

12.2 HO Overheads 160

12.3 The Hudson Formula 161

12.3.1 Modified Hudson (to Remove Double Counting of Profit on Profit) 161

12.4 The Emden Formula 161

12.5 The Eichleay Formula 162

13 Thickening Claims 163

13.1 Thickening 163

Index 173

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