Remember the myth about an Impossible choice?A poor knight is rejected by the king as a suitor for his daughter. To test the knight’s love, the king tells him he can have his daughter in marriage if he selects the correct door. Behind one is the lady; behind the other is a lion. The result of his choice is bliss or death.
You are sometimes faced with similar impossible decisions. When a problem arises on a construction project, it can be difficult for everyone involved to pinpoint the pertinent facts. Usually, there is a complicated tale of all the problems that occurred on the project, including those that had been addressed as the job progressed. Intertwined are comments about the skills and character traits of the people who caused or exacerbated the disputes.
The following are real-life situations from my own case files. I have presented them with only facts pertaining to the crucial matters. As you read each situation, imagine the scenes and how they most likely played out in the minds of the people on the job site and in the company’s management. Then, read the situation again, and note how the pertinent facts were distilled into a very briefly worded problem. Consider the possible solutions that follow.
Situation 1: Help
A job is running late for a hundred reasons. The general contractor wants it finished and asks if you could use some help. You say “yes.” Two of the GC’s employees show up and work with you for a month. At final payment, the GC deducts $40,000 as a backcharge for the two men. You are surprised.
A. You owe the money. Your acceptance of the offer of help exposed you to the backcharge.
B. You don’t owe the money. The GC was voluntarily accelerating the work for his own benefit.
C. You owe the money. The assistance saved you the cost of the work done by the GC’s employees.
D. You don’t owe the money. Because the extra men were not your employees, you had no authority over what work they did, how fast or well they did it.
Situation 2: Fair compensation
The construction manager sends you a subcontract. You reply, without signing, with a three-page list of the terms you think are unacceptable. However, you proceed with the work and get paid. Halfway through the job, the owner proposes to replace the construction manager and sends you his own contract form. You do not sign it but respond with a four-page list of proposed modifications. You continue to work to completion. During the job, you sent regular notices of claims for extra work.
A. Your claims are against the construction manager for the first half of the project and against the owner for the second half.
B. By objecting to the contracts and not signing them, all of your work is billable on a cost-plus basis.
C. All of your claims are recoverable from the owner.
D. By performing the work without resolving your objections, you accepted the contract as is.
Situation 3: Stick to the plan
After contract award, the owner changes the specification for lighting. You submit revised shop drawings and a proposed price increase. A few months pass, and the owner finally inquires about the lighting fixtures. The manufacturer informs you that there is an 18-week lead time, as the materials are coming from Europe.
A. You are liable for the delay because your proposed change order did not ask for time.
B. You are entitled to delay costs because all problems were caused by the owner’s change.
C. You are liable for the delay because you failed to ask the supplier for a delivery date.
D. You are entitled to delay costs, as the delays were unforeseen and beyond your ability to control.
Situation 4: Back to the roots
The drawings show the routing for underground cable to run power to the
homeowner’s new pool house. You trench for the cable as indicated and, in the process, cut through the roots of a 100-year-old tree. A year later, the tree falls in a storm because of its weakened root system.
A. You are not liable for the damage. By performing in accordance with the plans, you have fulfilled your contractual obligations.
B. You are liable. Once the subsurface conditions (roots) became known, you should have stopped and asked for instructions.
C. You are not liable. The presence of the tree was known to the owner who took the risk with the trenching route.
D. You are liable. By cutting the roots, you created a risk of serious personal injury and property damage.
Situation 5: Safe or sorry
Your contract requires you to install cable tray in an existing warehouse. You decide to connect the tray to support columns. The contract leaves routing to you, and there is no requirement to notify the owner of how you intend to install the cable tray. As you begin installation, the owner demands your certification that the columns are capable of handling the added weight. To save time, you install separate supports instead and make a claim for the added costs.
A. You cannot recover. The owner’s request is reasonable that you certify your work will be safe.
B. You can recover. Nothing in the plans alerted you to any limitation on the use of the columns.
C. You cannot recover. You had an obligation to notify the owner of your intent to modify the structure.
D. You can recover. The drawings did not prohibit a standard use of the columns for tray support or provide that testing would be required.
Situation 6: The essence of time
The CPM schedule shows plumbing work and electrical work as co-critical. The mechanical sub is slow and inefficient, so you wait to start your work until the mechanical sub is well ahead. The plumbing is completed 100 days late, and you finish 30 days after.
A. Both you and the mechanical sub are equally liable for 130 days of delay.
B. The mechanical sub is liable for 100 days of delay, and you for 130 days.
C. You are liable for only 30 days of delay.
D. You are liable for 30 days delay, but you are entitled to 100 days time extension, so you have a net delay claim against the owner for 70 days.
Once a dispute is over, it is much easier to sort out the pertinent facts and focus on the real issues. Can you describe so succinctly the problems you have encountered? If you can, you probably are well on your way to understanding the causes of the dispute and the most reasonable resolutions.
These are tough problems, so take some time to analyze them. In my next article, I will guide you through my reasoning and let you know conclusions I have reached. EC