Volume 6 - Number 37 | September 22, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 37 | September 22, 2008

Volume 6 - Number 37 | September 22, 2008

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EDITOR'S NOTES | Issue 6-37: If you’ve ever lost the rules to a board game, you know how frustrating it can be to try to play the game. Rules might change mid-play as a player “remembers” a rule or someone on the path to losing tries a last-ditch effort to win by creating a new rule. A construction contract is like game rules. It establishes the terms and conditions that parties agree to before the work commences. The only way the rules could (or should) change in mid-play is if all parties agree to the change. After a less than favorable arbitration decision, a disgruntled party tried to argue to a federal appeals court that the matter should not have been arbitrated. The court rejected the argument and rebuked the party for being a sore loser.

Another factor that affects a game and a contract is weather. If a contractor must deal with weather conditions that hamper the project, it is not uncommon for the contractor to request – and receive – a time extension. Such was not the case, however, for a contractor on a municipal project. The city should have granted an extension, ruled the state appeals court.

In this week’s last case summary, a government agency went for a win-win by bundling several related projects into one larger project for faster and cheaper delivery. The bundling was OK, ruled the court; however, it has some disadvantages for small businesses.

And finally, software developer Contract Communicator offers a look at how the industry has evolved in its philosophy and approach to claims resolution and risk management.

AGENCY BUNDLING OF MULTIPLE CONSTRUCTION PROJECTS ALLOWED: Federally governed Indefinite Delivery/Indefinite Quantity contracts can be consolidated to maximize cost savings and promote prompter delivery, rules the U.S. Court of Federal Claims. The ruling poses problems for small businesses, however.

CHANGE IS IN THE AIR: A NEW APPROACH TO PROJECT RISK MANAGEMENT: By Leon Cilliers
As the construction industry continues to spend billions in litigation and arbitration costs, one software company is looking for new ways to manage risk.

EXCUSABLE DELAY MUST BE CONSIDERED IN LIQUIDATED DAMAGES ASSESSMENT: Delays caused by adverse weather and a separate prime contractor affect a contractor’s ability to timely complete a municipal project. The city fails to consider the externally caused delays when assessing liquidated damages.