Mediation-65 Ways to Break Impasse

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DRBF application 2003

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DRB Guide Specifications

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DRB Guide Specifications

and

Sample

3-Party Agreement

DRB Guide Specifications

1. General

1. Definitions

1. Board—See Dispute Review Board.
2. Contract—The construction contract of which this Specification section is a part
3. Dispute—A claim, change order request, or other controversy that remains unresolved following good faith negotiations between authorized representatives of the Owner and Contractor.
4. Dispute Review Board—Three neutral individuals mutually selected by the Owner and Contractor to consider and recommend resolution of Disputes referred to it.

2. Summary

1. A Dispute Review Board will be established to assist in the resolution of Disputes in connection with, or arising out of, performance of the work of this Contract.
1. Either the Owner or the Contractor may refer a Dispute to the Board. Such referral should be initiated as soon as it appears that the normal Owner-Contractor dispute resolution effort is not succeeding, and prior to initiating other dispute resolution procedures of filing of litigation by either party.
2. Promptly thereafter, the Board will impartially consider the Dispute(s) referred to it. The Board will provide a nonbinding written recommendation for resolution of the Dispute to the Owner and the Contractor.
3. Although the recommendation of the Dispute Review board should carry great weight for both the Owner and the Contractor, they are not binding on either party.

3. Scope

1. This specification describes the purpose, procedure, function, and features of the Dispute Review Board. A Three-Party Agreement among the Owner, Contractor, and three members using the form and content of Attachment A will formalize creation of the Board and establish the scope of its service and the rights and responsibilities of the parties. In the event of a conflict between this Specification and the Three-Party Agreement, the latter governs.

4. Purpose

1. The Board, as an independent third party, will assist in and facilitate the timely and equitable resolution of disputes between the Owner and the Contractor in an effort to avoid acrimony, construction delay, and more formal means of dispute resolution.
1. Creation of the Board is not intended to promote Owner or Contractor default on the responsibility of making a good-faith effort to settle amicably and fairly their differences by indiscriminate referral to the Board.

5. Continuance of Work

1. Both parties shall proceed diligently with the work and comply with all applicable Contract provisions while the Dispute Review Board considers a Dispute.

6. Tenure of Board

1. The Board will be deemed established after all parties execute the Three-Party Agreement.
1. The Board will be dissolved as of the date of final payment to the Contractor unless earlier terminated or dissolved by mutual agreement of the Owner and Contractor.

1.02 Membership

1. General

1. The Dispute Review Board will consist of one member nominated by the Owner and approved by the Contractor, one member nominated by the Contractor and approved by the Owner, and a third member nominated by the first two members and approved by both the Owner and the Contractor. The third member will serve as Chairman unless the parties otherwise agree.

2. Criteria

1. Experience

1. It is desirable that all Dispute Review Board members be experienced with the type of construction involved in the project, interpretation of contract documents, and resolution of construction disputes.
2. The goal in selecting the third member is to complement the experience of the first two and to provide leadership of the Board’s activities.

2. Neutrality

1. It is imperative that the Board members be neutral, act impartially, and be free of any conflict of interest.
2. For purposes of this subparagraph, the term “member” also includes the member’s current primary or full-time employer, and “involved” means having a contractual relationship with either party to the Contract, such as a subcontractor, architect, engineer, or construction manager.
3. Prohibitions; disqualifying relationships for prospective members:

1. an ownership interest in any entity involved [with] the construction contract, or a financial interest in the contract, except for payment for services on the Dispute Review Board;
2. previous employment by, or financial ties to, any party involved in the construction contract within a period of 30 years prior to award of the Contract, except for fee-based consulting services on other project;
3. a close professional or personal relationship with any key members of any entity involved in the construction contract which, in the judgment of either party, could suggest partiality; or
4. prior involvement in the project of a nature which could compromise that member’s ability to participate impartially in the Board’s activities.

1. Prohibitions; disqualifying relationships for members:

1. employment, including fee-based consulting services, by any entity involved in the construction contract except with the express approval of both parties;
2. discussion concerning, or the making of, an agreement with any entity involved in the Contract regarding employment after the Contract is completed.

3. Disclosure Statement

As a part of the selection process, the first two prospective members will be required to submit complete disclosure statements for the approval of both the Owner and the Contractor. Each statement shall include a resume of experience, together with a declaration describing all past, present, and anticipated or planned future relationships, including indirect relationships through the prospective members’ primary or full-time employer, to this project and with all parties involved in the Contract, including subcontractors, design professionals, and consultants. Disclosure of close professional or personal relationships with all key members of all parties to the Contract shall be included. The third Board member will be required to submit such a statement to the first two Board members and to the Owner and Contractor as a part of his selection and evaluation process.

4. Selection Process

1. Nomination and approval of first two members

1. The Owner and the Contractor shall each nominate a proposed Board member and convey the nominee’s name and disclosure statement to the other party within 4 weeks after Contract award.
2. If the nominee is not rejected within 2 weeks after receipt of the name and disclosure statement, he shall be deemed approved.
3. No reasons for rejection need be stated. In the event of rejection, the nominating party shall submit another nomination within two weeks of receipt until two mutually acceptable members are named.

1. Nomination and approval of third member

1. Upon approval of both of the first two members, the Owner and the Contractor will notify them to begin selection of the third member. The first two members will endeavor to nominate a third member who meets all the criteria listed above. The third member shall be nominated within 4 weeks after the first two members a notified to proceed with his selection. The nominee’s name and disclosure statement will be conveyed to the Owner and the Contractor, who will either accept or reject the nominee within four weeks. No reasons for rejection need be stated. In the event of rejection, the first two members will be requested to submit another nomination within two weeks of receipt of notice of rejection.
2. In the event of an impasse in selection of the third member from nominees of the first two members, the third member shall be selected by mutual agreement of the Owner and the Contractor. In so doing, they may, but are not required to, consider nominees offered by the first two members.

5. Three-Party Agreement

1. All three Dispute Review Board members and the authorized representatives of the Owner and the Contractor shall execute the Dispute Review Board Three-Party Agreement within 4 weeks after the selection of the third member.

1.03 Operation

1. General

1. Dispute Review Board operating procedures consistent with this specification will be formulated by the Board as a task under the Three-Party Agreement

2. Contract Documents, Reports and Information

1. The Owner will provide a conformed set of plans and specifications to each Board member
2. The members will be kept informed of construction activity and other developments by means of timely transmittal of relevant information prepared by the Owner and the Contractor in the normal course of construction, including but not limited to periodic reports and minutes of progress meetings.

3. Periodic Meetings and Visits

1. The Board will visit the project site and meet with representatives of the Owner and the Contractor at regular intervals and at time of significant construction events. The frequency and scheduling of these visits will be as agreed among the Owner, the Contractor, and the Board, depending on the progress of the work. In the case of failure to agree, the Board will schedule the visits.
2. Each meeting shall consist of an informal roundtable discussion followed by a field observation of the work. The roundtable discussion will be attended by personnel of the Owner and the Contractor. The agenda will generally include the following:

1. Meeting convened by the Chairman of the Dispute Review Board.
2. Contractor discussion items:

1. work accomplished since the last meeting;
2. current status of the work schedule and schedule for future work;
3. anticipated or potential problems and proposed solutions;
4. status of current and potential disputes, claims, and other controversies.

1. Owner discussion items:

1. the work schedule;
2. perspectives on potential disputes, claims, and other controversies;
3. status of past disputes, claims, and other controversies.

1. Such other items as the parties may wish to discuss with the Board.
1. Set tentative date for next meeting(s).

3. The Owner shall prepare minutes of regular meetings and circulate them for comments, revisions, and/or approval of all concerned.
1. The field observations shall cover all active segments of the work. The Board shall be accompanied by representatives of both the Owner and Contractor.

1.04 Review of Disputes

1. General

1. The Owner and the Contractor will cooperate to ensure that the Board considers Disputes promptly, taking into consideration the particular circumstances and the time required to prepare appropriate documentation.
2. Procedures and time periods may be modified by mutual agreement.

2. Prerequisites to Review

A Dispute is subject to referral to the Board when:

1. Either party believes that bilateral negotiations are not likely to succeed or have reached an impasse, and,
2. If the Contract provides for a prior decision by the [Architect][Engineer][Construction Manager], such a decision has been issued. (In this case the parties shall cooperate to timely comply with this requirement and may waive it by mutual agreement.)

3. Requesting Review

1. Either party may refer a dispute to the Board. Requests for Board review shall be submitted in writing to the Chairman of the Dispute Review Board and shall state the Dispute in connection with, or arising out of, performance of the work of this Contract which the parties have considered but have been unable to resolve. The Request for Review shall state clearly and in full detail the specific issues of the Dispute to be considered by the Board and include a recommendation as to whether it may be heard at the next regular meeting or at a special meeting.
2. A copy of the Request for Review shall be simultaneously provided to the other party.
3. After conferring with both parties, the Board Chairman will establish a submittal schedule so that adequate time is allowed for the other party to respond to the requesting party’s statements and the supporting documentation before the hearing..

4. Scheduling Review

1. The Three-Party Agreement empowers the Board to schedule hearings.
2. Upon receipt of a Request for Review, the Chairman will schedule a hearing date.

5. Pre-hearing Requirements

1. Concise written position statements shall be prepared by both parties, with page number references to any supporting documentation, and submitted to each Board member and to the other party.
2. A single and complete compilation of supporting documentation, with pages consecutively numbered for ease of reference, is most desirable. The parties shall cooperate in compiling this documentation and submitting it to each Board member for review before the hearing.
3. The party requesting the Board review shall submit its position statement first, followed by the other party.

6. Hearing

1. Normally the hearing will be conducted at the job site. However, any location that would be more convenient and still provide all required facilities and access to necessary documentation is satisfactory Private sessions of the Board may be held at any convenient location.
2. The third member of the Board will act as Chairman of the hearing, or he may appoint one of the other members.
3. The Owner and the Contractor shall have representatives at all hearings. The Party requesting Board review will first present its position, followed by the other party. Each party will be allowed successive rebuttals until all aspects are fully covered. The Board members and the parties may ask questions, request clarification, or ask for additional data. In difficult or complex cases, additional hearings may be necessary in order to facilitate full consideration and understanding of all the evidence presented by both parties. Both the Owner and the Contractor shall be provided full and adequate opportunity to present all their evidence, documentation, and testimony regarding all issues before the Board.
4. Normally, a formal transcript will not be prepared. When requested by either party, the Board may allow recordation and transcription by a court reporter with the cost to be allocated as agreed by the parties. Audio or video recordings will not be permitted.
5. Attendance by, or participation of, lawyers will be at the discretion of the Board.

G. Deliberations

1. After the hearing is concluded, the Board will confer to formulate its recommendations. All Board deliberations shall be conducted in private, with all individual views kept strictly confidential from disclosure to others

8. Recommendation

1. The Board’s recommendation for resolution of the dispute will be provided in writing to both the Owner and the Contractor within 2 weeks of the completion of the hearings. In difficult or complex cases, and in consideration of the Board’s schedule, this time may be extended by mutual agreement of all parties.

1. Acceptance or Rejection

1. Within 2 weeks of receiving the Board’s recommendation, or such other time specified by the Board, both the Owner and the Contractor shall provide written notice to the other and to the Board of acceptance or rejection of the Board’s recommendation. The failure of either party to respond within the specified period shall be deemed an acceptance of the Board’s recommendation. If, with the aid of the Board’s recommendation, the Owner and the Contractor are able to resolve their dispute, the Owner will promptly process any required Contract changes.

10. Clarification and Reconsideration

1. Should the dispute remain unresolved because of a bona fide lack of clear understanding of the recommendation, either party may request that the Board clarify specified portions of its recommendation.
2. If new evidence has become available, either party may request that the Board reconsider its recommendation.

11. Admissibility

1. If the Board’s recommendation does not resolve the dispute, the written recommendation, including any minority report, will be admissible as evidence to the extent permitted by law in any subsequent dispute resolution proceeding or forum to establish (a) that a Dispute Review Board considered the Dispute, (b) the qualifications of the Board members, and ( c) the Board’s recommendation that resulted from the process.

1.05 Payment

1. The fees and expenses of all three members of the Board shall be shared equally by the Owner and the contractor. The Contractor shall pay the invoices of all Board members after approval by both parties. The Contractor will then bill the Owner for 50 percent of such invoices.
2. The Owner, at its expense, will prepare and mail minutes and progress reports, and provide administrative services such as conference facilities and secretarial services.
3. If the Board desires special services such as legal or other consultation, accounting, data research, and the like, both parties must agree, and the costs will be shared by them as mutually agreed.

Three-Party Agreement

I. Parties

A. Owner:____________________________________

B. Contractor:_________________________________

C. Dispute Review Board members:

1.___________________________________________
2.___________________________________________
3.___________________________________________

II. Situation

A. The Owner and contractor are now engaged in the construction of the ____________________________________(project name).

B. The ___________________________________(project name) Contract provides for the establishment and operation of a Dispute Review board (”Board”) to assist in resolving Disputes as defined therein.

III. Purpose

The objective of the Board is to consider, fairly and impartially, the Disputes referred to it, and to provide written recommendations to the Owner and Contractor for resolution of these Disputes.

4. Scope of Work

The scope of work of the Board includes, but is not limited to, the following:

1. Project Site Visits

1. The Board members shall visit the project site to keep abreast of construction activities and to become familiar with the work in progress. The frequency, time, and duration of these visits shall be mutually agreed upon among the Board, the Owner and the Contractor. In case of failure to agree, the Board shall schedule the visits.
2. In the case of an actual or potential dispute involving an alleged differing site condition or specific construction problem, it may be advantageous for the Board to view personally any relevant conditions. If viewing by the Board would cause delay to the project, videos, photographs, and descriptions of these conditions, collected by either or both parties, will be utilized.

2. Establish Procedures

1. During its first meeting at the project site, the Board shall, with the agreement of all parties, establish procedures for the conduct of its routine site visits and its hearings or disputes. The conduct of its business shall, in general, be based on the Specification provisions.
2. It is not desirable to adopt hard-and-fast rules for the functioning of the Board. The entire procedure shall be kept flexible to adapt to changing situations. The Board shall initiate, with the Owner’s and Contractor’s concurrence, new procedures or modifications to old ones whenever this is deemed appropriate.

3. Recommend Resolution of Disputes

1. Upon receipt by the Board of a written Request for Review of a Dispute, either from the Owner or the Contractor, the Board shall convene a hearing to review and consider the Dispute and thereafter issue a written recommendation to the Owner and the Contractor.
2. It is expressly understood that all Board members are to act impartially and independently in the consideration of facts and conditions surrounding any dispute. During the hearing, no Board member shall express any opinion concerning the merit of any facet of the case.
3. The Board shall make every effort to reach a unanimous recommendation. If this proves impossible, the dissenting member may prepare a minority report.
4. The Board’s recommendation, together with explanations of its reasoning, shall be submitted as a written report to both parties. The recommendation shall be based on the pertinent provisions of the Contract, applicable laws and regulations, and the facts and circumstances involved in the dispute. It is important for the Board to express, clearly and completely, the logic and reasoning leading to the recommendation so that both parties fully understand it.
5. The recommendation concerning any dispute is not binding unless agreed otherwise by the Owner and the Contractor.

4. Other

1. The Board members shall become familiar with the Contract Documents, review periodic reports, and maintain a current file.
2. Except for providing the services required in the Agreement, the Board and its individual members shall refrain from giving any advice to either party concerning conduct of the work or the resolution of problems which might compromise the Board’s integrity.
3. The Board shall perform services not specifically listed herein to the extent necessary to achieve the purpose of this Agreement.

V. Contractor Responsibilities

1. Except for its participation in the Board’s activities as provided in the Contract Documents and in this Agreement, the Contractor shall not solicit advice or consultation from the Board or its members on matters dealing with the conduct of the work or resolution of problems which might compromise the Board’s integrity.
2. The contractor shall furnish each Board member with pertinent Contractor-prepared documents, such as program schedules, to supplement the documents provided by the Owner.

6. Owner Responsibilities

1. Except for its participation in the Board’s activities as provided in the Contract Documents and in this Agreement, the Owner shall not solicit advice or consultation from the Board or its members on matters dealing with the conduct of the work or resolution of problems which might compromise the Board’s integrity.
2. The Owner shall:

1. Furnish each Board member with one copy of all contract Documents, including but not limited to the specifications, plans, addenda, progress schedule and updates, weekly progress reports, minutes of progress meetings, change orders, and other documents pertinent to the performance of the contract and necessary to the Board’s work.
2. In cooperation with the Contractor, coordinate the operations of the Board.
3. Furnish conference facilities at or near the site and provide secretarial and copying services.

7. Time for Beginning and Completion

1. The Board shall be active throughout the duration of the Contract. It shall begin operation upon written authorization of the Owner following execution of this Agreement and shall terminate its activities on completion of the Construction Contract after final payment has been made.
2. Except for choosing a third member by the first two members, the Board members shall not begin any work under the terms of this Agreement until authorized in writing by the Owner.

8. Payment

1. Payment for services of the Owner-appointed and Contractor-appointed members of the Board shall be at the rates agreed to between the Owner and the Contractor and the respective appointed Board members. Changes in the billing rates are subject to agreement between the Owner and the Contractor and the respective appointed members.
2. Payment for services rendered by the third member of the Board will be made at the rate agreed to among the Owner, the Contractor, and the third member. Changes in the billing rate are subject to agreement among the Owner, the Contractor, and the third member.
3. The first two members will be reimbursed for the time and expense associated with choosing the third member.
4. Direct, nonsalary expenses will be reimbursed at the actual cost to the Board member. These expenses may include, but are not limited to, automobile mileage, parking, and travel expenses from the Board member’s point of departure to the initial point of arrival, automobile rental, food and lodging, printing, long-distance telephone, postage, and courier delivery. Billing for these expenses shall include an itemized listing supported by copies of the original bills, invoices, and expense accounts.
5. Each Board member may submit invoices for payment for work completed not more often than once per month during the progress of work. Such invoices shall be in a format approved by the Owner and Contractor, and accompanied by a general description of activities performed during that period. The value of work accomplished for payment shall be established from the billing rate and hours expended by the Board member together with direct, nonsalary expenses. Satisfactorily submitted invoices shall be paid within 30 days.
6. Invoices of the Board members shall be paid by the Contractor unless otherwise agreed by both parties and the Board. Payments shall constitute full compensation for work performed and services rendered and for all materials, supplies, and incidentals necessary to serve on the Board.
7. The cost records and accounts pertaining to this Agreement shall be kept available for inspection by representatives of the Owner or Contractor for 3 years after final payment.

9. Termination of Agreement

1. This Agreement may be terminated by mutual agreement of the Owner and the Contractor at any time upon not less than 4 weeks’ written notice to the other parties.
2. Board members may withdraw from the Board by providing 4 weeks’ written notice. Board members may be terminated for or without cause only by their original appointer. Only the Owner may terminate the Owner-appointed member; only the Contractor may terminate the Contractor-appointed member; and the first two members or the Owner and Contractor must agree to terminate the third member.
3. Should the need arise to appoint a replacement Board member, the replacement member shall be appointed in the same manner as the original member was appointed. The selection of a replacement Board member shall begin promptly upon notification of the necessity and shall be completed within 4 weeks. This Agreement will be amended to indicate changes in Board membership.

10. Legal Relations

1. Each Board member, in the performance of his or her duties on the Board, is acting in the capacity of an independent agent and not as an employee of either the Owner or the Contractor.
2. The Owner and Contractor expressly acknowledge that each Board member is acting in a capacity intended to facilitate resolution of Disputes. Accordingly, it is agreed and acknowledged that to the fullest extent permitted by law, each Board member shall be accorded quasi-judicial immunity for any actions or decisions associated with the consideration, hearing, and recommendation of resolution for Disputes rightfully referred to the Board.
3. Each Board member shall be held harmless for any personal or professional liability arising from or related to Board Activities. To the fullest extent permitted by law, the Owner and Contractor shall indemnify all Board members for claims, losses, demands, costs, and damages (including reasonable attorney’s fees) for bodily injury, property damage, or economic loss arising out of or related to Board members carrying out Board functions. The foregoing indemnity is a joint and several obligation.
4. Board members shall not assign any of the work of this Agreement.

11. Disputes Regarding This Three-party Agreement

1. Disputes among the parties hereto arising out of this Agreement which cannot be resolved by negotiation and mutual concurrence between the parties and actions to enforce any right or obligation under this Agreement shall be initiated in the ___________________ Court of ___________________________ (jurisdiction).
2. All questions shall be resolved by application of ________________ _________________ (jurisdiction) law.
3. The Board members hereby consent to the personal jurisdiction of the Court of the _______________________ (jurisdiction).

12. Funding Agency Review

1. The ___________________(Agencies funding the project) have the right to review the recommendations and to attend Board meetings and hearings, and not to attend private Board deliberations.

13. Effective Date

1. This Agreement is effective as of ______________________.

Board Member Board Member Board Member

_____________ _____________ ______________

Contractor Owner

By:____________________ By:_____________________

Title:___________________ Title:____________________

DRB Forum 10-02 DanZ article

April 23rd, 2008 by admin, under Uncategorized. No Comments

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CII study of DRBs

April 23rd, 2008 by admin, under Uncategorized. No Comments

Construction Industry Institute study of DRBs

IR23-2 — Prevention and Resolution of Disputes Using Disputes Review Boards

Executive Summary:

The CII Dispute Prevention and Resolution Research Team identified Dispute Review Boards (DRBs) as a successful technique that has been used in the public works sector of the engineering and construction industry for many years. Typically, a DRB is made up of three members: one selected by the owner, who is acceptable to the contractor; one selected by the contractor, who is acceptable to the owner; and one jointly selected by the first two members, who is acceptable to both the owner and the contractor. The board meets at the jobsite on a regular basis for the duration of the project to keep informed of progress, problems, and disagreements, and to make non-binding recommendations for the resolution of disputes.

Since DRBs provide timely on-site dispute resolution on public works projects, the research team focused its research on observing DRBs in action to determine why they are effective and to test DRB implementation in the private commercial and industrial sectors of the industry.

The research indicated three key reasons for the success of DRBs:

1. 1. The provisions for establishing a DRB are included in the contract and the board is organized shortly after contract award. It is active throughout the construction period, with or without disputes. This early and continuing involvement permits board members to observe problems at the time they occur.
   2. This ongoing involvement, in turn, allows board members to grasp issues and facilitate timely resolution.
   3. The most critical element for a successful DRB is the selection of respected construction experts as board members who can be trusted to consider objectively all sides of an issue and to serve both parties equally and impartially.

The comprehensive field work done to study DRB operations confirmed that they can be successfully implemented in the private commercial sector of the industry. DRBs also promote prevention as well as resolution of disputes. The fact that a DRB meets at the site on a regular basis motivates owner and contractor project managers to solve problems and resolve disagreements in the normal course of business. For disputes that cannot be resolved by the project managers, the DRB is a fail-safe mechanism to facilitate an equitable and timely resolution.
Contents:

Executive Summary

1. Introduction

2. Implementation

3. Conclusions and Recommendations

Appendix A: Dispute Review Boards Implementation Guidelines

Appendix B: Dispute Review Board Provisions Proposed by the Underground Technology Research Council

Appendix C: Three-Party Agreement Proposed by the Underground Technology Research Council

References

The full text of this CII study can be purchased at http://construction-institute.org.

2004 Construction Salary Survey

April 22nd, 2008 by admin, under Uncategorized. No Comments

The Importance of a Pre-Bid RFI System

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The Importance of a Pre-Bid RFI System

The following chart shows how important it is to accurately document questions, answers and unresolved issues during the bid process.

© 2001 Paul Stout, Power Summit, Used by Permission

Extended Home Office Overhead Checklist

April 22nd, 2008 by admin, under Uncategorized. No Comments

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Extended Home Office Overhead Checklist

If it is not prohibited in the Contract, there may be entitlement to Extended Home Office Overhead if the Contractor can demonstrate that (1) there is a distinct period of suspended operations caused by the project owner, and (2) the suspension of work has an actual economic impact on the absorption of the contractor’s fixed home office overhead costs.

The following is a checklist of items which might be included in the calculation of damages, the initial ten of which are allowed by the Federal Acquisition Regulations (FAR) on Federal contracts:

1. Rent and/or mortgage payments
2. Clerical, accounting, administrative and executive salaries and benefits
3. Utilities and phone expenses (including internet access)
4. Non-project vehicle and travel expenses (project-specific costs are Field Extended Ohd)
5. Insurance
6. Property taxes
7. Depreciation
8. Employee recruitment
9. Professional and trade licenses and fees
10. Information technology (computers, processing), office supplies, photocopying, postage and non-project shipping, books, periodicals, miscellaneous general and administrative expenses

The following additional items are discretionary and may or may not be allowed. They specifically are NOT allowed on Federal contracts under FAR, except as noted in #11 and #13:

11. Advertising expense (disallowed under FAR except that which is related to the performance of the project)
12. Interest on borrowing and other financial costs
13. Outsourced legal, consulting and accounting expenses (disallowed by FAR except under FAR 31.205-33 costs of professional and consultant services are allowable when reasonable in relation to the services rendered and when not contingent upon recovery of the costs from the Government – these include services to enhance a contractor’s legal, economic, financial, or technical positions, including professional and consultant services generally acquired to obtain information, advice, opinions, alternatives, conclusions, recommendations, training, or direct assistance, such as studies, analyses, evaluations, liaison with Government officials, or other forms of representation)
14. Entertainment expenses
15. Contributions and donations
16. Bad debts, including related collection and legal costs
17. Losses on other contracts
18. Bid and proposal costs

Extended Field Overhead

April 22nd, 2008 by admin, under Uncategorized. No Comments

Extended Field Overhead

Extended Field Overhead is based on ACTUAL costs as documented by invoices, timesheets, accounting printouts, etc. These must be accurate and auditable.

The best procedure is to collect the source documents – invoices, timesheets, accounting printouts, etc. – organize them as shown below, summarize the information and calculate a calendar day rate, then attach the source documents as exhibits to the calculations.

If forward pricing Extended Field Overhead, utilize a calendar day average of a representative period, which may be the project period to date or only the most recent months, if there is substantial difference between various phases of the project. If pricing the Extended Field Overhead at the end of the delay, utilize ACTUAL costs for the period.

Organize the presentation of Extended Field Overhead into five sections:

1. Extended Field Office
   1. Office trailers
   2. Office furniture
   3. Office equipment including copy and fax machines, computers, etc.
   4. Communication equipment including phone company and ISP charges and 2-way radios
   5. Office utility bills (electricity, gas, water)
   6. Office supplies
   7. Office janitorial
   8. Project photography and videography
2. Extended Field Supervision (salary, benefits, taxes, housing and expenses reimbursed)
   1. Project Manager (if routinely costed to the job, not carried as G&A)
   2. Project Engineer (if routinely costed to the job, not carried as G&A)
   3. Project Scheduler (if routinely costed to the job, not carried as G&A)
   4. Superintendent
   5. General Foremen
   6. Field office clerical
3. Extended Field Labor (these may be estimated if time is not recorded in detail – if estimated, explain in detail how and why you calculated these amounts)
   1. Safety crews (flaggers, cone maintenance, fence maintenance)
   2. Security personnel
   3. General cleanup crews (site cleanup, street cleanup)
   4. Survey and staking crews
   5. Equipment maintenance crews (if routinely costed to the job, not carried as G&A)
4. Extended Equipment (rental costs or equivalent for owned equipment)
   1. Storage trailers
   2. Portable toilets
   3. Safety equipment (fences, K-rail, cones)
   4. General cleanup supplies (site cleanup, street cleanup)
   5. Support equipment (forklifts and other general equipment not tied to bid items)
   6. Water storage and trucks and de-watering equipment
   7. Winterizing, snow removal, heaters, air conditioners
   8. Staff equipment (pickup trucks for PM, Superintendent, General Foremen)
   9. Fuel, oil and maintenance for equipment
5. Summary of Extended Field Overhead
   1. Present the subtotals of the above four sections
   2. Summarize these into a unified cost per calendar day for Field Extended Overhead

CONTRACTORS: Utilize this format in preparation of your change order or claim.

OWNERS: Request that the contractor utilize this format in preparation of the change order or claim.

Documents Needed for Claims Analysis

April 22nd, 2008 by admin, under Uncategorized. No Comments

Documents Needed for Claims Analysis

1. Contract documents
   1. Prime Contract (Owner – GC)
      1. All Amendments
      2. All Change Orders and Change Order Requests

         1. Copy of approved change orders
            1. Include breakdown of labor, material, equipment
         2. Copy of requested, unapproved change orders and current status
            1. Include breakdown of labor, material, equipment
            2. Include all correspondence exchange regarding each denied or pending change order

   2. Relevant subcontracts
   3. Specifications including
      1. General Conditions
      2. Special Conditions
   4. Contract drawings including
      1. Addenda
      2. Architect’s Clarifications
      3. Sketches
2. Bid documents
   1. Bid work papers (if relevant to this issue)
3. Submittals and shop drawings related to this issue
4. RFIs and responses
   1. Include the total number of RFIs on the project, number related to this issue, number involving your organization only (for subcontractors)
   2. Include number of labor hours expended for contract work vs. change work

      1. Your organization
      2. All organizations performing work on the project (if relevant)
5. CPM Schedules
   1. Original approved baseline CPM
   2. All updates, especially the most recent update

      1. Include narratives or explanations attached to the updates
   3. Any 2-week or 3-week look-ahead bar charts
   4. Any recovery schedules, acceleration schedules
6. Project logs
   1. Submittal log
   2. RFI log
   3. Change order log
   4. Backcharge log
   5. Correspondence log
   6. Phone logs
   7. Email logs (if any)
7. Access to any electronic or internet project management systems, for example:
   1. Prolog
   2. Expedition
   3. Constructware
   4. Citadon
8. Meeting minutes, including
   1. Meetings between GC, Owner, Designer
   2. Meetings with subcontractors
   3. “Special topic” meetings including:

      1. Scheduling meetings
      2. RFI meetings
9. All relevant correspondence between the parties, including
   1. Letters between GC and owner
   2. Letters between GC and subs
10. Daily reports and diaries
    1. GC’s superintendent’s daily reports
    2. Subcontractors daily reports
    3. Inspector’s or QC daily reports
11. Photographs, video tapes and other visual media related to this issue (if none exist, begin documenting them now)
12. Internal memoranda
    1. Internal memoranda (within your organization)
    2. Notes of verbal conversations
    3. Memos to file
    4. Memos of phone conversations
13. Cost Code and budget reports
    1. Weekly
    2. Monthly
14. Possibly: relevant daily time sheets

    1. Include identification of hours spent on acceleration or disruption and delay
15. Lists of and receipts for equipment used (if relevant to the issue)

    1. Owned
    2. Rented
    3. Identify escalation related to this issue
16. Lists of and receipts or invoices for additional or substituted materials (if relevant to this issue)

    1. Include any quantity calculations or take-offs
    2. Identify escalation related to this issue
17. Schedules or lists of labor trades utilized (as relevant to this issue)

    1. Indicate entity supplying each labor trade (GC or sub)
    2. Include breakdown of base rates, benefits, taxes, workers comp, insurance, union benefits, etc.
    3. Identify escalation related to this issue
18. Existing or previous claims or requests for equitable adjustment (REA)
19. Project Manager’s brief project and issue HiSTORY (factual story form)

    1. Include major events and relevant minor incidents
    2. Describe the claim you envision (or have filed), including elements of the claim you anticipate: delay, disruption, acceleration, inefficiency, suspensions and stop-work orders, added or diluted supervision
    3. Be factual, include dates, names, if possible cross reference to actual documents which can be looked at while reviewing the narrative (NOTE: to the degree you do not do this, the consultant will likely have to do this.)
20. Bonds required and bond costs, as relevant
21. If claiming extended overhead, provide:

    1. Actual field costs during the extended period (include accounting printouts, invoices, receipts, etc.), including:

       1. Supervision above general foreman
       2. Project manager costs (if your accountant costs these to the project, otherwise they are part of home office overhead)
       3. Trailer rents (office and storage)
       4. Temporary power to trailers
       5. Janitorial and other services to trailers
       6. Additional costs of office equipment and supplies
       7. Extended safety and fencing costs
       8. Additional layout expense (beyond that in the bid)

    2. Audited financial reports for your organization showing total revenues, revenues for this project, G&A (general and administrative expenses) for all years during which this project is/was open
22. Any other documents you feel might be useful in understanding and preparing the analysis or claim