Unforeseen Condition Delay 2

[Sojisub]

On the baseline schedule, the contractor put down 9 days drill and pull 1100 ft of pipe underground (horizontal directional pull). During the operation, they encountered rocks which slowed down their operation. The rocks were not on the geotechnical report so it is fair for the contractor to claim additional cost due to an unforeseen condition. However, they finished the pull in 7 days. Are they entitled to additional cost due to the unforeseen condition?

 

[bimr]

if they didn't perform the "soil investigation", than they are at least partially responsible, regardless of how vague the requirement is - they simply did nothing.

The problem with that comment is that many geotechs will only guarantee the accuracy of their work in the immediate vicinity of the particular soil boring. You move 10 feet away and the geotech will take no responsibility for the underground conditions.

For an 1,100 feet pipeline, you would have to do many borings which will be quite expensive, probably more than the cost of the change order.

 

[1503-44]

For pipeline work it helps if you write the geotech investigation contract to not only specify N test pits or bore holes every km, but also include provision to allow for additional investigation, such that any important variations between any two bores can be delineated. Due to the nature of exploration work, its scope cannot be well defined in advance and therefore the contract should be let on a time and materials basis, rather than on a fixed price, or if done on a fixed price basis, it should include provisions for extra work to be performed on a time and materials basis.

Still it is not always possible to discover everything prior to opening up the trench. Unknown conditions may remain. Various contract options can be selected to deal with the situation, depending on acceptable risk sharing level and price factors. If you want the contractor to accept all risk, write the contract to specifically state so, but be prepared to receive higher bids that include the great risk you are placing entirely on the contractor. Lesser provisions that allow payment for extra work encountered as the result of opening the trench and discovering conditions worse than reasonably predictable will usually result in lower bid prices.

During execution of the work, those responsible should always keep in mind that gray areas should be addressed by evaluating if unknown conditions could have been reasonably predicted and expected from the information contained in the geotech report at the time the contractor submitted his bid. If so, then request for payment of extra work should be rejected. If conditions could not have been reasonably foreseen based on prior information, then the request should be accepted. If grey areas still remain, then the request should be flagged for further negotiation on site, between the CEOs, or perhaps eventually in court. Unless you are the construction or project manager, limit your action to reporting your opinion of reasonable discoverability. Let the project manager and construction manager sort out the other aspects. If you are one of the managers, or CEO, you already know what to do.

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I take no responsibility for any damages or injuries of any kind that may result.

 

[SwinnyGG]

it's my understanding that the contractor was to also do a soil investigation which would be a recommended risk reduction measure for this type of work

That may be the case - but unless that soil investigation is clearly defined, sending my foreman out to walk around and look at the dirt is sufficient, and I've checked that box and now I get to ask for more money.

The only way to know with 100% certainty what you will find when you excavate a trench or deep foundation... is to complete the excavation of that trench or deep foundation. Anyone who writes contracts for heavy civil knows this, and makes some provision for remediation of the stuff that every job runs into.

 

[dik]

I had a project recently that with the 3rd party exclusions... only the owner could use the report, not the contractor... It all part of being reasonable. If conditions change, unexpectedly, it's unreasonable for either the geotech engineer or the contractor, for that matter, to be responsible for the added cost. The owner bears the risk... after all, he's the one benefitting from the improvement.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[BigH]

Again - an experienced contractor working in an area (presumed) would/should have an idea of the general conditions - such as if one says a stratum is glacial till, then there is always a chance for boulders to be present - or similarly if the material is a residual soil. General area conditions should be known to some degree and contemplated. Seems like the geo report could/should have provided a bit more physiographic information. But also seems like the Contractor would have known the possibility and had planned for it - which apparently he did having (1) the machine ready to come to site and (2) finishing the job ahead of time.

Below - a residual soil in SE Asia . . . everyone knows (or should know having worked with residual soils that residual soils can contain corestone (boulders).

 

[coloeng]

While most contract documents are written to put the burden on the contractor you still need to be reasonable. If you contract out a lot of construction work you will get a reputation with the contractors, either good or bad. If it is a reputation that the owner is basically not responsible for any changed conditions because the contract documents say that the contractor was supposed to anticipate or investigate for differing conditions, then contractors will add a contingency to their bid to account for that. If contractors know that you will be reasonable then you will get better bids and the money spent on dealing with changed conditions will in the long run be less than the contingency that all the contractors add to their bids. I'm not by any means saying that you should always approve a change order request, but you need to be reasonable.

I have seen an owner consistently get bids that were 15 to 20% less for projects than an adjacent entity for similar projects. The adjacent entity consistently pushed the burden on the contractor. Over a 16 year period they probably had ten to twelve lawsuits that they dealt with where the contractor sued them (out of four to five projects per year). The reasonable owner had about the same number of projects per year and no lawsuits in that 16 year period.

Sure you can strictly enforce the contract documents and save $X on this project, but what will it cost you in the end?

 

[Sojisub]

coloeng

So far the contractor has spend 19 days working against 49 days estimated on the baseline schedule. The condition thus far is a lot easier than they had thought. I overheard them joking the soil is like "yogurt". So is it reasonable to take this into consideration.

 

[bimr]

While most contract documents are written to put the burden on the contractor you still need to be reasonable. If you contract out a lot of construction work you will get a reputation with the contractors, either good or bad. If it is a reputation that the owner is basically not responsible for any changed conditions because the contract documents say that the contractor was supposed to anticipate or investigate for differing conditions, then contractors will add a contingency to their bid to account for that. If contractors know that you will be reasonable then you will get better bids and the money spent on dealing with changed conditions will in the long run be less than the contingency that all the contractors add to their bids. I'm not by any means saying that you should always approve a change order request, but you need to be reasonable.

I have seen an owner consistently get bids that were 15 to 20% less for projects than an adjacent entity for similar projects. The adjacent entity consistently pushed the burden on the contractor. Over a 16 year period they probably had ten to twelve lawsuits that they dealt with where the contractor sued them (out of four to five projects per year). The reasonable owner had about the same number of projects per year and no lawsuits in that 16 year period.

Sure you can strictly enforce the contract documents and save $X on this project, but what will it cost you in the end?

Just to add to your comment, it works both ways. There are some Contractors that constantly look for change orders and litigation. When you see them on your bid list, you secretly hope they are not successful bidding as it makes your life difficult. In such case, you have to document everything and trust that your Contract documents are thorough.

 

[1503-44]

Easy work everywhere, right? Except for the bit with the rock.
No. You do not consider the generally easy working conditions.

Generally easy working conditions everywhere only reinforces the idea that the presense of rock would not be suspected.
Time taken to ccmplete is also not your concern.

You must only consider two things.

1.) Were those rocks noted as present in the geotechnical report or in other information provided to the contractor. NO
2.) Could you have seen the rocks during a preconstruction walk of the area? NO

Trying to play God will get you into the yogurt up to your neck or higher.

You have a lot of good advice above. If you still do not know what to do, you must now have a talk with your boss.

Statements above are the result of works performed solely by my AI providers.
I take no responsibility for any damages or injuries of any kind that may result.

 

[Mad Mike]

Do you have staff who witnessed the complications with the soil profile, observed the Contractor making every attempt to deal with them using standard equipment, and then finally as a last resort, give him written permission to bring on heavier equipment to deal with the situation?

My local Contractors know they won't get a cent extra unless the delays and complications have been proven and witnessed by the resident engineer.

Best,
Mike

 

[Sojisub]

We went back through the geotechnical reports and actually found that it indicated boulders and concrete in 1 of the reports. Sorry for this late information and not sure if it changes your opinion but appreciate any additional feedback.

And to clarify, they did not bring in new equipment. They switch out the bit that was more suited for rocks.

 

[1503-44]

Yes. If that information was made available to the contractor before he submitted his bid, yes, that definitely changes everything. That is the best reason you will find to object to extra payments.

Statements above are the result of works performed solely by my AI providers.
I take no responsibility for any damages or injuries of any kind that may result.