How to Avoid and Resolve Disputes over Delays and Disruptions - 4

a daily rate for all indirect costs (given, for example, the "burn
rate" for equipment and field staffing, how that rate will vary
over the course of the project and any home office overhead that
a change order would be likely to increase), the contractor may
also want to take advantage of this opportunity to negotiate
such a rate, or schedule a time to do so.
The contractor should then invite everyone to join in an
analysis of the impact that the hypothetical change order
would be likely to have on the schedule. If the project warrants it, the contractor might also want to raise the possibility
of engaging a neutral "project scheduler" on whom everyone
could rely for an impartial estimate of the duration of any
resulting delay. While such a neutral would opine only on
duration, and not entitlement, he or she could still expedite
any claims for delay.
Depending on whether the contractor had already reached
agreement with the client on such matters, the contractor could
also use the meeting to seek agreement on (1) a specific set of
procedures for resolving problems, if at all possible, at the project
level, and (2) what would justify taking a particular problem to a
higher level. The contractor might, for example, seek agreement
that the project teams will regularly meet and review project
progress and any problems that have surfaced. The contractor
might also seek agreement that the project teams:
* will elevate slippage in the schedule only if and when it
exceeds a certain number of days;
* will elevate other problems only if and when they remain
unresolved for a certain number of days; and
* will elevate questions about the cause of a problem only
if and when the uncertainty implicates one or more of the
contractual requirements for notice.
Finally, the contractor might seek agreement on a date or
deadline for a design freeze, after which the owner will not
make any changes to the design, except to the extent necessary to correct prior design errors or omissions.

A well-organized kick-off meeting
will provide an opportunity for the
contractor and its client to clarify and
align their expectations and help them
to avoid the kinds of surprises that
can easily grow into disputes.
B. "SCHEDULE RISK" WORKSHOP
Following contract award, and prior to the start of construction, a contractor can also hold a "schedule risk" workshop
with the appropriate representatives of not only the client,
but also the design firm and the key subcontractors. Some
AGC members favor a facilitated session that allows the teams
to develop, discuss, and collectively rate the risk of various
events that could cause a delay, including the likelihood of
their occurrence and severity the impact that each one would

be likely to have. Such a workshop tends to increase everyone's understanding of the schedule, and how delays in any
one party's performance could impact the project as a whole.
Once the client fully understands the risks, it can also tailor
its contingencies to fit the risks.

IV. STANDARDS AND PROCEDURES
FOR RESOLVING DISPUTES
In conjunction with their clients, construction contractors
can also clarify the standards that the parties will apply to any
disputes over delays or disruptions, and the procedures that the
parties will use to resolve such disputes. The best practice is
to incorporate such standards and procedures into the contract
between the parties, for that would make them legally binding. That would also enable the contractor to flow the same
standards and procedures down to all subcontractors. In addition the parties will typically find it easier to reach agreement
on such matters prior to any dispute. At any time, however, an
agreement on standards and procedures for resolving disputes
over delays or disruptions is useful to pursue. Both formal and
informal agreements reached at any time - including agreements
that the parties reach only after work has started or a dispute
has arisen - can be helpful.
A.NONBINDING OPTIONS
Contractors have several non-binding options. While much
depends on whether the parties perceive the process to be
truly fair and neutral, such options do promise to help the parties resolve differences of opinion. Among these non-binding
options are the following.
1. At a minimum, contractors can seek an agreement that
the appropriate members of the parties' project teams will
promptly (at the earliest stages of any disagreement) meet
and confer in good faith, and if necessary, that the appropriate members of their management teams will do the same
* If at all possible, such meetings and consultations should
also involve and include the appropriate representatives of
any subcontractors or other parties that may be responsible
for the delay or disruption.
* The meetings and consultations should begin with senior
project personnel and then work their way through the
hierarchy of each organization, as and to the extent necessary. Depending on the facts of the particular disagreement, the meetings and consultations may need to reach
and include the CEO (or equivalent) of each organization.
* If the disagreement is over a delay, the meetings and
consultations should include the project schedulers and
any schedule consultants the parties have engaged.
2. A second option for dealing with the specific risk of a delay
is to seek an agreement with the client, and if possible (in
a design-bid-build scenario) the design team, to retain a
neutral project scheduler on whom everyone can rely upon
for a credible baseline and a prompt assessment of the impact
that an event will have on the project schedule.



Table of Contents for the Digital Edition of How to Avoid and Resolve Disputes over Delays and Disruptions

How to Avoid and Resolve Disputes over Delays and Disruptions - Intro
How to Avoid and Resolve Disputes over Delays and Disruptions - 1
How to Avoid and Resolve Disputes over Delays and Disruptions - 2
How to Avoid and Resolve Disputes over Delays and Disruptions - 3
How to Avoid and Resolve Disputes over Delays and Disruptions - 4
How to Avoid and Resolve Disputes over Delays and Disruptions - 5
How to Avoid and Resolve Disputes over Delays and Disruptions - 6
How to Avoid and Resolve Disputes over Delays and Disruptions - 7
How to Avoid and Resolve Disputes over Delays and Disruptions - 8
How to Avoid and Resolve Disputes over Delays and Disruptions - 9
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