7009 How To Price and Document

How to Price and Document
Your Delay Claims

Bill Haydt
Director/Shareholder, Trauner Consulting Services, Inc.
bill.haydt@traunerconsulting.com
Distribution of the webinar materials outside of your site is prohibited. Reproduction of the materials and pictures without a written permission of the
copyright holder is a violation of the U.S. law.
Meet Your Instructor
Bill Haydt
 Director and Shareholder
Trauner Consulting Services, Inc.
 11 years of claims experience
 Qualified Expert in
Construction Scheduling and
Delay Analysis
 Instructor, Analyst, Scheduler,

Author
How to Price and Document Your Delay Claims

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DAY 1:
Determining the Costs

Associated with Delay
Webinar Outcomes
 Key Terms and Their Meaning

 Contract Provisions
 Delay Damages

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Problem: Project Delays
 As old as deadlines.
 As project complexity increases, the risk of delay
increases.
 Delays carry real and significant costs.

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Key Scheduling Terms
 Critical Path
 Longest Path
 Float

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Critical Path
 Determines the project’s completion date.

 Is the longest continuous sequence of work.
 Is the sequence of work that must be
progressed to prevent delays to the project.
 Exists on every project.
 Is dynamic and can change throughout the
course of the project.

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Critical Path = Longest Path
 The critical path is the longest path of activities in the

network.
 The longest path defines the forecast project completion
date.
 Only delays to activities on the longest path can delay the
project.
 Interim milestones and other events will have their own
longest path.
 Activities on the longest path may have float.
 Software and the “critical path.”

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The Critical Path

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Total Float
 In concept, float is the number of workdays that an activity

can be delayed without causing delay to the completion of
the project.
 Be careful: The calculation of float can be overridden by

adding constraints into the schedule. Try to avoid the use
of constraints.
 Be aware: Float for activities on the critical path may vary

due to multiple calendars and constraints.

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Float Misconceptions
 Float is used to determine the critical path.

 The path with zero total float, or least total float, is the
critical path.
 Float is the number of days an activity can be delayed
before it becomes critical or delays the project.
 Any activity with negative float is critical or contributing to
delay in the project.
 Each of the above is false, or not always true.

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Who Owns Float?
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Who Owns Float?
 If contract is silent:
 The project “owns the float.”
 Available for use on a “first come, first served” basis.
 Presumes use of float does not result in additional cost to either
party.
 Float ownership clauses:
 Should seek to address what float ownership means in terms of
cost.
 For example, if the owner “owns the float,” then has the owner
procured the right to delay any non-critical activities without the
risk of being responsible for additional costs that result from that
non-critical delay?

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Contract Provisions
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Relevant Contract Provisions
 Changes Clauses
 Change Order Pricing Provisions
 Claims Provisions
 Scheduling Provisions
 Time Extension Provisions
 Delay Damage or Cost Provisions

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Contract Provisions
 Owner-Drafted or Contractor-Drafted Custom

Contracts
 Standardized Owner Contracts
 Standard Form Contracts
 AIA Document A201TM – 2007
 ConsensusDOCS1TM 200 – 2007

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TM
AIA Document A201 – 2007
8.3 DELAYS AND EXTENSIONS OF TIME

8.3.1 If the Contractor is delayed at any time in the commencement or
progress of the Work by an act or neglect of the Owner or Architect, or of an
employee of either, or of a separate contractor employed by the Owner; or
by changes ordered in the Work; or by labor disputes, fire, unusual delay in
deliveries, unavoidable casualties or other causes beyond the Contractor’s
control; or by delay authorized by the Owner pending mediation and
arbitration; or by other causes that the Architect determines may justify
delay, then the Contract Time shall be extended by Change Order for such
reasonable time as the Architect may determine.
8.3.2 Claims relating to time shall be made in accordance with applicable
provisions of Article 15.
8.3.3 This Section 8.3 does not preclude recovery of damages for delay by
either party under other provisions of the Contract Documents.

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TM
AIA Document A201 – 2007
15.1.5 CLAIMS FOR ADDITIONAL TIME

15.1.5.1 If the Contractor wishes to make a Claim for an increase in the
Contract Time, written notice as provided herein shall be given. The
Contractor’s Claim shall include an estimate of cost and of probable effect
of delay on progress of the Work. In the case of a continuing delay, only
one Claim is necessary.
15.1.5.2 If adverse weather conditions are the basis for a Claim for
additional time, such Claim shall be documented by data substantiating that
weather conditions were abnormal for the period of time, could not have
been reasonably anticipated and had an adverse effect on the scheduled
construction.

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TM
ConsensusDOCS 200 – 2007

6.3.1 If the Contractor is delayed at any time in the commencement or progress of
the Work by any cause beyond the control of the Contractor, the Contractor shall be
entitled to an equitable extension of the Contract Time. Examples of causes beyond
the control of the Contractor include, but are not limited to, the following: acts or
omissions of the Owner, the Architect/Engineer or Others; changes in the Work or
the sequencing of the Work ordered by the Owner, or arising from decisions of the
Owner that impact the time or performance of the Work; transportation delays not
reasonably foreseeable; labor disputes not involving the Contractor; general labor
disputes impacting the Project but not specifically related to the Worksite; fire;
terrorism, epidemics, adverse governmental actions, unavoidable accidents or
circumstances; adverse weather conditions not reasonably anticipated;
encountering Hazardous Materials; concealed or unknown conditions; delay
authorized by the Owner pending dispute resolution; and suspension by the Owner
under Paragraph 11.1. The Contractor shall submit any requests for equitable
extensions of Contract Time in accordance with the provisions of Article 8.

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TM
ConsensusDOCS 200 – 2007

6.3.2 In addition, if the Contractor incurs additional costs as a result of a delay that
is caused by acts or omissions of the Owner, the Architect/Engineer or Others,
changes in the Work or the sequencing of the Work ordered by the Owner, or
arising from decisions of the Owner that impact the time of performance of the
Work, encountering Hazardous Materials, or concealed or unknown conditions,
delay authorized by the Owner pending dispute resolution or suspension by the
Owner under Paragraph 11.1, the Contractor shall be entitled to an equitable
adjustment in the Contract Price subject to Paragraph 6.6.

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Excusable, Non-compensable
Delays
Excusable, non-compensable delays are, typically, delays
that are not the Contractor’s or the Owner’s fault or
responsibility, and that could not have been foreseen by the
Contractor. Typically, the Owner will not compensate the
Contractor for excusable, non-compensable delays.

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Examples of Excusable,
Non-compensable Delays
1. Delays due to fires, floods, tornadoes, lightning strikes,
earthquakes
2. Delays due to weather
3. Extraordinary delays in material deliveries
4. Delays due to civil disturbances
5. Delays due to acts of the public enemy
6. Delays due to labor strikes

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Excusable, Compensable Delays
Typically, excusable, compensable delays are

delays that are not the contractor’s fault or
responsibility and they are the owner’s fault
or responsibility.

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Examples of Typical Excusable,

Compensable Delays
1. Delays due to changes.
2. Delays due to an Engineer-ordered
suspension.
3. Delays due to the neglect of the Owner or its
failure to act in a timely manner.

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1904.6.B Allowable Delay Costs*
1. Extended Field Overhead

2. Idle Labor
3. Escalated Labor
4. Idle Equipment or Equipment Demobilization
5. Material Cost Escalation or Material Storage
(*Taken from Standard Specifications drafted for the Minnesota DOT)

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Delay Damages
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Methods of Calculation
 Contract
 Estimates
 Actual cost
 Total cost
 Modified total cost

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Delay Damages
 Delay damages can result from both critical path

delays and non-critical delays.
 If a delay is caused by an inefficiency, then the
contractor may also be entitled to inefficiency
damages.
 Delay damages are the added costs the
contractor, the owner, or any other participant in
the construction project incurs because of a
project delay.

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Owner Delay Costs
An owner’s delay damages are usually defined and

limited by the liquidated damages provided for in
the contract with the contractor.

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Owner Delay Costs
 Many Owners “liquidate” their estimated delay cost into

the contract.
 Rates vary substantially, from a few hundred to $30,000
per day or more.
 Liquidated damages are a function of being on the
project longer.
 If damages are not liquidated, then the owner would
typically be entitled to actual damages.

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Owner Delay Costs: Actual Costs
 In lieu of liquidated damages, these are the Owner’s

time-based costs due to a delay.
 Can include the cost of continued contract administration
and engineering services, lost sales due to market
changes (a big issue, now), the cost of providing
temporary facilities, lost revenues, and financing costs.
 These can be substantial.
 Owners can also incur non-critical delay damages, but
these are typically not addressed by liquidated damage
provisions.

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Other Parties
The delay damages to which other parties will

be entitled will be a function of their contract
and the law.

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Contractor Delay Costs
Only those delay damages that are incurred

as the result of a compensable delay are
reimbursable to the contractor.

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Contractor Delay Costs: Labor
 Idle Labor
 Extended Labor
 Labor Cost Escalation

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Contractor Delay Costs: Idle
Labor
For workers idled by a compensable delay, the

contractor will typically be entitled to recover the cost
of time the labor is idle:
Hourly Wage (with Burden) X Idle Hours =

Extended Labor Cost

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Contractor Delay Costs:

Extended Labor
For workers who are on the site longer solely

because of a compensable delay, the contractor will
typically be entitled to recover the cost of extended
time the worker is on site:
Hourly Wage (with Burden) X Added Hours =

Extended Labor Cost

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Labor Cost Escalation
A compensable delay can cause a worker to work

during a higher-wage period than the contractor
reasonably planned. The resulting added labor cost
is typically compensable:
Additional Hourly Wage X Hours Expended During Higher-Wage
Period =
Added Labor Cost Due to Escalation
(May also apply to labor burden.)

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Equipment
 Idle Equipment
 Extended Equipment

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Idle Equipment
 Idle Equipment Costs

 Can be significant!
 Pricing guides versus actual costs.
Hourly Equipment Rate x Idle Hours =

Idle Equipment Costs

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Extended Equipment
Extended Equipment are added costs incurred due

to the extended period equipment is on site due
solely to the delay. Examples may include things
like dewatering pumps, generators, or scaffolding.
Hourly Equipment Rate x Idle Hours =

Extended Equipment Costs

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Contractor Delay Costs: Material
 Material Cost Escalation

 Storage Costs

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Material Cost Escalation
Material cost escalation may result when a compensable
delay causes a contractor to purchase construction materials
at higher cost. Typically associated with concrete or asphalt,
which do not have a “shelf life.”
Quantity of Materials Purchased X Added Cost per Unit =

Material Cost Escalation

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Overheads
 Field Office Overhead

 Home Office Overhead

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Field Office Overhead (FOOH)
 Costs incurred to support project, usually field costs.
 Must be time dependent.
 May include job site trailer rental, salaries of project
manager and superintendent, utilities, vehicles, and
similar expenses.
 Contract may define as a mark-up.
 Field office costs vary, but they can be approximated as
3% to 5% of the contractor’s bid price. A $75M, 2-year
project, could have daily costs of approximately $3,000
to $5,000.

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FOOH Example
 Objective
 Evaluate the costs submitted by a contractor and
determine whether or not each is a field overhead cost
recoverable in the event of a compensable delay.
 Background
 On a bridge project a contractor submitted a claim to
recover its field overhead costs for a 1-month delay on
a 12-month project. The table below summarizes the
costs.

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Home Office Overhead (HOOH)
 Costs incurred to maintain the contractor’s home office
operation.
 May include home office lease, executive salaries,
estimating and engineering departments, payroll clerks,
etc.
 Recovery of unabsorbed HOOH costs is controversial.
 Track actual costs to a project, if possible.
 Can be estimated using the Eichleay formula, or other
formulas.

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HOOH Example

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Contractor Delay Costs: Eichleay

Formula
Actual Contract Billings

x Total Actual Overhead During =
Allocable Overhead
Actual Contract Period
Total Actual
Company Billings
Allocable Overhead
= Daily Overhead
Total Days of Contract Performance
Unabsorbed
Daily Overhead x Days of Compensable Delay = Overhead

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HOOH Eichleay Example
 Objective
 Based on the background information provided, calculate the
unabsorbed home office overhead using the Eichleay method. Be
prepared to discuss your answer with the class.
 Background
 An owner suspends operations for 100 days on a $3 million
project. The final project duration was 500 days.
 During the suspension period, the contractor has no other work
that can accommodate the workers or equipment.
 Audit of contractor’s financial records document:
 Total company billing during the contract period is $12 million.
 Actual home office overhead cost during the same period is
$400,000.

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HOOH Eichleay Example
 Step 1:
 ($3,000,000 / $12,000,000) X $400,000 = $100,000
 Step 2:
 $100,000 / 500 days = $200 / day
 Step 3:
 $200 / day x 100 days = $20,000

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Summary
 The Process for Submitting or Reviewing

Delay Claims
 Entitlement
 Impact
 Cost
 Always Consult the Contract
 Change order procedures
 Time extension procedures
 Definition of excusable delays
 Definition of compensable delays
 Definition of allowable costs
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Questions
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How to Price and Document
Your Delay Claims
Live 2-Day Online Training
Bill Haydt
Director/Shareholder, Trauner Consulting Services, Inc.
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DAY 2:
The First Three Rules of Construction:

Document, Document, Document!
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Webinar Outcomes
After participating in this webinar, the learner will be able to:

1. Understand the important role that documentation plays in
the success of a construction project.
2. Recognize how good documentation supports effective
communication on the project.
3. Identify the types of good project documentation.
4. Recognize the benefits of contemporaneous
documentation over after-the-fact documentation.

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Presentation Overview
1. Why do we care?
2. Electronic or Paper?
3. Pre-construction/Bid Phase Documentation
4. Standard Project Documentation
5. Communications
6. Summary
7. Questions and Answers
How to Price and Document Your Delay Claims 55
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1. Why do we care?
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1. Why do we care?
One reason: Because it is an unfortunate fact that some

construction projects end up in some form of dispute that
leads to mediation, arbitration, or litigation.
Where someone who was not there and who does not
understand construction, or the project, will decide what
happened, and why it happened that way!
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1. Why do we care?
Another reason: Many disputes can be resolved when we

know the answer to two simple questions:
1. Who knew what?

2. When did they know it?
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1. Why do we care?
But perhaps most importantly: Effective communication

and documentation techniques increase the likelihood of
avoiding (or resolving issues in a timely manner) without
resorting to the claims and litigation route.
 Good and timely communication can:
 Mitigate or
 Eliminate surprises
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1. Why do we care?
When it comes to settling disputes: The best offense AND

the best defense is a well-organized, well-documented project
file that contemporaneously records the FACTS.
 Most often:
 The FACTS will determine the outcome.
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1. Why do we care?
5. Communications
Summary
Questions and Answers
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 The focus of this webinar is on “content” rather than

“medium.”
 However, based on our experience we do have some
observations and recommendations regarding document
and data control and sharing.
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 Whether its P6, Dodge Project Document Manager,

Spectrum Venture, COINS, ConstructWare, etc., -
Whatever medium you choose, remember that your job is
to manage:
 Time
 Cost
 Quality
 So, organize, and create the ability to use, your data in a
way that will facilitate those management tasks.
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 Consider using coordinated nomenclature or alpha-

numeric organization across all platforms; that is
 Schedule
 Cost Reporting
 Specifications and Plans
 Train your staff in the proper use and potential of the
chosen medium
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 Senior Managers should be responsible for the records

that are being kept, and periodically monitor those records
to ensure that the medium is truly facilitating the
management of Time, Cost, and Quality.
 Are Project Meeting Minutes, Shop Drawing Logs, Schedule
Updates, etc., using and updating the nomenclature and/or alpha-
numeric coding as work progresses and changes occur?
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And finally,
(as an experienced construction litigator once put it):
If it’s not in writing, it didn’t happen!
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“Everyone is entitled to his

own opinion, but not his
own facts.”
Daniel Patrick Moynihan

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What Does “Contemporaneous”
Mean?
Occurring during the same period of time.
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Contemporaneous vs. After-the-

Fact Documentation
It’s easy to It’s much more difficult,

“build the project on paper” and not nearly as effective,
by contemporaneously to reconstruct project
describing field operations documentation after-the-fact.
as they occur.

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1. Why do we care?
5. Communications
Summary
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3. Pre-construction/Bid Phase
Documentation
 Each of the stakeholders should start its documentation

during the preconstruction/bid phase.
 Contractor
 Owner
 Designer
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Documentation
Example:
The contractor could create a pre-bid “observations &
assumptions log” that accompanies the bid documents
through the estimating phase of the project right up to the
time the bid or proposal leaves your office.
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Documentation
Examples:
 Value Engineering
 Assumptions regarding the effect of inclement weather on
the project
 Notes from estimators or designers about anything that, in
their experience, seems strange or unusual
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Documentation
The preconstruction/bid phase files are valuable because the

cumulative information assembled by the management,
planning, and estimating staffs during the preconstruction/bid
phase of the project can provide valuable guidance to those
who are tasked with building the project.
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1. Why do we care?
5. Communications
Summary
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4. Standard Project
Documentation
 Meeting Minutes
 Daily Reports
 Notes to File
 E-mail
 RFI and Submittal Logs
 Digital Photos
 Videos
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4. Standard Project
Documentation
 Meeting Minutes: Characteristics of proper documentation

 Complete
 cover all topics discussed
 Inclusive
 capture all comments on each topic
 Accurate
 no editorial or inflammatory comments
 The facts and nothing but the facts

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4. Standard Project
Documentation
 Meeting Minutes: Best Practices

 Always read Meeting Minutes immediately
upon receipt!
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4. Standard Project
Documentation

 Must be distributed, often with a clause that states that the
minutes will be considered accurate unless revisions are
requested within 5 days.
 What happens when Meeting Minutes are not accurate or omit
information?
 If left unchallenged, inaccuracies and omissions in
the Meeting Minutes become the permanent
record.
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4. Standard Project
Documentation

 When a response to Meeting Minutes is required:
1. Inform the author in writing before the “expiration date.”
2. Staple your response to the subject meeting minutes and file.
3. At the next meeting, make it an agenda item to discuss the
inaccuracies and/or omissions.
4. If the inaccuracies and/or omissions are egregious, insist that
corrected minutes be issued.
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4. Standard Project
Documentation

Or if it is in writing, maybe it happened even if it didn’t!
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4. Standard Project
Documentation
Daily Reports: Are most useful when they dovetail with

activities as identified in the schedule and meeting
minutes to document the project for posterity and should
follow the same rules as meeting minutes.
 Complete
 Inclusive
 Accurate
 Factual
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4. Standard Project
Documentation
Over time we have developed a list of 16 items

that we think ought to be on a Daily Report…
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4. Standard Project
Documentation
Every Daily Report should include:

1. Weather
2. Location of work on site
3. Work accomplished
4. Quantities, if applicable (and if approximate, say so)
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4. Standard Project
Documentation

5. Workforce by trade and number of workers
6. Hours worked
7. Equipment in use
8. Idle equipment
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4. Standard Project
Documentation

9. Potential delaying events
10. Significant events
11. Safety issues and safety/toolbox talks
12. Meetings held on site
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4. Standard Project
Documentation

13. Direction received from AHJ
14. Deliveries
15. Record of visitors
16. Author’s signature and date
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4. Standard Project
Documentation
Daily Reports: Managers understand that:

 There is an art to creating good daily reports. Don’t
assume that it comes naturally.
 Field personnel must be trained to write accurate and
acceptable daily reports.
Now let’s look at some examples…
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4. Standard Project
Documentation
Daily Reports Example 1:

There was a storm water control project that required a large
diameter tunnel be bored through a mountain. The tunnel was
lined with a spray-on cementitious material called shotcrete.
The contractor’s foreman recorded the following in his daily
report.
“Good thing I had my goggles on. The nozzleman was an idiot – crete
was everywhere. This is the third guy in a row they’ve sent me who
has no clue what he’s doing.”
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4. Standard Project
Documentation
Daily Reports Example 1: Three years later…

After the project was completed and in use, the liner material
began to de-bond and fall off. The owner sued the contractor
for defective work. This one particular daily report became the
“smoking gun” the owner’s legal team was looking for.
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4. Standard Project
Documentation

The surveyor has billed us only one other time on the project back in
December of last year. We requested at that time they provide signed
daily time tickets for their hourly services (as required by their
subcontract agreement). Signed daily time tickets is a means of
verifying the hours on the job, they should be brought to our
superintendent and signed daily. They have never provided signed
daily time tickets, and never billed us again until the last day of August.
No way for me to verify hours worked on the job without signed tickets.
It’s their fault!
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4. Standard Project
Documentation

 On 189 days, daily reports recorded that manpower
assigned to the project was working within the project
limits but was not performing work associated with the
contract scope of work.
 On 180 days, the daily reports recorded that manpower
assigned to the project had been sent offsite to other
projects.
 On 120 days, the daily reports recorded that one or more
subcontractors were delaying the project.
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4. Standard Project
Documentation
Daily Reports
We recommend that someone at project management level
spot check at least one daily report per week from each
jobsite. Do this in order to maintain a continuous dialog with
the people responsible for writing daily reports and offer
guidance on their choice of words.
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4. Standard Project
Documentation
Notes to File
 Document an unusual occurrence
 Document a telephone conversation
 Document the status of something at a particular point in
time
 But note – Notes to File are incomplete communications
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4. Standard Project
Documentation
RFI and Submittal Logs are:

 Contemporaneous documents
 Excellent management tools
 Concise historical records
Keep these logs updated on a daily basis!
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4. Standard Project
Documentation
 Digital Photos and Videos Are:

 Contemporaneous documents, especially if date is printed on the
photo
 Precise records that capture an exact moment in time
 An inexpensive and very effective documentation method
 Extremely valuable in termination situations (to you or your sub)
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4. Standard Project
Documentation
 A Picture Is Worth A Thousand Words

 Engineers, architects, project managers, superintendents, owners’
reps, construction managers…
 Anyone with management responsibility should arrive at the
jobsite equipped with a digital camera.
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1. Why do we care?
5. Communications
Summary
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5. Communications
 Emails
 Schedules
 Letters
 Oral Communication
Anything shared

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5. Communications
Emails:
 Considered contemporaneous documentation
 Every bit as important as hard copy correspondence
 Admissible in legal proceedings
 Discoverable
Texts:
 Fast, but can it readily be stored or retrieved?
 Incomplete communication?
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5. Communications
Emails:
 Treat incoming e-mail as you would a letter or a fax
 print it! (including the attachment)
 file it!
 Because e-mail is a quick and easy method of communication, it’s
easy to lose perspective of the importance of the document.
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5. Communications
Schedules:
 Are a contemporaneous communication by the contractor
to the owner of the contractor’s current plan for
performing the work
 Each Schedule and Update needs to be preserved in its
original form
 Are the preferred source of information when analyzing
delay claims
 Electronic Schedule file contains a lot more information
than is shown on a paper print-out
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5. Communications
Schedules:
 Most scheduling software operates in “real time,” which
means that any changes made to schedules are effective
immediately.
 Always save a pristine copy of your baseline schedule
and every schedule update for the duration of the project.
Never “WRITE OVER” original schedules or
schedule updates!
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5. Communications
Oral Communications
 Examples of situations in which we rely on oral
communications
 Telephone conversations
 Field meetings
 Inspections with the AHJ
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5. Communications
Oral Communications
Whenever oral direction is given or received, or when
something is agreed to or promised during a conversation,
the best practice is to follow up with a written confirmation.
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5. Communications
Oral Communications
Here is an example of a subcontractor confirming direction given
by the general contractor:
“Yesterday in the supers meeting, you told me to set up my scaffold and
start laying block at the SE corner of the building. This morning out on site
you told me to set up and start block at SW corner. The scaffold arrives
today. I will set up at the SW corner per your direction.”
Signed & Dated & Copied for Sub’s File
106
5. Communications
Oral Communications
What do you do when you are given direction by someone not
authorized to do so?
107
54
5. Communications
Oral Communications
What do you do when you are given direction by someone not
authorized to do so?
Dear Owner,
Today your interior designer was at the jobsite for a tour. She decided
that the meditation room should not be painted fire-engine red as
shown in the room finish schedule. She directed us to repaint the room
a soft mauve color. However, since the room is already painted, there
will be a cost to repaint the room. Please advise if you would like us to
prepare a proposal for your review.
Sincerely,
Your Favorite Contractor
108
5. Communications
Letters
 A good construction letter should:
 Have an introduction, a body, and a summary.
 Be limited to one and only one subject.
 State the facts or questions clearly. (State why the letter is being
written).
 Discuss the subject in as few words as possible.
 Employ your best technical writing skills (omit the prose).
 Exclude emotion, sarcasm, threats, and profanity.
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55
5. Communications
A Real Example of a Claim Letter:

Per Special Provision Sections 9-1.04 Notice of Potential Claim, Acme protests the welding inspection requirements for
splicing steel pipe piles as interpreted by the Agency. The Agency notified Acme on May 8, 1997 that inspection is
required on all field welding performed. Special Provisions Section 10-1.22 Piling states that piling shall conform to the
provisions in Section 49, “Piling,” of the Standard Specifications, and the Special Provisions. Special Provisions Section
10-1.22 reads that unfilled pipe piles shall be full penetration welded. Partial welds may be restored to full penetration
welds in the field in conformance with AWS D1.1. Also Standard Specification Section 49-5.02 Splicing states that splices
for steel piles shall be made by full penetration butt welding the entire cross section in conformance with the requirements
in AWS D1.1. The welding procedure required is D1.1, but no inspection is required per 49-5.02 of the Standard
Specifications.
In the past, previous projects interpretations of this specification has not required welding inspection per Section 6 of AWS
D1.1 to be performed by the Contractor. Contracts following our current project have revised this specification section to
require that the Contractor performs welding inspection. Acme is supplying a CWI certified inspector per Section 6 of AWS
D1.1 for this project and requests additional compensation for all expenses incurred for this inspection.
Acme has attached partial Agency specification sections from other projects for your information regarding welding
procedures. Attachment 1, Agency Contract #11-050024 was bid prior to our current project which reflects our current
specifications. Attachment 2, Agency Contract #05-453404 was bid after our current project which includes additional field
welding quality control requirements…
110
5. Communications
The Actual Response to the Claim Letter

The Agency acknowledges the receipt of the contractor’s notice of potential claim regarding the welding specification.
The Agency takes exception to the implication that the contractor was not informed as to what welding specification was
applicable. The contract clearly defines which elements of the welding specifications were important to our application.
The contractor’s failure to provide the specified welding submittal prior to welding work for the project is the sole cause
for any delays or loss of efficiencies the contractor might be experiencing.
The contractor’s request for additional compensation for “scheduling delays” and “resource delays” has no factual basis.
The Agency takes exception that this request for additional compensation was made in the name of a contractual non-
persona “Joe Welder.” Mr. Welder’s statement that he prepared the notice of potential claim without review of the
correspondence file and with little or no personal involvement in this issue is disturbing.
Review of alien contract documents submitted by the contractor reveals only that they are welding specifications
applicable to other projects. Mr. Welder’s observation that the cast-in-steel shell concrete pile specification on another
project “reflects our current specifications” is baffling.
The applicable provision for splicing of the “open ended pipe piles” on the Big River Bridge is found in the Standard
Specifications, Section 49-5.02 “Splicing.”, “Splices for Steel Piles shall be made by full penetration butt welding the
entire cross section in conformance with the requirements in AWS D1.1.”
Quoting from the AWS D1.1 Section 1.1 “Scope”, “This code contains the requirements of fabricating welded steel
structures. When conformance to the Code is stipulated in the contract documents, all provisions of the code shall be
complied with, except for those provisions that the Engineer or contract documents specifically exempt.” In the contract
03-362404 no provisions have been exempted.
Your request for additional compensation is without merit.
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56
5. Communications
The Actual Response to the Claim Letter

The Agency acknowledges the receipt of the contractor’s notice of potential claim regarding the welding specification.
The Agency takes exception to the implication that the contractor was not informed as to what welding specification was
applicable. The contract clearly defines which elements of the welding specifications were important to our application.
The contractor’s failure to provide the specified welding submittal prior to welding work for the project is the sole cause
for any delays or loss of efficiencies the contractor might be experiencing.
The contractor’s request for additional compensation for “scheduling delays” and “resource delays” has no factual basis.
The Agency takes exception that this request for additional compensation was made in the name of a contractual non-
persona “Joe Welder.” Mr. Welder’s statement that he prepared the notice of potential claim without review of the
correspondence file and with little or no personal involvement in this issue is disturbing.
Review of alien contract documents submitted by the contractor reveals only that they are welding specifications
applicable to other projects. Mr. Welder’s observation that the cast-in-steel shell concrete pile specification on another
project “reflects our current specifications” is baffling.
The applicable provision for splicing of the “open ended pipe piles” on the Big River Bridge is found in the Standard
Specifications, Section 49-5.02 “Splicing.”, “Splices for Steel Piles shall be made by full penetration butt welding the
entire cross section in conformance with the requirements in AWS D1.1.”
Quoting from the AWS D1.1 Section 1.1 “Scope”, “This code contains the requirements of fabricating welded steel
structures. When conformance to the Code is stipulated in the contract documents, all provisions of the code shall be
complied with, except for those provisions that the Engineer or contract documents specifically exempt.” In the contract
03-362404 no provisions have been exempted.
Your request for additional compensation is without merit.
112
5. Communications
A Better Response to the Claim Letter

The Agency acknowledges receipt of Acme’s Notice of Potential Claim, dated May 22, 1997, regarding the
enforcement of specified welding requirements. We have reviewed the letter of May 22 forwarding the Notice and
its attachments. We disagree with the conclusion that our direction to Acme to inspect all field welds is a change
to the contract requirements based on the following:
1. Standard Specification Section 49-5.02 governs the splicing of the “open-ended pipe piles” on this project,
as Acme acknowledged in its letter.
2. Section 49-5.02 requires that “Splices for steel piles shall be made by full penetration butt welding the entire
cross section in conformance with the requirements in AWS D1.1.” Acme acknowledges the applicability of
AWS D 1.1 in its letter.
3. Section 1.1 of AWS D1.1 “Scope” states that “This code contains the requirements of fabricating welded
steel structures. When conformance to the code is stipulated in the contract documents, all provisions of
the code shall be complied with, except for those provisions that the Engineer or contract documents
specifically exempt.”
4. AWS D1.1 requires inspection of all field welds. Neither the Engineer, nor the contract documents relaxed
this requirement. Acme is still required to provide for inspection of all field welds.
5. The fact that the contract language related to the inspection of field welds was modified in subsequent
Agency contracts, does not change the requirements of Acme’s contract.
For these reasons, Acme is required to provide inspection of all field welds. The cost of field inspection is
incidental to the unit price paid to furnish and install the steel pipe piles. Acme is not entitled to reimbursement for
inspection costs beyond the reimbursement already provided by the unit price for pipe pile.
113
57
5. Communications
Why Was This Second Response Better?

 It stuck to the facts. (The deficiencies in Mr. Welder’s
preparation are irrelevant if he’s right!)
 It answered the contractor’s claim, which was about the
inspection of all field welds. The first response did not
specifically address that allegation.
 It stayed away from emotional words like “disturbed” and
“baffled.”
 Does referring to “alien contract documents” really help?
 The text was impersonal.
114
5. Communications
Letters
A good construction letter should exclude sarcasm:
I questioned why my firm was paid only 90% of our Change Orders #2, 4
and 5. This work was authorized by the Developer to be performed on a
T&M basis. We did just that; we did follow instructions.
I have thought of an easy solution for the Owner. They have only paid
90% of these extra work tickets. I don’t want the balance of the 10%. I can
take 10% of the piping back that I have installed and with the escalation of
material costs in the last year, I will install it at a job that is actually willing
to pay me.
Can you please indicate what 10% of the piping I can remove? I would
like to start this process on Monday July 14th.
115
58
5. Communications
Letters
A good construction letter should not poke a finger in the recipient’s
eye:
Due to discrepancies in the plans and the information provided by you the
architect, we are being forced to react to solve a problem with the tie
beams at the tops of the masonry shearwalls … If we encounter any
resistance from the City of ________ or the Threshold Inspector we would
hope that you will provide the assistance necessary to satisfy their
requirements.
116
5. Communications
Letters
A good construction letter might address this issue this way:
We are currently working with the City and the Threshold Inspector to
resolve the issue with the tie beams at the tops of the masonry walls. As
the designer-of-record, your assistance may be required. To keep you
informed of our progress, we will copy you on all correspondence related
to this issue.
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59
5. Communications
Memo to File
A good memo to file should exclude threats:
I have made a list of the following items which you may wish to take action
on, in response to the contractor’s claim:
1. Deny contractor’s claim and work with the attorneys to make up some
countersuit for a similar amount.
2. Work closely with the Resident Engineer and make a long punch list
which includes every possible small nit-picking item.
3. Advise the contractor to remove his batch plant from the job site within
the next seven days or threaten to charge him ground rent.
118
5. Communications
Letters
A good construction letter should exclude threats:
4. Review the number of rain days this year compared to previous years
and if it is substantially lower, decrease his contract time accordingly.
5. Review the Superintendent Daily Reports and see if there are any
items documented that can be used against him.
119
60
5. Communications
Letters
A good construction letter should exclude profanity:
In regard to your letter, dated November 22, _____, concerning possible
erosion of slopes on the contract captioned above, please be advised that
we are of the opinion that you are full of &!#%.
If you have any questions concerning this matter, please do not hesitate to
contact me. I remain
Very sincerely yours,
120
1. Why do we care?
5. Communications
Summary
121
61
Summary
1. Be judicious in your choice of words.

2. Include the facts and nothing but the facts.
3. As you write and review your correspondence, imagine
yourself explaining it in a deposition or at trial.
4. In certain instances, a hot letter or email should be
allowed to cool off overnight before sending.
5. If you think you need to document something…
Why? Because…
122
Summary
123
62
Summary
The one to beat…

We are in receipt of your Letter of Termination, which you kindly faxed to
us at 7:10 p.m. yesterday evening …
I find your predatory and abusive behavior, abusing of our good will and
intent, to be disgusting in the extreme. You promise and plead to obtain
what you want, only to turn around and break your promises by twisting
your words. Your firm has a reputation for this type of behavior, but you
shall not get away with it this time.
In summation, I have never worked with a more disorganized,
disreputable, disgusting, abusive, predatory, underhanded, lying,
backstabbing S.O.B. Owner in my entire life. The past two and a half
years working with you and your firm have been nothing but agony and
torture.
Sincerely,
124
Documenting Delays
 Provide Notice
 Often required.
 If required, provide it in the specified form.
 Adhere to contract specification requirements.
 If not required, provide it anyway, in writing.

125
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63
Documenting Delays
 Contemporaneous Documents
 Often more credible.
 Closer to the event; less memory dependent.
 Fixed, story can’t change.
 Remember to date and sign.
 May appear to be less biased.

126
126
Documenting Delays
 Schedule Reviews and Approvals

 Contemporaneous
 Identifies problem areas and helps avoid delays.
 Establishes an agreement as to dates and times for
both parties.

127
127
64
Documenting Delays
 Daily Reports, Logs, and Diaries

 Often the best contemporaneous documents.
 Must be prepared daily.
 Must be detailed.
 Should substantiate the writer’s evaluation of
performance.
 Date and sign.

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128
Acting on Delay Issues
 When to Act on Delay Issues

 Immediately
 Now
 Pronto!
 The ability to mitigate an impact diminishes with time.

129
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65
Summary
 Documenting Impacts
 Approved Baseline Schedule
 Schedule Updates and Revisions
 Provide Timely Notice
 Daily Reports, Logs, & Diaries
 Meeting Minutes
 Categorize and Present Costs

130
130
Questions
131
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How to Price and Document

Your Delay Claims

Meet Your Instructor

 11 years of claims experience

 Instructor, Analyst, Scheduler,

How to Price and Document Your Delay Claims

Determining the Costs

 Key Terms and Their Meaning

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

Key Scheduling Terms

How to Price and Document Your Delay Claims

 Determines the project’s completion date.

How to Price and Document Your Delay Claims

Critical Path = Longest Path

 The critical path is the longest path of activities in the

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

 In concept, float is the number of workdays that an activity

 Be careful: The calculation of float can be overridden by

 Be aware: Float for activities on the critical path may vary

How to Price and Document Your Delay Claims

 Float is used to determine the critical path.

How to Price and Document Your Delay Claims

Who Owns Float?

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

 Owner-Drafted or Contractor-Drafted Custom

How to Price and Document Your Delay Claims

8.3 DELAYS AND EXTENSIONS OF TIME

How to Price and Document Your Delay Claims

15.1.5 CLAIMS FOR ADDITIONAL TIME

How to Price and Document Your Delay Claims

6.3 DELAYS AND EXTENSIONS OF TIME

How to Price and Document Your Delay Claims

6.3 DELAYS AND EXTENSIONS OF TIME

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

Typically, excusable, compensable delays are

How to Price and Document Your Delay Claims

Examples of Typical Excusable,

How to Price and Document Your Delay Claims

1. Extended Field Overhead

(*Taken from Standard Specifications drafted for the Minnesota DOT)

How to Price and Document Your Delay Claims

How to Price and Document Your Delay Claims

 Delay damages can result from both critical path

How to Price and Document Your Delay Claims

An owner’s delay damages are usually defined and

How to Price and Document Your Delay Claims

Owner Delay Costs

 Many Owners “liquidate” their estimated delay cost into

How to Price and Document Your Delay Claims

 In lieu of liquidated damages, these are the Owner’s

How to Price and Document Your Delay Claims

The delay damages to which other parties will

How to Price and Document Your Delay Claims