Holloway Consulting’s experience as Construction Scheduling Consultants is that contractual requirements for timely notification of extra costs should be clear.
CONSTRUCTION SCHEDULING CONSULTANTSFAILURE TO PROVIDE TIMELY NOTICE
Contractual requirements for timely notification, should extra costs be anticipated, are not employed for exculpatory or punitive purposes. If an owner is going to be held liable for a contractor’s additional costs, logic and equity would point to the owner’s right to control or mitigate those costs. A differing site condition, a directed or constructive change order, etc., should not give rise to unbridled cost overruns. To place some form of check and balance on this concern, a notification clause such as the following has been used:
“Notification for Additional Compensation: Upon the occurrence of an event during the course of the work which is beyond the Contractor’s control and for which the Contractor intends to submit a claim for extra compensation in addition to the Contract Price, the Contractor shall, as a condition precedent to owner’s consideration of such claim, give owner notice in writing of such intent within seven (7) business days after the occurrence of such event, failing such notice the claim shall be deemed to have been waived by the Contractor.“
Compliance with a notice provision, while doing little to provide the contractor with immediate compensation, will satisfy a fundamental duty – the duty to protest. This duty extends to both directed and constructive changes. Although exception to the notice requirement is often considered when a constructive change has, as its cause, a defective specification, the correction of such defect may result in a dispute as to whether or not it is a directed change. If the owner directs a change in the specifications (despite the fact that the owner may consider the change as part of the original contract), the contractor is advised to lodge a protest as quickly as practical so as to provide the owner time to reconsider or maintain the said direction.
Call Holloway at (303) 984-1941 to discuss your construction scheduling consulting needs.
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