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The Holloway Consulting Group's E-m@il Construction Reporter The Original Construction Disputes E-mail Newsletter
The Original Construction Disputes E-mail Newsletter Sent July 7, 2011


Changes and disputes result not only from issues that arise after construction is underway, but also from circumstances that arise at project inception, such as:

  • Adjacent properties
  • Building code compliance
  • Building permit plan approvals
  • Easements/rights of way
  • Subsurface soils data
  • Interference from utilities
  • Temporary utilities

See part 1 for more information on change orders.

See part 2 for information on contract documents that lead to disputes.


The latent characteristics of properties adjacent to a construction site may not be fully apparent during the contractor’s pre-bid site investigation. If the owner is aware of possible adverse conditions involving adjacent properties, such conditions should be included in the bid documents. On the other hand, even the owner and designers might not be aware of and/or might not have considered the adjacent property’s potentially adverse affects on construction. Conditions that can potentially cause schedule delays and additional costs may include:

  1. A seasonal watercourse that drains precipitation into excavations
  2. Heavy vehicle traffic that restricts or delays perimeter site mobility and access
  3. Concurrent construction excavation activity that causes unanticipated delays and effects

These kinds of conditions can be difficult to recognize before they begin to affect the work. Accordingly, once they appear, the contractor is advised to attempt to quantify them and notify the owner.


The architect and its subconsultants are most often responsible for ensuring that the design meets the requirements of all entities having jurisdiction over the project. Whether it is ceiling headroom, provisions for the handicapped, the number of exits or handrail configurations, engineering and design are the responsibility of the design professionals. Conversely, contractors are most often only responsible for construction means and methods and performing the work per the requirements of the contract documents.

The initial indications of a designer’s failure to meet building code requirements will often come from a contractor’s construction experience, as opposed to design experience. For example, a flashing or exterior finish insulation system (EFIS) detail may be shown completely different from the way the contractor has always seen it in the past. Once an apparent building code violation has been observed, the process may or may not proceed in a straightforward manner, depending upon the owner’s and architect’s responses


Permit plan approval is similar to building code compliance in that it is the designer’s responsibility to incorporate all building code requirements into the documents and satisfy the local building department. The process of applying for and securing the building permit should be little more than the clerical formality of delivering the plans, specifications, and fee to the building department. If schedule delays are experienced because the building department discovers a design error or flaw, that schedule delay typically belongs to the owner and/or the designer. A more common problem is having the permit granted but conditioned on some additional modification to the design. This may not delay the job start, but could result in additional work and costs.

The contractor should not wait until it is moving onto the site to pick up the building permit. It is advisable to file the documents and permit application immediately upon contract award. If a problem is encountered and the permit is likely to be delayed, the contractor should confirm with the responsible building department representative that mobilization and temporary office setup can proceed, pending correction of the design. Before leaving the building department, the contractor might even establish with the building inspector the fastest way to communicate with all interested parties that the changes will need to be incorporated into the design.


The contractor’s access to the site should be clearly identified in the contract. If adequate site access is apparent, the contractor should proceed. Potential change orders usually involve a partial or total restriction of site access. If the contractor can demonstrate that the restrictions are contrary to that which could reasonably have been anticipated at the time of bid, compensation may be justified. To anticipate and avoid such problems, the contractor should review the contract documents looking for potential restrictions to access and for items such as easements, parking, traffic patterns, and businesses at the immediate perimeter of the contract limit lines. If an easement exists, the contractor should request a complete description from the owner of all conditions of the easement. In most cases, site access interferences occur with little or no warning. The first indication might be when job cost reports indicate that job productivity and efficiency have been impacted.


Geotechnical and soil boring data provide the contractor with information regarding subsurface characteristics of the site. Contractors should review and develop an understanding of geotechnical data to gain insight into how such data will affect construction. From these data, the contractor can begin the process of assessing the relative ease or difficulty of working at a site. For example, a high percentage of fine particles and low moisture content suggest that construction vehicle traffic may cause surface problems. Water and fine particles could rise to the surface and make the work areas impassable or difficult to access. Under these circumstances, the contractor may need to construct and maintain a temporary road of gravel or crushed stone throughout the construction period.

Considerations related to soil boring locations include:

  1. Relevance to the construction areas - If the geotechnical engineer provides boring data only around the perimeter of the site, the soil conditions in the middle of the site present only some uncertainty. If the boring locations within the building footprint are asymmetrical, they could fail to disclose the existence of subsurface rock.
  2. Water consistency throughout the site - The contractor may have prepared his bid based on a geotechnical report that used few boring points relative to the size of the site. The contractor should review boring data and soil characteristic information and look for inconsistencies in the depths of the borings, erratic boring locations, and the relationship between boring locations and construction areas. In addition, the contractor should analyze water table information and consider where the table will be in dry and wet seasons. When the contractor encounters undisclosed subsurface conditions that are inconsistent with the geotechnical and boring data, the contractor may have a basis to seek additional compensation.


The locations of pre-existing utilities such as storm and sanitary sewer, telephone, power, and water on a site are normally indicated on the plans. This information is typically made available to, the designer(s) by the respective utility companies. Incorrect information often comes from two sources:

  1. errors in the respective utility companies’ recordation or transmittal of as-built information, and
  2. errors on the plans.

A contractor is free to plan activities, locate temporary facilities, stockpile materials, and sequence the work around or between the utilities as required. However, before any excavation is performed, there is usually some entity to contact to reconfirm the exact locations of the utilities. As a precautionary measure, the contractor should endeavor to confirm that the information is consistent with the information on file with the respective utility and that the information has not changed since the information was originally provided to the designer.

The contractor can assume significant risk if it begins work in the vicinity of a utility without verifying its most current status with the respective authority. If damage is done to the utility under these circumstances, the responsibility may rest with the contractor. On the other hand, if the verification process reveals changed information regarding the utility, adversely affecting the work, this clearly justifies a change order.


The contractor’s estimator will typically make sure that temporary utilities have been accommodated in the bid estimate. Therefore, unless some qualification was included in the original agreement, the absence of temporary power and other utilities at the site will typically be difficult for the owner to accept as a changed condition. The rare cases where extra costs for temporary utilities become justified often go back to changed conditions between the time the project was bid and the time that the work actually begins at the site. If it can be demonstrated that the conditions observed at the time of bid with respect to temporary utilities were materially different from those when work begins, the contractor may be justified in requesting compensation for additional actual costs.



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