Best Practices on Construction Projects. January 29, 2008

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Best Practices on Construction

Projects

Best Practices on Construction

Projects

Project Management Procedures

Request for Information

Project Management Procedures

Request for Information

January 29, 2008

Presented by the

Claims Avoidance & Resolution Committee

January 29, 2008

Presented by the

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PROJECT MANAGEMENT

PROCEDURES

Request for Information

(RFIs)

PROJECT MANAGEMENT

PROCEDURES

Request for Information

(RFIs)

Construction Institute

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RFI Best Practices Panel

Claims Avoidance and Resolution Committee

Subcommittee for Project Management Procedures

Stephen A. Hess, PE

Lawrence M. Lenahan, PE

William Scott, PE

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RFI Background

RFI is a communication tool to facilitate resolution of

or to clarify design document issues

Typically contractor submits and designer responds

Clarify a legitimate question concerning the design

documents

Keep the project moving forward and build the job

Can lead to Change Orders

Process will vary from project to project

Effectively coordinate and manage RFIs

Assist documenting the history of the project

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RFI Background (continued)

• Design / Engineering firms becoming more involved with

construction claims (with both Owners and Contractors)

• Reason - design documents are allegedly:

Faulty

Ambiguous

Inadequate

Incomplete

Conflicting, etc…

• Claim submitted for acts or omissions of the Design

Professional – based on RFIs

• Perceived as providing a methodology to document

deficiencies in the contract documents and establish a

basis for additional costs and time

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RFI – When Used as Basis for Claims

(Abuses and Pitfalls)

RFI – When Used as Basis for Claims

(Abuses and Pitfalls)

Submitted for a clearly identifiable item that should have been addressed pre-bid

Submitted significant number to establish support for claim

•

“Design was incomplete / faulty – look at the number of RFIs submitted!”

Submitted numerous and excessive RFIs (at the same time) and overwhelm the designer or

Designer / Owner hinders the process and does not provide a decision or respond

•

“Delays caused by non-responsive or late replies to RFIs”

Insufficient response frustrates the Contractor and does not progress the work

•

“Provide as specified” or “It’s on the drawings”

Use RFI to propose alternative construction methods or substitute items (or-equal)

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Claims Based on RFIs

• Response to RFI will be the basis for the claim

• Extreme position that the first RFI indicates incomplete

design

• Contractor claims for:

Work performed based on response to RFI as a

Change Order

Additional construction costs

Delay damage and off-setting of liquidated damages

• Owner claims for:

Cost for delayed project completion

Increased interest and expenses

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Best Practices

• Develop an RFI protocol/procedure to address:

The items that will and will not be accepted as an RFI

Information which is on the contract documents will not be

addressed in a response

Define the documentation and supporting data required

Time frame for response

Qualify that the response is not a Change Order

Does not address construction means and methods or site

safety

Will not review requests for substitute items as an RFI

• Discuss the procedure at pre-construction meeting or include as

part of the bid documents

• Discuss RFI issues prior to formal submittal

“Confirming RFI” to confirm previous agreement

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Best Practices (continued)

• Proactively develop RFIs prior to construction or work in

an area

• Develop an RFI form and require project participants to

use it. Form should require:

Concise statement of the issue (limit to one issue)

Identify the specific plans or specification in question

• Develop internal procedure for receiving, handling and

responding to RFI in a timely manner

Single source responsibility

Procedure to forward to specialty consultants

Communicate when the RFI will be completed

• Maintain log and track status (monitored by individual in

company, but not involved with the project)

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Best Practices (continued)

• Define the response time

Designer will have at least 3 days…

"The Contracting Officer, acting on behalf of the Owner, will be the initial interpreter of the requirements of the Contract

Documents, and in such capacity, will render determinations on the acceptability of the Work. Notices, proposals or other

matters relating to the acceptability of the Work or the

interpretation of the Contract Documents shall be referred to the Contracting Officer in writing, within twenty (20) days after the Program Manager first recognizes the issue, but in no event more than six (6) months after the occurrence

giving rise to the issue, requesting a formal, written

determination, which the Contracting Officer will render on behalf of the Owner within a reasonable time."

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Best Practices (continued)

• During construction must reply timely and appropriately

• Inform the Owner if an RFI results in a design change,

additional costs or delay and document the reason

• “Dislodge” complex issues from the RFI process

Use subcommittee approach for more complex issues

• “Dislodge” resolved RFIs from the process

RFI response then moves to Change Order or other

Contractual process

• Prioritize RFIs

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Claim Scenario – Legitimate RFI?

RFI submitted for a clearly identifiable item that

should have been addressed pre-bid or is on

the existing contract documents

•

Are the RFI’s legitimate?

•

Check other bidder’s bid documents to demonstrate the contractor missed something that others included

•

Should issue be removed from the RFI process and addressed in another forum?

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Claim Scenario – Design

Incomplete or Faulted

Claim Scenario – Design

Incomplete or Faulted

Submitted significant number to establish support for

a claim that the design was incomplete / faulted

“Look at the number of RFIs we have submitted!”

•

RFI count may or may not indicate an incomplete or late-evolving design

•

Significant increase in RFI submissions late in the project often precedes an oncoming design claim

•

Are the RFIs valid or should be addressed in another forum?

•

Compare RFI with other bidder’s bid documents to demonstrate the contractor missed something that others included

•

When were the RFIs submitted relative to work execution? Or relative to the commencement of delay

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Sample RFI Distribution Chart

Monthly Detail Drawings Issued to Contractor by Designer

D J F M A M J J A S O N D J F M A M J J A S O N D J F Monthly Detail Drawings Total RFIs

- The designer issued drawings containing new scope and some changed scope through the life of the project

- The RFI's, which were usually sub-contractor items, grew steadilly during the project - the rate actually increased at the end of the prime work period

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Claim Scenario – Delayed

Response

Claim Scenario – Delayed

Response

Submitted numerous and excessive RFIs (often at

the same time) to overwhelm the designer and

establish a delay claim caused by late or non-

responsiveness to RFIs

•

Do the RFIs impact critical path activities?

•

Were delays cited contemporaneously?

•

Is there a review time or process specified in the contract?

EJCDC Standard General Conditions of the Construction Contract

AIA General Conditions

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Example Claim Presentation of

RFI Response Time

Example Claim Presentation of

RFI Response Time

RFI RESPONSE TIME

0-2 Days 18% 3-7 Days 15% 8-14 Days 7% More than 14 Days 15% No Response 45% 16 Construction Institute

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Claim Avoidance - Mitigation

Delays caused by incomplete or faulty design

• Know the Project schedule

• Manage the RFI process; do not just accept each as valid

and necessary

RFIs must conform with the intent to clarify contracts

and design documents/specifications.

• Track the receipt and return of RFI submittals – take notice

immediately of dramatic increases in RFI count and/or

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Claim Avoidance - Mitigation

Delays caused by late or lack of response

•

Establish procedures, including the RFI submission format, within the Contract or prior to construction

•

Track receipt and return of all RFIs during the project and act to detect trends

•

Know the schedule and prioritize

Designer understand the importance of response

Contractor pre-planning work and identify conflicts early

•

Do not “sit” on RFIs - accept and address or reject promptly

•

Ensure that RFIs are complete and do not accept RFIs that fail to conform to submission requirements

Clarification of Contract or design documents only

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Litigation / Legal Considerations

• United States v. Spearin, 248 U.S. at 136-37 (1918)

United States Supreme Court: "if the contractor is bound to build according to plans and specifications prepared by the owner, the contractor will not be responsible for the consequences of defects in the plans and specifications." Implied warranty

• Cumulative effect of changes recognized that inefficiency

claim based on disruptive effect of individual compensable

changes:

Jackson Constr. Co., Inc. v. United States, 62 Fed. CI. 84, 103-04 (2004)

(citing J.A. Jones Constr. Co., ENGBCA Nos. 6348, 6386-6391, 2000-2

B.C.A. (CCH) P31,000, at 153, 107, 2000 WL 1014011 (2000);

McMillin Bros. Constr., Inc., EBCA No. 328-10-84,91-1 BCA P 23,351, at

117,102-05, 1990 WL 140900 (1990), aff'd, 949 F.2d 403 (Fed. Cir. 1991);

Bechtel Nat'l, Inc., NASA BCA No. 1186-7, 90-1 BCA P 22,549, at 113,177-78, 1989 WL 160470 (1989)

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Litigation / Legal Considerations

• Duty

The government has a duty not to act in a way that will hinder or delay the contractor's performance (“refrain from willfully or

negligently interfering with a contractor's performance.”).

•

Malone v. United States, 849 F.2d 1441, 1445 (Fed. Cir. 1988), modified, 857 F.2d 787 (1988);

•

SMS Data Prods. Group, Inc. v. United States, 17 Cl. Ct. 1, 6 (1989).

For the government to be found liable for delay a plaintiff must

demonstrate that the government caused the plaintiff a compensable injury. The government, therefore, is not liable for breach of contract, or causes of action that rely upon "severe defects" in contract

drawings, or government hindrance of performance, unless SCBI proves that the alleged defects, changes, or hindrances negatively impacted costs and performance of the contract.

•

Servidone Constr. Corp. v. United States, 931 F.2d 860, 861 (1991);

•

Boyajian v. United States, 191 Ct. Cl. 233, 239-47, 423 F.2d 1231, 1235 (1970).

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Litigation / Legal Considerations

•

SOUTHERN COMFORT BUILDERS, INC., Plaintiff, v. UNITED STATES, Defendant.

No. 00-542C; UNITED STATES COURT OF FEDERAL CLAIMS 67 Fed. Cl. 124; 2005 U.S. Claims LEXIS 225; July 29, 2005

“SCBI alleges that many of the disruptions caused by the government resulted from NASA's failure to respond to plaintiff's RFIs in a timely manner, which addressed interferences or obstructions encountered by SCBI. In the documents provided to the court, SCBI submitted an

RFI log indicating the times within which NASA responded to SCBI's RFIs. Of the RFIs submitted by SCBI, many were answered in about a week's time. Others were responded to more slowly by NASA, including those which resulted in contract change orders.”

Ruled in favor of the Defendant (two contract modifications had to be paid by defendant, all other claims dismissed. Defendant awarded counter claim).

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Litigation / Legal Considerations

•

CADDELL CONSTRUCTION CO., INC., Plaintiff, v. THE UNITED STATES, Defendant.

No. 04-461C; UNITED STATES COURT OF FEDERAL CLAIMS; 78 Fed. Cl. 406; 2007 U.S; Claims LEXIS 285; September 7, 2007

Defective design resulted in plaintiff issuing large number of RFIs and government failed to promptly and fully answer and as a result plaintiff missed steel fabrication “window”.

Defendant contended RFI process was obstructed as Defendant held onto RFIs from subcontractors and submitted in large batches and that Plaintiff did not demonstrate delay caused by allegedly slow response

Ruled in favor of the Defendant based on “contractor’s duty to

coordinate” and that the Defendant answered more than one third of the RFIs in less than 30 days and more than 90% in less than 45

days

•

Third party beneficiary status of contractors, Privity, Economic Loss Doctrine, Accepted Work Doctrine

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

• Clearly define and use the RFI process with the designer

to seek clarification or interpretation of conflicts, errors,

discrepancies or ambiguities in the Contract Documents –

limit to clarification only

• Define and document the response time at the project

(kick-off) pre-construction meeting.

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

•

Define the number of copies required (no oral or incomplete RFIs

•

accepted)

•

Review and response to RFIs shall not constitute approval, direction, or procedures for means and methods.

•

Limit each RFI to a single issue

•

Information discernable from the existing documents, or addressing construction means and methods or site safety will not be addressed

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Designer should designate a specific representative to manage the process

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

• RFI Form should include

Chronological number for the RFI (Tracking Mechanism)

Date issued

Name of person and contractor requesting information

Applicable Specification section and page number

Applicable drawing number and title

Clear statement of the request

Remark for any increase in cost or time

• Designer should review RFI for compliance with protocol

and return any non-complying RFIs

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Sample RFI

Form

Sample RFI

Form

26 Construction Institute

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Sample RFI

Form

(

from Timberline

Software)

Sample RFI

Form

(

from Timberline

Software)

Company Address Company Address

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Sample RFI

Form

Sample RFI

Form

28 Construction Institute

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Sample RFI

From ConstructWare Software

Sample RFI

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

• Upon receipt of RFI, responsible party should

Calculate response due date

Notify Contractor of date received and when

response should be expected

Review for compliance with protocol and

return any non-complying RFIs

Enter RFI into log

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

• RFI log – manual or electronic, should include:

RFI Number

Name of requester and contractor

Date of receipt

Original response due date

Name of RFI reviewer

Date forwarded for review

Date returned to Contractor

Any extension information (date, etc)

Summary of response

Does response necessitate a change, extra or time

extension

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Sample RFI Log

Transit Project

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Sample RFI Log

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Sample RFI Log

From ConstructWare Software

Sample RFI Log

From ConstructWare Software

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Recommended Project Management

Procedure - RFIs

Recommended Project Management

Procedure - RFIs

• Forward response to Contractor and copy

appropriate parties (Owner, CM, Resident

Engineer)

• Contractor can disagree with response and

initiate meeting and resolution in another forum

– RFI is closed

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Recommended Best Practices

• Designer – understand your Contract and the

Contractor’s Contract provisions with the Owner

Use RFIs with owner during design phase

Required response time for RFIs and communicate

expected response time to contractor

Know Contract roles and responsibilities

Understand the Project Schedule

• Does the Contractor’s schedule need to or include shop

drawing review and other A/E related activities?

• Monitor and manage RFIs and utilize an RFI log

Be prompt with response and/or document why not

Don’t let paperwork languish!

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Additional References

• Defending Claims by Owners & Contractors for

Damages Arising from RFIs and Approved and

Unapproved Change Orders

, Seamen, Drew F.

and Waggoner, Thomas F., at The 40

th

_Annual

Meeting of Invited Attorneys, 2002.

• EJCDC Standard General Conditions

• AIA A201 General Conditions

• American Institute of Steel Construction Code of

Standard Practice, Articles 4.4.2 and 4.6

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Benefits of Implementing Procedures

• Facilitates communication

• Streamlines the RFI process

• Maintains progress on the project

• Documents project history

• Helps mitigate and avoids claims

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Best Practices on Construction Projects. January 29, 2008