Best Practices on Construction Projects

Providing Open Project Communication Strategies for RFIs January 16, 2009
Presented by the Claims Avoidance & Resolution Committee

Best Practices Panel

Claims Avoidance and Resolution Committee Subcommittee for Project Management Procedures  Stephen A. Hess, PE  Lawrence M. Lenahan, PE  William Scott, PE  John Ciccarelli, PE, CCE, PSP

Construction Institute Claims Avoidance and Resolution Committee

Communications Plan

Partnering Regular Meetings and Agendas Project Document Management and Control Document Policies Decision Matrix Strategies for RFI

Construction Institute Claims Avoidance and Resolution Committee

Project Document Management and Control

Submittal logs Change order logs Correspondence logs Email RFI log Project management software Conformed documents

Construction Institute Claims Avoidance and Resolution Committee

Documentation

Verbal directions Field directives Daily reports Record photos Retention policy Litigation hold Privacy of confidential information (i.e. SS #)

Construction Institute Claims Avoidance and Resolution Committee

Decision Matrix

Define Authority Levels Establish relationships Define communication routes

Construction Institute Claims Avoidance and Resolution Committee

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
Construction Institute Claims Avoidance and Resolution Committee 7

RFI Background (continued)

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

Construction Institute Claims Avoidance and Resolution Committee

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  Submitted numerous and excessive RFIs (at the same time) and overwhelm the designer  Designer / Owner hinders the process and does not provide a decision or respond  Insufficient response frustrates the Contractor and does not progress the work  Use RFI to propose alternative construction methods or substitute items (or-equal)
Construction Institute Claims Avoidance and Resolution Committee 9

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
Construction Institute Claims Avoidance and Resolution Committee 10

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
Construction Institute Claims Avoidance and Resolution Committee 11

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)
Construction Institute Claims Avoidance and Resolution Committee 12

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  Need response in: days, weeks, or months
Construction Institute Claims Avoidance and Resolution Committee

13

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 response time
Construction Institute Claims Avoidance and Resolution Committee

14

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

Construction Institute Claims Avoidance and Resolution Committee

15

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. Sample Contract language:

Construction Institute Claims Avoidance and Resolution Committee

16

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 Designer should designate a specific representative to manage the process
Construction Institute Claims Avoidance and Resolution Committee 17

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
Construction Institute Claims Avoidance and Resolution Committee

18

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

Construction Institute Claims Avoidance and Resolution Committee

19

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  Other (trade or discipline involved,)
         
Construction Institute Claims Avoidance and Resolution Committee 20

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

Construction Institute Claims Avoidance and Resolution Committee

21

Recommended Best Practices

Designer understand your Contract and the
Contractors 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 Contractors 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  Dont let paperwork languish!
Construction Institute Claims Avoidance and Resolution Committee 22

Benefits of Implementing Procedures

Facilitates communication Streamlines the RFI process Maintains progress on the project Documents project history Helps mitigate and avoids claims

Construction Institute Claims Avoidance and Resolution Committee

23

Questions?

Construction Institute Claims Avoidance and Resolution Committee

24

Sample RFI Form

Construction Institute Claims Avoidance and Resolution Committee

25

Company Address

Sample RFI Form

(from Timberline Software)

Company Address

Construction Institute Claims Avoidance and Resolution Committee

26

Sample RFI Form

Construction Institute Claims Avoidance and Resolution Committee

27

Sample RFI From ConstructWare Software

Construction Institute Claims Avoidance and Resolution Committee

28

Sample RFI Log

Construction Institute Claims Avoidance and Resolution Committee

29

Sample RFI Log From ConstructWare Software

Construction Institute Claims Avoidance and Resolution Committee

30

Sample RFI Log

Transit Project

Transit Project

Construction Institute Claims Avoidance and Resolution Committee

31

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 113,17778, 1989 WL 160470 (1989)

32

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).

33

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).
34

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 contractors 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

35

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 40th 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

Construction Institute Claims Avoidance and Resolution Committee

36