DISPUTE RESOLUTION
Problems arising during construction projects should not automatically develop into claims and disputes. Methods are available to help the project team avoid solvable problems becoming formal dispute resolution processes. These methods allow the participants, indeed with the aid of their attorneys, to maximize the opportunities to solve problems efficiently from the first days of the project, to build on those solutions to establish problem-solving as the norm for the project, and to focus more of their efforts on the achievement of a successful project rather than successful arbitration or litigation.
Claims Management
Resolving construction disputes is challenging. From mediation to arbitration and litigation support, Vertex can provide guidance in navigating the technical challenges throughout the dispute resolution process to provide your case the support it requires.
Our claims group comprises foremost experts in analysing complex claims and disputes that originate on construction and engineering projects.
When construction disputes or delays occur, stakes are high. Retaining competent construction experts to resolve those disputes significantly improves your outcome.
Our experts have a wealth of experience in identifying, analysing, preparing, and presenting claims and disputes on construction and engineering projects. Our hands-on experience has consistently proven invaluable to clients requiring expert advice or after-the-fact analyses of disputes and claims. Our claims service include claims management, claims analysis and alternate dispute resolution.
Schedule Delay & Disruptions
Meaning that the contractor cannot complete the works on time A claim for an extension of time (EOT) is usually at the forefront of a contractor’s mind and this is because an EOT relieves a contractor from liability for damages due to a delay, such as delay-related liquidated damages.
The concept of disruption refers to when disturbances, hindrances or interruptions to a contractor’s normal working methods result in a contractor experiencing lower productivity or inefficiency in the execution of particular project activities.
Vertex construction delay and disruption experts can provide the technical expertise your project or case requires.
Damage Assessment & Quantification
Construction projects often experience delays, changed work, productivity loss, acceleration, or construction defects which can lead to additional incurred cost. When a party incurs cost overruns due to another party’s actions and/or inactions, the cost incurred can be considered a damage. As a result, construction damages generally refer to a sum of money claimed or awarded as compensation for the increased costs resulting from another party’s acts or omissions.
Vertex experts can help simplify the process of understanding and recovering damages. Our experts diligently quantify, evaluate, and present damages associated with construction claims and cost overruns—a complex process since damages are often intertwined between various aspects of the project, such as cost estimating, scheduling, and project management. Working methodically through each issue, Spire’s construction damages experts identify liability, validate claims, quantify damages, and assist with resolving disputes. Typically, Spire’s experts evaluate the following types of damages:
- Actual damages
- Indirect and direct work
- Changed work
- Outstanding contract balance
- Cost to repair and correct defective work
- Increased cost to complete work
- Consequential damages
- Extended and/or increased general conditions
- Home office overhead
- Liquidated damages
- Increased labor costs
- Increased material costs
- Idle equipment
- Cost escalation
- Labor productivity loss
Conducting a detailed damages analysis involves a review of contemporaneous documents to understand the issues. Spire’s damages experts analyze all relevant documentation, such as contracts, bid estimates, change orders, payment applications, job cost reports, vendor/subcontractor invoices, progress tracking sheets, and correspondence. Spire generally applies the following steps when evaluating construction damages:
Entitlement Review – Identifying what damages can be claimed based on contracts, laws, regulations, and/or industry practice.
Variance analysis – Quantifying the difference between earned value (budgeted cost of work performed) and actual cost of work performed. A negative cost variance typically indicates that an activity or scope of work is over budget or has experienced a cost overrun.
Causation Analysis – Establishing the facts and timeline to determine exactly what occurred, when, and with what outcomes or impacts. A causation analysis typically determines the cause and effect for which the contractor or owner claims entitlement to compensation.
Damages Calculation – Quantifying damages using standard industry means and methods, such as discrete analysis of events and pricing, industry studies, measured mile analysis, and modified total cost.
Construction Defects
Generally, construction defects refer to a deficiency in the construction process – be that in design, materials, or workmanship – which leads to a failure in some aspect of the structure being built, and that causes damage to a person or property (financial or otherwise).
- DESIGN DEFECTS
These defects result from a design professional’s failure to produce accurate and well-organized construction documents. Design defects occur by error or omission. Errors usually require some sort of redesign and replacement of a component part, while omission can be remedied by adding to a contractor’s scope of work through change orders.
MATERIAL DEFECTS
Defects that arise due to damaged or inadequate building material are called “material defects”. When these defects come from the manufacturer, the parties using these materials usually won’t become aware of the defect until after they’ve already been incorporated into the project. This makes material defects particularly expensive because they may require additional labor and new materials.
WORKMANSHIP DEFECTS
When people think of construction defects, typically, workmanship defects are what come to mind. These defects occur when a contractor fails to build a structure or component part in accordance with the construction documents. Workmanship defects can range from simple aesthetic issues to structural integrity problems. Allocating liability and determining how (and even who) failed to abide by the property standard of care can be extremely complex.
