There can be times when a Tulsa commercial contractor and other parties involved in a project can have a disagreement. These disagreements can rise to different levels, but the American Institute of Constructors or AIC described claims and disputes in this way:
“…A construction claim is an unresolved request by the contractor for additional time or money as a result of a condition they believe is outside of the contract terms. Some of the most common causes for claims follow:
- slow change order, RFI, and submittal processing
- unresolved construction change pricing
- differing site conditions
- extreme or unusual weather conditions
- productivity loss from excessive change orders or miscoordination from owner/designer
- errors and omissions in contract documents…”
Every Tulsa commercial contractor has seen a discrepancy between plans and specifications or specs, and the AIC gave some possible causes for this as follows:
“…Rushed designs, compressed design budget/schedule, boilerplate specifications, and excessive design changes often lead to design documents that fail to adequately define the work to be performed by the contractor and can lead to claims and disputes. Often, systems and materials are described by both the plans and specifications. This arrangement creates a situation where discrepancies are easy to create. As a rule, when there is a discrepancy between the plans and the specifications, the specifications will govern…”
If the Tulsa commercial contractor and another party have a dispute, the most common way to resolve the it is negotiation and the AIC describes negotiation as:
“… Negotiation is the best option when a dispute arrives. Negotiations involve all of the parties working out a solution among themselves without expensive outside involvement. Successful negotiations include compromises, and the negotiations should be entered into with the understanding that all parties are probably going to have to give up something. The expression “cooler heads prevail” is applicable with negotiations, and all proposed settlements should be weighed against the cost of counsel, court fees, and other legal expenses…”
If a dispute between a Tulsa commercial contractor and another party can not be resolved between the two parties then professional help can be obtained to varying levels, there is mediation, arbitration, and litigation. The AIC defined mediation, arbitration, and litigation below:
“…Mediation is similar to negotiations but includes a neutral third-party mediator who assists with the negotiation. The mediation process is nonbinding, and any party can stop the process at any time. The mediator is often a skilled negotiator and looks for ways for both parties to reach an acceptable settlement. The cost for the mediator can range from a few hundred to a few thousand dollars a day, which is significantly less than arbitration and litigation. Arbitration is a form of dispute resolution that is often included in the contract as a required alternative to litigation. The American Arbitration Association is the most well-recognized certifying body for arbitrators and is often referenced in contracts. Clauses in contracts, agreed to before the dispute occurred, often require arbitration as the means for formal dispute resolution and make their decisions legally binding. Arbitration is widely accepted as a faster and less costly alternative to litigation. The final option to claim disputes is formal litigation through the courts. This is generally considered the last resort because of the high cost of legal and court fees. The opinion of many contractors is that if a claim goes to litigation, it isn’t a matter of winning but of who loses the least. Litigation is formally recorded and may be viewed by clients as a black eye and deter them from giving the contractor future work…”
One of the best ways a Tulsa commercial contractor can defend themselves and their organization from formal disputes is to have good quality control in the implantation of the project. The AIC described quality control as follows:
“… It has been said that there are three legs to any construction project: cost, time, and quality. Quality is perhaps the least tangible but by no means least important. From the contractor’s point of view, quality control is the act of ensuring that the building described in the contract document is built to the specified tests, standards, codes, tolerances, and design intent called for. However, quality doesn’t just happen. Like everything else on a construction project, quality must be planned and managed. This is often referred to as a quality assurance/quality control (QAQC) plan. Each QAQC plan should be tailored to the specific job; however, there are several practices used to ensure the quality that the owner paid for…”
When the Tulsa commercial contractor is unsure of an aspect of the project there are several ways to get clarification on a project. One of the most common ways to gain clarification on a project is an RFI. An RFI is a request for information. The AIC explains RFI’s as follows:
“…Request for information (RFI) formally documents a question or request for clarification by the contractor to the designer. The response does not formally alter the scope, time, or price of the contract and should not be used as a substitute for a change order…”
Sometimes the issue that arises requires a change or deviation from the plans. For a Tulsa commercial contractor to be able to make a deviation from the plan they must communicate with the architect and possibly the owner. Some changes the architect can make with asking the owner depending on the delivery method. The AIC described some ways an architect can make changes below:
“…Minor changes is a term included with AIA contracts that allows architects, without necessarily having approval of the owner or contractor, to authorize small changes in the work. Minor changes may affect cost and schedule, which would ultimately need to be reconciled with a change order… Architect supplemental instruction (ASI) is a document included with AIA contracts and used for minor changes in scope without any changes in schedule or costs… Construction change directive (CCD) is a document issued by the owner/designer directing the contractor to proceed with changes to the work without necessarily agreeing to a price. The advantage of this document is that work can proceed without having to wait for the change order to be formally processed. However, if there are disputes on the price, the contractor has lost much of their negotiating leverage if the work has already been completed. With AIA contracts, construction change directives require agreement by the owner and architect to be valid…”
To avoid a dispute a Tulsa commercial contractor should have a signed change order from the architect and owner, described by the AIC as:
“…Change order is the document that formally changes the cost, duration, or scope of the contract agreement. With AIA contracts, for a change order to be executed the architect, owner, and contractor must agree to the changes…”
For a Tulsa commercial contractor, getting clarification or making changes to project must follow a formal process to eliminate disputes and keep from loosing money on a project.