Claims for additional cost. Proceed to work or not?

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    Mitul Patel (Edited )

    Francis,

    From my understanding, construction change directive is issued by architect when the owner and contractor do not agree on something... 99.999% of the time its price.  The con. change directive tell contractor to continue the Work as directed while the owner, arch, and contractor hash out the price to avoid delays in the schedule. This could be done while or after the work is performed.  And usually G.C. will do as con. change directive says, because if the owner thinks the price of change in scope of work is less then what it really is, by the end of the work, G.C. has hard numbers to back him/her up.

    If there is change in scope of Work, and everyone agrees on everything (price and time), its a change order.

    If there is change in scope of Work, and owner and contractor cannot agree on price, its architect issues change directive.

    if there is change in scope of Work, and owner and contractor cannot agree on price, the architect issues change directive, and the contractor thinks its too much of a risk to proceed without having the owner signing off on the price, then he/she can relay on 15.1.4 to stop the work.  typically the G.C. would not do this, because this leads into getting lawyers involved and messes up the schedule.

     

     

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    Francis Pham

    Thanks for replying Mitulkumar. So your point is that in this scenario , the gc would use 15.1.4 to stop the work after notice has been given and until owner signs off on the additional contract sum. That’s interesting, I wonder if gc is allowed to use this clause in order to actually stop work, because all other provisions say gc must continue.

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    Yu Jen Su

    i dont think GC can just "stop work" because there's a change in contract sum or time. they still owe the base contract. When a con. change directive is issued, the contractor does the work, comes back with a hard cost. That cost is usually high, and owners may not want to pay that. But it was a con. change directive because both architect & owner deemed the work as necessary. 

    worst case scenario is Architect tries to resolve this dispute in cost as IDM. And if he can't, the claims goes into mediation. And if that still doesn't work, arbitration or litigtation.

    But GC don't just stop work because of a disagreement in change in contract sum or time.

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    Francis Pham

    Hi Yu,

    So regardless of 15.1.4 in this scenario, gc is to continue to work?

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    Yu Jen Su

    Yes, and to include directive change into scope whether he/she agrees or not. Contractor can only stop work if he/she isn’t paid or aesbestos is found. All written claims can be resolved without having to stop work.

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    Francis Pham

    Thanks for the input You

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