Scope of Work <\/span><\/b>\u2013<\/span><\/b> Impacts<\/span><\/b><\/p>\n This McLaughlin and McLaughlin (M&M)<\/a> Project Professionals<\/b> post is the eighth in a Subject Series\u00a0Construction Claims and Disputes<\/b>.<\/a><\/p>\n Recent posts (Parts 6, 7) address scope of work<\/span><\/b> within the overall subject of Construction Claims and Disputes<\/b>.\u00a0 Claims and disputes regarding scope of work are a widespread problem and represent the most common issue.\u00a0 Perhaps 75 to 90% of all engineering and construction claims and disputes involve contract scope of work<\/span><\/b>.\u00a0 However, this is not confined to engineering and construction.<\/p>\n Direct compensation for a scope of work change may merely be the proverbial \u201ctip of the iceberg.\u201d\u00a0 What about the rest of the story?\u00a0 Is the contractor missing many other costs or schedule impacts?\u00a0 Often, this is the case.\u00a0 This issue may be broader that an added piece of equipment, redesign to avoid a conflict or similar events.<\/p>\n Scope of work disputes are building blocks to other claim elements in the dispute.<\/p>\n The majority of the discussion will address entitlement to recovery (rather than pricing or quantum).\u00a0 For pricing (or quantum), please see McLaughlin & McLaughlin<\/b>\u2019<\/b>s<\/b><\/a> Project Professionals<\/b> Construction Claims and Disputes Part 4<\/a>\u00a0 and Part 5<\/a>.\u00a0<\/p>\n Delay<\/span><\/b> \u2013 Changes to the contract scope of work can influence (or impact) the overall project critical path and, hence, result in forecasted delays to the planned schedule performance.<\/p>\n In Construction Delay Claims<\/span><\/i>, Bramble and Callahan<\/a> characterize delay as follows\u201d<\/p>\n In construction claims, the term \u201cdelay\u201d is used to mean two different but related matters.\u00a0 Delay is often used to mean the time period during which some part of the construction project has been extended beyond what was originally planned due to unanticipated circumstances.\u00a0 Extension beyond what was initially planned may also be called prolongation.<\/p>\n Delay can also be the incident that affects the performance of a particular activity, with or without affecting project completion.\u00a0 This concept of \u201cpostponement\u201d occurs when the planned start of an activity or project is delayed.<\/p><\/blockquote>\n Bramble continues:<\/p>\n The effect of variations or changes on the remaining or unchanged work may entitle the contractor to a time extension.\u00a0 It is difficult to make this determination, because the effect of the variations may not be readily apparent.\u00a0 In some situations, the owner may grant a time extension to deal with the time associated with the change order work.\u00a0 If a time extension is given by the owner relating to changes in the work, there may be a rebuttable presumption that the time extension is compensable.<\/p>\n <\/p><\/blockquote>\n In fact, use of Time Impact Analysis or other forms of critical path analyses are proscribed in some scheduling specifications. \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 In Construction Scheduling: Preparation, Liability, and Claims<\/a><\/span><\/i>, Wickwire et.al. address this technique and provide examples of several noteworthy scheduling specifications.<\/p>\n Remember to include Extension of Time and Damage for Delay<\/b> (delay damages) if the schedule analysis supports this entitlement.<\/p>\n <\/p>\n Progress<\/span><\/b> \u2013 Progress of the work or scope can be measured and reported in terms of Earned Value. \u00a0In \u00a0Practice Standard for Earned Value Management<\/span><\/i> [link]<\/a>, Project Management Institute (PMI) defines as follows:<\/p>\n Earned Value (EV).<\/b>\u00a0 The measure of the work performed, expressed in terms of the budget authorized for that work.\u00a0 Earned value can be reported for cumulative to date or for a specific reporting period.<\/p><\/blockquote>\n This PMI standard discusses scope change analysis and the adjustments that may be needed to the Performance Measurement Baseline (PMB).\u00a0 Referred to as \u201cRebaselining,\u201d it takes two forms: replanning and reprogramming.\u00a0 The results of these project controls efforts may reveal conditions that have or will lead to cost and schedule variances.\u00a0 Therefore, these can be considered as impacts resulting from scope change.\u00a0 Entitlement to additional compensation may be appropriate.<\/p>\n Disruption \/ Productivity<\/span><\/b> \u2013 The impact of changed work or variations on the field labor productivity has been widely studied and analyzed.\u00a0 Please see McLaughlin & McLaughlin<\/b>\u2019<\/b>s<\/b><\/a> Project Professionals<\/b> Subject Series \u2013 Productivity<\/a> (18 posts) for extensive coverage.<\/p>\n In Calculating Lost Labor Productivity in Construction Claims<\/span><\/i><\/a>, Schwartzkopf devotes a chapter to \u201cThe Effect of Change Orders on Productivity.\u201d\u00a0 In this discussion, he cites a threshold of approximately 10% Change Orders (man-hours) as the onset of impacts of loss of productivity due to these accumulated change orders.\u00a0 Further, in Impact of Change<\/i>\u2019<\/i>s Timing on Labor Productivity<\/i>, Ibbs<\/a> (a very prominent authority on the subject of labor productivity) relates the impact of changed work and the timing (earlier or later in the project execution period) and impact.<\/p>\n Overheads<\/span><\/b> \u2013 Normally, this term refers to Jobsite and Home Office compensation that may be calculated using allocations or percentages (of direct costs).<\/p>\n In Calculating Construction Damages<\/span><\/i><\/a>, Schwartzkopf and McNamara devote individual chapters to Jobsite Overhead, Home Office Overhead and Profit.\u00a0 In Construction Damages and Remedies<\/span><\/i><\/a> , the American Bar Association (ABA) editor Douglas S. Oles devotes sections in Chapter 2 Elements of Damages<\/i> to:<\/p>\n The lesson here is that these categories of potential compensation can be complex and robust.\u00a0 It is worthwhile to evaluate these areas when larger change orders are being priced.\u00a0 Use of a simple percentage my result in missing legitimate and significant compensation.<\/p>\n Terms and Conditions<\/span><\/b> \u2013 Warranty and guaranty requirements\u2026\u00a0 Bonding and insurance\u2026 Liquidated damages\u2026\u00a0 Permits\u2026\u00a0 Risk\u2026 all have potential cost and time impacts when changed work is present.<\/p>\n Profit \/ Fee<\/span><\/b> \u2013 Assuming that the contractor is intent on making a profit on the work, suitable profit or fee (profit plus non-reimbursable expenses) should be included.\u00a0 This may be stipulated in the contract or from normal and customary levels for the industry and location in question.<\/p>\n Has the contractor been paid or otherwise compensated for these impacts created by changes (additions) to the scope of work?\u00a0 This point is important when pricing changed work (see McLaughlin &<\/b> McLaughlin<\/b>\u2019<\/b>s<\/b><\/a> Project Professionals<\/b> posts on pricing changes \u2013 Parts 4 and 5 to this series [link]).<\/p>\n We wish you good luck in your construction claims and disputes<\/b> regarding scope of work<\/span> <\/strong>and the related impacts to time, progress, disruption, overheads and other claim elements.<\/p>\n <\/p>\n It is important to note that McLaughlin and McLaughlin [M&M<\/b>]<\/a> is not a law firm and is not intending to provide legal advice.\u00a0 M&M<\/b><\/a> is a consulting firm providing (among other services) non-legal expertise in construction claims, dispute resolution and litigation support.\u00a0 The Resource Center is for the convenience of blog visitors and M&M<\/b><\/a> does not offer this for commercial purposes.\u00a0 For further information on M&M<\/b> <\/a>services, please see<\/i> <\/i>www.McLaughlinandMcLaughlin.com<\/i><\/b><\/a>.<\/i><\/p>\n <\/p>\n Scope of Work \u2013 Impacts This McLaughlin and McLaughlin (M&M) Project Professionals post is the eighth in a Subject Series\u00a0Construction Claims and Disputes. Recent posts (Parts 6, 7) address scope of work within the overall subject of Construction Claims and Disputes.\u00a0 Claims and disputes regarding scope of work are a widespread problem and represent the […]<\/p>\n","protected":false},"author":2,"featured_media":1712,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_s2mail":"yes"},"categories":[9,49,16,3,57,8],"tags":[6,208,230,218,219,228,232,38,39,247,239,127,126,238,237,246,181],"jetpack_featured_media_url":"http:\/\/projectprofessionals.org\/wp-content\/uploads\/2014\/01\/th-1.jpg","_links":{"self":[{"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/posts\/1711"}],"collection":[{"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/comments?post=1711"}],"version-history":[{"count":6,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/posts\/1711\/revisions"}],"predecessor-version":[{"id":1718,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/posts\/1711\/revisions\/1718"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/media\/1712"}],"wp:attachment":[{"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/media?parent=1711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/categories?post=1711"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/projectprofessionals.org\/wp-json\/wp\/v2\/tags?post=1711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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