soils - differing site conditions
DESCRIPTION
Unforeseen conditions contribute substantially to cost growth of construction contracts. Sometimes these conditions are hidden beneath the soil, sometimes in hidden risks in a building being renovated. But they often are costly and someone has to pay the bill. Therein is the conflict. Owners often attempt to shield themselves from these unforeseen costs through disclaimers and exculpatory clauses, and contractors seek to climb out of the financial hole they are buried in as a result of the unanticipated condition. This webinar discusses the risks to both the owner and the contractor when encountering conditions which the former says should have been foreseeable or for which he has no liability under the contract, and the contractor whose position is that these conditions are outside the shadow of foreseeability or the risk shifting clauses in the contract.TRANSCRIPT
Differing Site Conditions
Tom Frisby www.frisbygroup.orgL.L. “Buddy” Humphries www.LTEConline.com
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Soil problems can be devastating to human life, and to the pocket book.
Our Hope: Motivate owners/designers, contractors to prevent and/ or mitigate damages and errors.
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KNOW the right thing to do
Make sure OTHERS knowDO it right,
DOCUMENT that you did!
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Ambiguity
Nature of Soils
Clarity of Contract Going Cheap
Soils Investigation
Means & Methods
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Contract Management
Decision-Making
DocumentationScheduling
Pricing Cost Growth
Delay Acceleration
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In Disasters
In Structural Failures
In Increased Project Cost in Productivity
In Legalisms
In Contract Management
In Claims Management
Levees fail (Ninth Ward, Katrina)
Unreinforced Masonry Walls (Loma Prieta,
Earthquake)
Dam Failures (Buffalo Creek, West Virginia)
Pipeline Failures (Yellowstone River)
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This foundation failed 1000 years ago
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And again 1000 years later…
A grain elevator in Canada
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Condo in China
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This is a 12 story condo building in China lying on the ground. The roof Of the building is the bottom of the photo.
The cause is often a collaboration of Mother Nature, man’s Failure and limitations, and sometimes greed.
And sometimes we just ignore the obvious-The Tsunami Stones
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Cost Growth of Construction Contacts Federal Projects*
*This figure is approximate and project sensitive. The point is across America, a very large percentage of cost growth of construction contracts is due to changed conditions.
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Normal Duration
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Aloha Stadium – Pro Bowl ◦ Multi-Use Stadium Move inferior wings on concrete runways by air
movement system. Did not work due to displacement.
Cost of: ◦ Fix: $86,000◦ Delay & Impact: $3.3 million
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The soil is serious stuff Cannot be taken lightly When there is a soils problem it is often BIG!◦ Affecting the safety of human life◦ Causing extensive financial consequences
And for the most part, we learn from our mistakes-but not always. (Tsunami Stones)
And often soils problems occur at outset of project.◦ If no time extension, increased cost may increase
exponentially. ◦ If time is given, delay cost to owner due to
delayed use of project can also be substantial.
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ASCE’s“American Infrastructure Report, 2009”shows a sorry state of infrastructure and need for repair and new projects.
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Structure Grade CommentBridges C I in 5 deficient/
obsoleteDams D 4000 deficient
Drinking Water D-1 Pipes leak 7 B gallons. 36 states w/water problems
Levees D-1 $100B needed to repair
Energy D+ $115 Trillion by 2030
Roads D-1 1/3 in disrepair
Solid Waste C+ Includes electronic & hazardous
Waste Water D-1 $400 Billion needed
These projects are often “soils” driven Projection over next 5 years is $2.2 trillion
needed. Plus hospitals and other capital projects Even 5% of this projected cost either wasted,
spent of claims or used to correct failures would be enough to perhaps overcome your state’s budget deficit.
Yet, that may very well be what happens, and if we don’t learn from our mistakes… Levees will fail… and…
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The best friend of a project is CERTAINTY
An arch enemy is AMBIGUITY.
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An adequate and thorough site investigation is necessary to provide as much information as possible for: ◦ Design (foundation and structure but other
elements such as masonry walls, ceilings, seismic restraints of hospital equipment)◦ Construction Accurate estimate and defined scope of work. Avoiding critical path delay & disruption
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Scope of soils investigation work should NOT be dictated by
budget but by prudence, nature of site, and nature of the structure.
What to DoBy Owner’s Team1.Recognize importance of adequate site investigation, scope and budget it.2.Legal Requirements◦ Permits Aquarium delayed a year because city did not pursue
environmental permit on a timely basis, resulted in delay and cost of substantial remediation to site.
College library delayed 90 days because owner failed to process design documents through Architectural Board.
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What You Don’t Know Will Hurt You:•Subsurface materials 1000 feet apart from log borings may be substantially different from material at log borings. (Hollywood sewer line Project, a 330 excavator sinking in saturated,silty sands)•Excavation at base of volcanic mountain may encounter rushing water coming down through a volcanic tube (Eisenberg crust; Sewer line, Maui)
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Their reaction may surprise you:•Rock that turns to slurry when exposed to atmosphere and water, metagraywacke (USBR Gilroy Project)•Drilling and blasting coral for a light boat harbor had no effect on the coral. Turns out it was limestone breccia, very porous and the force of the blast simply sprayed water through the interstices in the material (Ta’u, Samoa).
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The soil is Dynamic•The cap of a glacial mountain flies like a Frisbee onto a USBR dam almost completed (Silver Jack, CO) •Concrete piles are either swallowed up or broken due to compressive strength of soils on East Coast (Medical University).In both cases, the failure of the design to recognize the characteristics of the soils was the ultimate cause of the problem. Note: These were NOT changed conditions, but failure of design.
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In each case above, adequate investigation would have revealed the characteristics of the conditions encountered and saved millions of dollars.
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The following are several graphs taken from the COE manual which contains extensive information of prudent geologisticalstudies. These are simply illustrative of the role of the soils investigation report for both design and construction purposes. Important points in the manual are: •An established protocol should be followed. •The investigation should be thorough•It should be tailored to site-specific needs.•Exploratory drilling is essential for all sites. The numbers anddepths of borings required to provide adequate coverage cannot be arbitrarily predetermined but should be sufficient to reasonably define the subsurface to the various site areas.•With creativity to fit the project needs.
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Bottom Line: Penny-wise in pre-bid site investigations can be dollar foolish once the backhoe starts work. Extensive geologic knowledge of site conditions can trump legal disclaimer and exculpatory clauses in assuring successful projects.
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Expansive Clays can experience changes in volume up to 30%.
The soils investigation should always evaluate the propensity of the soils to “shrink/swell”.
The Contractor should review the soils report to understand for himself the propensity of the soils to shrink/swell.Many contractors do not pay attention to the plasticity index and liquid index (Atterberg Limits). Sometimes this is not even in the soils report. Clays with an index above 50 are considered “fat clays” and are expansive. Per ASTM:
0-20 Very Low 21-50 Low51-90 Medium91-130 High>131 Very High
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Contractor Comply with clause in bid documents to do reasonable
pre-bid site investigation (See checklist in DSC Chapter, pp.)
The contractor shall be fully aware of all conditions that mightaffect successful complete of the work. Before submitting his proposal he shall examine the site and compare the actual conditions on site with those shown or represented by the plans and specifications, and shall determine the existence of all physical features, obstructions above or below the ground, ground elevations, etc., on or adjacent to the site, that might affect work. No allowance will be made for the Contractor’s failure to adequately familiarize himself with all conditions and no claim will be permitted for relief due to unforeseen conditions.
Contractor can generally rely on representations in contract documents, including soil reports.
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• Beware of “inferences”Log boring to log boring may vary
• No need to do subsurface investigation but…• Review Relevant Specifications , e.g.
“Rock Clause”Site Protection Means & Methods
• Bound by prior experience• Bound by “reasonably prudent contractor” test• Owner warrants under this clause “contracted documents”,
not other records NIC.
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Use Pre-Bid Site Investigation Checklist (see example on pg 28-33 of the chapter)
Contractor shouldn’t have to be:• A lawyer• Equipped with ESP
to figure out risks under a construction contract.
But he does!And it may help to keep buying those lottery tickets.
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Information only versus Contract Document:Boring logs and results of other subsurface investigations
and tests are available for inspection. Such subsurface information, whether included in the plans, specifications, or otherwise made available to the bidder, was obtained and is intended solely for the owner’s design and estimating purposes. This information has been made available only for the convenience of all bidders. Each bidder is solely responsible for all assumptions, deductions, or conclusions, which he may make from his examination of this information.
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In some states, enforced
In some states, enforced but not strictly.
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• Obtain advice of Excellent, Experienced Construction Attorney BEFORE bidding.
• Under any circumstances do a pre-site investigation as would be done by reasonably prudent contractor
• Use pre-bid investigation checklist (pg 28) as a guide on all projects.
• If the contractor has such a protocol, and routinely follows it, and bases its bid on the information and reasonable inferences based on the protocol, it has certainly enhanced its position if it runs into subsurface conditions that were unexpected.
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• Owners team can and should do a prudent site/ subsurface investigation.
• Risk should be fairly shared.
• But contractor must do pre-bid that investigation dictated by the nature of the site and information available to it. And do the best he can to protect himself.
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Job set up:• Review the soils report• Review the technical specifications to determine
requirements that affect soils activities (For example, the process for compaction testing, de-watering, trench and site protection)
• Review the contractual provisions relating to Differing Site Conditions
• Review the estimate to see what was anticipated
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Job set up:• Conduct a pre-construction conference with the
parties responsible for excavation or components of the substructure (such as piles) and discuss the processes, quality requirements and risks. It is wise to invite the owner’s representative to such meetings as experience shows a collaborative approach has a greater probability of success for all parties than an adversarial one.
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What is Covered:
Subsurface or physical conditions at the site which differ materially from those
indicated in this contract.
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Examples:
Log boring showed “gravelly sand with silt, clay, cobbles” that was “medium dense”. In fact, the material encountered was bedrock. The contractor was required to drill and shoot than machine excavate as planned.
But what if the contractor had previously worked in this area and knew the subsurface conditions were so dense that drilling and shooting was required?
And what if the contract contains an “information only” clause?
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Examples:On a sewer line, the test holes at the
pump stations indicate CH/CL soils with a water table below invert elevation of the structure. The contractor encounters siltysands with flowing water between the pump stations. Is this a Clause I DSC?
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If the owner has material information which is intentionally withheld from the contractor, this may rise to a Clause I claim. For Example:
In the bid documents, the log borings indicate medium dense, gravelly/sandy/siltysoils.
But prior to bid the owner has additional log borings which showed bedrock, these borings were not revealed to the contractor.
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What is Covered: • Unknown physical conditions • At the site• Unusual nature• Differ materially from those• Ordinarily encountered and generally recognized as
inherent in the work of character provided for in this condition
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Examples:• What appeared to be rock transformed to a slurry
when exposed to water and atmosphere (metagraywacke)
• But on the site of an old navy shipyard during excavation, batteries and petroleum waste were discovered. Would this be unforeseeable?
• But what if the contractor had made no pre-bid site investigation?
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Design Issue or Changed ConditionPiles which broke and/or misaligned
during pile-driving in coastal region; were thin pre-cast concrete piles the wrong design or was this a differing site condition?
Means and MethodsIf soils report states: “lay RCP’s in the dry”
and it is impossible because of flow of water, is this a true changed condition or a SpearinDoctrine Warranty?
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Subsurface ConditionsThe Contractor examines the site, bids on
the basis that this is a “balanced site” and no imported borrow will be required. In fact, there is a deficit of on site material and the contractor incurs great expense in hauling in material offsite.
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Subsurface ConditionsThe material on site was as represented in
the soils report. It turns out the problem was an error in the elevations shown on the site plan?
• Under the AIA, changed condition clause, is this covered?
• Should a noticeable elevation error have been discovered in pre-bid?
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Give immediate written notice to the owner or its representative. Under both of these clauses, the contractor is not to disturb the site, except for emergency purposes. Under AIA, the contractor must only give written notice within 21 days after first observance of the condition.
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Obviously, best practice under either clause is for the
contractor to:
Stop
Give immediate written notice to the owner or its
representative
Do immediate investigation of indications in the soil report in
comparison with the conditions now encountered.
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Document
Photographs including videos
Daily Reports
Notify scheduler so schedule can be updated
Establish a separate labor and equipment cost code
Be prepared to call in an expert in the field in the event the owner and/or its
representative does not agree that this is a changed condition
Note under AIA that if the owner or its representative denies the claim that this
is a changed condition, the contractor must submit its claim in response
thereto within 21 days after the adverse determination.
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If the contractor fails to give written notification pursuant to the changed condition clause as required, all hope may not be lost IF the owner’s representative is on site, observes the condition about which the contractor complains and has reason to believe that the contractor intends to submit a claim for additional compensation. HOWEVER, this should be the last resort. BEST PRACTICE: abide by the contract, provide written notice as specified by your contract.
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Fictitious company; real circumstance Lump sum bid A linear project in a suburban area Installing RBC (reinforced box culvert) Critical path is the RBC activity
◦ there were associated structures◦ and lateral utilities
CPM schedule was used to coordinate◦ road closures◦ utility shut down & lateral lines◦ fire department access
Boring locations are indicated
B-23 Borings 1 thru 22
showed similar RBC (12x10) Invert ~16’ deep Next to last boring log
indicated “cementitious” material only in the lower 2’; last boring log indicated nothing
Typical CPM for this type of project Concerned with timely completion AND disruptions Used to coordinate closures and shutdowns
Progress can be shown on a RPM (Repetitive Production Method) schedule◦ a type linear
schedule◦ for some it is a
preferable scheduling technique
Progress was good until first week of February
Projected to finish first week of March
Progress slowed significantly 1st wk Feb
52+00, “cementatious”material increased
Contractor verbally complained
Contractor suggested forward “potholing”
Field rep agreed; suggested location
Contractor suggested “drill & shoot”
Directed by owner to use drop ball (no blasting)
Most important – Notice
Maybe seem obvious but too many claims lack a clear notice◦ Purpose is so owner can mitigate their damages; lack of notice may compromise this right◦ Don’t rely on “constructive notice”◦ Run with the facts you have; “timely” notice is most important
KISC – keep it simple and clear◦ Professional; minimal emotion; “just the facts, ma’am”; no mealy mouth◦ Suggestions
1st paragraph single sentence problem statement “Beginning April 22, we encountered. . . “ be as clear as possible on start date single sentence notice “This is to notify you that . . . “
2nd (and following) paragraphs – details, supporting data Final paragraph – conclude with expectations “Given the situation described above, we
have stopped work in the specified area and need your directive prior to proceeding . . . “ Use adjectives/adverbs carefully (huge, terrible vs substantial, significant)
Realistic time constraints (need for response) (May) offer suggestions but be clear about limits
◦ No guarantees◦ Don’t even imply you are assuming someone else’s responsibility (contractual or design)◦ May be offered in separate letter (if preferred) so notice letter is concise
Few people take offense at clear, professional statement of fact◦ If they dispute what is conveyed that is OK; at least everyones position is clearly stated so it can be
resolved
Clearly indicate which is the contract schedule and which is conceptual Consider using a fragnet (rather than the whole schedule run) during concept Be sure as-built dates have been updated Split CPM activities as needed Include Notice(s) as an activity Include Owner directive(s) as an activity Duration should be based on◦ Apportionment of original◦ Real calculation (number of units, craftloading, production rate) be sure to have a basis of your impact if you just pull it out of the “air” make it known (no other choice) Describe as an allowance if such is the case
Show concurrency of activities where appropriate using SS and FF constraints with lead/lag rather than FS
Keep an eye on the Total Float of impacted activities in addition to the project (or subcontractor) end date.
Consider alternatives (what if Plan “A” doesn’t work as expected)
Excavation only is shown in example (several variations for RBC installation) Excavation activity split into four segments◦ allows for out of sequence work◦ note BID vs ALLOWANCE descriptions
STAGING activity indicates response time to directive◦ owner can either pay to be on standby or pay to respond◦ give them the choice (timing of directive is out of contractor control)
Add activity for 2nd owner directive – what to do about dense material
Be vigilant; track progress◦ Your work will
likely be scrutinized at some future date
Give progress reports◦ too many assume
no news is good news
◦ other side may think doesn’t matter we are on their “dime”
2nd notice if needed It’s not matter of
being “chicken little”; it is about giving the owner data to make informed decisions
Pricing Based on the best information we have at this point ◦ change pricing is like fishing while river rafting not ice fishing need to catch your fish and get back to the job at hand, holding on and
helping guide the raft to the end not like the warm little ice house with comforts of home and plenty of time
Attempt to quantity all ◦ some cases accurate ◦ other cases indicate as an allowance show expected minimum anticipated max
◦ assist owner with budget info to assist with decision (offered as a convenience) reserve rights to revise don't wait for subs - use allowances if needed both sides need to earn credibility Be clear what is covered
Be clear what is covered ◦ basis for change proposal what (change condition and what is covered) when (refer to notice letter) where (between sta 14+50 and 15+20) who assumes which risk
◦ It’s an estimate reasonable breakdown provide place for comments
may need to explain decision/logic about equipment demob an estimator makes "assumptions" so state your assumption offer alternatives clarify fixed vs allowance vs budget
price good until date (have real reason; explain the potential impacts) backup (sub/vendor quotes; estimating standard (RS Means); impact fragnet) optional: offer alternative (but do not take on design responsibility)
◦ purpose of pricing conceptual to assist everyone to grasp magnitude of situation budget estimate to assist with how to proceed (consider T&M) difference between "estimates" and "audits" – estimators vs bean counters too many time the CO process is delayed by late, incomplete or unreasonable
proposals – be ready to defend your estimate
◦ direct work/materials/equipment (the easy one!) ◦ other considerations is rework needed modification to current planned work
too often field gets caught between the current contract drawings and the changed situation
do not put field in a "holding pattern" management has to give crystal clear directive to the field
is work INflow or OUT OF flow can change just be added to present work load or does the change require special attention spreading supervision and resources going to a separate work area
additional resource considerations manpower (overtime; new crew, learning curve) supervision materials (especially long lead items); storage cost equipment / tools (if more manpower likely more equipment)
special general conditions items is it beyond what is covered by standard percentage GC markup examples: extra geotech services, extra excavation security
is there a potential to impact the production rate comprised of both cost (or time) and production unit (units in place) excavation production rate = BCY per EqpHr mixed crews may use $ instead of manhours
establish a separate cost code if needed the downside is it complicates standard project cost review; can also be handled
making note on daily report or schedule about exact start and end date of change work
need EV (earned value) or some way to record production units is there a potential overall schedule impact
identify all impacted schedule activities base impact on when all resources are available to perform the work long lead equipment/material
is work pushed into later period labor/material cost escalation weather conditions extended general conditions cost extended home office overhead is float absorbed with this change thereby taking away a future "safety net"
◦ impact on unchanged work congested workspace; interference with other crews; crew movement demob/remob
October (8 months) to complete the work after discovery
Like most claims there was plenty of blame to go around; but you can’t deposit “blame”in your bank account
Contractor may have made out worse other than a “smoking gun” was found◦ three additional borings
were done between bid time / NTP in the problem area
◦ not given to contractor◦ contractor proceeded as
planned because you don’t know what you don’t know
◦ Inevitable was put off◦ incorporating as a
change earlier would have been cheaper
Notice, notice, notice Keep good records (easier said than done until one gets in the habit)◦ remember if you can’t prove it; it didn’t happen◦ reconcile T&M tickets daily if possible (no less than weekly)◦ leave the ego and emotions out of it (the best ego boost is a successful project)◦ use and maintain an RPM schedule on linear projects:
it is a contemporaneous record allows everyone to see the progress and production rate alerts everyone to a problem provides a “measured mile”
Leave the performance guarantees to others◦ Hard to believe it took 8 months to complete the work
It’s usually cheaper to bite the bullet on the front end than the back end Just the facts, ma’am◦ neither overly optimistic nor pessimistic◦ be open with the facts (depending on your company policy)◦ being professional and honest is just good business
Owner Evaluation Checklist1. Immediate: When notified of a potential site or soils issue,
immediately cause the condition to be investigated by member(s) of the design team and/or a soils consultant if the circumstances warrant. The operative word is immediate for every reasonable effort should be made to maintain momentum of the project, to avoid delays, and at the same time, work together as a team to develop proper and prudent and timely decisions.
A. Document the investigation, include picturesIn addition to the formal notification letter get anecdotal input/information from contractor
B. Review pre-bid investigation documents and applicable specifications
1) Review contractor submittals relating to excavation (shoring, de-watering, mechanical versus blasting, etc.)
2) This provides a baseline for comparing the characteristicsof the soils set forth in the contract documents, and the means and methods (and quality requirements) with actual conditions.
3) Review contract (and if applicable subcontract terms)4) See if there are any unit price alternates attached to the
bid that may be of help when determining a cost effective plan
C. Call in geotechnical consultant
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Owner Evaluation Checklist
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The Reason for First Step
Fact Finding To Understand The Issue
2. Action Plan: A collaborative plan should be established:A. Determine immediate steps which need to be taken regarding to such issues as
safety, site protection. From the previous contract review, this aspect may or may not be the responsibility of the contractor.
B. Determine options for remedying the situation. There is usually a trade off between direct cost and how long it will take. Determine optimal remedy considering both physical results and cost (both direct cost and time sensitive project cost).
C. Determine what needs to be done-plus possible alternatives to deal with the problem (irrespective of who is responsible at this juncture) seek non-binding “conceptual”budget numbers from the contractor for various alternatives.
D. Consider trade-off options Is a difference pipe invert alignment feasible? Is a change in horizontal alignment feasible? If it is a linear project can other concurrent activities be accommodated by adding equipment or relatively minor deisgn
change (e.g. add a manhole to enable another excavator to proceed on the other side of the problem area).
E. Evaluate avenues for mitigating the damages and impact to the schedule.Overtime, if in the summer (long daylight) run two shifts, arrange for more
concurrency of schedule activities F. Team approach is highly recommended; involve Government agencies as necessary as
well seriously listen to all input. Aside from gaining more information we humans tend to “buy-into” a solution that we have participated in..
G. The owner has an obligation to give direction to the contractor. This can be done without respect to liability. It may involve a scope of work change or simply for the contractor to comply with the contract. But the owner should not just sit on his hands.
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The goal of this step: Develop a coordinated and objective, prudent game plan for going forward with
momentum and minimum disruption to the project.
3. Contract Management PlanA. Issue and RFP to the Contractor if it is determined that this is a DSC. (See
foregoing to determine if this is a differing site condition and the following Owner Defenses in making this determination)
1) To prevent delay, a Construction Change Direction can be issued.
2) Neither contractor nor owner should step over a dollar to pickup a dime. The important thing is to arrive at an agreement and memorize that agreement with a change order to get the project moving forward again. Hopefully,
a) The contractor will appreciate the owner not squeezing to tight and,
b) the owner will appreciate the contractor not attempting to get rich off the situation.
B. The contractor should be requested to update the schedule (whichever party is responsible).
1) If this is a justified changed condition, a reasonable time extension should be granted, or perhaps a proposal from the contractor for accelerating the project to meet the original schedule.
2) The contractor should be forewarned that any labor and equipment impact claim must be based on field documents
3) The owner should have a system of oversight of the operationsby the contractor to enable it to have adequate documentation to evaluate a claim.
4) How the time impact should be explicitly addressed in the change order.
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