Page 232 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
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17.6 Claims from the contractor
The term ‘claims’ is loosely used and has several meanings, which can cause
confusion unless the context within which the word is used makes the meaning
clear. In ordinary parlance the word is used to mean ‘claims for more money by
a contractor which may or may not be payable’, that is, for matters other than
those for which payment is specified in the contract. However, most contracts
formally recognize and define some types of ‘claim’ a contractor can submit.
Clause 53 of the ICE conditions sets out the procedure to be followed by the
contractor if he wants to claim (a) a higher rate or price than the engineer has
set under a variation order or in relation to some altered quantity under a bill
item; or (b) additional payment he considers he is entitled to under any other
provision of the contract. Under (a) the contractor must give notice of his
intention to make a claim within 28 days of being notified of the engineer’s
fixing of a price. Under (b) the contractor must give notice ‘as soon as may be
reasonable and in any event within 28 days after the happening of the events
giving rise to the claim’. The provisions with respect to (b) primarily relate to
claims for encountering ‘unforeseen conditions’ or claims for delay. Both these
are complex matters, which are dealt with separately in Sections 17.8–17.10.
Claims that arise concerning a rate or price set by the engineer for some
varied work or excess quantity measured are often uncomplicated. Sometimes
the facts need unravelling, such as – what activities is the rate to include; why do
records of time or quantity spent on the operation differ between contractor and
resident engineer? These matters have to be gone into in detail. The contractor
may contend that the rate should allow for standing time, ‘disruption’ and
‘uneconomic working’. There is truth in a contractor’s claim that any rate set
should allow for these matters. ‘Uneconomic working’ depends on the nature
and quantity of extra work ordered. To order something additional to a con-
tractor’s current work can put him to considerable re-organization. For instance
to order tie-backs to sheet steel piles after they have been driven involves
obtaining extra steel, making extra excavation, and probably hiring welders.
To get this organized may take some days, during which the contractor may
not be able to start the next major operation scheduled on his programme.
Fairly frequent claims consist of the contractor claiming he should be paid for
something for which there is no obvious measurement in the contract. This type
of claim depends on whether the terms of the contract allow payment or not.
This is when the specification, bills of quantities and method of measurement
come under close scrutiny, because any inconsistency between them is liable to
give the contractor at least some kind of case for payment. When specifications
and bills of quantities are very large, the odd error will invariably occur. The
resident engineer should take care not to agree an extra prematurely, he should
check the contract first, to ensure that it does not include the extra in some
bill rate.
Some contractors use confirmation of verbal instructions (CVIs) as ‘claims’
(see Section 13.3). The resident engineer or one of his staff tells the contractor