execution of the planned scope of work in less time than planned, or the execution of an increased scope of work in order to complete the works by the contract completion date.
Accepted Baseline (Master) Schedule
illustrates the major sequencing and phasing requirements of the project. It is recommended that a draft schedule for the whole of the works be submitted for acceptance by the PM. Once accepted by the PM, the schedule becomes the baseline or master schedule.
A formal procedure used as an alternative to litigation when negotiations and mediations are unsuccessful. It is a consensual process whereby both parties agree to the selection of an arbitrator and accept that there will be a binding award as a result.
the record of the history of the construction project in the form of a schedule, and is comprised of a bar-chart record of the start and end dates of every activity that actually took place, without necessarily having any logic links.
any difference between the circumstances/content of the contract works as carried out, compared with the circumstance/content under which the works are described in the contract documents as required to be or intended to have been carried out. A change may or may not carry with it a right to an extension of time and/or additional payment. These changes are usually carried out with the issuance of Contemplated Change Notices (CCN) which may become Change Orders (CO).
A formal written submission (usually by the contractor) requesting additional compensation in relation to a contract. A claim can be non-litigious (outside of the courts) or litigious (within the court system of justice).
These claims involve liability and are usually generated by a contractual relationship with a consultant (GC18) or contractor (GC6-R2860D) for additional compensation for changes in subsurface conditions (Reference GC6.2). Changes in scope of work negotiated under the GCs of the contract can become claims under certain circumstances. Other changes not initially considered as claims may be: unforeseen site conditions, design errors and/or omissions, acceleration or material substitution by PSPC. They are submitted in various forms, some little more than a letter with costing attachments, others in one or more bound volumes, together with detailed progress schedules, cost analyses, specialist reports etc., and usually entail the following:
A formal written response to a claim containing detailed analyses, refuting arguments and/or proposed acceptable compensation (if any).
A formal written document that is used to counter or oppose a claim, usually with alleged damages or costs against the claimant.
An amount deducted (backcharge) from a lump sum contract against a contractor for damages/costs incurred by PSPC due to incompleted work, unacceptable workmanship, and/or administration/overhead costs due to contractor-caused delays, etc.
They are extremely costly and time consuming to prepare and should be avoided to the extent practicable and only used as a last resort. They typically involve:
Statement of Claim:
A formal written legal statement, filed in federal or provincial court by a contractor or Consultant that often involves PSPC as a third party.
Statement of Defense:
A formal written legal statement of defense, filed in federal or provincial court by the defendant in response to a Statement of Claim.
Statement of Defense and Counterclaim:
A formal written legal Statement of Defense and Counterclaim filed by PSPC in a federal or other court of law, in response to a Statement of Claim by a contractor or Consultant, whereby the Statement of Defense is supplemented with a Claim (Counterclaim) against the contractor for damages incurred by PSPC.
A claim by one defendant against another.
Third party Claim:
A claim made by a defendant against a person not otherwise a party to the action (e.g. a plaintiff or another defendant); that person (the third party) then becomes a party to the action.
recovery or payment of money for work done or time expended whether by way of evaluation, loss and/or expense or damages.
occurrence of two or more delay events at the same time, one caused by PSPC, the other caused by the contractor, and the effects of which are felt at the same time.
A legally enforceable contract is a deliberate agreement (intention to create legal relations) constituted by, and unconditional acceptance of, an outstanding offer (offer of acceptance) involving a reasonably precise set of terms (certainty of terms) between two or more competent parties (capacity) that is supported by mutual consideration (consideration) to do some legal act voluntarily (legality of purpose).
Conflict Management and Alternative Dispute Resolution Service
Part of PSPC's Oversight Branch, the Conflict Management and ADR Services Group offers a range of options for managing conflict and resolving disputes - from providing advice and coaching in managing conflict, to facilitating voluntary processes for the resolution of disputes.
Contract Completion Date
date by which the contractor is contractually obliged to complete the work. The expression 'completion date' is sometimes used by contractors as the date when they plan to complete the work, which may be earlier than the contract completion date.
sequence of activities through a project network from start to finish - the sum of whose durations determines the overall project duration. A delay to the progress of any activity on the critical path will without acceleration or re-sequencing, cause the overall project duration to be extended, and is therefore referred to as 'critical delay'.
monies legally ordered or contractually demanded, to be paid as compensation for loss incurred. The term 'damages' is usually used when compensation is sought from PSPC (as per GC5.10 Assessment and damages for late completion - R2850) when the contractor caused the delays, whereas 'compensation' is used to provide a mechanism (as per GC6.2 Changes in subsurface conditions) to pay the contractor for the additional costs (damages) incurred as a result of delays caused by PSPC.
The action/event of delay: 'To cause to be later than expected'.
Quantification of delay:
'The time lost by the inability to proceed'.
Delay caused by PSPC:
any event, occurrence or action by PSPC that causes the contractor to be delayed in all or portions of the work. PSPC can cause delay to progress without delaying the contract completion date, or delay that causes an extension to the contract completion date. Delays caused by PSPC are usually excusable and compensable.
Delay caused by contractor:
any event, occurrence or action by the contractor that results in delay in all or portions of the work. These delays may impede progress without delaying the contract completion date or they may cause an extension to the contract completion date (for which the contractor is entirely responsible). Delays caused by contractor are usually non-excusable and non-compensable.
Force majeure delay:
delay for which fault cannot be attributed to either party to the contract. It is defined as an exceptional event or circumstance which: is beyond a party's control, the party could not reasonably have provided against it before entering into the contract, and the party cannot reasonably overcome it. Subject to giving notices, a party who is prevented from performing any of its obligations by force majeure is excused of such performance for as long as the force majeure prevents it from performing, and the contractor is entitled to an extension of time and reimbursement for any additional cost. Force majeure delays are usually excusable and sometimes compensable. In certain cases, a defaulting subcontractor may be treated as a force majeure event, if the contractor has demonstrated that it was clearly an unforeseeable event, that it has done all it possibly could to manage the event, but was unable to do so.
A difference of opinion or an impasse concerning the execution of the contracted scope of work or services, following deliberations to resolve a disagreement between a contractor and PSPC.
usually settled between the two parties through informal negotiations (although may result in formal claims)
dealt with by project managers and contract officers on a day-to-day basis and typically involve the scope of work, pricing, scheduling, or specification interpretation
usually resolved with written clarification or through issuance of change orders
Dispute Resolution Process
the definition of a dispute as per Standard Acquisition Clauses and Conditions (SACC) Dispute Resolution GC8 states that: "...a "dispute" means any disagreement regarding any issue identified by the contractor (and/or PSPC) in the notice submitted to Canada in accordance with paragraph 2 of GC8.3, "Notice of Dispute", and includes any claim by the contractor arising from such disagreement and any counterclaim by Her Majesty..." The process to be followed in resolving disputes is described in the conditions referred to above. Should the process go to mediation, refer to SACC GC8 Dispute Resolution - GC8.10 "Rules for Mediation of Disputes" for projects between $100,000 and $5,000,000 and GC8.8 "Rules for Meditation of Disputes", for projects greater than $5,000,000.
disturbance, hindrance or interruption of a contractor's normal work progress, resulting in lower efficiency or lower productivity than would otherwise be achieved. Disruption does not necessarily result in a delay to completion, although if the disruption is caused by PSPC and does delay completion, a contractor may be entitled to a time extension and additional compensation.
Dispute Resolution (DR) and Alternate Dispute Resolution (ADR):
The term 'DR' is used to define a full range of dispute resolution mechanisms, including litigation. The term 'ADR' is used to define all those mechanisms 'other than' litigation. These include negotiation, mediation and arbitration.
Errors and Omissions
Errors and omissions that cause delay to construction projects may lead to additional costs, reimbursable to the contractor. PSPC must practice diligence and recover losses from design consultants who are responsible for errors and omissions due to the negligent performance of their contract.
arises when the work detailed or specified in the construction documents requires a change due to improper design, following costs incurred in obtaining material or performing construction activities. Where no cost was expended prior to discovery, the change is considered an omission.
arises when additional material or construction activity is required by the contractor to complete the work due to lack of information in the contract documents. It also includes changes in the design/scope of the work discovered and corrected prior to incurring any cost. The omitted work, once identified, completes the original intent for which the owner would have paid had the omission not occurred.
Extension of time (EOT)
an EOT serves only to relieve the contractor of liability for assessments and damages for late completion (as per GC5.10) for any period prior to the extended contract completion date. It also provides both parties of the contract with a new end date for completion where delay has been encountered. The surety must provide consent to the EOT and the insurers must provide assurance that they will extend the insurance coverage.
applications for EOT should be made and dealt with as close in time as possible to the delay event that gives rise to the application. The contractor is potentially entitled to an EOT only for delays caused where PSPC has assumed risk and responsibility.
Procedure for granting EOT:
the updated schedule should be the primary tool for determining the amount of the EOT. (The updated schedule is the master schedule brought fully up to date to the point immediately before the occurrence of the relevant delays caused by PSPC.).
contractor seeks compensation for a group of events/delays caused by PSPC but does not or cannot demonstrate a direct link between the loss incurred and the individual events/delays caused by PSPC. These are typically received after project completion and are very difficult to substantiate and refute.
Head Office Overhead
incidental costs of operating the contractor's business as a whole and includes indirect costs which cannot be directly allocated to production on the site - as opposed to direct costs which are the costs of production. They are called administrative expenses.
the effect that a change has on an activity or the effect that a change to one activity has on another activity.
Interim Certificate of Completion
the completion of all construction work required, subject only to very minor items of work left incomplete. It is generally the date when the obligation to provide insurance transfers from the contractor to PSPC and the date from which the liability for defects commences. It is also the time when any assessments/damages against a contractor must be documented, therefore it is of utmost importance that the certification is undertaken with the greatest possible degree of diligence, because should hidden defective workmanship be discovered at a later date, the chances of cost recovery become minute.
A voluntary process involving intervention by a mutually acceptable, neutral and impartial third party selected either internally or externally to assist the negotiation process.
in relation to delay, mitigation means minimizing the impact of a risk/delay event. It should not involve significant additional costs or the use of special measures, e.g., extra labour or working hours. The contractor is expected (contractually) to mitigate the effects of changes/risk events, but is not expected to do so at additional expense without compensation.
A voluntary, non-adjudicative and informal discussion between the contractor and PSPC to
determine common interests in order to arrive at a mutually satisfactory outcome.
Prepared in Anticipation of Litigation:
A statement which protects information and documents (which are being specifically prepared for litigation) from disclosure to other parties.
an event or cause of delay for which either the contractor or PSPC has responsibility under the contract.
The privilege that can shield communications between lawyers and their client from disclosure.
Third Party Neutral:
This is a process whereby one or both parties can hire an independent expert in the field of a dispute in question, with the intention of obtaining a neutral evaluation or assessment of the causes of the misunderstandings.
Time Impact Analysis
method of delay analysis where the impacts of particular delays are mapped out at the point in time at which they occur, allowing the discrete effect of individual events to be determined.
accepted master (baseline) schedule updated with all progress achieved. The final updated schedule should depict the as-built schedule.
An assertion by a party that information disclosed in an attempt to settle a dispute cannot be used against that party in a court proceeding.