Managing Enhanced Risk in the Mega Project Era (2022) / Chapter Skim
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Pages 52-79
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From page 52... ...
52 NCHRP LRD 86 Excerpt 36 – Incentives and Disincentives I-15 Express Lanes, UDOT Bidding Contract Time Section 1.7. Incentives/Disincentives related to Time A
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NCHRP LRD 86 53 Excerpt 37 – Incentives and Disincentives I-69 Major Moves, INDOT & Indiana Finance Authority 17.2.1 Lane Closures at times and locations not consistent with the requirements of the PPA Documents result in tra c obstructions, inconvenience to the public and delay of vital commerce, and increased risk to highway users. All of these consequences result in direct and indirect nancial impacts to IFA, road users, businesses, communities, and taxpayers.
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From page 54... ...
54 NCHRP LRD 86 the design-builder. Having a single point of responsibility transfers the interface risk between D&C work and eliminates the nger pointing that can occur between the designer and contractor on a DBB project.
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From page 55... ...
NCHRP LRD 86 55 Excerpt 39 – Standard of Care SH 360 Project, TxDOT DB Contractor shall furnish all aspects of the Work and shall construct the Project and/or Utility Adjustments included in the Work as designed, free from defects (except to the extent that such defects are inherent in prescriptive speci cations required under the DBA Documents) and in accordance with: (a)
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From page 56... ...
56 NCHRP LRD 86 ages provision to be enforceable. First, the amount speci ed in the contract must be an estimate of anticipated damages caused by the breach of contract and must have been reasonable at the time the estimate was made.161 Neither the purpose nor amount of liquidated damages may be considered punitive, or the liquidated damages may be determined to be an unenforceable penalty.
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From page 57... ...
NCHRP LRD 86 57 Excerpt 41 – Liquidated Damages Alaskan Way Viaduct (SR 99) Bored Tunnel Alternative DB Project, WSDOT Cap On Liability for Liquidated Damages In no event will WSDOT assess Liquidated Damages in excess of $75,000,000.
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From page 58... ...
58 NCHRP LRD 86 Excerpt 43 – Limitation of Damages Project Neon, NDOT Appendix 19, Limitation of Damages for Failure to Open Lanes from a breach of contract. Classic types of consequential damages include lost pro ts, lost revenue, and loss of use.
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From page 59... ...
NCHRP LRD 86 59 Excerpt 44 – Consequential Damages Rapid Bridge Replacement Project, PennDOT Save where stated to the contrary, neither Party shall have the right to claim damages, including punitive and incidental damages, against the other Party for breach of this PPA, in tort or on any other basis whatsoever, to the extent that any loss claimed by either Party is for Indirect Losses. e Parties agree that, notwithstanding the foregoing limitation on each Party's liability, such limitation shall not apply to or limit either Party's right to recover from the other Party: (a)
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From page 60... ...
60 NCHRP LRD 86 e. Summary Recommendations In considering whether to limit a contractor's liability to the owner, the owner should be aware of any constitutional or legislative constraints on the ability of an owner to limit a contractor's liability or indemnity obligations.
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From page 61... ...
NCHRP LRD 86 61 substantial compliance test for determining whether a failure to comply with notice requirements may serve as a bar to recovery for changes. e OCTA I-405 Improvement DB project is constructed in a highly congested interstate corridor and as seen in Excerpt 45 includes an acknowledgment by the design-builder of the importance of timely notice and what matters will be considered in determining whether the owner is prejudiced by a lack of notice.
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From page 62... ...
62 NCHRP LRD 86 timelines for the parties to meet and agree upon the scope of the proposed change, as well as the submission of estimated cost and schedule impacts, so that potential changes to the scope of work could be evaluated and implemented expeditiously to avoid project delays. ere were several of owner-initiated change orders that were issued to accommodate changes originating from stakeholders.
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From page 63... ...
NCHRP LRD 86 63 ments impacting liability for various risks, the change order process itself is generally governed by the regulations, policies, and guidelines of the project owner. at said, when dra ing change order provisions, the dra er should be aware of any legislation that may impact the change order process.
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From page 64... ...
64 NCHRP LRD 86 "and a er investigation decide for themselves the character of the materials."182 e appellate court found that the contractor did not perform the necessary investigation and agreed with the trial court's opinion that "where a contractor ‘has opportunity to learn the facts, he is unable to prove ... that he was misled by the contract.'"183 It should be cautioned, however, that requiring independent investigation during the procurement may not necessarily relieve an owner from liability where the requirement conicts with the diering site conditions and the owner's statements.
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From page 65... ...
NCHRP LRD 86 65 Excerpt 46 – Di ering Site Conditions I-64 Hampton Roads Bridge-Tunnel Expansion Project, VDOT Section 4.3.1.3. Design-builder shall not be entitled to any adjustment in the Contract Price and/or Contract Times due to impacts of Diering Roadway and Bridge Improvements Site Conditions encountered during construction of the Roadway and Bridge Improvements not identi ed during the Scope Validation Period, unless Department, in its sole discretion, determines that the circumstances associated with such Diering Roadway and Bridge Improvements Site Condition justify making such adjustment.
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From page 66... ...
66 NCHRP LRD 86 contracts.188 However, while transportation agencies may consider for inclusion in federal-aid DB contracts diering site condition clauses "which are appropriate for the risk and responsibilities that are shared with the design-builder,"189 state 188 See, 23 C.F.R. § 635.309, which provides, in pertinent part: (1)
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From page 67... ...
NCHRP LRD 86 67 b. Project Delivery Method e DBB projects surveyed include typical force majeure de nitions.
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From page 68... ...
68 NCHRP LRD 86 Excerpt 49 – Force Majeure Events East End Crossing P3 Project, Indiana Finance Authority Force Majeure Event falls within definition of Relief Event. Force Majeure Event means the occurrence of any of the following events that is (i)
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From page 69... ...
NCHRP LRD 86 69 e SH 360 Project in Dallas includes in the force majeure event de nition a number of events that are treated similarly for purposes of providing relief to the DB contractor, including (f)
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From page 70... ...
70 NCHRP LRD 86 site or artifacts, as opposed to risking project stoppages if discoveries were made later in the middle of projects. Applicable noti cation of the location and nature of artifacts should be made immediately, and written con rmation within two days are expected.
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From page 71... ...
NCHRP LRD 86 71 includes a "scope validation period" a er the execution of the contract during which the contractor was able to make additional investigations and surveys to validate its assumptions regarding site conditions and other matters on ROW that was not available during the procurement. e contract provides the contractor with direct costs and a time extension, but not delay damages, for the following: discovery within or immediately adjacent to the Project Right-ofWay of archeological, paleontological or cultural resources (including historic properties)
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From page 72... ...
72 NCHRP LRD 86 d. Summary Recommendations An important factor in mitigating the risk of archeological, paleontological, or cultural resources is the performance of preconstruction surveys to determine the presence of such resources.
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From page 73... ...
NCHRP LRD 86 73 beyond the control of the parties, the project contracts generally include a limitation on delay damages for risks that are beyond the control of both parties on alternative delivery projects. Other strategies include requiring due diligence by the contractor prior to the commencement of construction and limiting change orders to discoveries that would not have been found by reasonable investigations.
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From page 74... ...
74 NCHRP LRD 86 old or to avoid destruction or adverse modi cation of a critical habitat. Where the FWS or NMFS, as relevant, determines that a project will result in take of listed species or will adversely modify a critical habitat, but will not jeopardize the species or destroy or modify the critical habitat, the agency will issue an incidental take statement (ITS)
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From page 75... ...
NCHRP LRD 86 75 could be set forth in the contract to precede litigation, such as mediation, arbitration, and dispute review boards (DRBs)
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From page 76... ...
76 NCHRP LRD 86 Excerpt 56 – Dispute Resolution I-405 Improvement Project, OCTA 19.2.2 Request for Dispute Resolution If design-builder objects to any decision, action, order or position of Authority (including any rejection or modi cation of a proposed Change Order by Authority) , then design-builder shall le with Authority a written request for dispute resolution.
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From page 77... ...
NCHRP LRD 86 77 a. Size and Complexity Many large, complex projects include DRBs as their primary dispute resolution forum.
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From page 78... ...
78 NCHRP LRD 86 stop work responsibilities, costs to terminate subcontractors and vendors. ese risks may be allocated based on the circumstances of suspension and termination.
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From page 79... ...
NCHRP LRD 86 79 of their funds for the D&C of the facility. Such payments will not be for the full amounts outstanding, but rather a portion of them such that the lenders have an incentive to make sure the concessionaire does not default on the contract.
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