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(CDR-3491) Case Study for Negotiating Time Extensions for Quantity Overruns in Unit Price Contracts

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Level: Basic
TCM Section(s):
6.4. Forensic Performance Assessment
10.3. Change Management
Venue: 2020 AACE International Conference & Expo

Abstract: Construction projects are interwoven with unpredictability, primarily due to the number of assumptions that are made through project development. Every day, organizations enter into legally binding contracts to perform the construction work, which is defined by those assumptions.The unit price contract is commonly used to reduce project procurement duration since a final design with accurate quantity takeoffs is not necessary before the contract award.Even when detailed drawings are available at contract award, changes or omissions may take place, which can cause deviation from the approved design, significantly changing quantities to be installed, often beyond contractual thresholds.But extensions of time that should accompany increased quantities are often overlooked or poorly determined.

The focus of this paper is to provide solutions for the challenges that organizations face when such variances exceed the specified thresholds and start to impact the project’s schedule. This paper presents the case of a highway construction project as well as delay evaluation methodologies used by the general contractor and owner’s scheduling consultant. This paper provides recommendations for the contract awarding agency to enhance resolution in similar situations.