Jump to content
The Wifcon Forums and Blogs
mdtpham

Two Buildings, One Excavation

Recommended Posts

We have a requirement to construct two buildings for two completely different uses on one piece of land. The buildings are not too far apart, so from an engineering standpoint, it would make sense to excavate the land at the same time for the construction of these two buildings to ensure that the excavation for one building does not undermine the area for the second building.

The design for one of the buildings is almost complete, while it would take several more months to complete the design of the second building. To ensure that we stay on schedule, excavation needs to begin in a few months.

Given that we have the design for one out of the two buildings and we know that we need to excavate the land for the construction of both buildings, what would be the best course of action to take (contractually)? (My KO is leaning towards a UCA to allow us to start excavation for both buildings and construction of one of the two buildings while we wait for the final design of the second building to definitize it.) Could excavation be considered a severable service?

I am with the DoD and am new to construction contracting, so any assistance would be greatly appreciated.

Share this post


Link to post
Share on other sites
Guest Vern Edwards

I have actually had to deal with this kind of situation as a CO, and if the site design is complete I would award a separate contract for the site preparation (what you're calling "excavation" -- there is probably more to it than just excavation).

I have done it in the past and it works well if you select a competent firm to do the work, if the design is sound, and if you establish a realistic schedule. I would not go with a letter contract for site preparation, unless you are facing a real emergency. It should not take too long to award a site prep contract. As with all construction there is a real chance of faulty design, differing site conditions, and maybe unusually severe weather, but that's life in the world of construction.

By the way, if you want to see the kind of thing that can go wrong on a construction project, read this court decision:

http://www.uscfc.uscourts.gov/sites/defaul...ARTIN122011.pdf

Share this post


Link to post
Share on other sites
We have a requirement to construct two buildings for two completely different uses on one piece of land. The buildings are not too far apart, so from an engineering standpoint, it would make sense to excavate the land at the same time for the construction of these two buildings to ensure that the excavation for one building does not undermine the area for the second building.

The design for one of the buildings is almost complete, while it would take several more months to complete the design of the second building. To ensure that we stay on schedule, excavation needs to begin in a few months.

Given that we have the design for one out of the two buildings and we know that we need to excavate the land for the construction of both buildings, what would be the best course of action to take (contractually)? (My KO is leaning towards a UCA to allow us to start excavation for both buildings and construction of one of the two buildings while we wait for the final design of the second building to definitize it.) Could excavation be considered a severable service?

I am with the DoD and am new to construction contracting, so any assistance would be greatly appreciated.

How about a separateLy funded option or CLIN in one contract?

Share this post


Link to post
Share on other sites
What about a separateLy funded option or CLIN in one contract?

joel, wouldn't we still need the design of the second building to be completed before the contractor can price its construction (either as a separately funded option or CLIN)?

Share this post


Link to post
Share on other sites
joel, wouldn't we still need the design of the second building to be completed before the contractor can price its construction (either as a separately funded option or CLIN)?

I thought that the excavation and site work design for the second building was finished. In that event, you could add this portion of the design for the second building - or what portion of the sitework is ready - to the solicitation for the first building, as a separately funded bid item. You would have to consider whether or not this would help expedite the availability of the site for constructing the second building, without slowing down the sitework for the first building.

Fast-tracking sitework while the building is still under design can often shorten the overall construction time for a building project. That is a major advantage of fast-tracking on design-build projects. Sitework often takes much time and can push the subsequent building construction into inclement weather conditions (e.g., winter or rainy season). That, in turn, raises costs for cold weather construction. A head start on site work can reduce overall costs.

Economy of scale by being able to simultaneously work two close or adjacent sites under the first contract might be achievable - or might not be economical. You can save one mob and demob, as well as the administrative time and expense of starting sitework on two separate contracts. You can also shorten the overall completion time on the second contract. That results in less site overhead. I can't state for certain without knowing the nature of the 2 siteworks or the scope.

If combining the 2 sitework efforts under one contract isn't doesn't provide any schedule advantage for the second project or slows down the sitework for the first project, then I'd agree with Vern that going out with a stand-alone sitework contract ahead of the building contract might be a good idea. Depends upon your reasons for expediting the 2nd sitework effort. A separate contract might involve additional fixed, overhead and mob/demob costs, though.

Share this post


Link to post
Share on other sites

I'm curious why an undefinitized contract action (letter contract) is necessary to award a contract for 2 siteworks and the first building. Please explain what the status of the design is for those features of work and why some other course of contracting action isn't feasible. Thanks.

Hey, as a minimum, you could award a fixed price contract for sitework on both sites then follow up with solicitations for the buildings. I'm relatively certain from what you said that the sitework could easily be split out from one or both designs. I could finalize notes on drawings within a day or two to denote the limits of the construction for a sitework only contract.

Sitework could include clearing and grading or it could also include site utilities. It's not rocket science to break out such work from an ongoing design.

Share this post


Link to post
Share on other sites
By the way, if you want to see the kind of thing that can go wrong on a construction project, read this court decision:

http://www.uscfc.uscourts.gov/sites/defaul...ARTIN122011.pdf

The Corps' message to Martin was "we want you to perform the additional work specified in the modifications, but you are still in default because the completion date (already passed) remains the same."

Unreal.

Share this post


Link to post
Share on other sites
The Corps' message to Martin was "we want you to perform the additional work specified in the modifications, but you are still in default because the completion date (already passed) remains the same."

Unreal.

Yes, from the perspective of reading the instant case, the government's position case appears to be "unreal". I do want to emphasize that this isn't the USACE's policy as an Army Command.

For many years, I taught a principle in classes and in our District's policy that I learned while working for the Middle East Division of USACE in Saudi Arabia. It is called the "Equity Principle". That principle is an exception to the "leave them where you found them" principle if the government directs a change after the contract completion period, while a delinquent contractor is still working to complete the current contract work.

The equity principle provides for an excusable, non-compensable time extension for change work directed after the completion date that will be, is being performed or was performed concurrently with other contract work for which the contractor would otherwise be charged liquidated damages due to its own fault. The Equity Principle essentially holds that the government should not take advantage of a firm because they are already late in completing the project. In addition, the contractor is not entitled to a compensable time extension for the concurrent period because it is already expending those type costs in completing the current contract work.

If the contractor can show however, that the change increases its direct or indirect costs for the unchanged, incomplete work or if the change requires additional indirect costs, then it would be entitled to an adjustment for those additional costs.

Share this post


Link to post
Share on other sites
Guest Vern Edwards

I wrote up the case for the February issue of The Nash & Cibinic Report in order to discuss the effect of organizational psychology on contract administration. The government's behavior was really shameful. The judge was clearly disgusted by it.

Share this post


Link to post
Share on other sites
I wrote up the case for the February issue of The Nash & Cibinic Report in order to discuss the effect of organizational psychology on contract administration. The government's behavior was really shameful. The judge was clearly disgusted by it.

No kidding. I read the entire court decision, and the digust you describe was plainly evident. In fact, I have to give the judge kudos for showing more restraint than I would have. The infamous USAF Tanker procurements have been excellent examples of what NOT to do during the solitication, evaluation and award phase of an acquisition. The example you cited is an excellent demonstration of what NOT to do during contract admin.

Unbelievable.

If I were to sum it up, for those that haven't read the entire decision, the Corps provided a defective spec to the contractor, who (surprise surprise) could not get the design to work, although they bent over backwards trying to make it work. Oh yeah, and some of the Corps suggested fixes were also faulty. Meanwhile, the Corps denies their design is defective and contracts with a 3rd party civil engineering firm to back up their position and ... wait for it ... the 3rd party firm agrees with the contractor that the Corp's design is faulty. Epic fail :blink: . Heck, the Corps eventually admits to the design defect, but quickly does an about face by ignoring the defect in subsequent actions. Meanwhile, the contractor (very wisely) haults or delays performance on numerous occaisions due to what turned out to be very valid work site safety concerns, to which the Corps was also apparently in agreement, but the Corps decided to fault the contractor with the delay anway. Later that fall, the Corps further delayed performance and again faulted the contractor for the government caused delay, in addition to the delays caused by the notoriously harsh North Dakota winter.

The Corps may as well have said to the contractor "We know our design was screwed up and as a result the site itself is dangerous, but make it work anyway and any delays resulting from our actions are your problem."

Share this post


Link to post
Share on other sites
Guest Vern Edwards

Here's a kicker: After the T for D a Corps spokesman gave a press statement in which he said that the contractor had been in over its head. More than a year after the unjustified T for D, the Corps issued a public information release calling the engineer who was responsible for the faulty design an "unsung hero" for his work on the project.

Share this post


Link to post
Share on other sites
Unbelievable.

...Later that fall, the Corps further delayed performance and again faulted the contractor for the government caused delay, in addition to the delays caused by the notoriously harsh North Dakota winter.

The Corps may as well have said to the contractor "We know our design was screwed up and as a result the site itself is dangerous, but make it work anyway and any delays resulting from our actions are your problem."

Please note that my comments above concerning the "Equity Principle" were only in response to FAR Fetched's post above it. He/she said:

"The Corps' message to Martin was "we want you to perform the additional work specified in the modifications, but you are still in default because the completion date (already passed) remains the same. Unreal."

I wasn't addressing who is to blame for the actual delay in the instant case. I was addressing a situation where the government believes that a contractor is behind schedule due to its substandard performance and the government changes or adds work during that period. The government should add excusable but non-compensable performance time under the equity principle for the time necessary to perform the additional or changed work, as long as it doesn't further delay completion of the original work.

According to the instant decision, the government was apparently responsible for the delays. In that event the delays would be not only excusable but compensable.

Share this post


Link to post
Share on other sites
Here's a kicker: After the T for D a Corps spokesman gave a press statement in which he said that the contractor had been in over its head. More than a year after the unjustified T for D, the Corps issued a public information release calling the engineer who was responsible for the faulty design an "unsung hero" for his work on the project.

Huh. Sadly, I can't say I'm all that surprised. I've seen agencies (which shall remain unnamed) present official awards or other recognition to employees who figured out ways of "improving" a process by commiting blatant violations of law or regulation.

Share this post


Link to post
Share on other sites

I'm curious why an undefinitized contract action (letter contract) is necessary to award a contract for 2 siteworks and the first building. Please explain what the status of the design is for those features of work and why some other course of contracting action isn't feasible. Thanks.

Hey, as a minimum, you could award a fixed price contract for sitework on both sites then follow up with solicitations for the buildings. I'm relatively certain from what you said that the sitework could easily be split out from one or both designs. I could finalize notes on drawings within a day or two to denote the limits of the construction for a sitework only contract.

Sitework could include clearing and grading or it could also include site utilities. It's not rocket science to break out such work from an ongoing design.

Joel, I apologize for not responding to your question sooner. I haven't been on WIFCON for a while and didn't realize that there were additional responses/questions to the initial question.

I previously stated that my KO is leaning towards a UCA. After further discussion with my KO this week, what was actually meant is an Unpriced Change Order to get the work started since we already have a contract in place for the prime to perform the work. Please let me know if you have any other questions. Thanks.

Share this post


Link to post
Share on other sites

mdtpham, are you indicating that the KO added the separate scope of the site work for the second, separate project to an existing contract for the first project, using the Changes Clause? That is very interesting.

Share this post


Link to post
Share on other sites

mdtpham, are you indicating that the KO added the separate scope of the site work for the second, separate project to an existing contract for the first project, using the Changes Clause? That is very interesting.

Joel, no. There is a larger overall project. These two buildings are additions to the main (much bigger) project under the Changes clause. I guess what confused me was the KO's use of the word UCA. The office (that I'm working at now) considers an Unpriced Change Order a type of UCA even though the definition of a UCA under DFARS 217.7401(a)(3) clearly excludes Unpriced Change Orders.

Share this post


Link to post
Share on other sites

Mdtpham, your answer is more interesting than what I thought you originally indicated. I thought you said that they added the site work for one project to an existing contract which included the scope of site work for another building. That raised a question in my mind as to how the site work for the second building was within the scope of the contract for the first project. Now you are telling me that they added the scope of both sites to an existing contract for a third building project as a change order.

I'm mildly curious why the government would have the right the add the scope of work for 2 separate building sites to another contract for one or more specific buildings by means of a change order under the Changes Clause? Is that within the original scope of the larger contract?

Just because an existing contract includes paving work, for example, doesnt meant that one can just go out and add paving of additional parking lots all over an installation under the Changes clause.

As another example, consider a painting contract for 25 buildings. One cant just go out and add more buildings to that contract using a change order just because "painting" is the scope of the contract.

Share this post


Link to post
Share on other sites

Joel,

Really, you are only mildly curious? That's it? I, for one, am sitting on the edge of my seat!

Where's my popcorn ...

:P

Share this post


Link to post
Share on other sites

mdtpham, I'm not saying that site work for 2 new projects couldn't be added to an existing contract by means of a bilateral supplement agreement. I am curious how such work could be directed as a "change order " under the Changes clause. It is possible that the work could be added via a bilateral, out-of-scope modification, after meeting the requirements for an exception to full and open competition. Perhaps there was a misunderstanding concerning the terms used.

As for "unpriced change orders", this is discussed under DFARS, 243.204-70 Definitization of change orders, not under DFARS 217.74. Many offices incorrectly refer to unpriced changes as "UCA's" from old 217.74 language from years ago.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×