Highway engineering projects are characterized by long duration, large scale, high technical content and complexity, etc. During the construction process, claims inevitably arise due to the construction site conditions such as changes in geological and climatic conditions, construction progress, price changes, and changes, discrepancies, delays and other factors such as changes in contract terms, specifications and construction drawings. Contractors in accordance with the law and the contract, not due to their own fault or negligence, and belongs to the owner should be responsible for the situation put forward claims, is an important means of contractors to safeguard their own economic interests. I have participated in a World Bank loan, international competitive bidding highway project claims management, according to my experience in dealing with the claims process, and combined with some examples, talk about how the contractor to carry out the cost of claims.
One, the contractor can claim the terms of the contract
Contractors in the early stages of the comprehensive and detailed reading of the contract documents are very necessary, through the study of the terms of the contract documents relating to the claim, the formation of claims ahead of the awareness of the contractors in the process of construction to seize every opportunity to claim. FIDIC civil engineering construction contract general provisions.
Second, the cost of claiming procedures
In the project management manual or project supervision procedures and methods are referred to the "FIDIC Civil Engineering Construction Contract Conditions" provides for the project claims procedures, the notice and proof of claims are provided for the time limit, and the requirement to maintain the same period of supporting documents. The following is the procedure for filing a claim for the Contractor's costs:
I) Notice of Intention to Claim
The Contractor shall notify the Engineer of its intention to claim, with a copy to the OWNER, within 28 days after the first occurrence of the event for which the claim is made. The content of the Notice of Intent to Claim is relatively simple, generally concise description of the name of the claim, the time and place of occurrence and possible losses to the contractor, the purpose is to express the contractor's intention to seek additional payment, in preparation for the future to provide further detailed reports.
II) Periodic Detailed Reports
Within 28 days of the issue of the Notice of Intention to Claim, or such other reasonable time as the Engineer may agree, the Contractor shall submit to the Engineer a statement of particulars stating the amount of the Claim and the basis on which the Claim is made. Where the event for which the claim is made has a continuous effect, the above material shall be deemed to be an Interim Detailed Report and the Contractor shall, at such intervals as the Engineer may reasonably require, issue further Interim Detailed Reports submitting the cumulative total amount of the claim and the basis on which the further claim has been made.
III) Application for Claim for Costs
Within the 28th day after the conclusion of the event of the Claim for Costs, the Contractor shall formally issue a Final Detail Report to the Engineer by way of an Application for Claim for Costs and shall be the final basis for the tripartite **** negotiation between the OWNER, the ENGINEER and the CONTRACTOR for the finalization of the amount of the Claim. How the level and quality of the claim application form is directly related to the success of the claim. The content of the "cost claim form" can be summarized as four elements: the basis of the claim, the content of the claim, supporting documents and claim amount calculation form.
1. Claim application basis
Contractor should be correctly quoted FIDIC contract terms, as their own claims for contractual basis, so that the engineer and the owner of the first to understand the theoretical basis for the claim. Application basis can be directly excerpted, quoted with the claim event related to the contract terms and legal provisions.
2. Claim content
The content of the claim is essentially the preparation of the contract terms for the argumentation process of the claim event, the requirements:
1) the claim content writers should be an in-depth investigation of the cause of the claim event, through and as a result of the claim event should be a concise and clear narrative of the claim event, event narrative, the terms of the citation, the loss of the contractor's depictions of the situation of the mutual interspersed to prove the causal relationship between the objective facts and the loss, and illustrate the inevitable connection between the owner's breach of contract, contractual changes or unexpected risks and the claims caused;
2) The analysis of responsibility should be clear and precise, not vague, and emphasize the impossibility of foreseeing the event of the claim by the Contractor, the Contractor's inability to be prepared for it, and the inability to stop it after the incident even though it was able to take measures;
3) To use tactful and appropriate language, avoiding strong unfriendly protesting language.
3. Claim Supporting Documents
After a claim has been made, it is important for the contractor to keep contemporaneous records, which are necessary to support any claim the contractor may wish to make. In addition, since the Engineer can review the Contractor's contemporaneous records without recognizing the Owner's liability upon receipt of the Notice of Intent to Claim, the Contractor should be proactive in inviting the Engineer to inspect the records and to seek the Engineer's advice as to whether any additional records are necessary, which will greatly assist in the Contractor's contemporaneous record completeness.
The supporting documents to be submitted by the Contractor include, but are not limited to, the following:
1) relevant clauses or provisions of the Contract Documents, Supplementary Agreements;
2) construction drawings, written notification of changes in the design;
3) records of the construction site, which may be in the form of text, diagrams, photographs, video recordings etc.
4) correspondence, documents etc. between the Owner, the Engineer and the Contractor's correspondence, documents, etc.;
5) minutes of various meetings, project reporting materials, contractor's monthly report on the project;
6) stage-by-stage statistical reports on the progress of the project, and the comparison table between the planned progress and the actual progress;
7) all kinds of test and inspection records, especially the test and inspection records of materials outside the contract;
8) the contractor's original documents, invoices, personnel, machinery, material entry and use.
I hereby emphasize that all supporting documents must be dated.
4. Claim Cost Calculation Form
Contractor's claims can be categorized into loss claims and extra work claims. Loss claim is mainly caused by the owner's breach of contract, engineer's instruction error or unexpected risk, the owner should be given compensation for the loss; extra work claim is mainly caused by the contract change and the engineer issued a change order. Claims cost composition is basically the same as the current highway project budget construction and construction costs, including direct costs, management fees, profits and taxes.
1) direct costs, including labor, materials and construction machinery costs. Machinery idle bench fee can be calculated as a percentage of the budget unit price such as 50%.
2) The management fee shall be selected according to the rates of each rate actually incurred in the claimed event.
3) For extra work claims, the contractor may claim for profit and tax according to the actual situation.
In the practical application, the owner, engineer and contractor also tend to use the bill of quantities in the unit price, rate as the basis for the calculation of the cost of the claim, the method that is simple and practical, easy for the three parties to receive; on the one hand, the contract works list unit price is the contractor believes that a more satisfactory bidding price, including direct costs, management fees, profits and taxes, etc., is a kind of comprehensive unit price; on the other hand, as the Owner, since the contractor's bill of quantities has been accepted, the use of this assessment of the cost of the claim should naturally be reasonable and acceptable; and, such as the method of calculating the cost of the claim according to the project budget, may be in the materials, machinery costs and the use of various rates on the more divergent, and even make the two sides to insist on not being able to determine a reasonable and satisfactory cost.
I have used the unit price method many times to calculate the cost of claims in the process of dealing with the cost of claims, so that the claims can be handled conveniently and concisely. For additional work claims, generally can be directly multiplied by the additional workload to the existing unit price as compensation costs; for loss claims, the amount of loss can be expressed in physical workload (such as rework workload), the amount of the part can also be estimated using the existing unit price. Only when it is not possible to refer to the existing unit price, the cost is calculated using the budgetary flat-rate method.
Examples of claims for costs
1. Claims arising from contradictions or defects in the contract documents
Basis for claim: 5.1 Dominant language and law, 5.2 Priority of contract documents.
Content of Claim: Chinese version of the bidding document stipulates that the strength of the second gray base layer is 0.8MPa, the English version of the bidding document stipulates that it is 0.6MPa, and the construction drawings require 0.8MPa, and the engineer instructed to require construction according to the construction drawings of 0.8MPa in the course of construction. The Contractor calculated the bid price at 0.6MPa according to the principle that the dominant language is English in paragraph 5.1 and the technical specifications take precedence over the construction drawings in the contract documents in paragraph 5.2, and requested to increase it to 0.8MPa during the construction, and shall be compensated for the cost.
Proof documents: bidding documents in Chinese and English, construction drawings, engineer's instructions, material procurement contract.
Calculation of the claimed cost: the compensation cost is calculated by considering the difference between the increase of 7% orthopedic content and the decrease of 7% of two-ash content on the basis of the original two-ash base layer quotation.
2. Claims arising from late submission of drawings
Basis of claim: Costs of delayed and missed drawings in paragraph 6.4.
Content of the claim: a cross-railway bridge T-beam construction, the contractor received a notice from the engineer, the plate rubber expansion joints change to QMF steel expansion joints, beam end of the pre-embedded reinforcement needs to be adjusted, the contractor immediately notify the engineer, required to provide expansion pre-embedded parts before August 20 change, but not until September 20 to receive. During this period, the contractor's T-beam prefabrication plan was disrupted, especially during the prefabrication yard work basically came to a standstill between August 20 and September 1. For this reason, the contractor filed a claim for costs, but did not request an extension.
Supporting documents: relevant notices issued by the engineer and the contractor, records of the use of site personnel and machinery.
Calculation of claimed cost:
Labor idle cost 9816 yuan
Machinery and equipment idle cost 19,868 yuan
Processing of pre-embedded steel components according to the original drawings was scrapped for 8651 yuan
Reworking of the prefabricated T-beam ends has been 5,323 yuan
Total amount of the claimed amount of 43,658 yuan
3. Unfavorable Claim for Natural Conditions and Underground Physical Obstacles
Basis of Claim: Unfavorable external obstacles or conditions in paragraph 12.2.
Content of the claim: a bridge bored piles design provides geological information for sub-clay, clay and sub-sand layers, but in the construction of bored piles are found in different depths of soft rock layer, increasing the difficulty of construction, and this situation is an experienced contractor could not foresee, the contractor asked for compensation for the cost of drilling.
Supporting documents: drilling records of bored piles, geological survey report.
Calculation of the claimed cost: the increase in drilling cost should be basically the same as the level of bidding price, and the formula for calculating the increase in drilling cost per linear meter for soft rock layer is:
Increase in drilling cost per linear meter for soft rock layer=comprehensive bidding price for drilled piles×drilling labor and machine fee for clay layer/(drilling labor and machine fee for clay layer+grouting piles concrete labor and machine)×(base price for drilling for soft rock layer/drilling base price for clay layer - 1).
The project*** had 24 piles drilled with a soft rock layer found, totaling $457,896 in claims.
4. Claims Arising from Owner's Risks
Basis of Claim: Clause 20.3 Damage caused by improper design of the project is repaired by the Contractor, but the Engineer shall determine the cost of reimbursement to be given to the Contractor.
Content of the claim: a bridge designed to consider the clearance under the bridge navigation is not adjusted, 78 pieces of plate girder lifting found that the clearance is low 0.3m, and both ends of the bridge approach to the grass-roots level has been constructed, the engineer asked to lift all the plate girder, cover girder height 30cm, before and after the approach slope of the longitudinal slope of 100m adjustment, add a layer of two gray grass-roots level and the original two gray grass-roots level, the contractor asked for additional rework costs and delayed for one month.
The contractor asked for additional rework costs and a one-month extension.
Documents: original construction drawings, bridge elevation acceptance form, engineer's instructions on slope adjustment.
Calculation of the claimed cost:
Hollow slab girder lifting and reinstallation cost according to the fixed amount 19812 yuan
Increase the cost of subgrade according to the bill of quantities unit price 209513 yuan
Cover girder heightening cost 12,312 yuan
Construction management fee of 5% 12,082 yuan
Total amount of the claimed money 253,179 Yuan
5. Claim for additional tests
Basis of claim: inspection costs not stipulated in paragraph 36.4.
Content of the claim: the contract specifications, construction drawings are not put forward grass-roots, sub-base bending test requirements, but the engineer instructed that the grass-roots, sub-base bending value must be examined, and thus, after passing the test, the contractor should get the test costs.
Substantiating documents: engineer's instruction, report sheet of bending settlement test.
Calculation of the claimed cost: 6 laborers are needed for the bending settlement test, one Yellow River car, and one set of bending settlement meter (at 50% of the purchase price). According to the frequency of the engineer's instructions to calculate the number of measurement points, the number of measurements can be completed per shift according to the actual situation, labor, automobile shift unit price according to the fixed amount, thus calculating the cost of 265422 yuan, in addition, taking into account 5% of the management fee, the final determination of the amount of the claim is 278693 yuan.
6. Claims for engineering changes
Claims based on: 52.1 paragraph changes in the estimate.
Example 1:
Content of the claim: K16+473 position was originally designed as ф1.5m round pipe culvert, the engineer issued a change notice requesting to change to 6×4.15 reinforced concrete box culvert, 38.5m long. 6×4.15 box culvert in the bill of quantities quoted at 11,249.54 yuan/m, but the contractor argued that the roadbed at K16+473 was filled to a height of 4.5m. Together with the culvert bottom position of 4.15m below ground level, the cumulative excavation depth of the secondary excavation reaches 8.7m, which makes the construction more difficult, and the original tender price is already obviously not applicable, so the contractor requested to re-draft the unit price.
Calculation of the claim cost: the new box culvert offer is composed of two cases: 1, the box culvert main structure concrete, reinforcing steel according to the bill of quantities of box channel concrete, reinforcing steel unit price valuation; 2, auxiliary engineering costs, such as cofferdams, drainage, roadbed excavation, construction right-of-way, box culvert backfill, according to the fixed amount of calculations, the rate of the management fee according to the actual construction conditions selected. Finally, the overall cost of box culvert is calculated as 1017735 yuan, unit price 26434.68 yuan/m, which is 584628 yuan more than the original offer of 433107 yuan. With unit price change way to avoid the loss caused by the original unit price is low.
Example two:
Content of the claim: a bridge main span substructure has been constructed according to the four-lane design drawings, the owner in order to reduce the difficulty of construction of the main span in the future widened into six lanes, the main span substructure is required to widen into six lanes. The contractor is requesting to be paid for the cost of the secondary approach and the cost of the pier widening and splicing concrete construction.
Supporting documents: notice of change, substructure widening construction organization design.
Calculation of claimed cost: completion of pier after widening. The amount of physical works is measured directly according to the list unit price, and the claimed cost consists of the following parts:
Equipment second transfer fee 11,186 yuan
Mud pool reconstruction fee 2,197 yuan
Site regrading and construction right-of-way repair 24,510 yuan
New and old piers spliced and chiseled out of the concrete fee 4,560 yuan
Site management fee 15 percent 6368 yuan
Total amount claimed is 48,821 yuan
7. Claim for increase or decrease in the volume of work
Basis of claim: 52.2 paragraph engineers do have the authority of the rate, 52.3 paragraph change more than 15%. (The following example is based on paragraph 52.2)
Content of the claim: If an item involves an amount more than 2% of the contract price, and the actual amount of work carried out under the item exceeds or is less than 25% or more of the amount of work in the bill of quantities, an adjustment of the unit price of the item may be considered. The contractor's unit price for gravel drainage bedding was $66.93/m3, the bill of quantities was 111,660 m3, or 2.05% of the contract price, and the actual quantity of work was 208,584 m3, or 186.8% of the bill of quantities for that line item, which qualifies for a unit price adjustment. The contractor's quotation for this item was much lower than the reasonable price of $80/m3, and the contractor proposed that the owner should exempt the contractor from the loss due to the greatly increased volume of work and the fact that the construction period had not been prolonged after the increase in the volume of work, and the contractor also demanded to compensate for the additional cost of catching up the work.
Calculation of the claim cost; by the owner, engineer, contractor tripartite negotiation, the use of neighboring contractor's reasonable offer of 84.68 yuan / m3, beyond the bill of quantities of gravel drainage mat to be compensated for the calculation formula is as follows:
(84.68-66.93) × (208584-111,660) = 1720401 yuan
8.INSURANCE CLAIMS
Basis of Claim:
Any amounts not insured or not recovered from the Underwriters under Section 21.3 shall be shared by the Owner or Contractor in accordance with the responsibilities set forth in Article 20.
Content of Claim: In 1996 and 1997, the construction of the project was affected by floods and typhoons respectively, and the cost of damage was $907,666, but the insurance company only paid $310,000. Because the two floods and typhoons (the meteorological department produced a certificate saying that "rare in all years") is an experienced contractor usually can not predict and prevent the force of nature, the remaining 597,666 yuan loss should be shared by the owner, the contractor according to the responsibility.
Calculation of the claimed costs: the owner argued that although the two floods and typhoons were forces of nature that an experienced contractor would not normally be able to predict and prevent, the contractor still had a certain amount of time to take precautions after receiving the weather forecasts. Finally, the owner, the engineer, the contractor **** the same negotiation on the failure to obtain compensation from the insurance company for the loss, the owner to compensate the contractor 60% or $358,600.
9. Failure to provide site possession of the claim
Claims based on: 42.2 If the owner fails to give the right to site possession in accordance with the provisions of paragraph 42.1, resulting in the contractor to pay the cost, the contractor is entitled to reimbursement from the owner.
Example 1
Content of Claim: A bridge with 4 sets of bored piles was being constructed from south to north according to the plan, but the factory building across the bridge was not demolished and relocated according to the time limit promised by the Owner due to various reasons, which made the construction plan of the 4 drilling rigs disrupted, and the Contractor waited for the plant to be demolished and relocated for 7 days, and had to build a separate right-of-way and make a detour to the north side of the road for construction, which resulted in the cost of removal of the rigs and the cost of idling the rigs should be reimbursed by the Owner. Idle costs caused by this should be reimbursed by the owner.
Substantiating documents: records of man-machine idling, site photographs, contractor's construction plan, and memorandum on the deadline for dismantling and relocating the plant.
Calculation of the claimed cost:
Cost of borrowing land and construction of additional 500m of right-of-way is RMB 55,782 yuan
Man-machine idleness cost (7 days) is RMB 16,723 yuan
Winding way and moving machine cost (800m) is RMB 10,000 yuan
Construction management fee of 5% is RMB 4,125 yuan
Total claimed cost is RMB 86,630 yuan
Example 2
Constantiation documents: site photos, contractor plan, and memo of plant demolition period.
Example two
Content of the claim, a cross-railway bridge main hole girder erection, the railroad department according to the Ministry of Railways documents require the collection of 120,000 yuan construction safety management fee, the contractor believes that the owner did not provide "site possession and its access", that is, across the railroad hollow plate girder erection of the required construction work "The Contractor argued that it should not be held liable for the construction safety fee because it was not due to the Contractor's negligence (e.g., poor planning, failure to take adequate safety measures in advance, etc.), and that, pursuant to Section 42.2, the Contractor should be held liable for any costs incurred by the Owner as a result of the Owner's failure to give possession.
Substantiating documents: notice of the Ministry of Railways on the collection of safety fees for construction over the railroad, receipts issued by the railroad.
Calculation of the claimed costs: the owner pays the contractor all the costs according to the amount shown in the construction safety fee receipt issued by the railway department.
10. due to price changes caused by the increase or decrease in the cost of the project caused by the claim
FIDIC contract conditions have been given to the price adjustment formula, the contractor according to the provincial bureau of statistics quarterly price indexes provided by the calculation of price adjustment coefficients, to the end of the project, the contractor *** to obtain the 360,530,030 yuan price adjustment compensation costs.
Four, conclusion
Claims is the contractor in the implementation of highway engineering projects in the process of fully utilizing the high level of management, a wide range of contracts, law, business, engineering technology and other comprehensive knowledge and knowledge of behavioral sciences, to maintain their own economic interests in an important way. Contractors to successfully carry out the claim, should do the following aspects of work:
1. Contractors must organize special personnel engaged in claims work, usually in-depth construction site as engineering and technical management personnel, comprehensive familiarity with the project, in order to find the opportunity to claim at any time.
2. The development of claims management system, strict adherence to the procedures for filing claims, the preparation of claims documents require clear logic, well-organized, justified.
3. Establish a good and sincere cooperative relationship with the owner and the engineer, and make them understand that accepting reasonable claims made by the contractor will ultimately enable the contractor to better serve the job.
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