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Construction Law/Transportation costs, additional remote quarries

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Question
Dear Mr. Sverdlin
MDB Haromonized edition 2005 GC FIDIC

We are the supervision consultant for the road project. The contract designates 22 roadside quarries for the construction of diaphragm and shoulders of lime stone sand mix.Bill says quarries are located between 6-11 km. However the contractor says in these 22 quarries located between 6-11 km they found noting and or not enough materials therefore they had to search other places outside 6-11 km, some of them located 40 km away and so on. Now they are claiming compensation for transportation distance increase because the quarries are located far from the project area.
my quastion is 1. Is the contractor right to claim compensation for the transportation cost increase and 2. what supporting documents to prove the claim they have to submit and to what the consultant has to pay attention in the first place.

Thank you

Answer
Gerry Sverdlin
Gerry Sverdlin  
29-Dec-2012
Dear Mansur,
The facts you laid out point to an existence of an apparently valid entitlement owed to the contractor under a rubric of changed conditions of the contract.  Although this appears to be the claim arising out of the unforeseen subsurface conditions, this type of claim is basically of defective specifications, where the quarries specified were not capable of yielding required aggregate in proper quantities and substitute or additional source quarries had to be located by the contractor.  
Provided the liability for defective quarry specifications and locations rests squarely with the Owner or its designer (although fact-specific, but usually the designer who prepared the tender documents), the Contractor seems to be entitled to full compensation of its additions costs incurred due to the defective specs – assuming, of course, he had no contributory liability for locating quarries or designating their respective yield rates and volumes.
In order to claim its compensation, the contractor would have to show the following:
1.  That proper aggregates were indeed not found in the quarries specified in the Contract within 6-11 km from the site;
2.  The cost of locating additional quarries (geotechnical investigations, survey, temp. easements for excavations, road permits, excavation or blasting permits, restoration / reinstatement costs - i.e. all costs allocated to finding other sources of aggregate acceptable under the Contract);
3.  The cost of additional transportation over and above the Contract-specific quarries - such as, fuel and consumables, tires, depreciation of the transport for the extra-mileage,
4.  Costs of disruption caused by defective specs = additional number of transport vehicles to mitigate delayed delivery, equipment utilization rate change per day/shift, re-sequencing of contractor’s operations, costs of consequential delay to other milestones affected; potential claims by affected 3rd parties;
5.  The cost of delay arising solely out of increased distance(s) of supply quarries - if number of transport vehicles stayed as prescribed in the Contract (Item 4 above) the cost of extended presence of the contractor on site (site office and maintenance crew, coupled with delayed presence of the consultant on the project) compared to original baseline schedule including, but not limited to, the costs of home office overhead, extended insurance, bonds, etc. for the extended period.
There are several distinct types of claims joined into a conglomerate claim.  Although some of the sub-types of this conglomerate claim you may not be familiar with, your job as a supervising consultant is to help the contractor to assemble the right types of records - by category - attributable to each element of the potential claim, so that both parties are in the position to carry out a proper assessment of validity of the Contractor’s claim - and to reach an equitable settlement of it as quickly and amicably as possible.  Although the burden of proof rests with the claimant-contractor, the level of requisite proof is by preponderance of the evidence (+/- 51% of more likely than not).  Without site-specific facts, this outline should provide you with sufficient kick-start.
I hope the answer is helpful to at least commence setting up the proper categories of records necessary for tracking all pertinent costs incurred under this claim.
Regards,
Gerry Sverdlin, PE, Esq.

Construction Law

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Gerry Sverdlin

Expertise

Questions I can answer or provide assistance to reflect the following subjects: contract terms and conditions, interpretation of ambiguity, construction management and practices, claims for costs and time, variation / change orders, disputes, dispute resolution techniques and organizations, claims for extra work or materials, delay analysis, disruption or interference, defective design and negligent supervision, construction risks and mitigation, warranties and insurance. Questions I can NOT answer: too numerous to list here.

Experience

Mr. Sverdlin provided over 20 years of services in dispute resolution and expert opinion of complex construction claims for extra work, delay & acceleration, defective design & installation, unauthorized deviations, differing site conditions, productivity loss, labor & material shortage, owner’s interferences, force majeure, bonding, warranties and insurance coverage. Mr. Sverdlin participated in dispute resolution proceedings regarding 10 mile sub-aqueous outfall tunnel at Deer Island Treatment Plant – Boston Harbor Project, and claims arising out of construction of the South Boston / South Bay Interchanges for the Central Artery/Tunnel Project in Boston, Massachusetts, USA, and multiple proceedings Middle East. Specialties: Mr. Sverdlin established expertise in construction contract preparation under EJCDC, AIA, FIDIC and agency-specific bespoke contract frameworks: procurement administration, resolving defects in scope of work coverage, specification and estimates, change order processing, project controls & cost recovery. Engineering practice encompasses design & procurement management of highway & rail transportation systems, wastewater treatment and drainage networks, key performance indicator regimen.

Organizations
2011 - CIArb Member Grade 1999 - Attorney at Law – Massachusetts Bar, BBO # 642980 1992 - Registered Professional Engineer - PE: Lic. MA-36839 - Civil Affiliated Memberships: MBA - Massachusetts Bar Association DRBF - Dispute Review Board Foundation TASA - Technical Advisory Service for Attorneys

Education/Credentials
2010 - 2011 - American University in Dubai -Grad. Sch. of Business Administration Construction Contracts, Means & Methods, Claims & Changes, Project Controls March 2009 - Chamber of Commerce, Colombo, Sri Lanka – Construction Management Seminar Changes & Claims, EOT/Delay Damages, Loss of Productivity – Measured Mile 2000- 2007– Boston Architectural Ctr & Wentworth Inst. of Technology - Construction Law 1991- 1993 - Northeastern University, Boston, MA – Land Surveying, Sewage Disposal System Numerous continuing education specialty courses Suffolk University Law School - Juris Doctor, law -1993 – 1997 Northeastern University - MS, Construction / Public Works Management - 1993 Polytechnic University - BS, Civil Engineering 1982 – 1985

Past/Present Clients
Representative Projects Dubai International Airport UAE Muscat & Salalah Int'l Airports Oman South River Dredging Mechanical Scituate, MA Permitting / Boundary Dispute (Title V) Worcester, MA Hazardous Material Site Assessment New Bedford, MA Groundwater Pollution Monitoring Burlington - Woburn, MA Hazardous Material Disposal - Site Clean-up Wrentham, MA Sewer Rehabilitation Project – STEP Abu Dhabi, UAE Dubai Metro - Road & Transportation Authority, Dubai, UAE Boston Harbor Project - Deer Island MWRA - BHP Winthrop, MA 1,200 MGD Waste-Water Treatment Plant Doha North Sewerage Treatment Works Ashghal, Doha, Qatar 254K m3/d STP, 25-km triple force mains, 33-km Interceptor Sewers 10,000 l/s PS Central Artery / Tunnel Project - MHD / MTA Boston, MA 116 lane-miles Old Colony Railroad - Commuter Rail (Boston, MA 70+ mi) Cherry St. Reconstruction Full-Depth Bridgewater, MA 2.1 mi Scenic Roads Reconstruction Town-wide Wayland, MA 8.7 mi Strawberry Hill Rd Reconstruction Full-Depth Concord, MA 1.7 mi Craigsville Beach Rd Reconstruction Full-Depth Hyannis, MA 3.4 mi Water Main Replacement Southborough, MA EMAAR – Gulf III Towers, Dubai, UAE Mixed-Use Hi-Rise Peabody Properties Residential Hi-Rise Lynn, MA Bristol Properties Shopping Mall Attleboro, MA May Institute (children w/special needs) Institutional Randolph, MA Bear Hill Executive Park Commercial Waltham, MA Prospect Hill Executive Park Commercial Waltham, MA Residential Community Subdivision 128 lots Hopkinton,MA Retirement Community Subdivision Residential – 126-lots Warren,MA Independence Mall Retail Kingston, MA Mashnee Village Subdivision Residential – 54-lots Buzzards Bay, MA Hyannis Industrial Park Heavy Commercial

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