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COST

THEJOURNALOFAACE INTERNATIONAL-
THEAUTHORITYFORTOTALCOSTMANAGEMENT

January/February 2016

ENGINEERING
www.aacei.org

THE INNER WORKINGS OF


ORACLE/PRIMAVERA P6
CONTINGENCY DRAWDOWN
FORECASTING,TRACKING,
AND ACTUAL CONTINGENCY
SPEND FORECASTING
CHANGING TREND IN
RISK ALLOCATION
DIFFERING SITE
CONDITIONS
COST ENGINEERING
CONTENTS

TECHNICAL ARTICLES
4 The Inner Workings of Oracle/Primavera P6
Ronald M. Winter, PSP FAACE

23 Contingency Drawdown Forecasting,


Tracking, and Actual Contingency
Spend Forecasting
Robert J. White

31 Changing Trend in Risk Allocation


Differing Site Conditions
Steven A. Collins and James G. Zack, Jr. CFCC FAACE

ALSO FEATURED
2 AACE International Board of Directors 52 Professional Services Directory
2 Cost Engineering Journal Information 52 Index to Advertisers
22 2016-2017 Election Board Candidates 53 Calendar of Events
52 New Recommended Practice

COST ENGINEERING JANUARY/FEBRUARY 2016 1


CONTENTS

COST ENGINEERING
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2 COST ENGINEERING JANUARY/FEBRUARY2016


TECHNICAL ARTICLE

The Inner Workings of


Oracle/Primavera P6
Ronald M. Winter, PSP FAACE

tence. The majority of P6 users are un-


Abstract: Oracle Primavera P6 scheduling software is noted for its diverse aware of the underlying calculations for
and extensive set of features and range. The newer date fields and their cal-
new date fields, nor do they under-
culation methods have started intense discussions and caused some misun-
derstanding in the scheduling community. The sheer number of different stand their intended usage. This article
date fields can be a benefit, or a curse, to the scheduler depending on the discusses the underlying calculations
users mastery of how they should be used. for P6 date fields and their potential
Every scheduler should clearly understand the softwares methods of cal- uses.
culation in order to use this powerful tool at its full capacity. This article will It is essential to understand the
define the durations used and describe the P6 date fields, their uses, and the underlying structural format of P6 soft-
underlying calculations. P6 examples will be used to calculate Critical Path ware before delving into its functions.

P
Method (CPM) dates on a schedule that has been progressed with status. This Without such appreciation, errors can
is a little known method of calculation. This article is based on an earlier easily be made in the execution. The
paper, presented in 2009 at an AACE International Annual Meeting, with new
basis of CPM is the accumulation of
and updated information and an entirely new emphasis. This article was first
presented as PS.2063 at the 2015 AACE Annual Meeting In Las Vegas. task durations following rules of logic
in order to calculate planned dates.
Thus, the P6 user must be aware of the
rimavera Inc, (now packages, including Primaveras earlier
basis and limitations behind the way P6
Oracle/Primavera) has a long scheduling software product, Primav-
handles durations and dates.
history of introducing Critical era Project Planner (P3.) This fact may
Path Method (CPM) schedul- explain why many experienced P3
P6 Durations
ing software, beginning in 1983. In users have so much trouble learning to
One of the greatest differences be-
1999, Primavera introduced an entirely properly use P6.
tween P3 and P6 software is how they
new CPM scheduling package designed This confusion is partly a result of
respectively deal with durations. Users
for enterprise-wide project manage- an incorrect assumption that P3 must
of P3 had to decide upon the unit of
ment, the name of which seemed to be an earlier version of the current P6
measure before they created a new
change yearly over the next 16 years. software. Date fields with similar
schedule. The P3 user must express all
This new softwares name has names in both P3 and P6 behave very
durations in units of months, weeks,
gone from Primavera Enterprise to P3e, differently in one than in the other. In
days, or hours. After the schedule was
P3 Engineering and Construction, addition, the plethora of new date
created, the chosen unit of measure
P3e/c, Teamplay, Primavera, P6, Project fields in P6 creates a steep learning
was forever fixed and indivisible. Most
Manager, Enterprise Project Portfolio curve to P6 mastery. A lack of docu-
CPM software works in a similar man-
Manager (EPPM), Professional Project mentation regarding these features
ner.
Manager (PPM), and P6 Professional. adds to the confusion.
Most construction projects are
For simplicity, this article will refer to all Besides a fundamental shift in the
scheduled in days. This unit of measure
of this software simply as P6. way that dates are conceptualized, P6
is normally appropriate for planning,
P6 handles dates fundamentally has more kinds of useable dates than
estimating, and measurement. Appro-
different from most other software practically any other software in exis-

4 COST ENGINEERING JANUARY/FEBRUARY 2016


priate unit granularity is enforced by an setting their user preference to only If the users display is set to display
engineering assumption that all work display whole days without hours. days, then any numerical entry is mul-
begins at the beginning of the work day When displaying durations, one can tiplied by the hours/day setting and
and all work finishes at the end of the also have P6 round the current duration that number is stored in the database
work day. P3 had no provision for to the nearest whole number. This does in hours for that entry. Alternatively,
measuring durations less than the cho- not mean that the dates and durations one can override the default setting by
sen unit of measure. If the schedule is are now being measured in whole days; entering the number followed by the
measured in days, then partial days only that the data is displayed that way. measurement acronym. For example,
were not allowed. Because the engineers who de- entering 5w (the w being a recog-
The point to be made here is that signed P6 used a method of storage nized short-hand to tell P6 that the
the engineers who designed P3 were that allowed for fractional dates and number is a measure of weeks) would
forced to consider significant accuracy. fractional days (down to the minute or cause P6 to multiply this number by the
If a schedule is set to measure dura- even second), they were not con- hours/week factor and store that num-
tions in units of days, then every math- strained the way the P3 engineers ber of hours in the database. If the de-
ematical calculation has to return a were. They were free to have durations fault display is still set to days, then P6
whole number of days. As an example, down to the minute and compute early would divide the number of hours
a six-day activity statused as 30 percent start and finish dates down to the stored in the database by the
complete would result in four days re- minute, regardless of how the end re- hours/day factor and display that num-
maining, not the 4.2 days that the sult was displayed. This ultra accuracy ber of days in the entry location the P6
mathematical calculation would sug- of date and time storage means that a user just used.
gest. Engineers would say that if work P6 user can plan in units of days, enter P6 displays the hours per time pe-
is planned using whole days and meas- only durations in whole units of days, riod settings in either the admin pref-
ured it in whole days, then it is false ac- and still get calculated results that are erence window or the user preference
curacy to try to predict anything with expressed in hours, minutes, and sec- screen (for pre-Version 7 users), as
better accuracy than a full days dura- onds. shown in Figure 1. Readers should note
tion. P6 handles this conversion of input that figures 1-3, 6-17, 19-23, 25, and
Users of P6 face an entirely differ- to storage in the database and back 31-33 are from Oracle Primavera P6,
ent philosophy about the measure- again into display with an hours per Versions 7 and 8.
ment of duration and time. All dates time period factor. There are four pos- Before Version 7, if the admin pref-
are stored in the database as a complex sible factors: erence option of, Allow users to spec-
number that describes dates as the ify the number of work hours for each
date, hours, minutes, and even sec- Hours/Day time period, is selected; then each
onds. In other words, all P6 dates are Hours/Week user can define their own hours/day
actually a measure of time. Hours/Month conversion factor. This results in each
Users of P6 can approximate the Hours/Year user potentially displaying a different
look of a schedule calculated in days by duration, given the same hour number

Figure 1 Admin and User Preferences for Time Periods

COST ENGINEERING JANUARY/FEBRUARY 2016 5


in the database and a different conver- schedules. In addition, various activi- splitting of activities to reflect acceler-
sion factor. If the admin preference op- ties in the same schedule may work on ation of the work.
tion, Allow users to specify the dissimilar work schedules.
number of work hours for each time Changing the conversion factor Smallest Unit of Measurement
period is not selected, the hours per whenever desired to meet current If any duration unit of measure-
time period settings defined in the needs does not solve the problem. ment is acceptable for input and every-
admin preferences are used for the Aside from having to keep a list of what thing is physically able to be stored
conversion. These settings for which schedules use which factor, there exists down to the nearest second, this begs
conversion option was used are not ex- the possibility that some activities in a the question: What is the basic unit of
ported with the schedule backup. schedule might need one setting and measurement in P6? The basic theory
P6 Version 7 (and later) users have others might need another. of calculation of a CPM schedule states
this admin setting changed to read, The correct method for assigning that there must be a smallest unit of
Use assigned calendar to specify the conversion factors is to use the Version measurement.
number of work hours for each time 7+ individual activity calendars to set The Primavera literature says that
period. The user preference setting each activitys day/hours conversion the schedule is calculated in hours. The
was removed in Version 7, and was re- factor. Another solution is to always Calendar work/non-working hours
located to the individual activity calen- enter all durations in the native hours per day template is calibrated to the
dars, as shown in Figure 2. A click on format, thereby avoiding the conver- nearest half of an hour, so this means
the calendars time period button sion altogether. Instead of entering 2 that whole hourly units cannot be the
brings up the hours per time period one would enter, 16h. This way, even smallest unit of measurement. The fact
window. Instead of one user prefer- if the displayed duration is incorrect, that it is possible to enter dates down
ence figure, each activitys calendar the database will contain the correct to the single minute seems to indicate
contains the desired conversion factor. figure and the calculated dates will still that P6 at least considers time intervals
Theoretically, each activity could have be correct. to the minute.
a unique conversion factor if enough There are a few issues that must To verify the smallest unit of meas-
calendars were created. be considered when using assigned cal- ure (and thus the CPM unit of measure
The pre-Version 7 feature of using endars for time periods. The adminis- for P6) one can set P6 to display activity
a single conversion factor for all activi- trator set conversion is still the default durations in hours with two decimal
ties does not work well. This setting is setting. All new calendars default to 8.0 places (the highest accuracy display
used for all projects and for all activities hours per day, even 24-hour calendars. available). When one enters 0.01 hours
and does not take into account that Finally, the user must be sure to change (which is 0.6 minutes) for Activity 0.01
various projects may operate different calendars when workdays or working Act, P6 automatically converts this dis-
work schedules and different shift hours change. This may necessitate the play to 0.02 hours (roughly one
minute). P6 will accept entries of 0.02
and 0.03 hours, but not 0.01 and 0.04
hours. Activity 0.04 Act accepts the
0.04 entry and displays 0.03. The com-
puted schedule results are shown in
Figure 3.
This schedule displays a complete
CPM project that is only six minutes in
length (from 08:00 to 08:06.) Activity
0.01 Act starts at 08:00 and ends at
08:01. Activity 0.02 Act starts at
08:01 and ends at 08:03. Activity 0.03
Act starts at 08:03 and ends at 08:04.
Entries of less than a minute get
rounded-up to a whole minute.
Clearly, P6 computes schedules to
a granularity of a minute. P6 handles
this unit of measurement as one
minute is equal to 0.0166667 hours.
The CPM network shown in Figure 3
would hand-calculate, as shown in Fig-
ure 4.

Figure 2 Assigned Calander for Time Periods

6 COST ENGINEERING JANUARY/FEBRUARY 2016


Figure 3 P6 Unit of Measure

Figure 4 CPM Calculations of a Six-Minute Schedule

P6 Dates 08:00 (8/24) equals 0.3333328. To- time, as well as the date, when enter-
P6 stores dates in what is known gether, this date and time would be ing actual dates. This is because of a
as Julian date format. This is a decimal stored in the P6 database as, problem called, the default time Issue.
number that uses whole numbers to 41705.3333328. This format is fully When a P6 user enters just the
represent the day and the decimal frac- able to handle any future require- date for an actual entry, the P6 pro-
tion to represent fractions of a day. ments, as the size of the number type gram must supply an appropriate time
Using the conversion factors of 24 used allows for more than two fol- to go with that date. The start of the
hours in a day and 60 minutes in an lowed by 10304 zeros years. day, 00:00 (midnight) is quite often
hour: Repeating Figure 4 in the actual the default. This means that when a P6
numbers used by P6 would result in the user enters an actual finish date, with-
One day = 1.0 day network displayed in Figure 5. out specifying a time, the date is set to
One hour = ( 1/24 ) = 0.041666 day the start of the day. This is incorrect as
One minute = ( 1/24/60 ) = Default Time Issue CPM equates this time to the finish
0.0006944 day The format that P6 dates are dis- time of the day before. If one wants to
played in actually has an effect on the designate an actual finish date, one
An example of this format using accuracy of entries. Normally, P6 users must specify a time of 16:00, or what-
the date and time of March 7, 2014 working in whole days tend to hide the ever time is used to indicate the end of
08:00 would find that March 7, 2014, display of the time. It is strongly recom- the working day. The result of this entry
responds to Julian date 41705 and mended that every P6 user display the has the following undesired effects:

Figure 5 P6 Date Calculations of a Six-Minute Schedule

COST ENGINEERING JANUARY/FEBRUARY 2016 7


One day activities become zero ways display times when entering Resource Date Fields
duration as the start and finish dates. Relationship Date Fields
time are set to the same date and Audit Record Date Fields
time (midnight). The Date Fields
When setting a late finish con- The first step in understanding P6 There are so many date fields de-
straint, the time is set to the start dates is to realize the scope and variety fined in P6 that a resource-loaded
of a day. This in effect causes the of the pre-established types, or date schedule with 1,000 activities would
constraint to actually occur one fields. Other date fields can be created most likely have at least 50,000 date
day earlier than it is intended, by the user but will not be covered fields set aside for use. A list of the pre-
when the constraint time is set to here. The definition of an activity date established P6 date fields are shown in
00:00 (at the start of a day) and field, means that every activity in the Table 1.
not 17:00 at the end of the day. schedule has a slot available for stor-
ing the particular date that applies just Project and WBS Dates
Oracle/Primavera provided a fix to that activity. Whether or not a date Even though activity dates are the main
for this issue in P6 Version 7 by auto- is actually assigned to that slot or field, focus of this article, a brief introduction
matically supplying the normal start P6 maintains a space for that date for to project and WBS dates is appropri-
time for starts and the normal finish every activity in the schedule. ate since some of them affect the ac-
times for finishes when not entered by One logical way of categorizing the tivity-level calculations.
the user. This software fix only works date fields is by functional hierarchy.
under some circumstances and does Date fields can be categorized into five Anticipated Start and the Antici-
not cover the issue of entering sus- main groups: pated Finish date fields are used
pense dates or constraint dates. In during the project planning stage,
order to be able to check for accuracy Project and WBS Date Fields and can be set at the Enterprise
and consistency, the P6 user should al- Activity Date Fields Project Structure (EPS), project, or

Table 1 Date Fields in P6

8 COST ENGINEERING JANUARY/FEBRUARY 2016


Figure 6 Early/Late Start/Finish Dates

WBS level. These dates are dis- Early Start/Finish and Once the CPM calculation is fin-
played at EPS level bars and Late Start/Finish Dates ished, P6 returns to the actual dates
columns when the schedule is just The Critical Path Method (CPM) is and generates a Gantt chart with bars
a placeholder and no activities are a procedure use to calculate projected showing a mixture of actual and calcu-
assigned. These dates remain as dates from activity remaining duration lated dates using the dates found in the
historical records when activities and precedence logic [3]. It is a curious start and finish columns. The barchart
are added and the CPM calculates fact that all who learn to manually cal- does not faithfully display the results of
the start and finish times. culate a CPM schedule always use a the CPM calculations, especially for
Planned Start date field is the start schedule without existing status. Un- bars before the data date that reflect
date of the project. No early dates fortunately, no available publication ex- the actual, not calculated dates.
will be calculated before this date. plains how to calculate the CPM when The above algorithm can be
This date will automatically be activities have actual status [2]. P6 ap- proven using P6. The P6 early start,
used as the data date until a new pears to be unique in the transparency early finish, late start, and late finish
one is manually entered. of displaying all internal CPM date cal- (early/late start/finish) columns are
Must Finish By date field is a date culations. This transparency has caused presented differently from their coun-
constraint placed on the project some consternation in the world of terparts in Microsoft Project or P3.
completion. Must finish by date scheduling experts who thought that After the CPM calculations are com-
determines the late finish of the they understood everything possible plete, Microsoft Project blanks out all
first activity in the backward pass. about their craft. calculated date entries for completed
P6 documentation offers very little Simply put: every activity in the activities. P3 actually deletes the calcu-
information about Forecast Start schedule is considered when comput- lated dates for completed activities
date. This date represents the start ing a CPM, even those that have been from the database and replaces those
date of the resource leveling statused as complete. Unless overrid- computed dates with the established
process on the backward pass. If den by a constraint, all activities with- actual dates. This substitution has led
resource leveling has not been out a predecessor are scheduled (with scheduling experts to conclude that ac-
used, this date will match the consideration to their calendars) to tivities with actual dates were not used
Planned Start Date. begin on the current data date (early in computing the current CPM sched-
Finish Date is the latest early finish start) and their remaining durations are ule dates.
date calculated when P6 last used to compute their early finish. This Beginning with their Version 5.0
scheduled the project. rule even applies to completed activi- software release, P6 took a third ap-
Actual Start is the actual start date ties with a remaining duration of zero. proach and boldly displayed the calcu-
of the project, and it is inherited Original durations have nothing to do lated dates, even for completed
from the first started activity. with CPM date calculations. activities. It only does this in the re-
Similarly, Actual Finish date is in- Immediate successors of the activ- tained logic CPM calculation mode. P6
herited from the last completed ities whose early dates were just eval- treats the progress override and actual
activity in the schedule. This field uated are considered in like kind with dates calculation modes the same way
will be blank until every activity completed activities all piling-up on as P3 does.
has been statused as complete. the data date like a stack of milestones. Figure 6 shows a P6 schedule dis-
This process continues until one finally playing the actual date columns, as
Activity Date Fields uncovers an activity with a remaining well as the early start, early finish, late
P6 activities have the largest share duration greater than zero (i.e., an un- start, and late finish columns for activ-
of the date fields in P6. Many of them completed activity). From here on, the ities that are completed.
are quite unique to this software. The calculations proceed as most CPM ex- Notice in the above example that
documentation supplied by Oracle/Pri- perts normally would appreciate. This Activity 0277X-12 actually started on
mavera on these unique fields is lack- process allows one to consider the de- 03APR06, but had an early start of
ing in detail and functional laying effects of uncompleted work re- 04DEC06. This early start date corre-
observation. sulting from out-of-sequence progress lates to the 04DEC06 data date used for
under the retained logic CPM calcula- that calculation. Also note that the late
tion rule. start of 11MAY07 indicates that this

COST ENGINEERING JANUARY/FEBRUARY 2016 9


Figure 7 No Progress Activity - Start/Finish Date

Figure 8 Activity in Progress - Start/Finish Date

Figure 9 No Progress Activity - Planned Start/Finish Date

completed activity has float! After all, played in Figure 7. If there is no budgeted and current information as
total float is merely the subtraction of progress on the activity, then the start well.
the early start workday from the late date is equal to the early start and the Planned dates are generated from
start workday. Given the two calculated finish date is equal to the early finish. the calculated early dates. They match
dates, one can compute the float by The user can manually input a start the early dates exactly as long as the ac-
subtraction. date, but schedule calculations will tivity does not register an actual start,
If P6 can compute the total float generally overwrite the user input. resource leveling is not used, or the
for completed activities, then why does When the activity is in progress, user does not manually update these
it not display this value? The initial P6 start is equal to the actual start and fin- fields. As the schedule is statused and
Version 5.0 did calculate and display ish will remain equal to early finish, as the resulting CPM calculations cause
this float for completed activities, as shown in Figure 8. Again, the user can the early dates to change, the planned
well as uncompleted ones. Actually dis- manually enter a start date and user dates automatically mirror the early
playing float values for completed ac- input will overwrite actual date. dates change, as shown in Figure 9.
tivities was the last straw for When the activity is complete, Once the activity reports progress,
scheduling experts and evidently start and finish dates will be equal to planned dates are neither static, like
everyone complained. Primavera the actual start and finish dates. In this baseline dates, nor dynamic, like early
quickly issued Version 5, Service Pack case, if a user manually enters a start and late dates. When the user assigns
1, to blank out the float column for or finish date, P6 will keep the changed an actual start to an activity, the
completed activities. Just like the moral dates and actually overwrite the actual planned start date is frozen to match
of many science fiction movies back in dates without notice! the actual start date (unless manually
the 1950s, this was information that, changed). The planned finish date will
Man was not meant to know. Planned Start/Finish Dates also then be frozen (assuming no man-
The astute reader may ask, If P6 Of all the date fields available in ual intervention.)
can be used to display the float of com- P6, probably the most interesting and Planned finish is not equal to early
pleted activities, then is this float the controversial ones are planned dates finish or even to the actual finish date
activitys as-built float? Unfortu- (Planned Start and Planned Finish.) The (once applied.) Instead, planned finish
nately, computing the as-built float of majority of P6 users are unaware of the is equal to actual start, plus the activ-
an activity is not that simple [7]. planned date calculations and how itys original duration (using the appro-
they are used. This is understandable priate calendar). The dates inferred by
Start/Finish Dates as only one reliable partial reference the baseline bar do not represent
Start and finish dates work similar was found [4]. when the activity actually started and
to the way they do in Microsoft Project. Planned dates do not always dis- finished. Rather, they represent the
They represent the early dates when play planned information. In some in- date that the activity actually started
activities have no progress, as dis- stances they are used to display and when it should have finished, not

10 COST ENGINEERING JANUARY/FEBRUARY 2016


when it actually finished. earned value curves when no External Early Start and
Manual input into the planned baseline has been assigned. Once Late Finish Dates
date fields can change all assumptions. a baseline has been set, then base- Otherwise, independent P6 sched-
The early start and planned start fields line values are used for displaying ules can be linked by assigning a rela-
are not directly linked. Manually chang- the earned value curves. tionship from one activity in one
ing the planned start date will not af- The S-curve graphic is generated schedule to another activity in the sec-
fect the early start date. Later schedule from the planned dates. ond schedule. It is dangerous to export
CPM calculations will overwrite the a single schedule when schedules are
user input with the calculated early Planned dates are often acciden- linked to other schedules with such re-
start date. There is no warning to the tally used when sharing layouts created lationships, as these relationships are
user that their input will be overwrit- by other people for other schedules. then lost in the exported file.
ten. This occurs when the layout says to In cases like this, where the inter-
The user can manually input a show baseline bars, but the receiving schedule relationships are lost, P6 does
planned finish to overwrite the calcu- P6 user has not designated a baseline its best to maintain proper timing by in-
lated planned finish. This change will (the assignment does not import.) In ternally constraining the appropriate
also automatically change the original this case, planned dates are automati- early/late dates of the activities missing
duration of the activity without provid- cally used in its place without warning. their inter-project relationships. These
ing any warning to the user. Layouts are a formal package of internal constraints are called, exter-
Planned dates are used by many of settings used to define what is dis- nal early start and external late fin-
the popular features of P6 such as [4]: played on the screen. To make commu- ish constraints This causes the
nicating schedule issues easier, schedule to mimic the effects of the re-
If there is no baseline assigned, multiple users often share the same lationship at the time of the export.
then the planned dates are used settings, or layout. Thus, when one The imposed constraints will not
for calculating the variances. user assigns a primary user baseline show up under the tasks constraint
Progress spotlight uses the and a second user applies this layout boxes, as these are internally imposed.
planned dates. This differs from but they have not assigned a user base- The only indication of an imposed con-
what one expects after using other line, then the "planned dates" are used straint will be an asterisk printed to the
software with update progress. as a baseline. right of the date in the start or finish
Actual dates are changed to column. These constraint dates will
planned dates without any warn- The Intended Use of Planned only be visible if the external dates
ing. To overcome this problem, Dates columns are displayed.
many schedulers run a global Planned dates are primarily in- Most people notice the results of
change to set the planned dates tended to be the source of baseline external constraints when they have
equal to the start and finish dates schedule dates. When a baseline sched- unexplained extreme negative float
before running the automatic up- ule is saved, whatever dates that were values on isolated activities in the
date feature. saved in the activity planned dates schedule. Others note this when activ-
When a baseline has not been as- fields will be the dates displayed when ities are unresponsive to what-If
signed, planned dates are used to the baseline start and baseline finish analyses or schedule updates; unwill-
display a project or user primary dates are displayed or listed. Unlike ing to display the effects of changes to
baseline bar. Planned dates are with MS Project, baseline dates are not the system.
represented as the bars for base- stored independently in the database. To stop P6 from automatically cre-
line schedule when nothing is se- Apparently, when opening a schedule, ating such external constraints, the op-
lected in the assign baselines form. P6 references the schedule designated tion setting for, Ignore relationships to
P6 users who have baseline sched- as the baseline schedule and displays and from other projects on the sched-
ules, but forget to properly assign the planned dates in the baseline date uling options tab should be checked. P6
them, end up with the current field of the schedule. will then skip creating external dates
schedules planned dates for base- Planned dates have a highly com- during XER backups. The user can also
line schedule dates. plex, two-way interaction with other directly remove the external con-
Planned dates are also used in the fields in the schedule and even in other straints entirely from the schedule by
activity usage profile to show the schedules assigned as baselines. Chang- showing the external early start and ex-
budgeted values and as the base- ing a planned start date can change the ternal late finish columns, deleting the
line values when no baseline has activitys actual start date. Changing a external dates shown, and then recal-
been set. Once a baseline has planned finish date may result in chang- culating the schedules CPM dates.
been assigned, then baseline dates ing the activitys remaining duration. These constraints are not listed in the
are used. Manual entries into these fields are standard constraints boxes on the ac-
Planned dates are also used in the therefore strongly discouraged. tivity tab.
activity usage profile to show the

COST ENGINEERING JANUARY/FEBRUARY 2016 11


Figure 10 Suspend and Resume - Early Start/Finish Date

Figure 11 Suspend without Resume - Early Start/Finish Date

Suspend and Resume Dates duration. dates are unique to resources.


The suspend and resume functions Activities can be set to resource
in P6 were added in Version 5. Many driven. In this case, activity dates Remaining Early
software packages suspend an activity are computed using resource cal- Start/Finish Dates
at the end of the working day. A P6 ac- endar. Although the P6 documentation
tivity is suspended on the exact minute Resources can be set to driving does not directly state this, the remain-
and hour specified (which due to the activity dates. In this case, the ac- ing early and late start/finish dates ap-
default time issue is usually at the be- tivity will not be scheduled to pear to be the computed early and late
ginning of the specified day). begin until the resource begins. start/finish dates adjusted for resource
P6 calculates an actual duration Entering an actual date for re- leveling. If resource leveling has not
for all activities based on the amount source can update the activitys been run and no manual entry has
of non-suspended time. The amount of dates. Resource actual dates must been made to this field, then remaining
time that an activitys progress is sus- be within the time period of activ- early start equals the early start date as
pended is generally deducted from the ity actual dates. shown in Figure 12.
total duration. Units and costs are not The existence of resource actual Like the early start date, this date
spread over the period of suspension. dates will prevent the user from continues to track the earliest the ac-
If the suspend/resume functional- being able to remove activity ac- tivity can continue if the activity is sta-
ity is used, then the early start is set tual starts when attempting to de- tused as active. In P6 Version 7, the
equal to the resume date. The early fin- status an activity. remaining fields were blanked out if an
ish is calculated using the resume date Resource leveled schedules also actual date was registered. In Version
and the remaining duration as shown strongly affect dates. 8, they are now displayed just like the
in Figure 10. standard early and late start/finish
If the suspend date is entered P6 can be configured to automati- dates as shown in Figure 13.
without a resume date, then P6 ignores cally generate the resource dates; but The default operation is to over-
the suspend date. P6 sets the early even then, there are instances where write the early start date with the re-
start to the data date shown in Figure the scheduler must manually adjust re- sulting remaining early start date after
11. In other words, P6 ignores the sus- source dates in order to maintain the schedule has been resource lev-
pend date unless a resume date is also proper functioning of the schedule. eled. There is a resource leveling op-
entered. The resource date fields include: tion to preserve the scheduled early
dates instead of overwriting them. In
Resource Dates Planned Start and Finish Dates this case, one will be able to observe
Resources assigned to an activity Actual Start and Finish Dates the earliest the activity could start or
have almost as many dates assigned to Start and Finish Dates resume; as well as the date that re-
them as do activities. There are several Remaining Early Start and Finish source leveling picked to start the ac-
configuration settings that must be set Dates tivity as shown in Figure 14.
for proper functioning of activity re- Remaining Late Start and Finish Once again, the reader is cau-
sources: Dates tioned not to directly enter date infor-
mation into these calculated fields,
Activity type should be fixed dura- The first three sets of dates oper- even if this is allowed by P6. For in-
tion if resourced or otherwise the ate summarily to those corresponding stance, the user can manually change
resources will change the activitys dates for activities. Only the remaining the remaining early finish date and this

12 COST ENGINEERING JANUARY/FEBRUARY 2016


Figure 12 Unprogressed Activity - Remaining Start/Finish Date

Figure 13 Activity in Progress - Remaining Start/Finish Date

Figure 14 Resourced-Leveled Resume Dates

would automatically change the re- of date field records, every record in The P6 User ID of the person per-
maining duration of the activity with- the database contains the three audit forming the above record transactions
out warning. date fields listed above. P6 has storage is also recorded. Most of this informa-
set aside to hold a unique date from tion is not viewable by the P6 user. The
Relationship Dates every one of the above fields for every audit dates fields that are viewable in-
When one considers that a rela- activity in the schedule. A resource- clude those listed in Table 2.
tionship with a lag functions just like an loaded, 1,000 activity schedule could Figure 15 displays an example of a
activity with duration, it is reasonable easily have 50,000 date fields, set aside P6 schedule with the activity audit
to assume that computed early and in the database just for that one proj- dates shown. The added by, added
late start/finish dates could be com- ect. date, last modified by, and last modi-
puted for relationships. If these dates Audit fields were added to practi- fied date columns are shown.
can be computed, then one could also cally every record in the P6 database The blank added date fields are
compute the total float of a relation- beginning with Version 5. Activities, re- the result of showing audit information
ship. This float is not necessarily the lationships, activity resources, and for finish milestones. This is a P6 bug
same thing as activity float. In fact, it even activity steps have audit fields as- that is on the list of potential enhance-
would be considered the measurement signed to every transaction. Each indi- ments.
of the controlling relationship between vidual record has the following date
two activities. information recorded: P6 Calculations
P6 places these relationship date Oracle/Primavera P6 and EPPM soft-
fields under the heading, Multiple Date Created ware have many advanced CPM func-
Float Paths. By expanding this head- Date Last Updated tions. This article will cover the basis
ing, one can display the following Date Deleted for these functions, as well as the op-
columns in the relationship tab: tions available. It will also break down

Relationship Early Start


Relationship Early Finish
Relationship Late Start
Relationship Late Finish
Relationship Total Float

These dates are not saved in the


database. They are re-computed every
time the user opens a new schedule.

Audit Dates
In addition to the four main types
Table 2 Viewable Audit Dates Fields in P6

COST ENGINEERING JANUARY/FEBRUARY 2016 13


Figure 15 Activity Audit Dates

the functions of both the longest path the beginning of that day. Similarly, if tween time and duration. With P3, a
calculation and the multiple critical an activity finished on the 01AUG08, it one-hour duration activity might start
paths function. was at the end of that day. Because un- at 08:00 and end at 08:59; that is, ac-
started daily activities begin in the tivities start at the beginning of a pe-
CPM Calculations morning and always finish at the end riod (in this case an hour) and end at
P6 uses a different CPM calcula- of the day, the CPM calculation rule for the end of the time period.
tion formula than other software prod- the earliest start of the successor activ- P6 uses the format employed by
ucts, such as P3. With P3, the formula ity requires one to add 1 to the work Microsoft Project scheduling soft-
for calculating the early finish of an ac- day number of the finish of the prede- ware. For P6, a one-hour activity might
tivity was: Early Start + Duration 1 = cessor when computing the start of the start at 08:00 and end at 09:00. By say-
Early Finish. P6 does not subtract the successor [1]. This is not the case with ing that the activity ends at 09:00, this
1, but later rounds-up finish times to P6. The example shown in Figure16 really means that it ends at 08:59:59.
the first non-working period when dis- highlights this issue. With P6, one does not need to add 1
playing the date [6]. This can give the When both activities are on the to time difference calculations, nor is
same end result, with a different same calendar, Activity 2 starts the day the addition of 1 necessary to com-
day/hour being displayed. If 16:00 was after Activity 1 finishes. As shown in pute the start of successor activities
the last working hour of the day, P3 the bottom section of Figure 16, Activ- when dealing with finish-to-start rela-
would indicate a completion of 16:00, ity 1 is on a 9:00 to 17:00 calendar and tionships.
whereas P6 would indicate 17:00. Activity 2 is on an 8:00 to 16:00 calen- How P6 Calculates the CPM
With P3, the data date was the be- dar. In this case, Activity 2 starts the P6 calculates CPM dates on in-
ginning of the first available working same day Activity 1 finishes. progress schedules differently than
time unit and the activity finish was the Another issue that former P3 users most people think. There is no complex
end of the time unit. If the data date must deal with is the fundamental dif- formula used to show retained logic
was 01AUG08, then the data date was ference in defining the correlation be- with out-of-sequence activities. The

Figure 16 Eects of Calendars

14 COST ENGINEERING JANUARY/FEBRUARY 2016


Figure 17 Out-of-Sequence Progress Before CPM Calculation

answer is so simple that it is difficult to between the actual date bar and the P6 recalculates the duration of ac-
convince some people of the correct- new planned work is optionally drawn tivities with expected finish dates as
ness. Luckily, P6 itself displays how it is in with necking, as shown in Figure 19. the difference between their actual or
done. Notice how the early start date for calculated early start dates and the as-
To use a physical example to ex- the third activity in Figure 19 is signed expected finish date. Expected
plain the process, imagine the follow- 08APR08; six days later than the cur- finish constraints can be defined in the
ing four activities shown in series in rent data date. The start date is listed schedule but not considered during the
Figure 17. Out-of-sequence status has as 17MAR08; the actual start date. scheduling process. This CPM option is
been entered, but the CPM has not as checked by default.
yet been recalculated. Schedule Calculation Options There is an option to have P6 au-
When P6 re-computes the sched- P6 has more schedule calculation tomatically level the activities for re-
ule using the retained logic rule, it only options than most software packages source availability each time the
looks at the activity remaining dura- and most of them will affect the date project is scheduled. This can be a
tions and begins calculating the sched- calculations. The calculation options, nearly invisible operation, as resource
ule from the data date (02APR08 in this defined in the general tab shown in Fig- leveling reports (if produced) are not
example.) For clarity, the hours and ure 20, will be discussed. automatically displayed. Schedule
minutes are not shown. Figure 18 The first schedule option on the analysis should always begin their re-
shows just how simple this process is. general tab is whether or not to ignore views by checking to see if this option
After the schedule has been recal- relationships to and from other proj- is selected. Be sure to also note that if
culated, The start and finish columns ects. One can elect to have P6 ignore the option to automatically schedule is
are populated from the early start and relationships that link to activities lo- also selected, the schedule will be lev-
early finish columns unless there is an cated in different schedules. If this op- eled every time the user moves from
actual date, which replaces the calcu- tion is selected, P6 computes the one activity to the next. This can result
lated date followed by the symbol, A schedule without regard to any logical in a noticeable time lag and slow down
timing in any other dependent sched- data entry.
ule. P6 does not provide any indication Out-of-sequence progress is not
of whether the current schedule actu- uncommon in construction schedules.
ally has any inter-project relationships. P6 includes three different options for
If this option is selected, backups of handling the computations for this
this single schedule will also not in- condition.
clude any internal constraints (called, If the retained logic option is
Figure 18 CPM Calculation external constraints.) selected, P6 does not schedule the
The make opened-end activities remaining duration of a pro-
for actual. critical option overrides standard gressed activity until all of its pred-
P6 then fixes-up the barchart CPM calculation rules and artificially ecessors are complete. In Figure
portion by plotting the start and finish constrains any activity without a suc- 21, remaining early start of the
column dates. Everything to the left of cessor to have their late dates equal out-of-sequence successor (Activ-
the data date line is colored blue for ac- the early ones. The use of this option ity 2) is generally set to the early
tual. The program colors everything to is discouraged as this creates addi- finish of predecessor (Activity 1)
the right using green for early dates. If tional critical paths that normally do [5].
a gap exists between the two, the area not effect project completion.

Figure 19 Displaying CPM Calculation

COST ENGINEERING JANUARY/FEBRUARY 2016 15


If the progress override op-
tion is selected, P6 ignores net-
work logic and allows the activity
that has begun out-of-sequence to
progress without waiting for the
predecessor activity to complete.
In this case, remaining early start
equals the data date and the early
finish is calculated by adding the
remaining duration to the remain-
ing early start as shown in Figure
22.
It is important to note that
not only did the out-of-sequence
Activity 2 continue progressing on
the data date, but that Activity 1 is
no longer a critical activity! Even
though P6 displays the relation-
ship between the two activities on
the screen in the barchart and ac-
tivity details, this relationship is
completely ignored during
progress override CPM calcula-
tions and treated as if it had been
deleted. Progress override is ap-
plied to every type of relationship
other than the Finish-to-Finish (FF) Figure 20 Schedule Calculation Options
relationship. In the example the out-of-sequence successor. as shown in Figure 23.
above, Activity 1 now does not This assignment has the potential The late finish of the prede-
have any successor activities. of creating negative float without cessor (Activity 1) is set to the day
Introduced with Version 3.5, date constraints. before the actual start of the out-
P6 has a calculation option called, For actual dates calculations, of-sequence successor (Activity 2).
actual dates. If the actual dates the early start of the out of se- Activity 1 should have been com-
option is selected, then the prede- quence successor (Activity 2) is pleted on 07JUL08 so that Activity
cessors late finish is set to the generally set to the early finish of 2 can start on 08JUL08. This logic
time unit before the actual start of predecessor (Activity 1) or +1 day, is flawed since Activity 2 already

Figure 21 Retained Logic

Figure 22 Progress Override

Figure 23 Actual Dates

16 COST ENGINEERING JANUARY/FEBRUARY 2016


started; it is evident that Activity 1 Successor Activity Calendar At this point, P6s longest path process
finish was not necessary. Although Predecessor Activity Calendar diverges from the standard CPM back-
there are no date constraints im- 24 Hour Calendar ward pass procedure.
posed, the schedule calculates a Project Default Calendar (the cal- Instead of calculating the CPM
negative float for these isolated endar selected as default for new backward pass, P6 traces a path back-
activities. activities on the defaults tab of ward through the logic, following the
If actual dates option is se- project details) controlling logic path. It does this by
lected, the start to start lag calcu- identifying which predecessor activity
lation option is disabled and actual Regardless of the relationship lag has zero Free Float. All activities iden-
start is always used as the begin- setting, P6 uses the successors calen- tified by this procedure are listed as
ning of the lag calculation. dar when determining whether a fin- being on the longest path.
In general, using actual dates ish-to-finish relationship is a part of the Figure 24 shows a sample longest
option will cause the CPM to be- longest path. This undocumented fact path calculation versus a total float crit-
have like retained logic if the out- often causes the P6 longest path to be ical path. The milestone in red has a
of-sequence activity has started discontinuous if different calendars are finish on or before constraint that re-
but not finished and to behave like used. sults in a -2 total float value. The total
the progress override option if the float critical path is shown in red. The
out-of-sequence activity has fin- Longest Path Calculations longest path process designates the ac-
ished. P6 software has the ability to cal- tivity, last act as the end of the
culate the longest logical path through longest path and traces the controlling
The next option is to allow the cal- a schedule network. This list of activi- path backward (designated as a check-
culation of total float based on the fin- ties represents the longest continuous box.) In the example in Figure 24, the
ish date of each project in a collection string of activities that must be com- two methods have only one activity in
of schedules or on all opened sched- pleted in order to complete the proj- common, activity Act 1.
ules. P6 is frequently used in a multi- ect. One cannot shorten the length of Even though P3 software also des-
schedule environment where a group a project without shortening the dura- ignated a longest path, P6 uses a
of semi-independent schedules can be tion or modifying the logic of activities slightly different technique to identify
opened together and run as a single on the longest path. the controlling logic. P3 identified the
network. The longest path is a superior controlling path logic while calculating
The, each project option allows method for identifying the schedules the forward pass and saved this infor-
each schedule to calculate their spe- critical path over using total float as the mation. P6s post calculation method
cific critical path independently even if indicator. The total float method some- is inferior in that it can sometimes lose
they were tied together in a network times misses activities and can become the path because of calendar changes,
of relationships. This method of calcu- discontinuous because the activity cal- as well as following resource leveling.
lation fails to identify the single critical endar changes or from start float being The longest path method as imple-
path for a project of multiple sched- different from finish float. mented by P6 has other issues that can
ules, while the other option allows for The longest path calculation starts cause it to become discontinuous. Even
a single, common measurement. The out just like the standard CPM calcula- though it ignores any constraints that
problem with offering two options is tion by calculating the early start and solely affect the backward pass, for-
that aside from viewing the scheduling early finish dates of every activity in ward pass constraints such as start on,
log (which may not be available,) there the network. This is called performing start on or after, finish on, and finish on
is no indication as to which option was the forward pass. It then identifies the or after can halt the backward control-
used for the definition of total float activity with the latest early finish date. ling pass identification. Figure 25
when later reviewing the results of a
CPM computation.
P6 users have four options when
designating a calendar to calculate the
lag between predecessors and succes-
sors. This one setting is used for all re-
lationships in the schedule. The default
setting used to be the successor activ-
itys calendar until Version 4 of P6,
when the predecessor activitys calen-
dar was used as the default. The lag
can be calculated based on:

Figure 24 Discontinuous Longest Path Calculation

COST ENGINEERING JANUARY/FEBRUARY 2016 17


Figure 25 Discontinuous Longest Path Calculation
shows an example of a schedule where have float different from the predeces- with an increasing path number, begin-
the longest path activities are identi- sors activity float was first formally es- ning with 1.
fied by a checkbox, as well as coloring poused in 2003 [8]. The concept was Figure 26 shows a relationship
the bars red. later presented in a different format in float CPM network example. Each rela-
The Activity P1N2260 had a start 2004 as enhanced PDM [9]. Primavera tionship is marked with an abbreviation
on or after constraint that caused the used the concept of enhanced PDM to of its relationship type (FS, FF, SS, SF)
activity to begin later than it would develop multiple critical paths and in- followed by a slash and then the lag
have using CPM calculations alone. troduced it in P6 Version 5 in 2005. value. The FS/0 relationship between
This caused the longest path to stop its A relationship with a lag duration Act 1 and Act 4 is a finish-to-start with
backward tracing several months short operates very summarily to an activity zero lag.
of the data date. with duration. Early and late start/finish The relationship can be better vi-
dates can be computed for each rela- sualized if it the lag is replaced with a
Multiple Float Path Calculations tionship and the difference between corresponding activity. A relationship
The advanced tab of the schedule the two would result in a total float cal- with zero lag would be depicted as a
options window holds the settings for culation; this time for the relationship zero-duration milestone with a dia-
the multiple critical path function. The and not for the activity. When an activ- mond shape and the non-zero other
purpose of using the multiple critical ity has multiple predecessors, then lags as an activity rectangle with a
paths function is to identify and rank each may have different relationship length equal to its duration. Figure 27
secondary critical paths. It does this by float that denotes the degree that the shows the transformation with blue-
calculating the float of every relation- relationship is controlling the start of colored replacements.
ship in the schedule and then using this the activity. Tracing paths backward The blue activities representing
information to iteratively trace and based on the next lowest relationship relationships can now have their CPM
label all predecessors links. float would provide for a listing of the early and late dates calculated and the
The concept that relationships can various controlling paths in diminishing Total Float (TF) and Free Float (FF) cal-
order of criticality. Each path is labeled culated from this. These values are

Figure 26 Relationship Float Figure 27 Relationship Lags Figure 28 Relationship Float


Example Visualized Computed

18 COST ENGINEERING JANUARY/FEBRUARY 2016


shown in blue in Figure 28.
The multiple critical paths function
provides two different methods for
tracing the paths backward; total float
method and free float method. The
method using relationship total float
entails finding the latest, lowest rela-
tionship total float and following each
predecessors lowest relationship total
float. The software tags each activity
with a float path number beginning
with 1 and stopping when the activity
does not have a predecessor. The soft-
ware returns to the last activity again Figure 29 Sample Multiple Critical Paths Calculations
starts again with next lowest relation-
ship total float using the next highest
number (2; then 3, etc.).
The method using relationship free
float uses the same method as with re-
lationship total float, except that it uses
the lowest relationship free float. In this
case, the lowest free float equals the
controlling relationship with float path
1 being the same as P6 calculated
longest path. A working example show-
ing both types of multiple critical paths
are shown in Figure 29.
The activity labeled, Last Act is
identified to be the latest, lowest rela- Figure 30 Float Path 1 for Both Example Methods
tionship free float activity and the mile- est relationship total float activity. The fied. Figure 30 identifies the free float
stone labeled, finish-on-or-before is two methods will begin from these method float path 1 in green and the
identified by P6 as being the latest, low- points if no overriding activity is identi- total float method float path 1 in red.

Figure 31 P6 Example of Total Float Multiple Critical Paths

COST ENGINEERING JANUARY/FEBRUARY 2016 19


Figure 32 P6 Example of Grouping Total Float Multiple Critical Paths

The same example entered into P6 fortable using the relationship free float completion activity for the endpoint.
would produce what is shown in Figure setting. Figure 33 shows the same ex- One can also use this entry to investi-
31. Activity, Last Act is highlighted ample after the multiple critical paths gate the drivers to milestone comple-
and the relationship tab shows the was computed using the free float set- tion by inserting the Activity ID of the
computed relationship total float and ting. Notice how float path 1 also cor- milestone.
relationship free float for the three responds to the P6 longest path. The ability to specify the number
predecessor relationships. P6 users have the option of using of float paths to calculate does not
P6 provides a better way to pres- relationship total float or relationship seem very important as this process is
ent multiple critical paths by grouping free float when computing multiple very quick on moderately large sched-
and sorting activities by float path num- critical paths. The total float setting will ules and the storage requirement is the
ber. Figure 32 shows this method em- reflect relationship float while the free same regardless of what number is
ployed using the total float method. float setting will reflect the longest used. Users can just leave this entry
The 1 above the first four activities path. blank to calculate all paths.
denotes float path 1 and the 2, 3, and 4 It is dangerous to leave the, Dis-
below this list the next most critical play multiple critical paths ending with Summary
paths in this example. activity blank as the software will P6 is an incredibly complex and flexible
P6 users used to seeing longest them pick the ending activity. Normally scheduling software. The flexibility of
path designations may be more com- users should designate the substantial P6 can be a benefit, but it is intimidat-

Figure 33 P6 Example of Grouping Free Float Multiple Critical Paths

20 COST ENGINEERING JANUARY/FEBRUARY 2016


ing to a scheduler expecting other CPM unless resource leveling has been tional, Morgantown, WV.
softwares relative simplicity. Every P6 used. 3. OBrien and Plotnick, 2005, CPM
scheduler should clearly understand Planned dates are used in place of in Construction Management,
the softwares method of calculation to baseline dates when baselines are Sixth Edition, McGraw-Hill.
use this powerful tool at its full capac- not assigned. This potentially af- 4. Harris, 2008, Project Planning and
ity. A brief summary of some of the im- fects earned value and variance Control Using Primavera P6, East-
portant points are listed below: calculations. wood Harris Pty Ltd.
During export, the external rela- 5. Harris, 2008, From Planning Planet
Each schedule is calculated and up- tionships might be lost and an in- web blog, www.planningplanet.com,
dated to the nearest minute. With- ternal date constraint placed in its Building Works, Victoria , Australia.
out diligence on the schedulers stead. 6. Winter, 2004, Determining the
part, this can lead to situations By default, the standard Gantt Critical Path, PS.02 - 2004 AACE In-
where the successor activity begins chart display shows activity bars ternational Transactions, AACE In-
on the same date as the predeces- reflecting the start dates, not the ternational, Morgantown, WV.
sor finishes. early dates. 7. Avalon, 2014, Calculating the As-
If the durations are entered in time It is very dangerous to manually Built Critical Path, PS.1691 - 2014
units other than hours, then they enter date or duration information AACE International Transactions,
are automatically converted to into calculated, interconnected AACE International, Morgantown,
decimal hours using a single, set fields. P6 will generally adjust WV.
conversion factor. Later these du- other portions of the calculation 8. Winter, 2014, Computing the
rations are re-converted back to input in response to such changes. Near-Longest Path, PS.11 - 2014
days using the currently existing Retained logic is the best CPM cal- AACE International Transactions,
conversion factor. For accuracy, culation method for estimating AACE International, Morgantown,
many schedulers enter durations in overall schedule completion. WV.
hours, even when scheduling in Progress override allows for auto- 9. Herold, 2004, Enhanced PMD,
days. matic activity sequence resched- Concepts and Benefits, PS.09 -
Schedulers should always show uling. 2014 AACE International Transac-
time, as well as dates when enter- The actual dates calculation option tions, AACE International, Morgan-
ing actual dates, even when work- best if actual dates in the future town, WV.
ing in days. When times are not are allowed.
shown, earlier versions of P6 de- Multi-schedule programs can cal- ABOUT THE AUTHOR
fault to entering 00:00 in the time culate a single critical path using
portion of the date field. Later ver- total float.
sions guess at the correct time for Relationship calendars settings can
actual starts and actual finishes, cause discontinuous longest paths. Ronald M. Winter,
but not for other date entries. Longest path is the best option for PSP FAACE, is with
Early start, early finish, late start, showing remaining work. Ron Winter Consult-
and late finish dates are based The lowest total float is the best ing, LLC. He can be
upon computing the entire sched- method for showing milestone im- contacted by send-
ule starting from the current data pacts. ing email to:
date. This means that completed The multiple critical paths feature ron@ronwinterconsulting.com
activities will show early and late identifies and orders the near-crit-
start/finish dates that are not ical paths.
equal to their actual start/finish FOR OTHER RESOURCES
dates. REFERENCES For additional resources go to:
Early start and finish dates are not www.aacei.org/resources/vl/
blanked-out or replaced with ac- Do an advanced search by au-
1. Winter and Evrenosoglu, 2009, thor name for an abstract listing of
tual dates when actual dates exist Much Ado about Dates - Under- all other technical articles this author
and retained logic is used. This standing P6 Date Information, has published with AACE. Or, search
combinational behavior is reserved PS.15 - 2009 AACE International by any total cost management subject
for the P6 start and finish columns. Transactions, AACE International, area and retrieve a listing of all avail-
Early start shows the newest calcu- Morgantown, WV. able AACE articles on your area of in-
lated early start date (using the terest. AACE also oers pre-recorded
current data date) even for activi- 2. Winter, 2003, How to Befuddle a webinars, an Online Learning Center
ties with actual dates. College Professor (Without Really and other educational resources.
Start and finish dates are early Trying), Cost Engineering Journal Check out all of the available AACE re-
dates, corrected for actual dates sources.
45, 10 (2003): 8-10, AACE Interna-

COST ENGINEERING JANUARY/FEBRUARY 2016 21


S&K 6 Available in Digital and Print
The 6th Edition of the
Skills and Knowledge
of Cost Engineering is
now available. This
full color publication
contains updated
graphics and tables,
revisions and adapta-
tions of existing con-
tent, and the inclusion
of 11 chapters of con-
tent not found in pre-
vious editions. This
comprehensive publi-
cation augments information found in the Total Cost
Management Framework and is an excellent resource
for research into cost engineering topics.
This publication is available today as a digital
download or a print-on-demand publication and is also
available for direct purchase through Amazon.com. To
begin the purchase process, visit the AACE Online
Store, https://netforum.avectra.com/eweb/shop-
ping/shopping.aspx?

2016 -2017 ELECTION


BOARD CANDIDATES ANNOUNCED FOR THE

A slate of candidates for the 2016-2017 AACE annual election is being announced to the AACE membership by the
Nominating Committee, chaired by Past President Martin Darley, CCP.

For President-Elect, the candidates are: Charles E. Bolyard Jr., CFCC PSP FAACE and John L. Haynes, PSP.
For VP-Finance, the candidates are: Christopher W. Carson, CEP DRMP PSP FAACE and Cindy L. Hands, CCP.
For VP-North American Regions, the candidate is: Jacqueline T. Doyle, PE PSP.

Regions 1, 2,4,7, and 9 will elect a Director-Region to the AACE Board of Directors.

Region 1, the candidates are: Pranab Kumar Deb, PSP, and Les McMullan, FAACE.
Region 2, the candidates are: Patrick M. Kelly, PE PSP, and Omoniyi (Niyi) Ladipo, CCP EVP.
Region 4, the candidate is: Harrison W. Staley.
Region 7, the candidates are: Husain Ali Al-Omani, CCP CEP DRMP EVP PSP and Maged Sayed El-Hawary, CCP EVP
PSP.
Region 9, the candidates are: Garvan G. McCann and Sean T. Regan, CCP CEP.

Voting will open on February 1, 2016, and will continue through 4 p.m. Eastern US time on March 15, 2016. Eligible
voters will be AACE members with dues paid current as of Dec. 31, 2015. Anyone who renews or joins, in the period from
Jan. 1, 2016 to March 15, 2016, will not be eligible to be added to the voter list, or to vote in the 2016 election.
To learn more about the upcoming election, go to www.aacei.org/aboutUs/structure/elections/

22 COST ENGINEERING JANUARY/FEBRUARY 2016


TECHNICAL ARTICLE

Contingency Drawdown Forecasting,


Tracking, and Actual Contingency
Spend Forecasting
Robert J. White

Abstract: There are many different methods of calculating contingency as


part of estimate at completion for projects from general rules of thumb to
sophisticated Monte Carlo simulations. However, the fundamental theory of
what happens to that number after it is calculated seems to be a source of
confusion for projects. Project controls must be able to calculate, under-
stand, and articulate contingency drawdown for projects. Analysis of contin-
gency must begin with the fundamental understanding that there are

F
differences between forecasting contingency requirements, tracking contin-
gency drawdowns, and forecasting when the contingency could actually be
spent. Proper forecasting and control of contingency can be a leading indi-
cator of project success in terms of cost, risk, and schedule. This article was

first presented as CSC.1937 at the 2015 AACE Annual Meeting in Las Vegas.

or the purposes of this theo-


retical exploration of contin-
gency management, the
is used to account for risks or uncer-
tainties that the project is exposed to.
For example, if the project is procuring
Figure 1 Simple Illustration of a
Project Budget
field. For large, complex projects
without a rich database of past analog
definition of budget contin- its steel from a gulf coast supplier, it
gency is the difference between what may be valuable to model some kind of projects, it may be reasonable to
the projects deterministic costs (scope hurricane risk that could interrupt sup- develop a full cost and schedule risk
plus allowances) and the projects initial ply and cause a cost increase. Contin- analysis incorporating risk range for
funding level. This is not a discussion gency is the additional cost (or each activity, a quantified risk register,
around neither cost estimating nor cost schedule) the project predicts it re- level of effort costs for schedule
estimating best practices and the chart quires beyond base scope plus al- duration, and unknown-unknowns.
above does not explore all the impor- lowances to finish the project. The controls for the project
tant subtleties of estimating such as es- contingency should match the level of
calation, inflation, owners cost, EPC Contingency detail used in creating the estimate for
premiums or any other standard esti- Calculation at Estimate contingency. According to AACE,
mating practices. In Figure 1 above, Methods of quantifications include
A mature projects organization
identified scope is any component of (but are not limited to) subjective risk
will likely have a scalable approach to
the project that has a price and volume study team assessments (e.g., rating
contingency calculation at estimates
component. For example, x tons of each factors impact as high, medium,
for projects. For small, often repeated
structural steel at y dollars gives a total or low), manual estimates of the
projects such as simple wells in a
base cost of (x*y). Allowances are used impact of each factor or group of
known field, contingency calculation
to account for potential variances in factors, or complex simulation or
can be as simple as adding 10 percent
price or volume, such as price per ton parametric models [1].
to the calculated project cost based on
variances between potential contrac- As a project enters execute, a
past performance on wells in that
tors. Beyond allowances, contingency good cost controller should be

COST ENGINEERING JANUARY/FEBRUARY 2016 23


constantly updating the project cost
forecasting and phasing. Figure 2
represents a simple forecast
drawdown curve for a project that is
eight months into execute. The
project was funded with a total
contingency at the top horizontal line
(total contingency), and has plans to
consume contingency in a straight line
drawdown every month until project
completion. The actual drawdown for
the project shows that some months
the project has used more or less of
the contingency than planned. This is
a simple effective way of
communicating where the project is
regarding consumption of Figure 2 Typical Contingency Control Draw Down Chart
contingency. Based on this graph, it
appears that the project predicts that
it will need more contingency than it
has used.
Based on the contingency
drawdown curve (shown in Figure 2)
at first glance, many inexperienced
project professionals may believe that
it is a predictor of when the project
will spend contingency. However, by
drawing a simple cost phasing forecast
curve (Figure 3) it becomes clear that
the drawdown curve does not reflect
the pace at which the project can
spend contingency. Because of the
normal S-curve of project cost and
schedule progress, spending at the
beginning and end of the project
tends to be lower than in the middle
of execution. Therefore, it is very Figure 3 Project Spend Forecast Curve
unlikely that the project will spend an
even amount of contingency during
each month of the project. This is an
over dramatization of the fallacy of
linking drawdown curves to forecast
spending.
Even sophisticated rules of thumb
can also lead to poor controls
regarding contingency spending and
forecasting. A clever cost controller on
a mega project might use the heuristic
of assuming proportional contingency
spending based on the cost timing
forecast of the project, as shown in
Figure 4. This method is a much better
guess than a straight line draw down
premise, but it could very easily paint
a totally incorrect picture. An easy
example is a situation where
Figure 4 Spreading Contingency Forecast Based on Base Cost Timing

24 COST ENGINEERING JANUARY/FEBRUARY 2016


that a well-organized cost and control
system be designed, developed, and
implemented so that immediate
feedback can be obtained [2].
Now that the difference between
forecasting a drawdown of
contingency and the projects ability
to spend the money has been
established, what is the solution that
drives transparency and
accountability? A controlled project
that accurately forecasts needs for
contingency allows a company to
manage a portfolio to maximize
investment opportunities. If a
portfolio has 10 mega projects where
Figure 5 How Contingency is Usually Spent the contingency is managed well, it
could reasonably execute an 11th
workforce availability is constrained, spend the money. If a risk does not project in the same time frame. To
such as in offshore or remote materialize, then the appropriate empower the portfolio manager to
locations where the bed-space is contingency should be drawn down. make these kinds of decisions, the
fixed. In these situations, a risk like That fact alone should convince any project must communicate when it
poor performance factor may be project professional that drawing can release contingency, and when it
realized over many months at peak down contingency does not relate could realistically spend the cash it
craft level. Assuming this risk was directly to when the money can or will has in contingency. The total cost
well-modeled and accounted for in be spent. management system reiterates this
the contingency calculation, the It is important to note that point: The advantage of periodic
project should not be overly although Figure 5 represents how drawdowns is that they efficiently
concerned of exceeding the project contingency is usually spent on manage the enterprises limited
budget, and as each month goes by projects, this graph creates a unique resources, and project teams are less
where the field performance is bad, problem for cost controllers likely to spend contingency funds on
the project can assume consumption attempting to explain how their work outside of the current approved
of the contingency budget. However, phasing matches the schedule. This baseline project scope [3].
and this is very important, even problem is exacerbated when a
though the contingency is being project is scheduled to end at the end Contingency Draw Down
drawn down every month, the money of a fiscal year, but the contingency Forecasting
cannot be spent until the back end of forecast could take significant The following methodology
the project manifesting in an spending into future fiscal years. How assumes a mega-project with
increased duration of peak craft in the can the cost controller be forecasting adequate resources and motivation to
field. The non-intuitive graph (Figure to spend money when the schedulers execute a deep cost and schedule risk
5) demonstrates this problem. say the project will be complete? This analysis. For this kind of exercise, the
The only way that a cost is often a problem in comparing contingency calculation would need
controller can use contingency draw probabilistic cost and a deterministic to be made up of continuous and
down and contingency spending schedule. Cost controllers must be discrete risks. An example of a
forecasting effectively is by totally cautious to avoid this apples to continuous risk is the performance
disconnecting the two concepts. The oranges comparison, else they risk factor for craft labor. An example of a
timing of contingency drawdown does losing credibility. Comparing discrete risk is an event for the project
not reflect when the money can or probabilistic cost and probabilistic that could increase cost, such as
will be spent to cover the contingency. schedule should allow the cost curve Simultaneous Operations (SIMOPS)
Another important point to note is in Figure 5 and the probabilistic S- between offshore drilling rigs and
that if the project is funded at a P50 curve for progress to line up. subsea installation vessels; if these
value, then there is an equal chance two activities line up at the same
that the project will not spend its The Integrated Solution time, then the project may incur
entire contingency. The project should According to Harold Kerzner, standby costs on one of the vessels.
be drawing down contingency Effective management of a program Optionally, the project may
whether or not it plans to actually during the operating cycle requires include contingency for unknown-

COST ENGINEERING JANUARY/FEBRUARY 2016 25


unknowns. Inclusion of unknown-
unknowns is a portfolio based
decision. In general, project managers
can probably not be held accountable
for unknown-unknowns since these
very low-probability, very high-impact
risks cannot be funded by the project
even if they do occur. However, if the
portfolio has no way of accounting for
aggregate unknown-unknown risks, it
may be reasonable for each project to
include this calculation so that the
roll-up costs of all projects include
these rare occurrences. The rarity
means that they will not likely occur
on any project alone, but will likely
perform on one of the projects in the Figure 6 Layered Approach to Drawdown Curves
portfolio.
Separating the contingency Clarication on Draw Down schedule integration do well in
calculation into three categories, Consume or Return? drawing pretty, easy to understand
continuous risks, discrete risks, and Up to this point, this article has drawdown curves, but they do very
unknown-unknowns, allows the been written from the perspective little in regards to forecasting when
project to construct a multi-level that draw down does not distinguish the project can actually spend money
drawdown curve that tells a story for where the money goes, just that the to cover that contingency. A
how the project will proceed. uncertainty of whether or not the successful method employed on mega
Continuous risks can be mapped to project needs the contingency is gone. projects is to categorize the risks in
activities in the schedule and drawn A healthy portfolio includes tension different areas (such as topsides
down based on the progress of those between the portfolio manager and construction, wells, subsea
components. For example, drawing the project manager around what installation) and have a hypothetical
down construction performance contingency draw down actually discussion with the project
factor risks as work is liquidated in the means. Project managers look at the management as to how the project
field; the fewer hours that remain, the curve in Figure 6 assuming that is would overcome a risk. For example, if
less exposed the project is to poor when they will need the money, and the project has a risk around
performance. Discrete risks should be portfolio managers look at that curve performance factor in offshore
mapped to when the risk is likely to as when the project manager will be installation, would the project
occur in the schedule; in the SIMOPS able to return the money. As with manager consider a flotel to add
example, once the subsea installation most project questions, the answer is beds, or would this risk just result in
campaign is complete, the project can It depends. If the drawdown schedule extension? Most
draw down that contingency. If the represents a discrete risk that has contingency spend tends to come at
project is directed by the portfolio to materialized, then the project the end of projects. In fact, it may be
include unknown-unknown, it may be manager would make the argument best to have the cost contingency
best to keep the total value of that he or she needs to keep that spend linked to the schedule risk
unknown-unknowns available to the portion of the contingency and draw it analysis in a way that the cost
project for the entire duration since down by transferring budget from the contingency is largely phased after
there is so little known about this contingency to the account where the deterministic project completion
category, it could be needed at any money will actually be spent. If the dates, or better yet, at the completion
time. Using this methodology, the discrete risk has passed without of activities. This could lead to an
draw down curve for a project begins occurring, then the portfolio manager unfortunate behavior of
to take shape as shown in Figure 6. is reasonable in asking to take that communicating that the project needs
Note the step-wise nature of the money from the project budget and the entire contingency until the end of
discrete risk contingency. As the move it to the portfolio, hopefully to the project. This premise would cause
project passes events where the risk fund other profitable projects. the portfolio to make poor decisions
may or may not materialize, it should regarding the start timing of future
draw down contingency accordingly. Forecasting Contingency Spend projects as contingency is tied up in a
This is where controls get project that may no longer need it.
difficult. Mathematical heuristics and This once again emphasizes the need

26 COST ENGINEERING JANUARY/FEBRUARY 2016


Figure 7 Four project Portfolio with Even Contingency Spend

to de-couple the projects ability to The major limitation to these tools is as well. For example, if a project had a
spend contingency from how much that they tend to only analyze critical risk of welding quality at a flow line
the project needs in contingency at path items. Schedule contingency is spool base, poor quality could cause
any given point in time. driven almost entirely by critical path. re-work and increased cost. If subsea
Therefore, on a complex project, there installation is not on critical path, this
Applications to could be an enormous schedule risk to re-work may have no impact on the
Schedule Contingency an activity with high float. It would be schedule or on the schedule
Fundamentally, schedule tempting to draw down schedule contingency requirements. Often
contingency can be treated similar to contingency when the risk has passed, float and schedule contingency
cost contingency. Using a risk based but if the float is greater than the are used interchangeably. They are
approach; the project team can schedule risk impact, then drawing not the same term. Float is for
consider timing of discrete events to down that contingency will give a false activities that are not on critical path;
draw down risk after certain events. sense of security and could lead to a schedule contingency is for activities
Equally, the project should be able to surprise when the risk that is actually that are on critical path. While this is
draw down continuous schedule risks driving the contingency requirement not an article to further define or
based on duration of remaining materializes in the future. discuss scheduling, it is important for
activities. The tools for schedule There are situations where a risk a cost controller to understand the
contingency calculation can be much could have a significant cost impact, broad implications of attempting to
more sophisticated than the tools for but no schedule impact. If a project phase cost contingency.
cost contingency calculation because controller were to get the project
of the inter-connected nature of the manager focused on the contingency Portfolio Example
schedule. For example, using drawdown graph that shows key Figure 7 assumes a portfolio of
Primavera and Primavera Risk events in the schedule that could four projects ranging from $10million
Analysis, a risk manager can toggle on incur risks, it is important to reiterate to $20million starting in 2016, each
or off certain risks to quantify the that passing those risks may not lead project start is staggered by a quarter.
actual impact on project completion. to a schedule contingency draw down If a portfolio were to use an evenly

COST ENGINEERING JANUARY/FEBRUARY 2016 27


Figure 8 Realistic Contingency Spend Forecast - Portfolio View
spread
contingency spend forecast for is 14 percent of the capital spend in manager from project one starting in
projects, the portfolio spend would 2016 that could be invested elsewhere January 2016 on project four starting
look similar to Figure 7. In Figure 7, to make a higher return for the in October 2016, in the first case
each color is a different project with business. For this portfolio of four (Figure 7) this approach seems
the base spend represented by the projects ranging from $10million to reasonable as the overlap is only five
solid bar, and the forecast contingency $20million, that difference in 2016 can months and project one is deep in run
spending as the white bar outlined in be about $6 million. A year of interest down as project four begins.
the same color. This contingency for that $6 million, not being spent in However, the overlap in Figure 8 (the
algorithm assumes contingency 2016, could fund the 2018 realistic case) is more like eight
spending will happen to the exact contingency requirements essentially months. Not many project managers
same proportion as project spend reducing the total cost portfolio. can effectively manage two projects
every month. The fundamental flaws Improved cost engineering of over that length of time, or at very
of this approach were discussed in contingency forecasting is not just an least not as effectively as the
The Trap section earlier in this academic exercise, it is a business assumption in Figure 7. Contract
article. Note the differences between value added imperative. management would also be a concern
Figure 7 and Figure 8 which is the Another key reason to use in the differences of the two cases,
proposed solution for the contingency portfolio planning for projects is the since the realistic case (Figure 8)
spending forecast. ability to cross load resources, extends over a new year. meaning
In Figure 8, the portfolio manager including direct and indirect labor. A construction or support contracts for
has a much more realistic view of how smart portfolio manager should be the project must be written to allow
the cash will actually be spent for the looking for which resources can be for extra time as required.
project. Although the graphs may not shared between projects, and when
look significantly different, for these key project personnel can transition Conclusion
projects, there is 14 percent less from one project to another. For Contingency drawdown curves
funding required in 2016. That is a example, if the portfolio manager communicate how much contingency
significant financial requirement. That were hoping to use the project the project predicts it will need, at any

28 COST ENGINEERING JANUARY/FEBRUARY 2016


given point in time on the project, to can add immense value to a portfolio ABOUT THE AUTHOR
complete the project. It may be and its ability to aggregate risks for
easiest to think of drawdown curves greatest return. The methodology laid
as commitment curves. If the curve is out in this article provides an Robert J. White is
drawn well, based on reasonable opportunity for a cost controller to employed with
premises, the project manager, or make a significant business impact. Shell International
more importantly portfolio Exploration and
leadership, should be able to look at REFERENCES Production. He can
any month and see how much extra 1. AACE Total Cost Management be contacted by
money should remain committed to Framework, 7.6.2.3 Quantify Risk sending email to:
the project for future contingencies. Factor Impacts, accessed on-line Robert.j.white@shell.com
This valuable information must not be January 2015.
confused with cash phasing of 2. Kerzner, Harold, Project
contingency. Knowledge of how much Management: A Systems FOR OTHER RESOURCES
contingency we need to finish a Approach to Planning, To view additional resources on
project does not directly correlate to Scheduling, and Controlling. this subject, go to:
when the project can spend the John Wiley and & Sons, Inc., www.aacei.org/resources/vl/
money. Phasing of probable Published in 2009.
contingency spend requires an 3. AACE Total Cost Management Search by author name for al-
analysis of the project schedule and Framework, 10.3.2.7 Manage isting of articles this author has pub-
an understanding of how risks will be lished with AACE. Or, search by
Contingency and Reserves,
subject for a listing of all available
mitigated. A transparent, risk-based accessed on-line January 2015. AACE articles on your area of interest.
approach to contingency forecasting

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COST ENGINEERING JANUARY/FEBRUARY 2016 29


TECHNICAL ARTICLE

Changing Trend in Risk Allocation


Differing Site Conditions
Steven A. Collins and James G. Zack, Jr., CFCC FAACE

sometimes included within the scope


Abstract: This article has been prepared by the Navigant Construction of the clause.
Forum authors in order to explore a series of court and Board of Contract
This article goes on to list the six
Appeals decisions concerning coverage of the differing site conditions clause.
While preparing an earlier paper entitled, Trends in Construction Claims and part test for a successful differing site
Disputes [1], the authors noted that there have been a series of decisions is- condition claim and also lists five
sued by courts and Boards of Contract Appeals over time which seem to be additional contractual requirements
increasing contractor risk under the differing site conditions clause. This ar- contractors must comply with in order

T
ticle explores such decisions and highlights the risks for contractors concern- to prevail. The contractors duty to
ing differing site condition claims. The article also draws conclusions and sets continue work is also examined.
forth some practical recommendations for both owners and contractors in A brief discussion of the reverse
dealing with the risks of differing site conditions. This article was first pre- differing site condition claiman
sented at the 2015 AACE Annual Meeting in Las Vegas as CDR.1868. owner claim that may be asserted
against a contractor seeking recovery
he Differing Site Conditions necessarily so! [2] Over the years, the of funds from the contractor when
clause is one of the oldest courts and Boards of Contract Appeals they encounter conditions materially
clauses used in construction have been slowly changing the inter- better than anticipated. The article
contracts, having been cre- pretation of risk allocation under the goes on to explore a number of court
ated by the U.S. Federal government in clause. A series of court and board and Board of Contract Appeal
1926. It is generally accepted that the cases have increased the contractors decisions that appear to be slowly
object of the clause is to transfer the risk concerning differing site condi- eroding the traditional risk allocation
risk of latent site conditions to the tions. commonly accepted under the
owner, thus enticing contractors to re- This article discusses the Differing Site Conditions clause, along
duce their contingency cost at the time definition of a differing site condition with lessons learned from each case.
of bid. The promise of the clause is that and why there is a need for a Differing Finally, the article provides a list of
if the contractor encounters a materi- Site Conditions clause in a practical recommendations for both
ally different condition during the ex- construction contract. The article sets owners and contractors dealing with
ecution of the work, the owner will forth the history and purpose of the the risks of differing site conditions.
compensate the contractor for the re- clause, examines the modern Differing The purpose of the article is to
sulting cost and/or time. For nearly 90 Site Conditions clauses, and provides a summarize these legal decisions and
years this standard clause has been discussion of the terms indications reach a conclusion on whether they
used widely in both public and private and material difference, as well as represent a new trend in the scope of
contracts. Most practitioners in the an overview of the impact of contract coverage concerning differing site
construction industry think they know disclaimers related to differing site condition claims. If so, this trend
what the clause means and how it op- conditions. The article explores what should be of concern to many in the
erates. But, in the words of one of the conditions are generally not covered industry.
mid-20th century deans of construc- by the clause and conditions that are
tion law, Max E. Greenberg, It aint

COST ENGINEERING JANUARY/FEBRUARY 2016 31


Denition of a contracts. Generally, contractual relief Why not just leave the risk with the
Diering Site Condition involves an assignment of risk to one contractor? It is because when
Differing site conditions (also of the parties to the contract. Such contractors are faced with unknown
often referred to as changed contract clauses specifically identify conditions they are unable to properly
conditions or unknown conditions) are what risk events are assigned under estimate the cost, leaving contractors
generally defined as latent (i.e., the contract; to which party the risk is with only two possible choices during
hidden) physical conditions at the assigned; the conditions under which the bidding period. First, if they deem
project site which differ from those the other party is entitled to relief; the risk too high, they may walk away
conditions identified to the contractor and what steps the affected party from the project by not submitting a
during the bidding period. Put another must take to activate the contractual bid. While this protects the contractor,
way: relief promised. Thus, if such an event it is of little help to the project owner
arises and the affected party complies if good contractors decide not to
A differing site condition with the terms and conditions of the bid, leaving the project to less
(also called a changed condition) contract, the party to which the risk is experienced or less savvy
is a physical condition other than assigned is obligated to compensate contractors. Second, if the contractor
the weather, climate, or another the other party for the resulting decides to accept the risk of latent site
act of God discovered on or damagestime and/or cost. The conditions, the only way they can
affecting a construction site that Differing Site Conditions clause possibly budget for this risk is to add a
differs in some material respect promises contractual relief in the contingency [7] (sometimes a
from what reasonably was event a differing site condition is substantial contingency) to their bid.
anticipated. [3] encountered and the contractor Again, while this may protect the
complies with the requirements of the contractor in the event they
A differing siteor changed clause. encounter a differing site condition
condition as they are sometimes (assuming that the cost impact of the
calledis a physical condition What Is the Purpose of A differing site condition is less than the
encountered in performing the Diering Site Conditions Clause? amount of the contingency) it does
work that was not visible and not Why Do We Need A Diering not help the owner as the initial bid
known to exist at the time of Site Conditions Clause In A prices are higher than they would
bidding and that is materially have been absent the contingency for
Construction Contract?
different from the condition differing site conditions.
One author outlined the need for
believed to exist at the time of In order to avoid either situation,
a Differing Site Conditions clause in
bidding. [4] owners frequently incorporate a
the following manner [5]:
Differing Site Conditions clause into
In the first instance, the difficulty their contract documents, assigning to
It is a well settled
with encountering a differing site themselves the risk of encounters with
proposition that the purpose of a
condition is that it was not anticipated unanticipated site conditions. The
Differing Site Conditions clause is
during bid preparation. As such it was theory underlying this assumption of
to shift the risk of unknown
neither planned for nor budgeted. risk is that if the contract contains a
physical conditions to the owner
Accordingly, there is nothing in the Differing Site Conditions clause the
of the site by allowing a
project plan, the construction bidders will reduce that portion of
contractor to seek an equitable
schedule, or the project budget to their bid contingency centered on the
adjustment in the contract price
deal with this problem other than risk of latent site conditions, thus
when the contractor encounters
typical bid and schedule reducing their bids. This results in a
unanticipated conditions. Ideally,
contingencies. Second, since most lower contract value at the outset of
the corollary benefit to the owner
differing site conditions involve the project, leaving the owner to pay
is that the contractor does not
underground conditions and since only the actual, documented cost of
inflate its bid price to
underground work most often occurs encounters with latent site conditions
accommodate for the possibility
at the outset of a project, encounters via change order or contract
of encountering unanticipated
with differing site conditions have a modification. If no differing site
conditions. Thus, a Differing Site
high potential to delay the entire conditions are encountered, the
Conditions clause serves to
project. owner pays no extra costs.
prevent turning a construction
In discussing this risk assumption
contract into a gambling
by the project owner, one author
transaction. [6]
The Concept of Contractual Relief noted the following.
The question arises, why do
The concept of contractual relief owners deliberately assign the risk of
is frequently employed in construction for this risk allocation to
latent site conditions to themselves?
apply in the real world, the law

32 COST ENGINEERING JANUARY/FEBRUARY 2016


must be clear as to the precise practical result of this traditional risk the Changed Conditions clause argued
risk that is shifted to the owner. assignment follows: the use of the clause would eliminate
As stated by one court, the element of gambling from
If contractor were required federal construction contracts.
In practice a to assume the full risk of Without this clause, they claimed, the
contractor may not always increased costs of unfavorable contractor would, presumably
accurately anticipate the and unforeseeable physical site include in every bid a contingency
rather esoterical legal conditions, they would have to amount based on a worst case
standard by which the choose between (1) undertaking a scenario, resulting in increased bid
contract representations will costly pre-bid analysis of prices. The author cited a 1942 Court
be judged. As a result, what a subsurface site conditions; or, (2) of Claims case, Ruff v. United States
contractor might have including sizable contingencies in [13] wherein the court stated that:
thought were reliable and their bids. Either alternative
viable affirmative contract would prove unnecessarily costly the alternative is that the
indications/representations to the owner and the contractor bidders must, in order to be safe,
could, as here, turn out to in the long run. [10] set their estimates on the basis of
be no representations at all. the worst possible conditions that
As a result, the contractor in The U.S. Department of might be encountered.
such case is left both without Transportation, Federal Highway
a substantive remedy and Administration, summarized the The most recent change to the
also without having noted history of the Differing Site Conditions U.S. Federal Differing Site Conditions
and provided for such a clause in U.S. Federal contracts in the clause was made in 1963, when the
contingency amount in its Geotechnical Engineering Notebook, title of the clause was modified from
bid. [8] Geotechnical Guideline No. 15, Changed Conditions to Differing Site
Geotechnical Differing Site Conditions. Otherwise, this contract
Thus, unless the esoterical Conditions [11]. This document notes clause has remained virtually the
legal standards become more that in 1926, the Federal Board of same since the 1935 modification.
explicit, a rational contractor may Contracts and Adjustments started
still include a contingency for requiring a Differing Site Conditions Modern Diering
differing site conditions in its bid clause in all federal construction Site Conditions Clauses
or, alternatively, may include no contracts. The document notes that As noted earlier, the original 1926
contingency on the mistaken this board initiated the requirement, Differing Site Conditions clause
assumption that the owner bears to eliminate the contingency factor included only one type of differing site
all risks associated with for subsurface conditions and to limit condition, conditions materially
unanticipated site conditions. In the latent cost incurred by contractors different from those indicated. The
either event, the purpose of the for pre-bid subsurface explorations. 1935 version of the clause included a
DSC clause would be defeated. This document noted that the original second type of differing site condition,
[9] Differing Site Conditions clause [where] the contractor encounters
included only conditions that differed unforeseen, unusual conditions which
Therefore, to keep the good materially from indicated conditions. differ materially from conditions
contractors in the chase for a project; However, in 1935, the clause was ordinarily encountered. [14] These
to make the risk allocation clear; to modified to include, situations two conditions became known
establish standards for measuring where the contract is silent regarding colloquially as Type 1 and Type 2
when the risk allocation clause will subsurface conditions but the differing site conditions. More
operate; and to reduce bid costs, a contractor encounters unforeseen, recently, many Differing Site
thorough and well crafted Differing unusual conditions which differ Conditions clauses have added a Type
Site Conditions clause is necessary. materially from conditions ordinarily 3 differing site condition that included
encountered. (Underscoring encounters with hazardous and/or
provided.) toxic waste not reported to be or
Another author noted that the identified in any site conditions report
History of Diering U.S. Federal government began using provided during the bidding period.
Site Condition Clauses a Changed Conditions clause widely in Most modern standard form
Traditionally, common law placed 1927, on all firm fixed price contracts contracts in the U.S. contain some
all risks of unknown, unanticipated in order to eliminate bid contingencies form of a Differing Site Conditions
site conditions on contractors. The related to subsurface conditions [12]. clause. And, most of these clauses
This author noted that advocates of contain both a Type 1 and a Type 2

COST ENGINEERING JANUARY/FEBRUARY 2016 33


differing site condition. Type 1 materially from that indicated or unknown physical conditions of
differing condition claims are more referred to in the contract an unusual nature that differ
frequently asserted because most documents [16] materially from those ordinarily
contracts contain information on or The Design Build Institute of recognized as inherent in
representations concerning site America describes this type of construction activities of the
conditions. Type 2 differing site differing site condition as, character provided in the contract
condition claims are certainly possible Concealed or latent physical documents. [21]
but considerably less frequent than conditions or subsurface ConsensusDocs describe a Type 2
Type 1 claims as Type 2 differing site conditions at the site that (i) differing site condition similarly
conditions are not predicated on a materially differ from the as, unusual and unknown
material difference between pre-bid conditions indicated in the physical conditions materially
information and actual conditions. contract documents [17] different from conditions
Although the Differing Site The Engineers Joint Contract ordinarily encountered and
Conditions clause was created by the Documents Committee defines a generally recognized as inherent
federal government, it has been Type 1 differing site condition as, in work provided for in the
widely adopted in the U.S. any subsurface or physical contract documents. [22]
construction industry. For example, condition that is uncovered or The Construction Management
the standard contract documents revealed eitherdiffers materially Association of America document
issued by the American Institute of from that shown or indicated in differ in great degree when it
Architects, ConsensusDocs, the the contract documents [18] comes to a Type 2 differing site
Construction Management condition recognizing only, an
Association of America, the Design Type 2 Diering Site Conditions underground facilitynot shown
Build Institute of America, and the Type 2 differing site conditions or indicated in the contract
Engineers Joint Contract Documents are generally described at unknown documents and was not a facility
Committee all resemble each other physical conditions at the site of an of which a contractor could
closely when describing the conditions unusual and unpredictable nature. reasonably have been expected to
included as follows. The U.S. Federal Highway have been aware and the
Administration describes Type 2 underground facility is uncovered
Type 1 Diering Site Conditions differing site conditions in their or revealed at or contiguous to
Type 1 differing site conditions Geotechnical Engineering Notebook the site [23]
typically refer to situations where the as, situations where the contract is The Design Build Institute of
contractor encounters unanticipated silent regarding subsurface conditions America documents describe
physical conditions in the field that are but the contractor encounters Type 2 differing site conditions
materially (i.e., substantially or unforeseen, unusual conditions which similar to the Federal Acquisition
considerably) different than those differ materially from conditions Regulation and the American
identified in the owner provided ordinarily encountered. [19] Institute of Architects document
documents available during the (Underscoring provided.) by stating, are of an unusual
bidding period. The description of a The contractual language nature differing materially from
Type 1 differing site condition is fairly describing a Type 2 differing site the conditions ordinarily
uniform across all of the standard condition is, again, fairly consistent encountered and generally
contract documents as follows: across all of the standard contract recognized as inherent in work
documents as follows. [24]
The Federal Acquisition The EJCDC documents describe a
Regulation, the American The Federal Acquisition Type 2 differing site condition
Institute of Architects and Regulation describes a Type 2 similarly, is of an unusual
ConsensusDocs all use the differing site condition as, nature, and differs materially
following language, subsurface unknown physical conditions at from conditions ordinarily
or latent physical conditions at the site, of an unusual nature, encountered and generally
the site which differ materially which differ materially from those recognized as inherent in work of
from those indicated in this ordinarily encountered and the character provided for in the
contract [15] generally recognized as inhering contract documents. [25]
The Construction Management in work of the character provided Type 3 Diering Site Conditions
Association of America describes in the contract. [20] Type 3 differing site conditions
the Type 1 differing site condition The American Institute of are relatively new in the construction
in the following manner, Any Architects documents describe a industry. Some contract documents
physical condition uncovered or Type 2 differing site condition in specifically include encounters with
revealed at the site differs nearly identical language, as, previously unidentified hazardous

34 COST ENGINEERING JANUARY/FEBRUARY 2016


waste materials as a type of differing Association of America contract documents to be within the scope
site condition different than the classic documents (2004 edition) have been of the work. [31]
Type 1 and Type 2 differing site modified to include a Type 3 differing
conditions. As with Type 1 and Type 2 site condition, other standard contract Conditions Typically Covered By
conditions clauses, a contract that documents have, in one form or Diering Site Condition Clauses
incorporates a Type 3 differing site another, including the following: Modern Differing Site Condition
condition clause assigns the risk of clauses generally cover unforeseen,
encounters with unanticipated The American Institute of hidden or latent physical conditions at
hazardous waste to the owner, unless Architects documents include a the work site, not indicated in or
the hazardous material is material form of Type 3 conditions as, a materially different from the
brought on site by the contractor or hazardous material or substance information available at bid. The three
one of their subcontractors. Since not addressed in the contract key elements at the outset of a
Type 3 differing site conditions documents and if reasonable differing site condition claim are the
language is relatively new, it is not precautions will be inadequate to following.
nearly as standardized as the language prevent foreseeable bodily injury
of Type 1 and Type 2 language. Some or death to persons resulting from UnforeseeabilityThe contractor
examples of Type 3 contract clauses a material or substance, including must be able to demonstrate that
include: but not limited to asbestos or the condition encountered was
polychlorinated biphenyl [28] unforeseeable based on all
The Los Angeles County ConsensusDocs deals with the information available at the time
Metropolitan Transportation Type 3 differing conditions as, A of bidding. The unforeseeability
Authority describes Type 3 hazardous material is any test extends to site investigations
differing conditions as, substance or material identified also. That is, provided the owner
Unidentified substances that now or in the future as hazardous offered a site investigation prior
design builder believes may be under laws, or other substance or to bidding, the contractor making
hazardous materials that are material that may be considered this sort of claim will also have to
required to be removed to a Class hazardous or otherwise subject to demonstrate that the condition
I, Class II, or Class III disposal site statutory or regulatory encountered was unforeseeable
in accordance with governmental requirement governing handling, even during the pre-bid site walk.
rules. Hazardous materials that disposal, or cleanup. The However, [i]n interpreting site
are included in the work, as contractor shall not be obligated investigation clauses, the term
identified in the contract for to commence or continue work site is often interpreted to mean,
design builder to handle, until any hazardous material essentially, sight, and to not
mitigate, and remediate, shall not discovered at the worksite has extend to requiring an
be construed in any way to be a been removed, rendered, or independent subsurface
Type 3 condition. [26] determined to be harmless by the investigation... [32] Basically, the
Similarly, the Standard owner [29] condition encountered must not
Specifications for Public Works The Design Build Institute of have been anticipated by the
Construction (the Greenbook) America addresses the issue of a contractor from a study of the
widely used by public works Type 3 differing conditions very contract, inspection of the site,
entities throughout Southern succinctly, Unless otherwise and their general experience. [33]
California describes a Type 3 expressly provided in the contract Physical ConditionThe condition
differing site condition as, documents to be part of the work, encountered must be a physical
Materials differing from that design builder is not responsible condition. The condition may be
represented in the contract for any hazardous conditions either a natural condition (i.e.,
documents which the contractor encountered at the site. [30] change in soil characteristics,
believes may be hazardous waste, The EJCDC contract documents encountering rock, etc.) or a
as defined in Section 25117 of the address the Type 3 differing site manmade condition (i.e.,
Health and Safety Code, that is condition with the clause, The unidentified utilities, buried
required to be removed to a Class contractor shall not be structures, etc.). In any event, the
I, Class II, or Class III disposal site responsible for any hazardous condition complained of cannot
in accordance with the provisions environmental condition be an economic, political,
of existing law. [27] uncovered or revealed at the site governmental or business
which was not shown or indicated condition (i.e., shortage of
While neither the Federal in drawings or specifications or qualified craft labor, inability to
Acquisition Regulations nor the identified in the contract get equipment or materials to the
Construction Management site, increased material costs or

COST ENGINEERING JANUARY/FEBRUARY 2016 35


ordinances that restrict Utility locations shown on documents, upon which a reasonable
performance of the work, etc.). drawings contractor can be expected to rely.
[34] Etc. Basically, the board concluded that an
At the SiteThe condition indication need not be an affirmative
complained of must be at the With respect to express statement or representation, that it
project site. Typically, the site is indications one court commented may be proven by inferences or
the location where the project is that: implications. The board went on to
being constructed. However, if state the following:
the owner provides a remote lay There must be reasonably
down area or if the owner plain or positive indications in the The causes of an erroneous
designates a borrow pit several bid information or contract indication in the contract
miles from the site then the documents that such subsurface whether simple error, negligence
Differing Site Conditions clause conditions would be otherwise or other are no longer
will cover differing site conditions than actually found. [38] important. An indication may be
at these remote locations proven, moreover, by inferences
because the owners actions Concerning express indications, and implications which need not
incorporated these locations into courts have noted that contractors meet the test for a
the term site for the purposes should not only be able to compare misrepresentation or
of the clause. [35] express indications with actual representation, concepts which
conditions, but also with all have a long common law history
Based in U.S. case law [36] , reasonable inferences and associated with fraud. [40]
assuming the contractor complies implications that can be drawn from
with the terms of the clause, the the information provided. One court One commentator concluded that
conditions shown in Table 1 are noted that it is not required that it is sufficient to justify relief if
generally covered by the Differing Site express indications be: indications concerning expected
Conditions clause. conditions at the project site can be
explicit or established from reasonable
What Are Indications? specific, but only enough to inferences and implications that can
Indications, for the purposes of impress or lull a reasonable be drawn from the contact documents
the Differing Site Condition clause, bidder not to expect the [41]. Based upon this approach to the
may be either expressed or implied adverse conditions actually issue of implied indications, boards
indications. [37] Express indications encountered. [39] and courts may look for design
are more easily demonstrated than requirements that cannot be met or
implied indications. Examples of Implied indications are indications construction methods that cannot be
express indications include: that are uncertain or ambiguous. The employed because of the conditions
contractor claiming an implied encountered [42]. Or, lack of detail in
Rock at specific elevations indication must be able to the description of the condition
Perched water demonstrate that the indication was referenced in the contract documents
Specific soil types reasonably inferable from the contract may be found to imply a certain

Figure 1 Conditions Generally Covered by the Diering Site Conditions Clause

36 COST ENGINEERING JANUARY/FEBRUARY 2016


condition exists when, in actuality, the declare whether or not the claimed for the owners design and
condition does not exist [43]. condition is materially different or not estimating purposes. This
without giving any reason. What is information has been made
What is a Material Dierence? clear, however, is that a contractor has available only for the convenience
The term material difference is an easier job of demonstrating a of all bidders. Each bidder is solely
a term of the legal art. One cannot material difference if the claim is responsible for all assumptions,
look in Blacks Law Dictionary under based on a Type 1 differing site deduction, or conclusions which
M for material difference and find a condition. In this situation, the he/she may make from an
standard definition. The term contractor can compare actual examination of this information.
material is defined as, Important; conditions with those indicated in the Some drawings of some of the
having influence or effect[44] As bidding documentsboth expressed existing conditions are available
such, to determine if a material and implied. If the claim is a Type 2 for examination at [another
difference has been encountered for differing site condition, the burden of location]. These drawings are for
the purposes of the Differing Site proving the material difference is information only and will not be
Conditions clause requires a situation substantially greater. The contractor part of the contract documents.
specific analysis. It is entirely will first have to prove what conditions The quantity, quality,
dependent upon the facts of each they anticipated at the time of bidding completeness, accuracy and
such encounter. Each individual claim and why this was a reasonable availability of these drawings are
of material difference must be expectation, as Type 2 claims are not guaranteed. Prospective
examined from the perspective of typically filed in the absence of any bidders shall telephonefor an
whether the condition encountered owner provided information. Next, the appointment to examine
had, or will have, a substantial impact contractor will have to document the drawings of the existing
on the contractors work as well as the conditions actually encountered. conditions.
time and cost of the work. Finally, the contractor will have to be The owner makes no
One author noted the following able to articulate and demonstrate the representation and denies any
when discussing what constitutes a material difference between the two responsibility for the accuracy of
material difference: conditions. any subsurface data furnished
and expects each bidder to satisfy
Materiality usually turns The Impact of itself as to the character, quantity,
upon the unique facts existing on Contract Disclaimers and quality of subsurface
the particular job. Facts that often As the Differing Site Conditions materials to be encountered.
bear on the question of clause became more common the The subsurface data furnished to
materiality are: (a) differences in number of differing site condition, or bidders does not constitute a part
the quality of substances changed condition, claims grew. of the contract and is furnished
encountered; (b) differences in Owners began to take defensive solely for information. Bidders
the quantity of work required as a actions to shield themselves from must make their own
result of the condition; (c) differing site condition claims. investigations as to subsurface
changes in the construction Amongst these actions were: conditions and no claim for
techniques required in order to additional compensation will be
deal with the condition. Site investigation clauses allowed regardless of the
Regardless of whether the word Unit priced contracts declaring subsurface conditions actually
material appears in the differing some aspects to the work encountered.
site conditions clause, the incidental to placement of the
difference must be material to work The obvious purpose of such
invoke the clause or for denial of Contractual disclaimers disclaimers is to insulate owners from
the claim to amount to a breach differing site condition claims. That is,
of contract. (Murrays Iron Works, Examples of disclaimers follow: owners employing such disclaimers
Inc. v. Boyce [2008] 158 CA 4th attempt to transfer the risk of both
1279, 1298). [45] Boring logs and results of other unknown site conditions as well as the
subsurface investigations and various representations made in the
Based on the above, it appears tests are available for inspection. contract documents to the contractor.
that the boards and courts have been Such subsurface information,
very reluctant to define the term whether included in the plans, Most government contracts
material difference preferring, specifications, or otherwise made contain boilerplate clauses and
instead, to perform a case by case available to the bidder, was special conditions which contain
analysis. Generally, decisions simply obtained and is intended solely disclaimer and exculpatory
language intended to relieve the

COST ENGINEERING JANUARY/FEBRUARY 2016 37


government of liability under The effect of an actual Acts of third parties [57]
certain stated circumstances. If representation is to make the Labor disputes [58]
literally applied, they could statements of the government Civil unrest [59]
frustrate the intended purposes binding upon it, despite Impact of local ordinances [60]
of the Differing Site Conditions exculpatory clauses which do not
clause. [46] guarantee the accuracy of a Conditions Sometimes
descriptionHere, although there Included Under the Diering
The authors do not believe that, is no (express) statement which Site Conditions Clause
most government contracts contain can be made binding upon the The plain language of the
boilerplate clauses any longer, government, there was in effect a Differing Site Conditions clause does
however in our experience there are description of the site, upon not restrict recovery to those
still a large number of contracts that which plaintiff had a right to rely, conditions that existed prior to bid
do attempt to disclaim responsibility and by which it was misled. Nor submittal. However, the Armed
for owner furnished information in does the exculpatory clause in the Services Board of Contract Appeals
one form or another. It has also been instant case absolve the has interpreted the clause to cover
shown that boards and courts often government, since broad only those conditions which pre-
refuse to enforce such disclaimers exculpatory clausescannot be existed the time of bidding [61].
when they are challenged [47]. given their full literal reach, and, Other boards and courts have
do not relieve the defendant of accepted this limitation likewise.
Boards and courts seem to take liability for changed conditions as There are, however, at least three
the position that owners cannot give the broad language thereof situations where post award
with one hand (by including a would seem to indicate [citation conditions may, under the proper
Differing Site Conditions clause in a omitted] General portions of the circumstances, gain coverage under
contract and reaping the benefit of specifications should not lightly the Differing Site Conditions clause.
lower bids) while taking away with the be read to override the Changed They are the following:
other hand (by trying to disclaim Conditions Clause [Citation
responsibility for information omitted] [50] Government Had a Duty to
provided and undercutting the Correct or Prevent the Situation:
contractors right of reliance on the Conditions Generally Not In situations where the
clause) [48]. Broadly worded, general Included Under the Diering government had the ability to
disclaimers are unlikely to survive a Site Condition Clause prevent the pre-existing
U.S. Federal Board of Contract Certain conditions encountered condition from being damaged or
Appeals or court challenge. An on a construction site, that many changed to the detriment of the
example U.S. Federal Court ruling on contractors characterize as changed contractor, and failed to do so,
broad based disclaimers follows: conditions have been specifically then under the theory that the
excluded from coverage under the government had a duty not to
Even unmistakable contract Differing Site Conditions clause by the hinder performance, Boards and
language in which the boards and courts. Typically, such Courts have allowed recovery
government seeks to disclaim excluded events are deemed to not be under the clause. [62]
responsibility for drill hole data physical conditions which is clearly Variations in Estimated
does not lessen the right of required by the Differing Site Quantities: Typically,
reliance. The decisions reject, as Conditions clause. Among the construction contracts include a
in conflict with the changed conditions excluded from coverage quantity variation clause which
conditions clause, a standard are the following: provides for an adjustment to
mandatory clause of broad contract price in the event a
application, the variety of such Weather conditions [51] quantity substantially overruns or
disclaimers of responsibility Acts of God Fires, floods, underruns the estimated quantity
that the logs are not guaranteed, hurricanes, typhoons, carried in the bidding documents.
not representations, that the earthquakes, etc. [52] This clause alleviates the need for
bidder is urged to draw their own Economic, governmental or a contractor to file a quantity
conclusions. [49] political conditions [53] variation claims under the
Delays caused by other Differing Site Conditions clause.
In another case, centering on a contractors [54] There are, however, some
broadly worded exculpatory clause, Acts of the government in its exceptions to this statement. If
the court commented: sovereign capacity [55] the quantities vary because the
Acts of War [56] contractor encounters an

38 COST ENGINEERING JANUARY/FEBRUARY 2016


entirely different job [63] or site condition claims which creates a conditions which may impact the
there is an unforeseen need for road map for contractors pursuing performance of the work [69].
an unusual construction such a claim and is now followed by The Site Visit clause is typically
methodology [64] then the other boards and courts [68]. These paired with a Site Investigation
Differing Site Conditions clause elements follow: and Conditions Affecting the
may be employed in lieu of the Work clause which contains an
quantity variation clause. If a The contract document acknowledgement by the bidders
board or court determines that affirmatively indicated the that they did, indeed, visit the site
the owners estimate was subsurface or latent site and satisfy themselves as to all
negligently performed [65], or if conditions upon which the site conditions which may affect
owner issued change orders contractors claim is based. the work [70]. Contractors who
substantially increase the The contractor must have acted do not visit the site prior to
estimated quantities [66] again, as a reasonable and prudent bidding place themselves in
the Differing Site Conditions contractor in interpreting the serious jeopardy should they be
clause may override the quantity contract documents. awarded the contract.
variation clause when it comes to The contractor must have Additionally, they may learn, to
pricing such variations. Material reasonably relied upon the their dismay, that they cannot
variations on owner provided indications of subsurface or latent rely upon the Differing Site
quantity estimates may become a site conditions in the contract Conditions clause to compensate
Type 1 differing side condition documents when preparing their them for situations they would
only if they resulted from a bid. have seen had they visited the
differing site condition. [67] The subsurface or latent site, and therefore unaware of
In the Absence of a Quantity conditions actually encountered when preparing their bid simply
Variation Clause: Since the differed materially from the because they did not perform a
quantity variation clause is subsurface or latent conditions site visit [71]. That is, the
intended to work in conjunction indicated in the contract contractors failure to perform a
with the Differing Site Conditions documents. site visit may negate the
clause, the Navigant Construction The actual conditions contractors ability to recover
Forum believes that if a encountered were reasonably under the Differing Site
contractor encounters a material unforeseeable. Conditions clause. In looking at
change in estimated quantities The contractors claimed excess this sort of situation the U.S.
and the contract does not include costs were solely attributable to Court of Claims concluded that
a quantity variation clause, the the materially different the contractor must show, that
any such claim for additional subsurface or latent conditions the conditions actually
costs may be pursued under the encountered. encountered were reasonably
Differing Site Conditions clause. unforeseeable based on all the
In such event, if the owner Five Additional information available to the
provided the estimated Contractual Requirements contractor at the time of bidding.
quantities in the bidding In addition to the indispensable [72] Information available
documents, then the claim would elements outlined by the Court of includes any and all information
be a Type 1 differing site Claims above, there also are five the contractor would have gained
condition. If the owner did not additional contractual requirements by making a site visit.
provide any estimated quantities which the contractor must follow in Notice to the OwnerMost
and the contractor was required order to successfully pursue a Differing Site Conditions clauses
to analyze the bidding documents differing site condition claim. Like the require that, The contractor
to ascertain the estimated above requirements, deviation from shall promptlynotify the
quantities, then such a claim any of these contractual contracts [owner] in writing of [73]
would be a Type 2 differing site may result in the contractor losing Written notice to the owner of a
condition. their claim. These contractual differing site condition is required
requirements are the following: to give the owner the opportunity
Roadmap for a Successful to examine the situation to
Diering Site Condition Claim Site InvestigationMost determine whether it is, or is not,
Six Indispensable Elements contracts contain a Site a differing site condition. The
The U.S. Court of Claims has Investigation clause stating that written notice also provides the
established what it calls the six the owner expects bidders to visit owner the opportunity to
indispensable elements for differing the site to observe the various determine the most cost effective

COST ENGINEERING JANUARY/FEBRUARY 2016 39


manner in which to deal with the clause, the owner, upon receipt
condition encountered. The lack of written notice, shall The contractor shall
of written notice of a differing promptly investigate the proceed diligently with
condition deprives the owner of conditions [77] This requires performance of this contract,
the opportunity to determine the the contractor to allow the owner pending final resolution of any
nature and extent of the problem. sufficient time to investigate the request for relief, claim, appeal,
Thus, from a claims perspective, condition. Contractors who file or action arising under the
the owners position is materially notice of differing conditions but contract, and comply with any
harmed or substantially continue work are at serious risk decision of the contracting
prejudiced. Recognizing this, of losing their claim. On the other officer. [79]
boards and courts frequently hand, should the owner take an
deny differing site condition inordinately long period of time The owner, subsequent to their
claims if it can be shown that the to investigate, they may become investigation, may direct the
contractor provided no notice to liable for an owner caused delay contractor to proceed with the work
the owner [74]. Thus, the failure for the delayed investigation plus even before reaching a determination
to provide prompt written notice the damages arising from the on the differing site condition claim. A
may result in the contractor not differing site condition. contractor who fails to diligently
prevailing with their differing site Mitigate DamagesIt is a pursue the work may face termination
condition claim [75]. However, if general principle of the law of for default. [80]
the contractor can demonstrate contracts that the amount of
that the owner had actual damages awarded to a non- Reverse Diering
knowledge of the conditions defaulting party will be measured Site Condition Claims
encountered in the field, the as though that party had made Although rare, it is possible for an
contractor may be allowed to reasonable efforts to avoid the owner to assert a differing site
pursue the claim. Nevertheless, losses resulting from the default. condition against a contractor,
the failure to provide written [78] Simply put, a contractor presumably for encounters with
notice makes it substantially who has encountered a differing conditions substantially better than
more difficult for the contractor site condition is not free to spend anticipated in the contract
to prove that they are entitled to whatever amount of money they documents. This is clearly outlined in
recover damages under the want to spend and expect to the U.S. Federal Differing Site
Differing Site Conditions clause. recover what was expended. Conditions clause wherein it states:
Stop Work in the Affected Area Contractors must act reasonably
The Federal Differing Site in overcoming differing The contracting officer shall
Conditions clause is a self- conditions in order to reduce the promptly investigate the
actuating stop work order [76]. A owners costs. Failure to mitigate conditions, and if he finds that
contractor performing work damages will not result in the such conditions do materially so
under a Federal contract, shall contractor losing their differ and cause an increase or
promptly, and before such entitlement to the claim but may decrease in the contractors cost
conditions are disturbed reduce the amount recovered. of, or the time required for,
provide notice to the owner. The performance of any part of the
intent of this requirement is to Contractors Duty to work under this contract,
preserve the condition so that the Proceed With Work whether or not changed as a
owner can confirm the condition Most construction contracts result of such conditions, an
encountered. Contactors who fail include a clause requiring the equitable adjustment shall be
to preserve the alleged differing contractor to continue working on made and the contract modified
conditions, allowing the owner to those portions of the project not in writing accordingly. [81]
investigate and determine what impacted by the differing site (Underscoring provided.)
was actually encountered, are condition pending the owners
almost guaranteed to lose their determination of whether the Litigation concerning reverse
claim. They will be unable to condition encountered was a differing differing site condition claims is
prove what condition they site condition. That is, the contractor extremely rare. One of the few
actually encountered because cannot suspend all work to await the reported cases is AFGO Engineering
they removed the evidence. owners decision. Corporation [82] which arose on a
Allow the Owner Time to U.S. federal contracts (as many project where the contractor had to
InvestigateUnder the U.S. others) have a specific clause to this remove 62 percent less rock than
Federal Differing Site Conditions effect: anticipated in the bidding documents.

40 COST ENGINEERING JANUARY/FEBRUARY 2016


In another case involving a claims. The authors believe these Appellant also has not
government reverse differing site decisions indicate that boards and shown that the conditions were
condition claim against a contractor courts have a much more nuanced reasonably unforeseeable based
the U.S. Court of Federal Claims understanding of the Differing Site upon all the information available
determined that the government Conditions clause than most at the time of bidding. A
grossly overstated estimated construction industry professionals. contractor has the duty to review
quantities and denied the The authors have also concluded that information that is made available
governments claim as a result. [83] there is a trend toward changing the for inspection [85]. Appellant
One of the authors has understanding of the risk allocation has not shown that the
experience with two reverse differing under this clause. government disclaimed the
site condition claims. In both cases, accuracy of any of the relevant
while the owners were able to Contractor Has a Duty drilling data. We believe that the
demonstrate conditions better than to Review Information data included within the contract
anticipated it was more cost effective Made Available for Inspection and the data made available upon
to prosecute the claim in the form of a The Appeal of Bean Stuyvesant request were part of the universe
deductive change order. The authors LLC [84] involved a contract where the of relevant information made
believe that the lack of reportable contractor was required to dredge soil available to the bidders, which
cases exists because few owners pay from a confined disposal area, appellant should have considered
attention to this type of claim and transport the soil via a pipeline and in order to prepare its bid. Having
those few that are aware of this claim place the material on a beach in order failed to do so, appellant cannot
and encounter such a condition are to restore a sea turtle habitat in North prove that it reasonably relied
more likely to pursue the issue as a Carolina. The contractor encountered upon all contract and contract-
deductive change rather than a formal conditions they believed were related data, as required by the
claim. materially different than anticipated Differing Site Conditions clause.
and filed a differing site condition [86]
Traditional Understanding of the claim. The claim was denied by the
Diering Site Conditions Clause contracting officer and appealed to In a similar case, Hunt & Willett,
After nearly 90 years most people the Armed Services Board of Contract Inc. v. United States [87] the court
in the construction industry think they Appeals. The bidding documents indicated that, the contractor
understand the Differing Site contained the following notice: cannot rest content with the
Conditions clause and how it operates. materials furnished to him or her; he
Most believe that the clause transfers Drilling logs of other borings or she must also refer to other
all risk of unforeseeable, latent site in the vicinityof the project not materials which are available and
conditions to the owner. Most believe provided in Appendix A are about which he or she is told by the
that they have an absolute right to rely available upon request. All contract documents.
on information provided with the requests shall be directed to Ed
bidding documents. Most believe that Dunlop of the Wilmington District Lesson Learned (Contractors):
owners are obligated to provide all Office at (910) 251-4492. The When a bidding document
information at the time of bidding. government will not be identifies other subsurface
And, most believe that when a responsible for any interpretation conditions reports and/or soil
subsurface conditions report is silent of or conclusion drawn from the borings are available upon
concerning water, rock, or other data or information by the request, request and review all
physical conditions, then this indicates contractor. Bidders are expected such information and incorporate
that condition is not anticipated. to examine the site of the work the knowledge gained into your
While the authors frequently and after examination decide for bid.
encounter these expectations, board themselves the character of Lesson Learned (Owners): Make
and court decisions are not necessarily material. certain that the design
in agreement. professionals and geotechnical
The board decision stated that the consultants identify, search out
Changing Risk Allocation other two bidders requested and and capture all subsurface
Concerning Diering received the information from the conditions reports and boring logs
previously done on or near the
Site Conditions other borings referenced in the
contract and did attend the site visit. site and incorporate an
The remainder of this research
Bean Stuyvesant did neither. The appropriate notice of the
perspective will examine the outcome
board ruled against Bean Stuyvesant availability of such additional
of a number of board and court cases
centering on differing site condition stating that:

*Previously known as the Certied Cost Consultant/Certied Cost Engineer


COST ENGINEERING JANUARY/FEBRUARY 2016 41
information in the bidding
documents. The court further noted that the Lesson Learned (Contractors):
obligation to disclose site information When reviewing bidding
Owner Has No Duty to Disclose had earlier been ruled upon in the documents, do not assume that
Information Reasonably Available following manner. the owner is required to provide
Through Independent Investigation all possible information available.
North Pacific Erectors, Inc. v. State There are four Be prepared to perform and
of Alaska, Department of requirements for establishing document some independent
Administration [88] involved a when the government has failed investigation of conditions
contract for renovation and asbestos in its duty to disclose superior potentially impacting the project.
removal of a state office building. The knowledge. First, the contractor If other information is discovered,
contractor, requested additional undertakes to perform without make certain that the bid cost
payment for the asbestos removal, vital knowledge of a fact that reflects this independently
claiming there was a differing site affects performance costs or discovered information.
condition that made the project much direction. Second, the
more labor-intensive than it had government was aware that the Where the Contract is Silent
expected. The claim was denied at contractor had no knowledge of a Diering Site Condition
both the project and the agency level. and had no reason to obtain such Claim Cannot Arise
The contractor appealed to the information. Third, the contract P. J. Maffei Building Wrecking
Superior Court who upheld the specification supplied either Corporation v. The United States [90]
agencys determination. The misled the contractor or did not was an appeal from the General
contractor appealed to the State put it on notice to inquire. Fourth, Services Board of Contract Appeals
Supreme Court asserting that its claim the government failed to provide decision that Maffei was not entitled
was a valid differing site condition the relevant information. [89] to an equitable adjustment for a
claim and that the state breached its shortfall of salvageable steel in a
duty to disclose information about the Turning to the North Pacific case demolition contract with the
project. the court ruled in the following government. The bid documents did
The court decision recorded that manner: not contain as built drawing of the
North Pacific and their asbestos structure to be demolished but
removal subcontractor neither Although the department required the bidders to deduct the
participated in the pre-bid conference had more control over the anticipated salvage value of the steel
nor made a site visit. Having said this, information here the from their bid cost. The documents
the court noted: department did not have also noted that a local city agency
absolute control over the relevant had, drawings of the existing
Contractors would not have information. Rather, North Pacific conditions but noted that, These
been able to see the pan deck could have reasonably acquired drawings are for information only and
surface at a site visit, however, the information without resort to will not be part of the contract
because fireproofing was still the department. North Pacific documents. The quantity, quality,
covering the pan deck at the site. could have requested photos or completeness, accuracy and
an inspection of an exposed pan availability of these drawings are not
Earlier, in one of the deck, spoken to other contracting guaranteed.
administrative hearings, the states companies that had previously
hearing officer concluded that the performed asbestos abatement In Maffei, the court ruled that:
state had an obligation to disclose the for the department in Juneau, or
condition North Pacific complained researched conditions of similar the contract documents
about and failed to do so. The officer buildings in the area We did not indicate the amount of
commented that the Departments conclude that North Pacific could steel recoverable from the
Deputy Commissioner: have conducted research on its Pavilion, within the meaning of
own and was not dependent on the Differing Site Conditions
determined that the the department as the only clausesuccess on a Type I
department did not have a duty reasonable avenue for acquiring Differing Site Conditions claim
to disclose the site condition, information on the surface of the turns on the contractors ability
reasoning that it was possible for pan deck. Accordingly, we hold to demonstrate that the
North Pacific to have obtained that the state had no duty to conditions indicated in the
the information through site visits disclose information regarding contract documents differ
or an independent investigation. the pan deck surface. materially from those it

42 COST ENGINEERING JANUARY/FEBRUARY 2016


encounters during performance On this basis, the court concluded upon the bidding information when
[91]. As a threshold matter, then, the Differing Site Conditions clause preparing their bids. Similarly, if a pre-
this kind of Differing Site only applies to those conditions that bid site walk would have revealed the
Conditions claim is dependent on exist on the date the parties sign the condition, even though it was not
what is indicated in the contract. contract, and not to site conditions shown in the geotechnical report,
[92] created after contract award. then the contactor cannot rely
A contractor cannot be exclusively on the bidding
eligible for an equitable Lesson Learned (Contractors): If information.
adjustment for change conditions site conditions change
unless the contract indicated subsequent to contract award, do Lesson Learned (Contractors):
what those conditions would not rely upon the Differing Site Bidders must perform a
supposedly be. [93] Conditions clause for an equitable reasonable amount of
adjustment to the cost or time of independent investigation
Ragonese v. United States [94], an the contract. Look to other concerning subsurface conditions
older case, is cited by some as equitable adjustment clause such especially where the bidding
standing for, a contract silent on as the delay or the changes information is silent on matters
subsurface conditions cannot support clauses instead. that, logically, should be present
a changed conditions claim [95]. on or near the site.
Stated more succinctly, one court Contractors Cannot Rely On
ruled that the Differing Site Conditions Contract Indications Where When Bidding Information Makes
clause, cannot be invoked if the Simple Inquiries Might No Specic Representation
plans and specifications do not show Reveal Contrary Conditions Contractors Cannot Claim
or indicate anything about the Even in situations where the Materially Dierent Conditions
alleged unforeseen condition, i.e., if owner includes all subsurface Metcalf Construction Co., Inc. v.
they say nothing one way or the other information in the bidding documents United States [100] involved a Navy
about subsurface [conditions][96] and makes no attempt to disclaim contract to construct military housing
Put even more bluntly, another court responsibility for the information on a base on Oahu, Hawaii. During the
stated where the contract is silent, provided, contactors cannot rest easy. course of construction Metcalf
a claim cannot arise.[97] In Foster Construction C.A. and encountered expansive soils and filed
Williams Brothers Company, A Joint a differing site condition claim. The
Lesson Learned (Contractors): If Venture v. The United States [99] the claim was denied. Metcalf took this
the bidding documents are silent U.S. Court of Claims ruled that: claim, along with several others, to the
on an issue (for example, U.S. Court of Federal Claims. Metcalf
groundwater) this is no guarantee The contractor is unable to claimed that the Navy failed to
that the condition does not exist. rely on contract indications of the perform a timely investigation
Investigation from other sources subsurface only where relatively subsequent to the notice of differing
may be well warranted. simple inquiries might have site conditions and unreasonably
revealed contrary conditions. rejected the geotechnical reports
Owners Do Not Assume All Risk (Underscoring provided.) submitted by Metcalf in support of
of Unforeseen Conditions their claim. The Contracting Officers
Olympus Corp. v. United States For example, in a highway project denial of the claim stated the
[98] involved a paving contract which where the subsurface investigation following:
was delayed, at least in part, due to an report contains 30 borings to a depth
oil spill that contaminated the soil. The of 15 meters (and the deepest cut on As far as the information
court stated that the Differing Site the drawings is approximately eight provided in our soils report is
Conditions clause: meters) all of which show no concern[ed], the fact that it
groundwater, bidders may not be able differs significantly from the soils
does not shift the risk of to rely on the lack of indication of report generated by the
all unanticipated adverse site groundwater. If the contractor could contractor in itself does not
conditions from the contractor to have, for example, reviewed and warrant as equitable adjustment
the government. Rather, the determined from the local Soil If the contractor decided to
government bears only those risks Conservation Service office that base the cost of the work relying
that encourage more accurate groundwater records show that at upon the government provided
bidding. certain times of the year groundwater data, thats the risk they took and
levels rose to within three meters of any consequences resulting
the surface, then bidders cannot rely therefrom is their responsibility.

COST ENGINEERING JANUARY/FEBRUARY 2016 43


Even before potential bidders had
The court noted that the submitted proposals in response the solicitation required
government issued geotechnical to the request, the government each offeror to use a geotechnical
report addressed only, site had clarifiedthat the contract engineer to assist in the
preparation, foundation support, would be amended if the preparation of its proposal, Fluor
footing, slab and reinforcement contractors post award elected not to do so, instead
requirements The court took notice independent investigation turned relying upon the geotechnical
of the fact that the request for up soil conditions significantly information provided by the
proposal instructed the contractor to different than those described in government in its EFS and SUP.
employ their own geotechnical the governments report. Fluor did not retain geotechnical
consultant subsequent to contract engineer until after contract
award to perform an independent Similarly, the Civilian Board of award.
investigation for the design of the Contract Appeals in Flour
project. The court concluded in this Intercontinental, Inc. v. Department of Finally, the board noted that this
regard that: State [103] took a similar approach. was a design/build contract and
The board noted that Section C.2.8 of concluded that This contract placed
In other words, Metcalf the contract stated that: all of the responsibility for design and
could rely on (the government construction (and, as a consequence
issued report) for bidding The contractors all of the risk) on Fluor.
purposes, but the Navy advised geotechnical engineer shall
all potential contractors they review all available geotechnical Lesson Learned (Contractors):
could not rely on (the information provided in the When the contract information
government issued report) in contract package and become makes no specific representations
performing theproject. familiar with the soil and site as to conditions to be
conditions at the project site by encountered, contractors may
Citing Comtrol v. United States visiting the site. During the site not be successful in claiming that
[101] the court concluded that: visit and subsequent phases of the condition encountered
the project, the contractor shall differed materially from the
Because the contract made examine and/or verify the conditions anticipated.
no specific representation as to information provided and obtain Lesson Learned (Contractors):
the type of soil to be any additional information to When bidders are faced with a
encountered, it cannot be said complete the design and requirement to perform their
that [the contractor] encountered construction of the project. The own independent, post award
conditions materially differing contactor remains solely geotechnical investigation, they
from those specifically indicated responsible and liable for design may not be able to rely
in the specifications. sufficiency and should not exclusively on the owner
depend on reports provided by furnished subsurface
While Metcalf I was vacated and the [government] as part of the information.
remanded by the U.S. Court of contract documents.
Appeals for the Federal Circuit in Subsurface Soils of One Type
Metcalf II [102] the Appellate Court The board also noted that Section Will Probably Not Transition
did state the following in regards to E.6.2 stated that: Into Another Type Along a
the argument raised in Metcalf I: Straight Line Projection
Information Obtained by The Appeal of NDG Constructors
The government made clear Offeror Before submitting a [104] involved a contract for
that its pre-request soil report proposal, each offeror shall, at its installation of a water line into an Air
was not to be the last word on own expense, make or obtain any Force base in South Dakota. A portion
soil conditions for purposes of the additional examinations, of the work involved tunneling under
project. A revised request for investigations, explorations, tests an interstate highway. The
proposals stated that the and studies, and obtain any government issued two subsurface
requirements in the soil additional information which the investigation reports each indicating
reconnaissance report were for offeror requires. that the contractor in the tunneled
preliminary information only. The section would encounter clay material
resulting contract required that Based on this contractual which would then transition to shale.
the contractor conduct its own language the board concluded the The subsurface reports both
independent soil investigation following: contained the following statements:

44 COST ENGINEERING JANUARY/FEBRUARY 2016


project, BTC did not expect to maintenance dredging of the Corpus
the subsurface conditions transition from Fine Alluvium to Christi Entrance Channel in Texas. The
at other times and locations at Carlile Shale or, to use its Corps included information in the
the site may differ from those terminologies, from clay fill bidding documents concerning the
found at our test boring locations material to shale rock material character of the materials to be
the soils between the boring at any specific point but only at dredged and the in-situ densities. The
locations may differ significantly some point. And, as BTC Corps made available the records of
from those found at the boring predicted, the soil profile indeed previous dredging (self-performed by
locations. changed from clay fill material to the Corps in past years) at their district
shale rock material at some office.
During the tunneling operation point. Stuyvesant had bid on two
NDG encountered much more shale We conclude that NDG has previous Corps dredging jobs and had,
than clay and filed a differing site failed to prove that the soil profile in each case, reviewed the information
condition claim to recover the encountered was a Type I in the district office related to those
additional time and cost incurred. The differing site condition because two jobs. Stuyvesant elected not to
contracting officer denied the claim the AETs geotechnical reports visit the site for the Corpus Christi job
and NDG appealed to the Armed and the boring logs did not nor take material samples or echo
Services Board of Contract Appeals. indicate where the transition soundings. Instead, Stuyvesant relied
During the board hearings, NDGs from Fine Alluvium to Carlile on the fact that the technical
geotechnical expert testified that Shale would occur, and because provisions of this contract were,
lacking any other information than the in estimating the work, BTC very similar, almost identical to the
two soil borings near the tunneled recognized that the transition technical provisions of the previous
portion of the work, the only option a from clay fill material to shale two projects. They concluded that it
bidder has for estimating and planning rock material would take place at was, not warranted to go to the
purposes is to draw straight lines for some point rather than at any expense of or necessary to do any
soil and rock conditions from boring to specific point. particular further investigation
boring. The board rejected this Stuyvesant filed notice of
position with the following statement: Lesson Learned (Contractor): differing site condition and a claim
When faced with a situation such during the performance of the work
It is highly improbable that as the one NDG faced bidders due to the increased density of the
subsurface soils of one type may be well advised to retain the materials encountered which
would transition into another services of a local geotechnical impacted their productivity and
type along a straight line consultant to review the owner increased their cost. The Corps denied
projection. We do not accept NDG furnished information and the claims and Stuyvesant appealed
experts opinion in this regard provide advice on how to this adverse decision to the U.S. Court
because it is intrinsically interpret the data and prepare of Claims who upheld the Corps
unpersuasive. this portion of the bid. If this is denial. Stuyvesant then appealed to
done, it will need to be the U.S. Court of Appeals for the
Citing P. J. Maffei Building documented in the event of a Federal Circuit.
Wrecking Corp. v. United States [105] later differing site condition claim. The appellate court examined the
and S.T.G. Construction Co. v. United Lesson Learned (Owner): To case and the lower courts ruling and
States [106] and relying on the potentially avoid claims such as concluded that the Claims Court
disclaimer language contained in the this, owners may want to consider correctly stated:
subsurface investigation reports, the use of a geotechnical design
board concluded: summary report or a geotechnical the six average density
baseline report where the readings were identified to be
A contractor cannot be geotechnical consultant guides only did not reach the
eligible for an equitable interprets soil, rock and water level of estimates and [were]
adjustment for a Type I changed conditions between borings. clearly not facts upon which
conditions unless the contract [107] plaintiff could rely.
indicated what those conditions
would supposedly be. Here, the Subsurface Data Provided in the The appellate court also noted
contract documents did not Contract May Be a Guide Only that, Government estimates are not
indicate where precisely the Stuyvesant Dredging Company v. warranties.
contractor would encounter United States [108] involved an Army
Carlile Shale. In bidding the Corps of Engineers contract for

COST ENGINEERING JANUARY/FEBRUARY 2016 45


Lesson Learned (Contractors): Each Government Contract the form of notice regarding a
Contractors must review owner Stands On Its Own differing site condition and stated:
provided information carefully Finally, the Stuyvesant Court
when preparing bids. If the addressed the argument that on their notice need not follow any
information is included as a two previous bids Stuyvesant did specific format, but must merely
guide then the contractor may review the material in the Corps make the contracting office
be at risk for relying totally on this District office, visited the site and aware of the differing site
information. conducted various tests. Stuyvesant condition. Notice under the
argued that on those two projects the differing site provision of the
Contractors Cannot Prove material encountered was the same contract requires no precise
a Diering Site Condition as the material indicated. Stuyvesant formula. The obligation to give
Based Upon Information then went on to note that the notice is discharged when a
They Never Reviewed technical specifications for the Corpus contractor makes the
The Stuyvesant Court also dealt Christi Channel project were virtually government representatives
with the issue of Stuyvesant having identical to the previous two projects, aware that he is encountering
not reviewed the Corps information thus justifying their assumption that either subsurface or latent
from previous projects, available in the conditions to be encountered in physical conditions at the site
their district office. The appellate the Corpus Christi project, were the differing from those indicated in
court upheld the claims court ruling same as those to be found in the the contract.
that: other two channels.
The appellate court summarily Lesson Learned (Contractors):
[P]laintiff cannot prove a dismissed this argument with the Review the contracts Differing
differing site condition based following statement: Site Conditions clause closely.
upon the information in the files Contractors are only required to
of the Corps because it never Each government contract provide prompt written notice of
reviewed that information until stands by itself Unless the differing site condition to the
the contract was nearly government advises contractors owner. While not stated it is
completed, but more importantly that conditions in different probably wise to state what the
the Corps records accurately contracts are the same, a materially different condition is
reflected the character of the contractor acts at its peril if it and its location.
materials encountered by other assumes that what it learned on
dredges. different contracts applies It Is Not Necessary That
equally to a new contract. Indications in the Contract
Citing Vann v. United States [109] Be Explicit or Specic
the appellate court noted that where Lesson Learned (Contractors): In an older case which is still
a contractor has the opportunity to Bidders cannot assume that frequently cited by more recent cases,
learn the facts [but fails to do so] he is conditions from previous Foster Construction & Williams
unable to provethat he was misled contracts are the same as the Brothers Company v. United States
by the contract. conditions in the new contract [112], the court indicated a standard
currently out for bid. [110] for determining whether there are
Lesson Learned (Contractors): implied conditions in the bidding
When other available Among all of these adverse documents:
information is noted in the rulings which appear to be narrowing
bidding documents bidders must the coverage of the Differing Site [I]t is not necessary that the
take the time and make the effort Conditions clause the Navigant indications in the contract be
to review this information. Such a Construction Forum came across explicit or specific; all that is
review may prove helpful in two court rulings which appear to be required is that there be enough
bidding and planning the project. more favorable to contractors. of an indication on the face of the
Further, such a review will help contract documents for a bidder
preserve the contractors right to Notice of Diering Site reasonably not to expect
file a differing site condition on Conditions Need Not Follow subsurface or latent physical
the basis of a material difference Any Specic Format conditions at the site differing
between available information In a bit of good news for materially from those indicated in
and actual conditions contractors, Metcalf I did reiterate an the contract.
encountered. older court decision [111] concerning

46 COST ENGINEERING JANUARY/FEBRUARY 2016


Lesson Learned (Contractors): For Contractors up with industry developments,
Bidders should summarize the Prior to bidding on a project, it construction law has stopped its
subsurface and latent conditions may be wise to: evolution. Additionally, the scarcity of
they anticipate, based on review actual trials increases the odds that
of all documents provided and Carefully review the contract and decisions such as those cited in this
referred to, as part of the bidding understand how it assigns the risk research perspective will have more
process. Once the conditions of differing site conditions. sway over future differing site
anticipated are summarized, Search the contract for onerous condition disputes.
bidders should record how they exculpatory clauses or contract As contractors seem to be much
relied on these conditions and language disclaiming the accuracy more at risk as a results of these
how their reliance was translated of site information reflected in decisions and others like them, then
into the bid. the bid documents. contactors must be more alert to
Perform a reasonable site situations such as those outlined
Practical Recommendations inspection and make a written above. Being able to document that
for Owners and Contractors and photographic record of your the contractor reviewed all available
Dealing With the Risks of site investigation. Notice the site information, participated in the
Diering Site Conditions physical characteristics of the prebid conference and performed a
In an article entitled Differing surrounding property. prebid site visit is, likewise, critical.
Site Conditions Who Bears the If a differing site condition is Contractors must be able to document
Risk? [113] the author crafted a list encountered, follow carefully the their interpretations of available site
of suggestions for how to deal with contract notice requirements and information and why they reached
differing site condition risks. wait for instructions from the such interpretations. Contractors must
owner before disturbing the site also be able to document how they
For Owners conditions. relied upon these interpretations
To avoid liability for unknown or Keep careful and separate cost when preparing their bids. Attention
unforeseen site conditions, it may be records of your additional costs to notice and documentation
wise to: flowing from differing site requirements is critical. Strict
conditions. adherence to all contract
Disclose all known conditions Understand that the law varies requirements concerning differing site
prior to the submission of bids. greatly, from state to state, with condition claims is an absolute must.
If you include a differing site respect to the allocation of site Finally, whenever a contractor files a
conditions clause in the contract, conditions risk. Before bidding notice of differing site condition,
impose strict notice requirements work in an unfamiliar jurisdiction, separate accounting of all costs
and consider limiting the check with your construction related to the differing condition and
reimbursable costs to only direct lawyer. schedule tracking of the time impact
job site costs incurred by the of the differing site condition are
contractor. Conclusion critical to the success of any differing
Exculpatory clauses may not avoid Despite nearly 90 years of site condition claim.
liability when the contract continuous use and the general belief
documents make positive that everyone in the construction END NOTES
representations about the site or industry fully understands the 1. See Trends in Construction Claims
subsurface conditions. Avoid such Differing Site Conditions clause and its & Disputes, Navigant
representations within the scope of coverage, Board and Court Construction Forum, December
contract documents or otherwise. decisions seem to be narrowing the 2012.
If there is a desire to disclaim coverage of the clause, making it more 2. Max E. Greenberg, It Aint
geotechnical information difficult for contractors to recover Necessarily So!, 40 Muni. Eng. J.
provided to bidders, be sure the damages pursuant to the clause. Paper 263 (2d Quarterly Issue
contract clearly states that the Barring a watershed case concerning 1954).
geotechnical reports are not part differing site condition claims, the 3. Robert F. Cushman and David R.
of the contract documents. authors believe this erosive trend is Tortorello, Diering Site Condition
Prior to letting a project, be likely to continue. As noted in an Claims, Wiley Law Publications,
certain that you understand how earlier report, Trends in Construction John Wiley & Sons, Inc., New York,
the contract allocates the risk of Claims and Litigation [114], one of the 1992.
unknown or differing site unintended consequences of the 4. Neal J. Sweeney, Thomas J.
conditions. vanishing trial is that construction Kelleher, Jr., Philip E. Beck and
law is stagnating. Rather than keeping Randall F. Hafer, Smith Currie &

COST ENGINEERING JANUARY/FEBRUARY 2016 47


Hancocks Common Sense 15. Federal Acquisition Regulation, and Facilities Aecting the Work:
Construction Law, John Wiley & 52.236-2, Diering Site Existing Facilities.
Sons, Inc., New York, 1997. Conditions (APR 1984) (48 FR 24. Design Build of America
5. Owen S. Walker, Diering Site 42478, Sept. 19, 1983, as Document No. 535, Standard
Condition Claims: What is Below amended at 60 FR 34761, July 3, Form of General Conditions of
the Surface of Exculpatory 1995). American Institute of Contract Between Owner and
Clauses or Other Disclaimers?, Architects Document A201 Design-Builder, 4.2.1, Diering
The Procurement Lawyer, 2007, General Conditions of the Site Conditions, 1993.
Summer 2013, American Bar Contract for Construction, 3.7.4, 25. Engineers Joint Contract
Association, Chicago, IL. Concealed or Unknown Documents Committee C-700,
6. J.F. Shea Co., Inc. v. United States, Conditions. ConsensusDocs 200, Standard General Conditions of
4 Cl. Ct. 46, 50 (1983) citing Peter Standard Agreement and General the Construction Contract, 4.03,
Kiewit Sons Co. v. United States, Conditions Between Owner and Diering Subsurface or Physical
109 Ct. Cl. 517, 522-23, 74 F. Sup. Constructor, 3.16.2, Concealed Conditions, 2007.
165, 168 (1947). or Unknown Site Conditions, 26. Design Build Contract Between
7. Contingency An amount 2011, Revised July, 2012. Los Angeles County Metropolitan
added to an estimate to allow for 16. Construction Management Transportation Authority and
items, conditions, or events for Association of America, Inc., Kiewit Pacic Company I-405
which the state, occurrence, or 4.19.4.1.2, Physical Conditions Sepulveda Pass Widening Project,
eect is uncertain and that and Facilities Aecting the Work: April 23, 2009, Section 6.7,
experience shows will likely Existing Facilities, 2004. Diering Site Conditions.
result, in aggregate, in additional 17. Design Build of America 27. The Greenbook Standard
costs. Typically estimated using Document No. 535, Standard Specications for Public Works,
statistical analysis or judgment Form of General Conditions of 2012 Edition, 3-4(c), Changed
based on past asset or project Contract Between Owner and Conditions, BNi Building News,
experience. (AACE International Design-Builder, 4.2.1, Diering Vista, CA.
Recommended Practice 10S-90, Site Conditions, 1993. 28. American Institute of Architects
Cost Engineering Terminology, 18. Engineers Joint Contract Document A201 2007, General
Rev. January 14, 2014.) Documents Committee C-700, Conditions of the Contract for
8. Citing Weeks Dredging & Standard General Conditions of Construction, 10.3.1, Hazardous
Contracting, Inc. v. United States, the Construction Contract, 4.03, Materials.
13 Cl. Ct. 193, 219 (1987) ad Diering Subsurface or Physical 29. ConsensusDocs 200, Standard
861 F. 2d 728 (Fed. Cir. 1988). Conditions, 2007. Agreement and General
9. Jerey M. Chu, Diering Site 19. Oce of Engineering, GT Conditions Between Owner and
Conditions: Whose Risk Are Guideline No. 15, April 30, 1996. Constructor, 3.13, Hazardous
They?, The Construction Lawyer, 20. Federal Acquisition Regulation, Materials, 2011, Revised July,
April 2000, American Bar 52.236-2, Diering Site 2012.
Association, Chicago, IL. Conditions (APR 1984). (48 FR 30. Design Build of America
10. Irv Richter and Roy S. Mitchell, 42478, Sept. 19, 1983, as Document No. 535, Standard
Handbook of Construction Law amended at 60 FR 34761, July 3, Form of General Conditions of
and Claims, Reston Publishing 1995). Contract Between Owner and
Company, Inc. A Prentice Hall 21. American Institute of Architects Design-Builder, 4.1, Hazardous
Company, Reston, VA, 1982. Document A201 2007, General Conditions, 1993.
11. Oce of Engineering, GT Conditions of the Contract for 31. Engineers Joint Contract
Guideline No. 15, April 30, 1996. Construction, 3.7.4, Concealed Documents Committee C-700,
12. David Michael Pronchick, The or Unknown Conditions. Standard General Conditions of
Diering Site Conditions Clause: 22. ConsensusDocs 200, Standard the Construction Contract, 4.03,
Time for A Change, Master of Agreement and General Diering Subsurface or Physical
Laws Thesis submitted to The Conditions Between Owner and Conditions, 2007.
National Law Center, George Constructor, 3.16.2, Concealed 32. Neal J. Sweeney, Thomas J.
Washington University, or Unknown Site Conditions, Kelleher, Jr., Philip E. Beck and
September 30, 1990. 2011, Revised July, 2012. Randall F. Hafer, Smith Currie &
13. 96 Ct. Cl. 148, 164 (1942). 23. Construction Management Hancocks Common Sense
14. Oce of Engineering, GT Association of America, Inc., Construction Law, John Wiley &
Guideline No. 15, April 30, 1996. 2004, 4.19.3, Physical Conditions Sons, Inc., New York, 1997.

48 COST ENGINEERING JANUARY/FEBRUARY 2016


33. Robert F. Cushman and David R. 46. Overton A. Currie, R. B. Ansley, 56. Keang Nam Enterprises, Ltd.,
Tortorello, Diering Site Condition Kenneth P. Smith, Thomas E. ASBCA No. 13747, 69-1 B.C.A.,
Claims, Wiley Law Publications, Abernathy, Diering Site 7,705.
John Wiley & Sons, Inc., New York, (Changed) Conditions, Brieng 57. Dyer & Dyer, Inc., ENG BCA 3999,
1992. Papers No. 71-5, Federal 80-2 B.C.A. 14,463.
34. Hallman v. United States, 68 F. Publications, Inc., Washington, 58. Bates-Cheves Construction Co.,
Sup. 204 (Ct. Cl. 1946); Robert E. D.C., 1971. ICBA No. 670-967, 68-2 B.C.A.
McKee Gen. Constr., Inc., ASBCA 47. James J. Tansey, Analyzing 7,167.
No. 521, 60-1 B.C.A. (CCH) 2,526 Contractor Claims, Construction 59. Cross Construction Company,
(1960). Briengs 88-8, Federal ENG. BCA No. 3636, 79-1 B.C.A.
35. Tobin Quarries, Inc. v. United Publications, Inc., Washington, 13,708.
States, 114 Ct. Cl. 286 (1949); D.C., July 1988. See also, 60. Edwards v. United States, 19 Cl.
Baltimore Contractors, Inc., Metropolitan Sewerage Comm. v. Ct. 663 (1990).
GSBCA 4808R, 80-2 B.C.A. R. W. Construction, Inc., 241 N.W. 61. Randall H. Sharpe, ASBCA No.
14,676; Blaze Constr. Co., IBCA 2d 371 (Wis. 1976); Roy Strom 22800, 79-1 B.C.A. 13,869; Acme
No. 2863, 91-3 B.C.A. (CCH) Excavating & Grading Co., Inc. v. Missiles and Construction Co.,
24,071 at 120,506 (1991). Miller-Davis Co., 501 N.E.2d 717, ASBCA No. 10784, 66-1 B.C.A.
36. See Neal J. Sweeney, Thomas J. (Ill. 1986); Contra Cruz Constr. Co. 5,418.
Kelleher, Jr., Philip E. Beck and v. Lancaster Area Sewer Auth., 62. Homan v. United States, 166 Ct.
Randall F. Hafer, Smith Currie & 439 F. sup. 1202 (E.D. Pa. 1977). Cl. 39, 340 F.2d 645 (1964); Frank
Hancocks Common Sense 48. George D. Ruttinger, The Diering W. Miller Construction Co., ASBCA
Construction Law; Robert F. Site Condition Clause: What Are No. 22347, 78-1 B.C.A. 13,039;
Cushman and David R. Tortorello, Contract Indications?, NCMA Arkansas Rock & Gravel Co., ENG
Diering Site Condition Claims; Irv Journal, National Contract BCA No. 2895, 69-2 B.C.A. 8,001;
Richter and Roy S. Mitchell, Management Association, Security National Bank of Kansas
Handbook of Construction Law Summer 1986. City v. United States, 184 Ct. Cl.
and Claims. 49. Foster Construction C.A. v. United 741, 397 F.2d 984 (1968).
37. Foster Construction C.A. v. United States, 4356 F.2d 873, 888 (Ct. Cl. 63. Brezina Construction, Inc., ENG
States, 435 F.2d 873, (Ct. Cl. 1970). BCA No. 3215, 75-1 B.C.A.
1970). 50. Woodcrest Constr. Co. v. United 10,989.
38. Pacic Alaska Contractors, Inc. v. States, 408 F.2d 395 (Ct. Cl. 1969). 64. Dunbar & Sullivan Dredging Co.,
United States, 193 Ct. Cl. 850, 436 51. Schouten Construction Co., ENG BCA No. 8265, 73-2 B.C.A.
F. 2d 461, 469 (1971). DOTCAB 78-14, 79-1 B.C.A. 12,285.
39. Metropolitan Sewerage 13,553; Turnkey Enterprises, Inc. 65. John Murphy Construction Co.,
Commission v. R. W. Construction, v. United States, 597 F.2d 750 (Ct. AGBCA No. 418, 79-1 B.C.A.
Inc., 241 N.W.2d 371 (Wis. 1976). Cl. 1797); Roen Salvage Co., ENG 13,836.
40. Reliance Enterprise, ASBCA Nos. BCA 3670, 79-2 B.C.A. 13,882. 66. Leavell & Co., ENG BCA 3492, 75-
27638, 27639, 85-2 B.C.A. 52. Praxis-Assurance Venture, ASBCA 2 B.C.A. 11,596.
18,045. No. 24748, 81-1 B.C.A. (CCH) 67. United Contractors v. United
41. George D. Ruttinger, The Diering 15,028 (1981) (abnormal States, 177 Ct. Cl. 151, 368 F.2d
Site Condition Clause: What Are rainfall); Arundel Corp. v. United 585 (1966).
Contract Indications?, NCMA States, 103 Ct. Cl. 688, 711-12 68. Weeks Dredging & Contracting,
Journal, National Contract (1945) (hurricane); Hardeman- Inc. v. United States, 13 Ct. Cl.
Management Association, Monier-Hutcherson v. United 193, 218 (1987), ad 861 F.2d
Summer 1986. States, 458 F.2d 1364, 1370-71, 728 (Fed. Cir. 1988); Simpson
42. R. L. Spencer Constr. Co., ASBCA (Ct. Cl. 1972)(adverse sea and Constr. Co., VABCA No. 3176, 91-1
No. 18450, 75-2 B.C.A. (CCH) wind conditions). B.C.A. (CCH) 23,630 (1990);
11,604 at 54,423 (1975). 53. George E. Jensen Contractors, Shumate Constructors, Inc.,
43. Caesar Constr., Inc., ASBCA No. Inc., GSBCA Nos. 3242, 3249, 71-1 VABCA No. 2772, 90-3 B.C.A.
41059, 91-1 B.C.A. (CCH) 23,639, B.C.A. 8,735. (CCH) 22,946 (1990); Weston-
at 118,417 (1990). 54. Robert E. McKee General Bean Joint Venture v. United
44. Blacks Law Dictionary (Revised Contractor, Inc., ASBCA 521, 60-1 States, 115 Fed. Cl, 215, 2014 U.S.
Fourth Edition), West Publishing B.C.A. 2526. Claims LEXIS 417, March 14, 2014.
Company, St. Paul, MN, 1968. 55. Dunbar & Sullivan Dredging Co., 69. See, for example, FAR 52.237-1,
45. Bernard Kamine, Diering Site ENG BCA 3165-3167, 3191, 73-2 Site Visit, which is contained in all
Conditions, Kamine Law PC, 2014. B.C.A. 10,285. Federal construction contracts.

COST ENGINEERING JANUARY/FEBRUARY 2016 49


70. See, for example, FAR 52.236-3, 89. Citing Morrison-Knudsen Co. v. 108.834 F.2d 1576; 34 Cont. Cas. Fed.
Site Investigation and Conditions State, 519 P.2d 834, 841 (Alaska, (CCH) 75,414 (1987).
Aecting the Work, which is also 1974); see also Conner Bros. 109.420 F.2d 968, 982, 190 Ct. Cl. 546
contained in all Federal Constr. Co. v. United States, 65 (1970).
construction contracts. Fed. Cl. 657, 688 (Fed. Cl. 2005); 110.However, contractors are
71. See Top Painting Co., Inc., ASBCA see also Philip L. Bruner and expected to use past experience
No. 57333, 12-1 BCA 35,020; Patrick J, OConnor, Jr, Bruner & when bidding new contracts.
D&M Grading, Inc. v. Dept. of OConner on Construction Law, 111.Ace Constructors, Inc. V. United
Agriculture, CBCA No. 2625, 12-1 5:108 at 176 (2002). States, 70 Fed. Cl. 253, 273
BCA 35,021; Orlosky, Inc. v. 90. 732 F.2d 913; 1984 U.S. App. (2006).
United States, 64 Fed. Cl. 63, LEXIS 15001; 32 Cont. Cas. (CCH) 112.435 F.2d 873 (1970).
(2005). P 74,426. 113.Donald OToole, Troutman
72. Stuyvesant Dredging Co. v. United 91. Citing Arundel Corporation v. Sanders.
States, 834 F.2d 1576, 1581 (Fed. United States, 207 Ct. Cl. 84, 515 114.See Trends in Construction Claims
Cir. 1987). F.2d 1116, 1128 (Ct. Cl. 1975). & Disputes, Navigant Construction
73. FAR 52.236-2, Diering Site 92. Citing Foster Construction C.A. Forum, December 2012.
Conditions. and Williams Brothers Company
74. McDevitt & Street Co. v. Marriott v. United States, 193 Ct. Cl. 587, ABOUT THE AUTHORS
Corp., 713 F. Supp. 906, 919 (E.D. 435 F.2d 873, 881 (Ct. Cl. 1970).
Va. 19089), ad in part, revd in 93. Citing S.T.G. Construction co., Inc.
part, 911 F.2d 723 (4th Cir. 1990). v. United States, 157 Ct. Cl. 409,
75. Brinderson Corp. v. Hampton 414 (1962).
Roads Sanitation District, 825 F.2d 94. 128 Ct. Cl. 156, 159, 120 F. sup. Steven A. Collins, is
41 (4th Cir. 1987). 768, 769 (1954). with Navigant
76. FAR 52.236-2, Diering Site 95. Foster Construction C.A. and Consulting, Inc. He
Conditions. Williams Brothers Company, A can be contacted by
77. Ibid. Joint Venture v. The United States, sending email to:
78. Holland v. Green Mountain Swim 193 Ct. Cl. 587, 435 F.2d 873, scollins@navigant.com
Club, Inc., 470 P.2d 61 (Col. 1970). 1970 U.S. Ct. Cl. LEXIS 74.
79. FAR 52.233-1, Disputes. 96. 368 F.2d 585, 595 (Ct. Cl. 1966).
80. FAR 52.249-10, Default (Fixed 97. Neal & Co. v. United States, 36
Price Construction). Fed. Cl. 600, 617 (1996), ad, 121 James G. Zack, Jr.,
81. FAR 52.236-2, Diering Site F.3d 983 (Fed. Cir. 1997). CFCC FAACE, is
Conditions. 98. 98 F.3d 1314, 1315 (Fed. Cir. employed with
82. VACAB No. 1236, 79-2 BCA 1996). Navigant Consulting,
13,900. 99. 1936 Ct. Cl. 587, 435 F.2d 873, Inc. He can be
83. Perini Corporation v. United 1970 U.S. Ct. Cl. LEXIS 74. contacted by sending
States, 180 Ct. Cl. 768, 381 F.2d 100.102 Fed. Cl. 334; 2011 U.S. Claims email to: jim.zack@navigant.com
403 (1967). LEXIS 2329.
84. ASBCA No. 53882, 2006-2 B.C.A. 101.294 F.3d at 1357, 1367 at 1363
(CCH) P33, 420; 2006 ASBCA (Fed. Cir. 2002). FOR OTHER RESOURCES
LEXIS 88, October 5, 2006. 102.742 F.3d 984; 2014 U.S. App. To view additional resources on
85. Citing Randa/Madison, Joint LEXIS 2515, February 11, 2014. this subject, go to:
Venture III v. Dahlberg, 239 F.3d 103.CBCA 490, 491, 492, 716, 1555, www.aacei.org/resources/vl/
1264, 1270-72 (Fed. Cir. 2001); 1763; 2012 WL 1144972, (Civilian Do an advanced search by au-
Billington Contracting, Inc., B.A. A.). thor name for an abstract listing of
ASBCA Nos. 54147, 54149, 05-1 104.ASBCA No. 57328, 2012-2 B.C.A. all other technical articles this author
B.C.A. P 32,900 at 162,994. (CCH) P 35,138; 2012 ASBCA has published with AACE. Or, search
86. Citing Comtrol, Inc. v. United LEXIS 85, August 21, 2012. by any total cost management subject
States, 194 F.3d 1357, 1362 (Fed. 105.732 F.2d 913, 916 (Fed. Cir. 1984). area and retrieve a listing of all avail-
able AACE articles on your area of in-
Cir. 2002); H. B. Mac, Inc. v. 106.157 Ct. Cl. 409, 414 (1962).
terest. AACE also oers pre-recorded
United States, 153 F.3d 1338, 107.See Delivering Dispute Free webinars, an Online Learning Center
1345 (Fed. Cir. 1998). Projects: Part III Alternative and other educational resources.
87. 351 F.2d 980, 985 (Ct. Cl. 1964). Dispute Resolution, Navigant Check out all of the available AACE re-
88. 2013 Alas. LEXIS 118, September Construction Forum, June, sources.
6, 2013. 2014.

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