Cost Engineering March-April 2015

THEJOURNALOFAACE INTERNATIONALTHEAUTHORITYFORTOTALCOSTMANAGEMENT
COST
March/April 2015
ENGINEERING
SOFT SKILLS
ARE VITAL FOR EFFECTIVE
PROJECT CONTROLS
CALCULATING THE
AS-BUILT
CRITICAL PATH
TRENDS IN
CONSTRUCTION
CLAIMS AND
DISPUTES
www.aacei.org
CONTENTS
COST ENGINEERING
TECHNICALARTICLES
4Soft Skills are Vital for
Effective Project Controls
Christopher W. Carson, CEP DRMP PSP FAACE and Patrick Kelly, PSP
13Calculating the As-Built Critical Path

Andrew Avalon, PE PSP
24Trends in Construction Claims and Disputes

James G. Zack Jr., CFCC FAACE
ALSOFEATURED
2
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AACE International Board of Directors

Cost Engineering Journal Information
AACEs Federal Agency Roundtable
AACE 2015 Annual Meeting
38
AACE International 2015 Elections
41
41
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44
Professional Services Directory

Index to Advertisers
AACE International Online Store
Calendar of Events
COSTENGINEERINGMARCH/APRIL 2015
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COST ENGINEERING MARCH/APRIL2015
TECHNICAL ARTICLE
Soft Skills are Vital

for Effective Project Controls
Christopher W. Carson, CEP DRMP PSP FAACE
and Patrick Kelly, PSP
Abstract: The industry is full of recommendations for good technical project

controls techniques, some written by the authors, but rarely does anyone
address the need for exemplary soft skills in the project controls role.
Wikipedia defines soft skills as, the cluster of personality traits, social graces,
communication, language, personal habits, friendliness, and optimism that
characterize relationships with other people. In order to be an effective
member of the project management team, it takes good soft skills. These
soft skills are necessary to be effective, if the PM team is to listen to recommendations from project controls. Whether its planning projects, capturing
update information, addressing risks, discussing corrective actions, or providing claims avoidance support, if the PC expert is not also an expert in soft
skills, the value is greatly reduced. This article provides some recommendations for those skills, personality testing such as the Meyers-Briggs Personality Profile, that are necessary to supplement the technical skills, and offers
ways to both train and test for the necessary soft skills. This article was first
presented as DEV.1760 at the 2014 AACE International Annual Meeting in
New Orleans.
he industry is full of recommendations for good technical

project
controls
techniques, some written by
the authors, but rarely does anyone address the need for exemplary soft skills
in the project controls role. No matter
the technical proficiency, the inability
to communicate the message behind
the analysis will result in wasted effort.
Wikipedia defines soft skills as, the
cluster of personality traits, social
graces, communication, language, personal habits, friendliness, and optimism that characterize relationships
with other people.
In order to be an effective member
of the project management (PM) team,
it takes good soft skills. These soft skills
are necessary to be effective, if the PM

team is to listen to recommendations
from Project Controls. Whether its
planning projects, capturing update information, addressing risks, discussing
corrective actions, or providing claims
avoidance supportif the PC expert is
not also an expert in soft skills and unable to ultimately communicate the
message behind the analysis, the value
is greatly reduced or lost. Ultimately,
the project controls consultant must be
able to identify the needs of the client,
produce the analysis, and communicate the result. A failure of any piece of
this trifecta can lead to the entire engagement being considered a failure or
a waste of time and money.
This article provides some recom-
COST ENGINEERING MARCH/APRIL 2015
mendations for these soft type skills,

(i.e., personality testing such as the
Meyers-Briggs Personality Profile), that
are necessary to supplement the technical skills and offer ways to both train
and test for the necessary soft skills.
What Are Soft Skills?

As Identified by AACE International
Soft skills generally refer to those
attributes that are not considered engineering skills, particularly when those
engineering skills are as defined by
AACE Recommended Practice 11R-88,
Required Skills and Knowledge of Cost
Engineering, as the, application of scientific principles and techniques [1].
In this application, planning, analyzing,
validating, optimizing, estimating, predicting, and managing are all required
technical skills. Leadership, leadership
roles, motivation, incentives are included, but viewed as a science, behavioral science, with theories
advanced to deal with these roles. So,
in the construction or project management world, even the relatively nontechnical roles and skills are reduced to
a science so one can deal with these
skills from an engineering perspective.
The AACE Total Cost Management Framework, includes a section
called, People and Performance Management, Chapter 11 [5]. This section
addresses how people perform, and
used to influence others in a way that

is individually meaningful. Emotional
intelligence (EQ) is comprised of up to
82 different specific skill attributes, that
can be used to characterize an individual's strengths and development areas.
By mapping an individual's skills to the
requirements of the job, departments
can craft a data-based development
plan to raise performance to the next
level. Task balance is an indication of
the inherent task type preference that
each individual has. It can be used to
obtain and maintain optimal job satisfaction and performance [7].
While some of these clearly are
soft skills, the full list of soft skills
should encompass much more.
Figure 1 Performance Expectancy Model - TCM
while much of it is oriented towards
productivity in the work process, the
section clearly explains how capability
is a function of a number of components, from motivation to developed
skills. This is an important concept, and
soft skills can be developed, learned,
and trained.
If one considers that the subset of project management called project controls includes the disciplines of
planning and scheduling, cost management, risk management, document
control, some contract administration,
and forensic analysis, it is obvious that
many of these skills are engineering
and technical skills, and that is where
the industry seems to place the greatest priority.
The handbook for a planning and
scheduling expert is AACE Recommended Practice 14R-90, Responsibility
and Required Skills for a Project Planning and Scheduling Professional [2].
This recommended practice (RP) lists
nine duties, and only one of those duties covers soft skills, number 3, described as, Supporting the project
team efforts toward the development
of the project plan and translating that
project plan into the project schedule.
Of the other eight duties, the only references to soft skills include terms like
informing and providing.
For the 2005 AACE International
Transactions, Rohit Singh, CCP, authored a paper in which he identified
soft skills that he thought were missing

[9]. His list, organized into three main
areas of basic skills, interpersonal skills,
and experiential learning, included
reading, writing, speaking, setting
goals, effective negotiations, effective
job searching, personal career development, and good management education. Clearly, some of these are
necessary soft skills, but the list is
hardly comprehensive and fails to address the real needs for project controls
professionals in order to develop competency and accomplish the goals.
In Cost Engineering, Volume
51/No. 3, March 2009, Edward Munzio
and Dr. Deborah Fisher attempted to
quantify soft skills, which they describe
as: behavior, motivation, emotional intelligence, and task balance, calling
them the four basic metrics of human
interaction [6].
Their explanation of these metrics
shows that they are indeed soft skills.
Behavior is the most clearly visible indicator of another person's behavioral
preferences. Behavioral assessment
teaches the ability to read and respond
to behavioral tendencies. This improves
influencing skills, teamwork, and career
direction using information easily observed. Motivation is a quantifiable
part of any individual that can be measured and understood as the basic reason for taking action. The factors
related to motivation can be quantitatively assessed and then learned and
As Identified by Project Management

Institute (PMI)
The primary guidance from PMI for
project management, including project
controls, is PMIs global standard, A
Guide to the Project Management
Body of Knowledge (PMBOK Guide),
currently in the fifth edition [8]. This
guide lists 10 processes, and two of
those processes deal with this topic of
soft skills, project communications
management and project stakeholder
management.
Some of the communications skills
identified in this guide include:
listening actively and effectively;

questioning and probing ideas and
situations to ensure better understanding;
setting and managing expectations;
persuading;
motivating;
coaching;
negotiating;
resolving conflict; and,
summarizing, recapping, and identifying the next steps.
These are important skills that are

used throughout the PC consultants
career, bringing success through competent use of these skills. The PMBOK
Guide Project Communication Management chapter has a good section related to communication models,
explaining how communication is a two

way effort. Ideas are transmitted to the
receiver and then the receiver translates the message, which may or may
not align with what the sender expected to transmit. This chapter recommends acknowledgement of
communications to ensure the message was accurately transmitted. Ensuring that transmitted information
was understood by the receiver is an
important point and reinforces the importance of these soft skills to improve
on understanding.
Suggested Soft Skills

and Organization
In reviewing soft skills, the authors
found that they segregate into several
primary categories; communications,
motivation, presentation, and follow
up.
With these categories to organize
the skills, the list looks something like
this:
Communications
o critical (objective) thinking;
o reading and comprehension;
o writing; and,
o succinctness.
Motivation
o motivational leadership;
o networking and relationship
building;
o partnering, teambuilding, and
teamwork; and,
o empathy and tactfulness.
Presentation
o interpretation;
o public speaking; and,
o negotiation and persuasion.
Closing/Resolution
o persistence;
o managing expectations; and,
o mentoring and training.
Notice that this is not so dissimilar

from the four metrics in the
Munzio/Fisher article; behavior, motivation, emotional intelligence, and task
balance, except this list is organized
more for types of actions that require
the skills.
Why Do Soft Skills Matter?

A planner and/or scheduler can be
technically at the top of the profession
and extremely competent with the
software, analytical enough to identify
pertinent issues, and print fancy, accurate, and impressive charts, but not be
particularly good at communicating the
results. It is the communication with
the stakeholders that makes projects
successful.
The schedule is the primary communications tool on the project, but
since its a technical product, if someone doesnt interpret that tool, put the
output into language that is clear and
concise for the project management
team, the schedule information has not
been transmitted.
However, the public role of a PC
practitioner is to deal with people; eliciting cooperation and information, facilitating involvement and buy-in,
building relationships, and communicating. Communicating is particularly
difficult since the role is focused on
highly technical tasks resulting in technical analysis and conclusions, but the
output must be simple messages that
are used to provide information that
will likely convince stakeholders to take
certain actions. This is ultimately vital
because none of the analysis components, whether an estimate, a schedule, a risk management plan, are
precise. They are all based on subjective information that started with a
tentative plan and is modified as conditions change on the project. The
schedule, for example, is not accurate
down to the day even if the schedule is
written using one day as the smallest
time unit. The estimate, as another example, is not exact; it is based on production rates which vary according to
the resources, the project conditions,
the political climate, and many other
factors. Although the software will
allow a level of precision in calculations
that seems very high, the data used in
the calculations does not permit that
level of precision. When estimating a
project, generally the same accuracy is
gained by rounding off to the nearest
$100 as is gained by carrying pricing
out to the nearest penny.
COSTENGINEERING MARCH/APRIL 2015
The plan established for the project is not the only way to accomplish
the scope of work, but rather, it is the
PM teams best plan at the time of the
planning session.
The PC expert needs to have the
ability to elicit the construction plan
from the PM team, facilitate turning it
into a schedule, explain the plan then
modeled by the schedule, analyze the
schedule as production advances,
make recommendations for actions
based on performance, and gain acceptance from all stakeholders that
those recommendations are appropriate and important. This effort makes
use of a variety of soft skills and the
better the PC expert is with those soft
skills, the more likely it is that the team
will work together for the common
goal.
A large part of those abilities center around the ability to take a complex
and highly analytical effort, glean the
vital information from that effort, and
explain it in common sense and simple
language. A good story is more convincing than a pile of technical analysis
printouts. This is probably one of the
greatest weaknesses in a project controls staff, and the place where impressive improvements can be made.
Even in situations when there is a
dispute, such as when the owners
agent can not recommend acceptance
and approval of a contractors schedule, it is soft skills that will settle the
case, not the detailed analysis. As Chris
Carson wrote in his 2012 AACE International Transactions article, The goal is
to use the data to meet with the contractor, convince them to cooperate, fix
the schedules, and convince them that
documentation is a strong rebuttal to
loose/inaccurate claims. It also shows
that the owners analysis process is accurate and convincing. Once convinced, the contractor is more likely to
provide approvable schedules, and to
accept the reasonableness of the suggested settlement [4].
The stakeholders on the project
will be many different types of people
with varying degrees of technical skills,
however, none of them will likely have
the level of understanding of project
controls as the PC team. This is why it

is so important that good communications provide clear, concise and explanatory information and the viewer
or receiver stakeholder understands
the message.
Traditional Roles for Project Controls
Professionals
The traditional roles for project
controls professionals are well defined
in some of the publications reference
above, and generally, project management teams understand what the PC
team is doing. It is a given that the project control professional will be technically analytical and it is expected that
some analysis will be, in the weeds;
however, the inability to put the analysis in larger context and to communicate its trends and findings may result
in the analysis missing the point.
Weaknesses in Traditional Roles
Part of the problem with the lack
of good soft skills in the project controls world is the perception that the
technical analysis is the only thing that
matters in project controls. Certainly,
technical expertise provides the objective and thorough analysis of complex
issues, as modeled in schedules and
budgets, but the data has to be obtained from someone, the results need
to be explained to someone, and the
PC professional generally needs to convince someone that the recommendations for action are worthwhile and
important.
The Art of Empathy
While a project controls professional must be technically proficient at
his or her craft, they must be much
more rounded to truly be effective.
Project controls professionals must
possess the seamless ability to put
themselves in the shoes of their clients.
Whether contractors, owners or designers, the project controls professional must instantly perceive the
motivations, constraints and limitations
of those he or she is working for. Project controls professionals are in a
unique position to have to interact with
all these client types, and the mastery
of dealing with can be boiled down to
the exercise and development of empathy. Empathy can be uniquely challenging to those who have solely
studied analytical subjects through
their schooling. Lets face it, not many
project controls professionals are coming from liberal arts colleges or acting
schools these days. While the focus in
our field and its continuing education
seems to be technical enhancement
and certification progression, the
rounding of ones ability to empathize
should be a treated as important to the
progression of the career of the project
control professional as any analysis
technique.
Technical Nature of the Role
A large part of the problem with
failure to develop vital soft skills in project controls professionals is the nature
of the role; highly technical and analytical. This attracts engineers and analytical people, who often do not have the
natural soft skills. In addition, the profession places maximum priority on
those technical skills, with requirements for understanding the methodologies and software support for those
roles, and very little priority on the soft
side of the skills. In a world of complex
calculations, complicated software,
and a lack of appreciation for the precision of the data, it is easy to drop into
that technical world. But, if no one understands the issues but the experts,
they will not be resolved. Just as in a
dispute, it is the expert who can condense the complicated and detailed
data that was analyzed into a single
slide that will prove his or her case.
Need for Development of Relationships
Often, PC professionals do not see
any need to develop intra-project relationships, when that is really vital to
performing the task effectively. Relationship building involves development
of trust from daily interactions, but beyond that, it requires some effort to interact with the other stakeholders. This
is why the communications plan is so
important, it can help identify which
stakeholders the PC team needs to engage and how frequently. Done correctly, the relationships which are built
early will be preserved through to the

final closeout item in the project. These
relationships help drastically with
stakeholder expectation management,
as the people get to know each better
and build a better level of understanding and trust.
Failure to Translate Technical Jargon
into Plain English
Not every technical person can
communicate the complex issues in
simple words. This is amplified by the
highly technical PC professional who
deeply understands the issues and
doesnt need to parse them down to
simpler concepts, and often is a bit dismissive of those who need the simple
concepts. However, everyone needs to
recognize that few people have the
technical competence, and more importantly, few need to have it. The
stakeholders will each have their own
areas of expertise, and will need issues
explained in such a way that they are
relevant to their areas.
This soft skill is one of the hardest
to develop, and worse, one of the hardest to maintain. Many PC professionals
start out with a good concise explanation, but over time, their communications allows the technical jargon to
creep in and the simple explanation to
be overwritten. Thats why it can be
helpful to have someone on the team,
who is not technical, review reports
and see if they can understand them. If
the document controls clerk cannot understand the schedule report, it likely
is not explained clearly enough. Remember, facts by themselves are not
analysis, so the relevance and interpretation of facts are of prime importance.
Vital Soft Skills

After examining a number of articles/papers and books that appear to
address soft skills, the authors believe
that the prevailing industry understanding of these skills is not thorough
enough. This article should help identify and promote the soft skills that are
so vital to success.
Communications Skills
Under a broad heading of commu-
nication skills, the first step is in thinking, ensuring that critical thinking is
prevalent. Critical thinking is objective
review of issues, ideas, arguments,
data, opinions, and allows the PC practitioner to look at these things without
any preconceived notions. This is a vital
step since it lowers the barriers to the
exchange of information that is a daily
task for this role. A critical thinker will
listen without judging and gain a better
understanding of the situation or the
data transmitted from another team
member or stakeholder. This includes a
fair assessment of information provided by the contractor when working
for an owners CM, or a fair assessment
of the owners position when working
for a contractor.
The ability to read a multitude of
documents and information channels
and understand the data included, with
no deviation from the original data, is
absolutely necessary for this role. This
comprehension often does not come
easily to professionals, but it is a skill
that has to be developed. This is the
difference between knowledge and
evaluation in the commonly called
Blooms Taxonomy of Educational Objectives; knowledge is just hearing and
learning facts and data, whereas evaluation includes grasping the meaning
of the facts and data, analyzing the
data, and evaluating the data objectively [3]. As the project controls professional becomes more and more
competent, the professional should be
using higher levels of critical thinking;
moving through the levels; knowledge,
comprehension, application, analysis,
synthesis (or evaluation by the revised
taxonomy), and evaluation (or creating
by the revised taxonomy).
The last soft skills in this category
include writing clearly but equally as
important, the ability to write succinctly, reducing the data to the pertinent issues. Often reports and
communications are so riddled with
technical information that it takes another highly technical professional to
understand. This is a huge risk and a
true PC professional must gain the soft
skills to bridge this concern.
When the soft skills are missing or
limited, reports tend to delve into spe-
cific details and provide little to no

analysis or interpretation. Stating the
critical path runs through activity
#12365, F/R/P Deck 3B, does not convey the same information as, the critical path runs through the forming and
pouring of the concrete deck on Level
3 on the SE corner. And, that statement of fact should be followed by an
explanation of the appropriateness of
the critical path, and what it means to
production and performance.
Another example that one often
sees is reporting of out-of-sequence activities during a schedule update. A report may say, there are 72 activities
that are out-of-sequence this period,
but that bare fact is useless unless one
knows what that means to the validity
of the schedule. Does it mean that the
schedule is not reporting accurately? If
so, by how much? Is this relevant?
What does it mean to the various readers of the report? Does it really affect
the critical path of the schedule?
So, the ability to take highly technical information, parse it down to the
various stakeholders, and ensure that
they understand the relevance of the
information is a vital soft skill. This is
particularly important if the analysis
suggests that some action must be
taken; in this case, it is even more important that the report displays a convincing reason for the action.
Motivation Skills
Since the project controls professional is engaged with a methodology
that many stakeholders do not understand, using software that they cannot
use, with hundreds of activities and
schedule components that affect the
output, it is very important that the
team believes in the competency and
appropriateness of the project controls
effort. This takes leadership and not
just leadership, but motivational leadership, to ensure that the team is supported without overstepping project
manager boundaries, yet supportive of
the project controls operation. A good
networking effort and the building of
relationships with all stakeholders will
make the effort run smoothly.
The schedule development/planning session and the risk workshop are
great opportunities to build teams and

partner with the stakeholders, and the
project controls professional plans, facilitates, and manages these sessions.
Done properly, the entire team starts
the project as partners, and the PC effort should help maintain the partnering atmosphere during the project.
Conflicts can be used to improve the
partnering effort, and using good soft
skills of empathy and tactfulness will
allow the team to retain the respect for
all members rather than evolve into
non-productive paper battles.
Persuasion and Negotiation Skills
Since the conclusions from analysis have to presented and sold to the
stakeholders, it is crucial that the PC
professional has excellent presentation
skills. This starts with solid public
speaking skills, allowing interpretation
of data and demonstration of the validity of analysis conclusions, often using
graphics rather than reams of analysis
support documentation. Once the conclusion is presented and the audience
understands the position, the PC professionals effective persuasion and negotiation skills will help the
stakeholders to understand and agree
with the conclusions and any required
actions. This can be a need for a recovery effort, a need for additional resources, a change in field staff, or any
of hundreds of problems that need resolution on a project. As long as the
team is intact, including all stakeholders, and the RC staff listened and communicated with the stakeholders, most
issues can be discussed and with good
soft skills, the resolution is more likely
to be accepted by the stakeholders.
Closing/Resolution Skills
Initial acceptance of recommended actions is the first step toward
closure of issues requiring resolution,
but it is up to project controls to ensure
that complete actions are taken to fully
resolve. This could be ensuring that
constructability review comments,
once accepted, are incorporated accurately into the final drawings, or revised
change orders are re-submitted in a
timely manner. This takes persistence
and the ability to monitor to comple-
tion all issues.

Part of successful stakeholder
management is managing their expectations. An outcome could be the best
possible outcome, but if the stakeholders did not buy into the outcome, and
their expectations are different than
the outcome, the result could be a disaster. The difference between success
and failure is often simply the competence with which the stakeholders expectations were managed. If the CM
provides a budget for a change order
and gives a range of pricing, maybe
$18,000 to $24,000, and doesnt provide a clear communication that the
budget is a range, the owner stakeholder likely will expect $18,000, but
the contractor stakeholder likely will
expect $24,000. The PC staff can manage the expectations of both stakeholders, not by promising exact prices, but
by reinforcing that the budget is a
range, and that range can be narrowed
down as more information is available.
The communications in this example
make all the difference in the final satisfaction of both stakeholders.
Finally, a good project controls
professional must be a teacher. He or
she must be able to constantly train the
PM staff and the stakeholders in the PC
disciplines. This means being an advocate for critical path method (CPM)
scheduling, explaining how it works
from the inception, and reinforcing the
message throughout the project. It

means mentoring the newer people
and ensuring that everyone understands why PC systems are operated
and what the analysis results mean to
the stakeholders. With proper training
and management of expectations, and
a consistent effort to close out all issues, the end of the project will arrive
with the stakeholder team intact.
How to Develop and

Train for Soft Skills
Training is key to developing soft
skills; while some people are naturals
at these skills, they can and should be
taught. We have hesitated to use the
word psychological in this article, but
many of these soft skills are psychological insight and application. Behavior is
generally subject to the external environment; the atmosphere or culture,
the way they are treated, the way people react to them, the way their ideas
as received. Different personalities act
and react in different ways, and once
there are personality clashes, it is difficult to bridge over the breakdown in
the team and the partnering effort.
Fortunately, a psychologist named
Carl Jung spent much of his life in the
study of personalities and his writings
formed the basis for many academics
to study these issues. Two later psychologists, Isabel Briggs Myers and her
mother, Katharine Briggs, used some of
the Jung theories to develop their own

personality inventory in order to understand personalities.
The Myers-Briggs Type Indicator
(MBTI), sometimes called the 16 type
Myers-Briggs assessment, is a very useful tool for interpretation of personality
and identification of potential conflicts.
This inventory is available freely online,
and there are short tests that can be
taken to determine anyones personality type within the system.
In summary of the MBTI, there are
eight basic indicators:
extraversion or introversion;
sensing or intuition;
thinking or feeling; and,
judging or perceiving.
As an example, personalities may

treat time differently from other personalities; where one person will see
an appointment at 10 a.m., as a do-ordie time and always arrive early for the
meeting; another personality will see a
10 a.m. appointment as a morning
appointment and never be on time.
That single personality trait can set up
emotional reactions that will destroy a
good team. This is the difference between the judging person who has to
be on time and the perceiving person
who is wandering through their day.
This category actually includes closing
Figure 2 Myers-Briggs Preferences Graphic by CPP, Publisher of the MBTI

Figure 3 Please Understand Me Reference Book by David Keirsey

out decisions (judging) or leaving
things open-ended (perceiving), so it
tends to create many problems beyond
the simple time sense.
Thinking people who are strongly
oriented to that indicator focus on logic
and consistency, whereas the feeling
people look at people and situations.
Strong indictors of thinking often are
engineers, where strong indicators of
feeling are often teachers or nurses.
The two letter combinations allow better narrowing of the personalities, so
the system needs some study, but its
not hard to understand.
The authors have found that once
an inventory is taken with the PM
team, people start to understand other
personalities and are less inclined to
believe that the other person is going
out of their way to create disharmony
or problems. In fact, it is interesting
that the discussions about these types
of personality conflicts often become a
bit funny when one person tells the
other, you are such an NT, rather
than, you are rude and obnoxious.
The authors have used this MBTI
for years to avoid conflicts, as well as to
resolve interpersonal relationship
problems.
Another psychologist, David
Keirsey, has spent much of his life in
study and research into personalities
and testing, and developed his Keirsey
Temperament Theory, which uses the
Myers-Briggs philosophy to generate
four temperaments. He has taken the
studies deeper into the educational psychological arena and uses his system effectively to guide people into careers
and roles. The authors have read and
used his books, Please Understand Me,
and Please Understand Me II. Both
10
books serve to guide anyone into the full

use and understanding of personalities
and personality testing and behavior.
3.
Conclusion
Ignoring the soft skills that are so
vital to performing a project controls
function will quickly cause failure in a
number of areas. In addition to learning how to estimate, how to analyze
risk, how to schedule a project, it is imperative that PC staff learn and gain expertise in these soft skills. No matter
how technically proficient the project
controls analysis is, the inability to
communicate it phonetically and empathetically to the client will ultimately
doom the analysis to failure.
Knowing your strengths and weaknesses, from a personality perspective,
and rounding out that side will push
you to being an effective project controls consultant, just as much as learning the latest analysis technique or
mastering the latest revision to an
AACE recommended practice. Identifying your client, knowing their motivations, building consensus, producing
the analysis and communicating that
analysis will serve to make your client
appreciate your value as a project controls consultant. Soft skills are an integral part of that communication that
should not be ignored.
REFERENCES
1.
2.
AACE International Recommended Practice 11R-88, Required Skills and Knowledge of

Cost Engineering, page 2, paragraph 6.
AACE International Recommended Practice 14R-90, Responsibility and Required Skills for a
4.
5.
6.
7.
8.
9.
Project Planning and Scheduling

Professional, page 5, item 3.
Bloom, Benjamin, Taxonomy of
Educational Objectives, Handbook
1: Cognitive Domain, 1956.
Carson, Chris, Dealing with Contractors Schedules That Cannot be
Approved, AACE International
Transactions, 2012.
Hollmann, John K., PE CCP, Total
Cost Management Framework,
AACE International, First Edition,
2006.
Muzio, Edward and Dr. Deborah
Fisher, Soft Skill Quantification
(SSQ): Human Performance vs.
Metric, Cost Engineering, Volume
51/No. 3, March 2009.
Muzio, Edward and Dr. Deborah
Fisher, Soft Skill Quantification
(SSQ): Human Performance vs.
Metric, Cost Engineering, Volume
51/No. 3, Page 1, Column 3, March
2009.
Project Management Institute, A
Guide to the Project Management
Body of Knowledge (PMBOK
Guide), published by Project Management Institute, Inc., 14 Campus
Boulevard, Newtown Square,
Pennsylvania, 19073, 2013.
Singh, Rohit, CCP, The Missing
Soft Skills for Project Controls,
AACE International Transactions,
DEV.S01, 2005.
ABOUT THE AUTHORS

Christopher W. Carson, CEP DRMP PSP
FAACE, Director of
Program Controls,
with ARCADIS, can
be contacted by
sending e-mail to:
chris.carson@arcadis-us.com
Patrick C. Kelly, PSP,

Senior Project Controls
Consultant
with Kelly Consulting Services, can be
contacted by sending
e-mail
to:
pat.kelly@kellyconsultingservices.org
FOR OTHER RESOURCES

To view additional resources on
this subject, go to:
www.aacei.org/resources/vl/
Do an advanced search by author name for an abstract listing of
all other technical articles this author
has published with AACE. Or, search
by any total cost management subject area and retrieve a listing of all
available AACE articles on your area
of interest. AACE also oers prerecorded webinars, an Online Learning Center and other educational
resources. Check out all of the available AACE resources.
AACE's Federal Agency Roundtable

April 10 - Washington, DC
Federal Procurement Methods and Trends
AACE Internationals Government Liaison Committee cordially invites you to attend the Spring 2015 Federal Agency Roundtable, scheduled for April 10, at the
20 F Street NW Conference Center in Washington, DC.
The focus of the roundtable discussion, which will
be facilitated by ocers of the Association, will be Federal Procurement Methods and Trends.
ideally, both federal agency representatives, as well
as their contractors, will be able to join us for what
promises to be an interesting and thought-provoking
discussion of procurement methods, complete with the
generation of action items that will ideally lead not only
to continued conversation, but ideally, potential improvements.
Registration is now open at www.aacei.org and

free to members and non-members who are employed by a federal agency. Registration is $35 for
members/$50 non-members who are private sector employees/contractors.
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SB_1314_16
TECHNICAL ARTICLE
Calculating the
As-Built Critical Path

Andrew Avalon, PE PSP
Abstract: The as-built critical path of a project schedule can be determined

by developing as-built calculation schedules for each relevant schedule
analysis period. An as-built calculation schedule removes verified actual
dates from the schedule and revises the activity and lag durations to be equal
to the actual durations. The creation of the as-built calculation schedule enables the CPM scheduling software to then calculate the as-built critical path.
To properly create an as-built calculation schedule, it is necessary to determine the driving predecessor relationships in the as-built schedule when
there are multiple predecessors to an activity. If a predecessor is not driving,
the actual lag duration should be reduced to the originally planned lag value
to create float in the as-built calculation schedule. If the determination of
driving predecessor relationships is not performed, all activities in the asbuilt calculation schedule would have zero total float and would be equally
critical. This article presents procedures to ensure that the as-built driving
lag values are determined objectively to avoid inconsistent or subjective assessments in calculating the as-built critical path. This article was first presented as PS.1691 at the 2014 AACE International Annual Meeting in New
Orleans.
he determination of the asbuilt critical path of a project

is of great importance for the
analysis of schedule delay
claims. It is commonly accepted by
scheduling practitioners that the critical path of a project is dynamic and
may change over time, such that the
as-built critical path may be different
from the as-planned critical path. Many
contracts require that the contractor
demonstrate that the claimed delay
events impacted the project completion date, which is driven by the asbuilt critical path or longest path to
completion. The calculation of the asbuilt critical path is also essential for
performing collapsed as-built or but-for
schedule analyses, as described in

AACE International Recommended
Practice 29R-03, Forensic Schedule
Analysis, Method Implementation Protocols 3.8 and 3.9, for modeled, subtractive delay analyses. However, as
acknowledged in RP No. 29R-03, Subsection 4.3.C, there presently is no consensus among practitioners regarding a
common set of logic rules for accurately determining the as-built critical
path because actual dates override
float values. This article presents proposed guidelines for calculating the asbuilt critical path.
Verifying the Accuracy of

the As-Built Schedule
The calculation of the as-built critical path requires that an accurate asbuilt schedule first be developed. To
verify the reliability of the as-built
schedule, contemporaneous project
records should be reviewed to confirm
the accuracy of the actual dates. Any
necessary corrections to actual dates
and progress percent complete values
should be documented based on contemporaneous project data such as
daily reports, monthly progress reports, meeting minutes, payment applications, drawing logs, submittal logs,
superintendent logs, and progress photographs. Source Validation Protocols
2.2 and 2.3 of AACE International Recommended Practice 29R-03, Forensic
Schedule Analysis, provide procedures
for using as-built schedule source documentation to reconstruct, validate,
and rectify as-built schedules and
schedule updates.
Converting As-Planned Logic

to As-Built Logic
After the as-built schedule dates
are validated and rectified, it is necessary to review the reasonableness of
the as-built schedule logic. Work activities may have been performed out-ofsequence from the as-planned logic.
Method Implementation Protocol
3.8.K.2 of AACE International Recom-
13
Figure 1 Out-of-Sequence Logic Correction: Guideline No. 1

mended Practice 29R-03, Forensic
Schedule Analysis, provides procedures
for converting as-planned logic to asbuilt logic. In some cases, the actual sequence of work and the relationships
between activities may be different
from the planned sequence of work
and activity relationships. Therefore,
the logic relationships between the activities in the as-built schedule at the
end of each window may be different
from the planned logic relationships at
the start of the window. Accordingly, if
the actual sequence of work indicates
that different logic relationships between activities are warranted, the
schedule logic should be adjusted to
represent the as-built conditions and
the logic revisions should be documented.
Activities that have out-of-sequence logic with long negative lag values that were completed or were
in-progress within each schedule analysis window should be identified. Guidelines for correcting out-of-sequence
logic with long negative lags are detailed in the following paragraphs.
Often large negative lag relation-
14
ships may exist in the as-built schedule

that stem from the as-planned schedule logic. To more accurately model the
actual work sequences in each schedule analysis window, adjustments
should be made to the as-built schedule logic to replace out-of-sequence
logic and large negative lag values (e.g.,
greater than 15 work days) with more
reasonable logic ties. While the contractors original logic should be used
wherever possible, the following guidelines are recommended when analyzing
and rectifying out-of-sequence logic resulting from the as-built date conditions.
Guideline 1If the as-built date conditions produced a long negative finishto-start (FS) relationship, where
practical, change the long negative FS
relationship to a short positive start-tostart (SS) relationship, as shown in figure 1.
Guideline 2If the as-built date conditions produced a long negative FS relationship and guideline 1 would produce
a negative SS relationship, where prac-
tical, change the long negative FS relationship to a short positive finish-to-finish (FF) relationship, as shown in figure
2.
Guideline 3If the as-built date conditions produced a long SS relationship
and the as-built conditions allow for a
reasonable and shorter FS relationship,
then, where practical, change the long
SS relationship to a short FS relationship. For example, a SS +35 day relationship between two activities in the
as-built condition could be changed to
a FS +10 day relationship between the
same predecessor and successor activities, as shown in figure 3, example A.
In other cases, a short negative FS lag
may be more realistic for modeling actual work sequences than a long SS lag,
as shown in figure 3, example B.
Guideline 4If the as-built date conditions produced a long FF relationship
and allow for a reasonable FS tie, then,
where practical, change the FF relationship to a FS relationship. For example,
a FF +55 day relationship between two
activities in the as-built condition could

be changed to a FS +10 day relationship
between the same predecessor and
successor activities, as shown in figure
4, example A. If the as-built conditions
would produce a long negative FS relationship, for which the absolute value
of the lag duration is greater than the
positive FF lag value, then the existing
FF relationship should be retained, as
shown in figure 4, example B.
Guideline 5If the work activities were
performed significantly out-of-sequence and the as-built date conditions
do not allow for a reasonable FS, SS,
and/or FF tie, then remove the inappropriate predecessor logic and replace
the relationship with a different, more
reasonable predecessor activity relationship. To select a more reasonable
predecessor activity to replace the inappropriate predecessor, where practical, trace the network logic preceding
the inappropriate predecessor to identify a more appropriate predecessor
earlier in the logic chain and then reapply guidelines 1 through 4 to determine
the appropriate logic tie.
When converting the as-planned

logic to the as-built logic, it is generally
preferred to select logic relationships
with shorter lag durations rather than
longer lag durations, based on a comparison of the absolute values of the
lag durations. Furthermore, physical
work flow restraints driving the actual
design, procurement, construction, and
commissioning activity sequences
should govern the rectification of the
as-built logic. The purpose of the asbuilt logic rectification is to realistically
model the work sequence relationships
for how the project was actually built.
When making the above as-built
logic adjustments, it is necessary to
identify and correct any open-ends created while correcting the out-of-sequence logic. The logic should be
checked in the as-built calculation
schedule to ensure that no activities
have open-ends. If new open-ends are
identified, appropriate logic ties should
be added to close the open-ends.
Finally, if Primavera or similar software is used to develop the as-built
schedule and the progress override calculation mode is used, it may be neces-
sary to identify and correct the logic for

any activities with effective open-ends
because of progress override. The
progress override calculation mode ignores logic relationships and allows an
activity with progress to continue even
if its predecessors have not finished.
Based on the as-built dates and calculated progress spanning a schedule
window data date, some task activities
may have effective open-ends because
of the progress override schedule calculation setting. When schedule activities are worked out-of-sequence, the
progress override feature nullifies the
predecessor-to-successor logic for activities that started out-of-sequence,
and then allows the late finish dates for
these activities to slip to the completion date of the latest finishing activity
for the project. This condition is not realistic or reasonable and the resulting
late dates and corresponding float values are incorrect. Therefore, activities
with effective open-ends because of
the progress override calculation mode
for each analysis window should be
identified and appropriate logic adjustments should be made to eliminate the
15

open-ends.
The specific logic modifications
performed to correct any out-of-sequence logic or to close effective openends in each schedule analysis window
should be documented in conjunction
with rectifying the as-built logic. Any
assumptions made and procedures followed while correcting the as-built
logic should be documented to ensure
consistency and avoid subjectivity during the rectification process.
Creating an As-Built Calculation

Schedule for Each Schedule
Analysis Window
After verifying the accuracy of the
as-built schedule dates and correcting
any out-of-sequence as-built logic ties,
an as-built calculation schedule can be
developed for each schedule analysis
window. A windows-based analysis is
often preferred over a single analysis of
16
the entire project duration to better account for how the critical path changed
over time. The purpose of the as-built
calculation schedule is to calculate the
as-built critical and near-critical paths
and as-built float values. The selection
of the schedule analysis windows is
typically based on the availability of the
schedule updates, key contractual
events and issues, changes in the critical path, and cost and time considerations.
In commonly used scheduling software, such as Primavera, actual dates
override the schedule logic and the actual start and finish dates of activities
become fixed regardless of the logic
when actual dates are input to record
as-built progress. Therefore, the asbuilt critical path and float values,
which can only be determined from the
schedule logic, are not provided by the
software calculations for the work that
was performed prior to the data date.

The critical path and float values are
only displayed for work yet to be performed after the data date.
To create an as-built calculation
schedule, it is necessary to destatus the
as-built schedule by removing the actual dates from the activities in
progress during the schedule analysis
window and inputting actual activity
and lag durations and progress percent
complete values. The start and finish
dates in an as-built calculation schedule
are driven by as-built schedule logic, asbuilt activity durations, and as-built
percent complete values for the activities in each schedule analysis window.
The as-built logic, driving lag values, actual durations, and percent complete
values are input into the as-built calculation schedule such that they generate
the same early start and early finish
dates for activities as they actually

started and finished during each window. The as-built calculation schedule
also calculates the same forecasted
start and finish dates for activities beyond the end of the schedule analysis
window.
Figures 6, 7, and 8 summarize
three basic steps for creating an as-built
calculation schedule. In figure 6, step 1
involves the identification of the asbuilt dates for the activities within the
schedule analysis window.
In figure 7, step 2 involves the calculation of the as-built activity and lag
durations for the activities within the
schedule analysis window.
In figure 8, step 3, the actual dates
are removed and the actual activity and
lag durations and percent complete values are input into the schedule such
that the scheduling software calculates
the start and finish dates of the activities to be the same as the as-built start
and finish dates. The removal of the actual dates is referred to as destatusing
the schedule.
The Destatusing Procedure

The schedule is destatused by
moving the data date in the as-built calculation schedule from the end of the
schedule analysis window to the beginning of the schedule analysis window.
Figure 9 presents the potential activity
date condition, where the schedule
being analyzed contains unfinished activities and the analysis period begins
later than the project start date.
The actual date conditions and corresponding actions for destatusing
schedule activities occurring within
each schedule analysis window are
summarized in table 1.
All actual dates prior to the destatused data date are not changed and
this portion of the schedule remains
statused with actual dates. All forecast

dates after the end-of-window data
date also remained unchanged.
As noted in table 1, the percent
complete and remaining duration values need to be computed for activities
having the date conditions of activities
D and F. Source validation protocol
2.3.D.1.a of AACE International Recommended Practice 29R-03, Forensic
Schedule Analysis, discusses the hindsight method for calculating remaining
durations based on actual dates and
durations. The computed percent complete and remaining duration values
should be input into the as-built calculation schedule to maintain the as-built
schedule activity start and finish dates.
At this point in the development of
the as-built calculation schedule, the
original and remaining durations of all
activities are correctly adjusted but the
lag durations for each relationship have
17
Figure 6 As-Built Calculation Schedule Creation: Step 1

18

not yet been adjusted to maintain the
as-built schedule activity start and finish
dates. The early dates of the activities
that have been converted from actual
dates should match the as-built schedule dates. The goal is to quantify the lag
durations required to drive the original
as-built schedule dates and model this

in the as-built calculation schedule.
Each predecessor relationship must be
reviewed for each activity that used to
have an actual date but no longer does.
It is then necessary to compute the
actual lag duration by converting the

beginning date for the lag into a workday number and the ending date for
that lag into a second workday number
and subtracting the two workday values. The following formulas summarize
the actual lag duration calculations:
19
Figure 9 Activity Status Conditions for Destatusing Procedure
Table 1 Actual Date Conditions and Corresponding Actions for Destatusing Schedule Activities
20
Table 2 Sample Driving Lag Calculations

Finish-to-Start Lag Duration = Successor Start Date - Predecessor Finish Date
- 1 day
equation 1
Finish-to-Finish Lag Duration = Successor Finish Date - Predecessor Finish

Date
equation 3
Start-to-Start Lag Duration = Successor

Start Date - Predecessor Start Date
equation 2
Start-to-Finish Lag Duration = Successor Finish Date - Predecessor Start Date

+ 1 day
equation 4
If using Primavera scheduling software calendar rules, the activity calendar for the predecessor activity should
be used in performing the conversion of
an activity date to a workday number. If
the activity date is an actual start and
falls on a non-workday, then the next
higher workday is used. If the activity
date is an actual finish and the date falls
21
on a non-workday, then the next lower

workday is used. The calculated actual
lag durations are then input into the asbuilt calculation schedule.
After performing the actions in
table 1, the resulting as-built calculation schedule will have a new data date
at the beginning of the schedule analysis window and the calculated start and
finish dates of each activity within the
analysis period will be adjusted to
match the actual conditions shown in
the as-built schedule.
Driving Predecessor
Lag Determinations
To properly create an as-built calculation schedule, it is necessary to determine the driving predecessor
relationships in the as-built schedule
when there are multiple predecessors
to an activity. If a predecessor is not
driving, the actual lag duration should
be reduced to the originally planned
lag value to create float in the as-built
calculation schedule.
The actual lag duration for each relationship within the schedule analysis
window should be calculated but it is
not necessary to apply all of the actual
lags to all relationships in the as-built
calculation schedule. If all lags in the
as-built calculation schedule are converted into the actual lags, the activity
dates in the as-built calculation schedule would be correct but all activities
would have zero total float and the entire schedule network would be on the
as-built critical path.
To determine the driving relationship, the shortest duration variance
between the planned lag and the actual lag for each predecessor to a successor should be calculated. In other
words, it is necessary to identify the
predecessor tie that most probably
caused the successor activity to start or
finish based on the closest predecessor to the successor activity with consideration for planned lag durations. If
the variance between the planned lag
and the actual lag is negative, then the
relationship must become a driving relationship to maintain the correct asbuilt dates in the as-built calculation
schedule. If multiple relationships have
22
the equally shortest variance between

the planned (contractor defined) lag
and the actual lag, then all relationships with the equally shortest variance
are designated as driving relationships.
The actual lag should only be input
for driving relationships and the nondriving lag durations should be left as
originally input in the contractors plan.
To ensure that the as-built calculation
schedule driving lag values are determined objectively, and to avoid inconsistent or subjective assessments in
developing the as-built critical path,
the following procedure is used:
When there are multiple predecessor activities to a successor activity, the predecessor with the
smallest variance between the actual lag and the planned lag is
used as the driving predecessor
and all other positive lags for predecessors to the same successor
are reset to the planned lag value
contained in the verified as-built
schedule. The planned lag typically
is the lag value input contemporaneously by the project scheduler,
or may be a lag duration that has
been rectified by the schedule analyst based on documented facts
regarding the reasonable lag duration required between two activities.
If a successor activity has only one
predecessor, then the actual lag
value must be used as the driving
lag value to correctly calculate the
successor activity dates to correspond with the verified as-built
schedule dates.
If two or more predecessors to an
activity are equally driving, meaning that they have equal variances
between the actual lag and
planned lag, then each predecessor should be assigned the required driving lag values such that
they equally drive the successor
activity dates.
All actual negative lags must remain negative to retain the original dates in the verified as-built
schedule.
If a predecessor is not driving,
then the actual lag duration

should be reduced to the planned
lag value in the verified as-built
schedule to create float in the asbuilt calculation schedule.
Table 2 presents examples of driving lag duration calculations. Note that
the smallest value in the variance column for a group of predecessors determines which relationship is driving.
Negative variances are treated as being
smaller or shorter than positive variances. Rows in table 2 are shaded in
yellow for successor activities with
multiple predecessors.
In summary, when there are multiple predecessor activities to a successor activity, the predecessor with the
smallest variance between the actual
lag and the planned lag should be used
as the driving predecessor and all other
positive lags for predecessors to the
same successor are reset to the
planned lag duration. All actual negative lags must remain negative to retain
the original dates in the original schedule.
If two or more predecessors to an
activity are equally driving, meaning
that they have equal variances between the actual lag and planned lag,
then assign the required lag durations
to each predecessor such that they
equally drive the successor activity
dates. If a predecessor is not driving,
reduce the actual lag duration to the
planned lag value to create float in the
as-built calculation schedule.
Calculating As-Built Critical Paths

and Near-Critical Paths and
Reviewing for Reasonableness
After the driving predecessor relationships are determined and input
into the as-built calculation schedule,
the schedule is recalculated to determine the float values and as-built critical and near-critical paths for activities
that were completed or were inprogress during the window.
To ensure that the as-built calculation schedule was developed properly,
a variance analysis should be performed for all activities by comparing
the start and finish dates in the as-built
calculation schedule to the verified asbuilt schedule to ensure that there are
no date variances. If date variances are
found when performing this comparison, it is necessary to identify the date
inconsistencies and document the reasons for any acceptable variances. Date
variances may arise from activities having different calendars or when the asbuilt date falls on a non-work day as
defined by the schedule calendar.
Finally, the calculated critical and
near critical paths from the data date
at the start of the window through
project completion should be checked
for reasonableness. Subsection 4.3.C of
AACE International Recommended
Practice 29R-03, Forensic Schedule
Analysis, discusses questions to consider regarding whether activities on
the as-built critical path are reasonable, including:
Was the work critical on any

schedule updates?
Was the work perceived to be critical by project personnel contemporaneously as documented in
letters, meeting minutes, etc.?
Was the work qualitatively significant to the overall project outcome based on cost as well as the
analysts judgment and experience?
Were there resource restraints not
evident in the logic?
Was the work performed piecemeal or from start to finish without interruption? And,
Did the work drive other subsequent apparently critical work?
Finally, if a delay to any as-built activity would have delayed the overall
project completion date by that same
duration, it is reasonable to conclude
that the activity was on the as-built
critical path.
Conclusion
Calculating the as-built critical
path involves:
4.
verifying the accuracy of the asbuilt schedule dates;

converting as-planned logic to asbuilt logic;
creating an as-built calculation
schedule for each schedule analysis window;
destatusing the actual dates and
replacing them with actual activity
and lag durations and percent
complete values;
determining the driving predecessor relationships;
calculating the as-built critical and
near-critical paths; and,
reviewing the calculated as-built
critical path for reasonableness.
The above steps are performed prior to

any delay analysis and should be performed in a consistent manner. Any assumptions should be documented to
minimize subjectivity. The schedule analysts judgment and experience, however, will always be necessary to ensure
the reasonableness of the as-built critical path calculations.
RECOMMENDED READING
1.
2.
3.
AACE International Recommended Practice 29R-03, Forensic

Schedule Analysis, April 25, 2011
Revision, AACE International, Morgantown, WV.
Hoshino, Kenji P., 2002 Slide presentation (No paper published),
Catching the Elusive As-Built Critical Path, 2002 AACE International
Transactions, AACE International,
Morgantown, WV.
Livengood, CFCC PSP, John C. and
Jeffery L. Ottesen, PE CFCC PSP,
2010, CDR.06The As-Built Critical PathQuest or Discovery?,
5.
2010 AACE International Transactions, AACE International, Morgantown, WV.

Nagata PSP, Mark F., 2010,
CDR.02Which Critical Path: AsPlanned, Contemporaneous, or AsBuilt?, 2010 AACE International
Morgantown, WV.
Winter, Ronald M., 2004, PS.02
Determining the Actual Critical
Path, 2004 AACE International
Morgantown, WV.
ABOUT THE AUTHOR

Andrew Avalon, PE
PSP, is President of
Long International,
Inc., of Orlando, Fla.
He can be contacted by sending email to:
aavalon@long-intl.com
FOR OTHER RESOURCES
To view additional resources on
this subject, go to:
www.aacei.org/resources/vl/
Do an advanced search by author name for an abstract listing of
all other technical articles this author
has published with AACE. Or, search
by any total cost management subject area and retrieve a listing of all
available AACE articles on your area
of interest. AACE also oers prerecorded webinars, an Online Learning Center and other educational
resources. Check out all of the available AACE resources.
23
TECHNICAL ARTICLE
Trends in Construction
Claims and Disputes

James G. Zack Jr., CFCC FAACE
Abstract: Claims and disputes are a constant in the construction industry,

regardless of whether the industry is doing well or poorly. The number of
claims seems to have risen during the recent recession, despite the downturn (or perhaps as a result of the downturn) in the industry. This article,
based on research conducted by the Navigant Construction Forum,
overviews some relatively recent trends related to construction claims and
disputes in the areas of concurrent delay, suspensions of work, time extensions, notice and claim filing requirements, calculation of home office overhead, proof of differing site conditions, and risk transfer in the design/build
environment under federal government contracts. Through this insight, it is
believed that owners, design professionals, construction managers, contractors and subcontractors can devise ways to avoid such issues going forward,
thus making projects more successful, and more profitable, for all stakeholders.
hen the author first

became involved in
construction claims
and disputes on a full
time basis in the 1970s, he asked a
noted claims consultant why he had
chosen claims consulting as a career.
The response was short and pithy
When construction is good, claims are
good. When construction is bad, claims
are better! I did not fully appreciate
the accuracy of this response until the
recession in the early 1980s. The construction industry suffered a severe
downturn, but the number of claims
proliferated in an inverse ratio, thus
providing even more work for claim
consultants than when the industry
was doing well.
Over the past few years of the current recession, the industry has taken
a substantial hit economically. The
24
number of projects declined as did the

number of construction companies
throughout the nation. However, despite this decline (or perhaps as a logical reaction to this adverse impact to
the industry) it appears that the number of claims has risen.
Claimsmanship is generally defined as the art or practice of making
and winning claims by questionable expedients without actually violating the
rules. Claimsmanship has proliferated in the past few years and appears
to be equally practiced by both owners
and contractors, and their representatives [59]. As a direct result, the number of claims has likewise grown. From
this growth in claims several trends
have developed, among them:
The value of construction disputes

has declined in the US (as opposed
to the Mideast), but the duration

of such disputes has increased;
Court and Boards of Contract Appeal decisions limiting recovery of
damages in the areas of concurrent delay; suspensions of work;
time extensions; notices and claim
filing requirements; calculation of
extended home office overhead
costs; proof of differing site conditions; and, risk transfer in the design/build environment have all
become more frequent;
Increased use of false claim allegations in response to claim filings;
and,
Contractors have been trying to
create new forms of claims.
These trends may have been exacerbated by what the construction bar
refers to as the vanishing trial. In regard to this issue, it is noted that
In 1938, about 20% of federal civil cases went to trial. By
1962, the percentage was down to
12%. By 2009, the number has sunk
to 1.7%. The percentage of jury trials in federal civil cases was down
to just under 1%, and the percentage of bench trials was even lower.
So between 1938 and 2009, there
was a decline in the percentage of
civil cases going to trial of over 90%
and the pace of the decline was accelerating toward the end of that
period [29, 36].

In a private presentation in March
2012, Andrew D. Ness, then Chair-Elect
of the American Bar Associations
Forum on the Construction Industry
addressed this issue. As Mr. Ness
pointed out, in the US legal system
construction law is derived primarily
from case law prior legal decisions
[50]. Mr. Ness pointed out as the construction industry changes and evolves
(i.e., project delivery methods, Building
Information Modeling, Green Construction, location based scheduling,
etc.) so too must construction law. The
unintended consequence of the vanishing trial is that construction law
stops evolving.
This research perspective discusses each of these growing trends,
and where possible, offers some ideas

on how to mitigate or avoid the negative impacts of such trends in construction claims and disputes. First, lets
examine owner claimsmanship
trends.
Value and Duration of

Construction Disputes
It has been reported that globally
the value of construction disputes has
declined in the US and Asia, but increased slightly in Europe and substantially in the Mideast [40]. The average
value of the disputes sampled for this
report is set forth in table 1 by region.
At the global level dispute value has
declined 8% from 2010 to 2011.
This same report, however, also
concluded that the time required to resolve disputes rose from 9.1 months to
10.6 months. The average length of

time (in months) to resolve the disputes sampled increased at the global
level by some 16%, as set forth in table
2.
The report also identified the most
common causes of claims by region.
The cause of claims is ranked by region.
From this data, a trend appears which
is displayed in table 3.
By reverse scoring these rankings
by region (where a 1st place gets a 5;
2nd place receives a 4; and so forth)
and adding up the scores this report indicates that these causes of claims can
be ranked globally in the following
order.
1.
2.
Contract administration issues are

the largest cause of claims.
Incomplete design and ambiguous
Table 1 Global Construction Dispute Values (Dispute values shown in millions of US $)
Table 2 Average Length of Disputes
Table 3 Common Causes of Claims
25
3.
4.
5.
6.
contract requirements rank in second place.

The third highest cause of claims
is the failure of the owner and
contractor to resolve time extensions and delay damages at the
time they occur on the project.
Fourth place is occupied by conflicting party interests.
Unrealistic risk transfer ranks in
fifth place.
An unrealistic time of completion
occupies the last spot in this ranking.
This cause of claims listing and

ranking offers some suggestions regarding claims avoidance and resolution which will be discussed at the end
of this research perspective.
The EC Harris report provided a
good deal of information on claims
value, length of time to resolve disputes and the most common causes of
disputes. The methodology employed
in this study limited the projects and
disputes sampled to those the firm
handled during the 2010 and 2011 period.
A more robust survey of claims
and disputes was published in the summer of 2011. This survey determined
that in the 2009 2011 timeframe,
there were 65 international contract
arbitrations in which at least US$1 billion was in controversy [38]. The
amounts in controversy ranged from
US$20 billion to US1 billion. The
amount in controversy represented
the sum of claims and counterclaims.
The total value of these 65 disputes
was US$174.8 billion, with the median
value being US$2.73 billion. This global
survey indicates a much higher range
of dispute values than the earlier cited
study. This study also indicates that
more international projects, at least,
are going to arbitration than the earlier
study seemed to indicate.
Like the American Lawyer survey,
a recent Navigant Construction
Forum research perspective also concluded, among other things, that international construction arbitration is
growing rapidly [49]. Born and Miles
reported in an article published in
26
2006, that case filings with the International Chamber of Commerce (ICC),
the American Arbitration Association
(AAA), and the International Center
for Dispute Resolution (ICDR) have
increased between three and five fold
over the past 25 years [28]. A major
university in the UK documented an
8.5% growth among 22 arbitral institutions between 2003 and 2007 [42].
In preparing this research perspective, the Navigant Construction
Forum conducted a survey of Navigant senior claims consultants in-house
and an e-mail survey of a number of
external claims professionals with national and international claims experience. Juxtaposed to the results of the
studies above, the Forum found that at
least in the US, the numbers of claims
filed with project owners has increased
substantially over the past few years.
However, like the EC Harris study, the
Forums survey determined that the
value of the claims filed has fallen substantially and fewer and fewer claims
are being prosecuted to arbitration or
litigation.
Some of the findings of the
Forums survey related to the conclusions above follow:
Because of the change in the

economy over the past few years,
and the government funding more
projects than the private sector,
many contractors experienced
with negotiated private contracts
bid government contracts binding
them to stricter contract requirements.
Along the same lines, many of the
less than US$1 million claims are
filed by small contractors and subcontractors who entered the public sector when work in the private
sector dried up.
Fewer claims are going forward in
the dispute resolution process as
most are settled through negotiations and Alternative Dispute Resolution
(ADR)
processes
including mediation, project neutrals, and private trials.
Public works owners seem to be
less willing now to hand off dis-
pute matters to attorneys and are

more ready to compromise in
order to reach settlements.
The Navigant Construction Forum
concludes that international construction projects have larger disputes and
are more likely to resolve their disputes
through arbitration. On the other
hand, within the US, while the number
of claims seems to have increased substantially, claim values have declined as
many more small claims are now asserted. Additionally, fewer claims are
going to arbitration or litigation in the
US and more are resolved through negotiation and/or various forms of ADR.
Increased Limitations on
Recovery of Damages
Another trend observed by the Navigant Construction Forum is that it is
becoming increasingly difficult for contractors to recover on claims in litigation on government contracts. Courts
seem less likely to rule in favor of contractors in a number of areas. Some
limitations on contractor claim recovery are set forth below.
Concurrent Delay
Concurrent delay is defined as:
[t]wo or more delays that take place
or overlap during the same period, either of which occurring alone would
have affected the ultimate completion
date [19]. Concurrent delay has been
a contentious and hotly debated issue
since its creation in 1867 [56]. One in
depth article on the issue of concurrent delay examined the origins of the
doctrine of concurrent delay. The authors summarized the history of concurrent delay as follows:
it is evident that the modern doctrine of concurrent delay is
premised not on the equitable resolution of construction delays, but
is instead based on past litigants
failure or inability to effectively
prove their cases and the older
courts hostility toward liquidated
damages Over time, these factors merged and evolved into the
legal doctrine of concurrent delay.
After several years, the later courts

stopped delving into the real
analyses of these early courts, and
instead rotely applied these early
courts resolutions of concurrent
delay as a rule for resolving all
overlapping construction delays
[26].
The issue is contentious in the
main because it is frequently used as a
get out of jail card. That is when owners assess liquidated damages for late
project completion, contractors frequently respond with allegations of
concurrent delay (i.e., overlapping
owner and contractor delay periods)
asserting that all or a part of the late
completion was excusable, non-compensable delay, as a result of overlapping owner caused delay and thus not
subject to liquidated damages [45]. The
argument works equally well in reverse, when contractors assert owner
caused delay, owners often respond
with allegations of contractor caused
delay, alleviating the need to pay for
delay damages.
It appears, however, that courts
have become more conservative when
faced with concurrent delay arguments
and less likely to simply accept concurrent delay as a way of resolving delay
cases. Courts seem to be placing more
of a burden on contractors with respect
to concurrent delay. For example,
George Sollitt Construction Company v.
U.S., the court stated that a contractor
has an affirmative obligation to separate and apportion concurrent delay
[4]. That is, when a contractor is asserting a delay claim they must first prove
the delay was caused by an event for
which they were not responsible; then
project the duration of the delay to the
critical path; and then prove there was
no concurrent delay during the same
period [58]. The court also stated that
generally, recovery will be denied when
delays are concurrent or intertwined
and the contractor has not separated
its delays from those caused by the
owner [27]. The court also stated that
a contractor seeking recovery of compensable delay must disentangle its
delay from those allegedly caused by
the government and prove that both
delays impacted the projects critical

path [46]. Rulings such as this obviously
increase a contractors burden of proof
when arguing for recovery of compensable delay.
Additionally, two significant court
cases one a US federal case in 2010,
and the other a state case in 2011
seem to have created new hurdles concerning concurrent delay as follows:
In M. Maropakis Carpentry, Inc. v.
U.S., the Court of Appeals for the Federal Circuit ruled that the contractor
could not allege or assert concurrent
delay against government imposed liquidated damages, unless the contractor had filed a certified delay claim
under the terms of the Contract Disputes Act and requested and received
the contracting officers final decision
[2, 16]. In this case, the contractor had
written letters to the contracting officer but did not submit and certify a
delay claim. Nor did the contractor request and receive the final decision
from the contracting officer. The Court
of Federal Claims upheld the government imposed liquidated damages but
stated that they had no jurisdiction to
hear the contractors claim of concurrent delay. On appeal to the Court of
Appeals for the Federal Circuit, that
court likewise upheld the liquidated
damages assessment, but again denied
the contractor the right to argue concurrent delay as a result of their lack of
compliance with the Contract Disputes
Act. Through two court cases, the contractor was denied the right to present
his defense of concurrent delay.
In Greg Opinski Construction, Inc.
v. City of Oakdale, a California Court of
Appeals issued a similar ruling to
Maropakis, but relied on the terms of
the contract documents as California
does not have a statute analogous to
the Federal Contract Disputes Act [8].
The Superior Court ruled that since
Opinski had not followed the contractually mandated procedure related to
change orders, claims and time extensions, it was not necessary for the court
to review the alleged delay issues (the
concurrent delay argument), regardless
of which party was responsible for the
late completion. On appeal the Appellate Court ruled that:
[The] city was entitled to liquidated damages for [the] general

contractors late completion under
the construction contract, even if
the delays were caused by the citys
conduct, where the contract required any extension of time to be
obtained through certain procedures, and [the] general contractor
did not use such procedures [39].
The Appellate Court ruled in this
manner despite the fact that the city
admitted some of the delay they were
assessing liquidated damages for was
actually city caused delay.
After surveying the scene, concerning the issue of concurrent delay,
it appears that courts have increased
the contractors burden of proof concerning concurrent delay and constructed new hurdles concerning the
use of concurrent delay when owners
assess liquidated damages for late project completion.
Limitation on Recovery of Suspension
Costs
An owner directed suspension of
work is typically considered excusable,
compensable delay. Unless the terms
of the contract specifically preclude
cost recovery, in most cases the compensation sought includes extended
field office overhead costs, as well as
extended or unabsorbed home office
overhead costs. In the US, the Eichleay
Formula is the classic way to calculate
unabsorbed home office overhead. As
such, arguments concerning suspensions of work typically revolve around
how much delay did the suspension
order actually cause and are the extended or unabsorbed home office
overhead damages properly calculated.
In The Redland Company, Inc. v.
U.S., the Air Force issued a contract to
The Redland Company to resurface an
aircraft parking area at Homestead Air
Reserve Base in Florida in October,
2000 [18]. On December 1, 2000, the
contracting officer issued the Notice to
Proceed (NTP) with the work. The
contract required the contractor to
begin work within 14 days of receipt of
the NTP. Also, on December 1, 2000,
the contracting officer issued an order
27
suspending all work on the project until

further notice. The Air Force finally
lifted the suspension order on October
18, 2004, and directed that work begin
on October 20th and be completed by
December 19, 2004 a period of 60
days. The Redland Company began
work as directed but was unable, for a
variety of reasons, to complete work
until January 11, 2006 some 449 days
after the suspension of work order was
lifted, far beyond the 60 day time of
completion. The contracting officer
granted a time extension through January 11, 2006, did not assess any liquidated damages but did not grant any
compensation for the additional time.
The contractor filed several claims
for additional compensation in September, 2006, and requested that the
contracting officer issue a final decision
approving or denying each claim within
the 60 day time limit contained in the
Contract Disputes Act. The contracting
officer neither issued a final decision
on any of the claims, nor did he notify
the contractor when such a decision
would be issued. The contractor then
filed suit in the Court of Federal Claims.
The case involved 9 distinct claims.
However, of interest for this research
perspective is Claim 1 Unabsorbed
Home Office Overhead.
The contractor sought recovery of
their unabsorbed home office overhead for the period between December 1, 2000 and October 18, 2004
nearly four years and calculated the
damages based on the Eichleay Formula. The court openly acknowledged
that the Air Force issued an NTP and
suspended all work on the same day.
The court likewise acknowledged that
the suspension extended until October
18, 2004.
Citing P.J. Dick, Inc. v. Principi,
Nicon, Inc. v. U.S. and Altmayer v. Johnson, the court noted that to establish
entitlement to Eichleay damages a contractor must prove three elements [7,
10, 11]:
1.
28
Government caused delay or suspension of work of an uncertain

duration.
2.
3.
The delay must have extended the

original time of performance, or
that the contractor finished on
time but still incurred unabsorbed
overhead costs because it planned
to finish earlier. And,
The government required the contractor to remain on standby during the period of suspension,
waiting to begin work immediately
or on short notice once the suspension was lifted.
The Federal Circuit in Nicon

stressed that Eichleay damages are
only available when the government
caused delay occurs after performance
has begun, thereby extending the period of performance.
The Court of Federal Claims analyzed Redlands claim and determined,
while the government had issued a suspension order of uncertain duration
which extended the original time of
performance, Redland (1) had not
started work on the project and (2) had
not been required by the contracting
officer to remain on standby until the
suspension order was removed. Thus,
despite a four year delay, the contractor was denied recovery of unabsorbed
home office overhead using the Eichleay Formula; and, was denied the right
to recover unabsorbed home office
overhead using an alternative method
of calculation (allowed under certain
circumstances based on the Nicon decision). The denial of recovery centered
on the fact that the suspension directive was silent as to whether the contractor was to remain on standby
while the work was suspended.
After P.J. Dick some commentators
have suggested that it will be very difficult to establish the standby requirement because it is unlikely that
a contracting officer will issue a suspension order containing a requirement that the contractor be ready to
immediately resume full scale work
with no remobilization period [48]. It
is more likely to be the case now that
Redlands has zeroed in on the same
issue.
Based on these cases, it appears
that courts are actively looking for ways
to limit contractor damage recovery

pursuant to suspension directives. It
appears, that in Redlands, the court believed that the 4 year suspension was
too long to justify the award of overhead costs to the contractor. It also appears that courts may not understand
that work begins before the first
shovel full of dirt is moved. Providing
bonds and insurance, arranging and finalizing subcontracts and vendor
agreements, planning the work,
preparing and submitting the bid
breakdown, etc., all are work even
though no physical work in the field is
underway. Additionally, once a contract
is awarded, a contractors bonding capacity is impaired to the extent of the
initial contract value. During the four
years Redland was suspended, their
bond was in full force and effect. If Redland was a small contractor this bond
impairment may have prevented Redland from bidding on other projects as
they may not have had sufficient bonding capacity to cover new projects. All
are real costs incurred by contractors,
but the courts in these cases either did
not know how the construction industry operates or chose to ignore such
damages to protect the government.
Restrictions on Time Extensions
In a recent article published in Insight from Hindsight the author commented that
Turning to decisions addressing the merits of delay claims
and the means to prove them, we
find that the boards and courts are
demanding greater specificity in
proof of delays. Total time claims
continue to be denied. Lack of contemporaneous, updated schedules
is criticized. Contractor delays are
scrutinized for proof of government
delays. Claims lacking segregation
of contractor and government delays often lead to denial, as do
analyses based solely on claims prepared after the project is completed [44].
The author pointed to Phillips National, Inc., in which the Armed Services Board of Contract Appeals held
Phillips responsible for a number of delays on the projectbecause Phillips

did not present a schedule delay analysis of any sort to the contracting officer
or the Board separating the delays resulting from the governments change
orders from the delays caused by the
contractor [21]. The board noted that,
Without a CPM schedule, there was
nothing to approve and it follows that
no bilateral modification incorporating
an approved as-built schedule could
have been issued. As noted in this article, it appears that the board denied
the claim solely on the basis of noncompliance with the contracts schedule requirements.
The author of this article went on
to point out the results of Jackson Construction Co., Inc. v. United States [3].
In discussing the outcome of this case,
the author noted that, In denying the
claim, the courts decision provides a
checklist of what not to do in presenting a claim. (Underscoring provided.)
Among the things Jackson failed to do
were:
Improperly calculated the home

office overhead amount claimed.
Was unable to prove their intended early completion.
Failed to support the contention of
cumulative impact of multiple
changes beyond merely pointing
to a large number of change orders. And,
Signed off on all government issued change orders without a
proper reservation of rights.
As was pointed out, In summary,

this claim had no contemporary factual
support for its theories of claim, no
support for government liability, no
reservation of rights on many change
orders, no proper showing of causation
and no justification for using the total
cost method of calculating damages
[44]. Having said this, it is noted that
one interesting outcome from this decision was that the court stated that
notice to the government is not a prerequisite to proving intent to finish
early.
In a similar manner, the court in
George Sollitt Construction Company v.

U.S., analyzed US federal delay claim
case law, going back to 1909, to ascertain a checklist concerning time extensions [4]. The Sollitt Court came up
with the following checklist.
Compensable Delay:
The government is liable for an equitable adjustment when they

cause a delay to the contractors
performance.
The governments liability is limited to unreasonable delays under
the Suspension of Work clause.
The governments actions or lack
of action must be the sole proximate cause of the delay.
The burden of proving compensable delay falls to the contractor as
the claimant.
The contractor bears the burden
of separating and apportioning
concurrent delays.
The contractor must prove the extent of the governments delay
and its increased costs in order to
recover.
Increased costs of winter construction may be recoverable; provided
that the contractor can demonstrate that, but for the governments delay, the work would have
been completed prior to the winter.
Increased cost of winter work
must be apportioned if there are
concurrent delays.
When demonstrating the extent of
the governments delay, the contractor bears the burden of proving critical path delays.
Because the critical path changes
over time, critical path schedule
updates are needed to analyze delays.
The contractor bears the burden
of apportioning concurrent critical
path delays.
The contractor may recover wage
rate increase costs that would not
have been incurred but for the
governments delay.
The contractor must prove the
amount of home office and field
office overhead directly related to

the governments delay.
When the parties stipulate to a
daily delay cost, the contractor
must prove the extent of the governments delay, but is relieved of
the obligation of proving their increased costs.
When multiple delays by one party
are concurrent with each other,
that other partys delays must be
analyzed to ensure that the overall
effect of these multiple delays is
correctly attributed to that party.
Excusable Delay:
The government has the initial

burden of showing late completion and the contractor has the
burden of showing that the delay
was excusable.
When the government has caused
part of the delay to project completion, liquidated damages are either waived or apportioned.
Some may consider these various

decisions harsh or very tough on contractors attempting to assert delay
claims. Others, however, believe that
these decisions reflect a growing sophistication on the part of the judiciary
when considering delay claims and the
standard by which such claims are
measured. Finally, these decisions may
reflect a lack of attention to contract
requirements on the part of contractors who fail to file notice, follow contract procedures, and wait until the
end of the project to prepare and submit delay claims [44].
Notice and Claim Filing Requirements
A recent article published in Construction Lawyer discussed lack of notice as a defense against construction
claims [52]. The author noted that,
When technical and procedural defenses are upheld, they encourage contract drafters to include more of them.
Owners and their construction managers devise increasingly complex ways
to channel and limit the claims of their
prime contractors. Prime contractors
may similarly seek to circumscribe the
29
claims of their subcontractors. While

notice of claims is an issue of fairness
between owners and contractors, the
article points out that many owners
now, impose lengthy and detailed
claims notice requirements as preconditions for recovery. The author points
to one set of contract documents
which requires the following be provided within a short time after the initial notice of claim [37].
The contractor is required at a
minimum to provide the following
factual statement of claim;

dates;
owner and A/E employees knowledgeable about the claim;
support from contract documents;
identification of other supporting
documentation;
details on claim for contract time;
details on claim for adjustment of
contract sum; and,
statement certifying the claim
under penalty of perjury
Finally, this set of contract documents also states that any claim not in
compliance with these requirements
shall be conclusively deemed to
have been waived by contractor. (Lest
readers conclude that this particular
set of perquisites is unique to this particular state, the author of this research perspective has encountered
similar requirements in many contracts
across the US).
This article goes on to discuss enforcement of notice requirements at
the federal and the state levels. With
respect to enforcement of notices requirement in federal courts, the article
notes five general exceptions to notice
requirements, as follows
30
written notice was actually provided [41];

the contracting officer had actual
or imputed knowledge of the facts
giving rise to the claim;
notice to the contracting officer
would have been useless; and,
the contracting officer considered
the claim on its merits despite the
lack of notice [20].
The article also notes that several

states have citable law along the same
lines as the federal courts declining
strict enforcement of notice provisions
including Alaska, California, Massachusetts, Ohio, Pennsylvania and Virginia (in a case where a Virginia
municipality included a federally mandated notice provision in a federally
funded local project). The article notes
that Colorado has citable law with
waiving the lack of notice defense in
the event the owner initiates negotiation of the claim on its merits in the absence of written notice of claim. On
the other hand, several states has a judicial tendency to strictly construe and
enforce the lack of notice as a defense
against a claim including Florida, New
York, Virginia, and Washington. More
recently, a New Jersey Appellate Court
upheld the rejection of an extra work
claim because of the lack of contractually required notice [30].
This survey of state case law, concerning the enforceability of the lack of
notice defense, concludes with the following warning to contractors.
Unless a contractor is operating in a jurisdiction where the enforceability of notice provisions is
clearly limited, it is important for
contractors to understand the full
literal requirements of their contractual provisions and either comply fully, or negotiate a written
agreement, as to what form of notice will satisfy the other party
under those clauses [52].
Extended Overhead Calculated as a
Percentage of Costs
A 2012 US Court of Appeals case
determined that when a contractors
time of performance was extended, as
a result of owner caused changes, then
any extended home office overhead
cost had to be calculated as a percentage of the direct cost of that work. In
Redondo Construction Corp. v. Puerto
Rico Highway and Transportation Authority, the contractor was awarded
three highway construction contracts
by the authority [51]. All three projects
encountered differing site conditions
and owner caused changes resulting in
compensable changes and delay. Redondo filed claims, but before these
claims could be resolved, went into
bankruptcy. The various claims were
tried in Bankruptcy Court, which
awarded some $12 million in damages
to Redondo, plus pre-judgment interest.
On appeal to the Federal District
Court, the District Court affirmed the
damages awarded in all respects. The
Authority appealed this decision to the
First Circuit Court of Appeals. The Appellate Court upheld some of the lower
Courts findings, but focused in on the
issue of home office overhead recovery. Citing C.B.C. Enterprises, Inc. v.
United States [17] and Aniero Concrete
Co. v. N.Y. C. Constr. Auth. [9], the court
concluded that
When a projects completion is delayed because of necessary but unanticipated work for
which the contractor is entitled to
compensation, extended overhead
is usually calculated as a percentage
of the direct costs of the additional
work. This percentage-of-directcost approach comports with standard practice in the construction
industry under which a contractor
normally charges an owner a percentage of a projects direct costs to
cover its overhead.
at least some of the project delays were attributable to
extra work for which the debtor
was compensated. (Citation omitted.) For those delays, extended
overhead should have been
awarded as a percentage of the direct costs associated with the projects change orders and extra work
orders. (Citation omitted.) It is inappropriate to use the Eichleay formula to calculate home office
overhead for contract extensions
because adequate compensation
for overhead expenses may usually
be calculated more precisely using
a fixed percentage formula.
It is true that some federal government agencies use fixed markup rates
in their construction contracts specif-
ically the General Services Administration and the Veterans Administration

[32, 34]. It is also correct to state that
many state and local government
agencies and professional associations
impose fixed change order markup
rates in their contract documents [55].
However, based on the authors experience, such percentage of cost markup
rates rarely, if ever, takes into account
the cost of delay arising from an owner
caused changes. Rather, such predetermined percentages are typically the
owners opinion of what it may cost
the general contractor to administer
added work (including the management of vendors and suppliers and the
subcontractors involved in performing
a portion of the added work).
Assuming this is correct, then the
Redondo ruling deprives contractors
the right to recover delay damages
arising from owner directed changes
which cause project delay. Contractors
performing work under contracts,
without fixed rates for change orders
in the contract, should consider adjusting their markups when quoting
changes which involve project delay as
they may no longer be able to collect
delay damages separately.
Differing Site Conditions What is in
and What is Indicated in the Contract
Documents?
The Armed Services Board of Contract Appeals (ASBCA) recently examined a Type I differing site condition
(DSC) claim in the case of Appeal of
NDG Constructors, which arose from a
contract with the US Army Corps of Engineers involving the construction of a
waterline under I-90 to service
Ellsworth Air Force Base in South
Dakota [25]. A portion of this waterline
was to be tunneled under I-90 employing the bore and jack method. NDG
subcontracted the tunneling portion of
the project to BT Construction, Inc. BT
examined the two geotechnical reports
prepared for this project and issued
with the bid documents when preparing their bid to NDG. The NDG contract
included the standard differing site
conditions clause from the Federal Acquisition Regulations (FAR) [33].
BT encountered subsurface conditions it considered materially different

than those indicated in the contract
documents and filed notice of DSC to
NDG, who provided the notice to the
contracting officer. The contracting officer denied NDGs claim and NDG appealed to the ASBCA. NDG contended
that they encountered a different soil
profile, soil with different characteristics and increased soil moisture conditions all of which, they claimed, were
materially different from the conditions indicated at the time of bidding.
In part, NDG based their claim on BTs
assumption that the soils would transition from one type to another along
a straight line projection. Citing
Sternberger v. United States, the NDG
Court stated that: It is highly improbable that subsurface soil of one type
would transition into another type
along a straight line projection [14].
We do not accept NDG experts opinion in this regard because it is intrinsically unpersuasive.
With respect to the NDGs other
claims, the court focused on the issue
of what conditions were indicated in
the contract documents and concluded
that
A Type I differing site condition claim is dependent on what is
indicated in the contract. Foster
Constr. C.A. and Williams Bros. Co.
v. United States, 435 F.2d 873, 881
(Ct. Cl. 1970) ("On the one hand, a
contract silent on subsurface conditions cannot support a changed
conditions claim.... On the other
hand, nothing beyond contract indications need be proven."). A contractor cannot be eligible for an
equitable adjustment for Type 1
changed conditions unless the contract indicated what those conditions would supposedly be. P.J.
Maffei Bldg. Wrecking Corp. v.
United States, 732 F.2d 913, 916
(Fed. Cir. 1984); S.T.G. Construction
Co. v. United States, 157 Ct. Cl. 409,
414 (1962). Here, the contract documents did not indicate where precisely the contractor would
encounter Carlile Shale. In bidding
the project, BTC did not expect to

transition from "Fine Alluvium" to
"Carlile Shale" or, to use its terminologies, from "clay fill material" to
"shale rock material" at any specific
point but only "at some point."
And, as BTC predicted, the soil profile indeed changed from clay fill
material to shale rock material at
some point.
The court concluded that since the
soil conditions did, in fact, transition
at some point then the conditions
encountered did not differ materially
from those indicated in the contract
documents at the time of bidding. The
board also ruled that with respect to
the soil conditions, the general warnings contained in the geotechnical report to the effect that soils between
boring locations may varywas sufficient information to alert a contractor
to soil conditions. The board in this
case also ruled that despite the fact
that the soil borings were silent on the
moisture content of the soils, the contractor was solely at risk for drawing
any assumptions based on the absence
of moisture content.
In the Appeal of Bean Stuyvesant
LLC, the Armed Services Board of Contract Appeals dealt with the issue of
what, physical conditions at the
site were indicated in the contract
documents [22]. In Bean Stuyvesant,
the contractor relied upon the geotechnical information provided with the
bidding documents. However, the invitation to bid did not include soils information taken from another set of
borings at the site. The information
from the separate boring was, available upon request The contractor
did not request this additional information and did not see it until the information was produced by the
government at the board hearings.
The board ruled against the contractor on the basis that the conditions
encountered did not differ materially
from those indicated, based upon
available information. The board
concluded that a contractor has a
duty to review information that is
made available for inspection. (Underscoring supplied.)
*Previously known as the Certied Cost Consultant/Certied Cost Engineer
31
Based upon these cases, contractors seeking recovery under the differing site conditions clause
Are at risk when they draw

straight lines between boring in
order to calculate soil transition or
encounters with differing types of
soils and/or rock.
Are at risk by drawing conclusions
or inferences from silence (i.e.,
the absence of any groundwater
information from a series of borings may no longer justify the assumption that there is no
groundwater to be encountered
on the project). And,
Information referred to at bid as
being available upon request
may now be considered as information included in the contract
documents or incorporated by reference.
There two cases taken together increase a contractors risk concerning

latent site conditions considerably, and
indicate a lack of understanding of how
a contractor deals with geotechnical information during bidding. For example,
20 borings on a project showing no
groundwater at the depths of excavation typically means that the contractor should not expect to encounter
groundwater while excavating. While
the absence of data, such as this, has
typically been considered reasonable
and logical when making a bid, it is apparently no longer sufficient to justify
a material difference when seeking
recover for a differing site condition.
Risk Transfer Increasing in Government Contracts
The concept of equitable risk allocation has started to unravel in recent
years. Equitable adjustment doctrines
which have for many years provided
avenues of recovery for cost and time,
are now being modified by contract
drafters. For example, one respondent
to the Navigant Construction Forum
survey conducted in support of this research perspective commented that he
is seeing more anti-concurrent delay
clauses in contracts (i.e., contracts that
declare that concurrent delay as non-
32
excusable delay).
This same respondent also commented that he had been asked to review two sets of bridging documents
which were approximately 90% complete design (versus the more typical
30% design). The design/build entities
in these cases claim that given this
level of design detail done by the
owners consultant prior to bidding,
the Spearin Doctrine should apply. The
owner, as might be expected, asserted
that since this is a design/build contract the design/builder is solely responsible for the design and the
bridging documents were intended for
general guidance only. Strictly speaking, this is not risk transfer but has the
effect of substantially increasing the
design/builders risk if the owner holds
the design/build entity to the requirements of the bridging documents as if
they
were
crafted
by
the
design/builder.
A very recent Civilian Board of
Contract Appeals (CBCA) case related
to construction of a U.S. embassy
under a design/build contract [35]. According to the CBCA, the design/build
contract transferred all risk under the
contract to the design/build entity by
using clause such as the following:
The contractor remains
solely responsible and liable for design sufficiency and should not depend on reports provided by the
government as part of the contract
documents.
Offerors shall not rely on
any information provided by the
government concerning the host
country, such as climatology data at
the site, local laws and customs,
currency restrictions, taxes, or the
availability of local labor, etc.
With respect to the infrastructure
that was supposed to be available to
the site at the outset of construction,
the board commented that while the
contract documents stated the local
government had committed to provide utilities to the site by June
2003, nothing in these statements
can be construed as a promise from
the Department of State that these

events would occur The board also
decided that design/build contractor
had no right to rely on the design documents provided at time of bidding because the contract advised bidders
not to rely on the drawings, as the
drawings are for the sole purpose of illustrating the design intent Finally,
the board ruled that since the
design/build contractor was, solely
responsible and liable for the design, they should not depend on reports provided by the government as
part of the contract documents. This
ruling is an interesting juxtaposition to
the decision reached in the Appeal of
Bean Stuyvesant, LLC.
In Bean
Stuyvesant, the contractor was held liable for, available information not included or incorporated by reference in
the contract documents, whereas in Fluor
Intercontinental, the design/builder was
not allowed to rely on information provided by the owner and included in the
contract documents.
Increased Use of
False Claim Actions
False claims allegations are becoming much more frequent in construction today than at any time
previously. With the increased emphasis on the False Claims Actsince
1986, contractors who certify a claim
to the US government are potentially
liable to the government if any portion
of a passed through subcontractor
claim is determined to be a false claim
[1]. Subsequent to the Deficit Reduction Act of 2005, some 28 States have
adopted State False Claim Acts and
others apparently are contemplating
doing the same [53, 57]. Not only are
government agencies more likely to
counter contractor claims with allegations of false claims, but the legal profession has become very active in this
arena also. If one Googles whistleblower attorneys, youll find some
2.95 million hits in 0.22 seconds most
of which advertise firms ready, willing,
and able to assist potential whistleblowers with qui tam lawsuits under
the False Claims Act (FCA).
Added to this are some recent
changes to US federal law, which

broadened the definition of the term
claim, extended the reach of the FCA
to include subcontractors. One recent
paper summarized the impact of the
Fraud Enforcement Recovery Act of
2009 (FERA) in the following manner
[54].
FERA expanded the FCA in
several additional ways, such as by
eliminating the presentment requirement, adding a relate back
provision to circumvent statutes of
limitations, and declaring retroactivity for certain amendments. The
passage of FERA reflects the governments growing commitment to
discover and prosecute fraud. In
furtherance of that commitment,
Congress began to include antifraud measures in statutes, such
as the American Recovery and
Reinvestment Act (the Stimulus
Bill), that create an independent
board to oversee disbursed funds
and provide for government audits
[31].
False claims and charges of
fraud are receiving increased emphasis by the federal government.
For years, the playing field was limited to procurement of supplies,
and defense industry contracts, but
recently the clear trend has increased prosecution overall and
therefore greater focus on construction [44].
tent when submitting the claim for

the architects fee and dismissed the
governments FCA claim. While Riley
lucked out in this case, the case serves
to highlight the governments intent to
seek out and prosecute false claims
and fraud, and illustrates the risks a
contractor assumes when submitting a
claim which is not fully vetted.
In Daewoo the contractor submitted a certified claim to the government
in the amount of $64 million, which included approximately $50.6 million in
unsubstantiated costs. The contractor
apparently assumed that the claim
would be settled via negotiation and
did so in order to give them some
room to negotiate with the government. Regardless of the merits of the
initial claim the government counterclaimed under the Contract Disputes
Act (CDA) and the FCA and entered a
special plea in fraud under the CDA
seeking forfeiture of Daewoos entire
claim under the provisions of 28 U.S.C.
2514. When all was said and done,
the US Court of Appeals for the Federal
Circuit ruled that Daewoo not only forfeited their entire $64 million claim,
but also owed the government $50
million plus FCA penalties.
Contractors working on government contracts need to understand the
implications of the FCA and FERA; need
to thoroughly examine and document
all claimed costs; and must understand
the legal significance and risk of certifying a claim to the government.
New Forms of Claims

The author pointed to Riley Construction Co. v. United States and Daewoo Engineering and Construction Co.
Ltd. V. United States to help make his
point [5, 6]. Riley (a design build contractor) included both their claimed
costs, as well as their architects cost
on the basis that the architects fee
was based on a percentage of total
construction cost. Riley did this without asking the architect, and thus the
architect was unaware that they were
involved in the claim. When the government found out about this, they
counterclaimed with false claim and
fraud allegations against Riley. The
court determined that Riley lacked in-
Lest readers conclude that current

claimsmanship is exercised solely by
owners, lets now look at contractor
claimsmanship. Based on the
Forums survey, most contractor
claimsmanship seems to result in assertion of new forms of claims. Some
of those identified are set forth below.
Constructive Claim
In M. Maropakis Carpentry, Inc. v.
U.S., the contractor had submitted a
number of letters to the government
requesting time extensions [15]. However, notwithstanding the requirements of the contract and the Contract
Disputes Act (CDA), the contractor
did not certify the claim nor did the

contractor request a final decision
from the contracting officer [2]. During
their appeal to the Court of Appeals for
the Federal Circuit, the contractor argued that their letters to the contracting officer constituted a valid claim for
a time extension sufficient to give the
Court of Federal Claims jurisdiction
over the matter. As stated by the Court
of Appeals, Maropakis also argue[d]
that even if it was not in technical compliance with the CDA, the US had actual knowledge of the amount and
basis of Maropakis claim and therefore the Court of Federal Claims had jurisdiction.
In essence, Maropakis tried to create a constructive claim a claim derived by inference or implied by
operation of law analogous to constructive changes, constructive suspensions and constructive notice.
Maropakis did this, of course, in order
to get the court to hear their case, as
the Court of Federal Claims rule that
they did not have jurisdiction as the
contractor had not fully complied with
the requirements of the Contract Disputes Act. The Appellate Court focused
on the statutory requirements of the
CDA and chose not to infer the existence of a construction claim in the absence of these clear requirements.
All in all, this was an ingenious attempt by a contractor to get around
clear statutory requirements. The Navigant Construction Forum believes
that more contractors will attempt to
use the constructive knowledge approach to excuse their own non-compliance with contract or statutory
requirements concerning claim submittals.
Underinspection Claim
The concept of a constructive
change to a contract arising from improper inspection or overinspection
is not a new one in construction law
[43]. Several respondents to the
Forums survey mentioned having experience with claims of underinspection. Typically, these claims have been
described in one of two ways. In the
first instance, underinspection is alleged as a way to recover additional
33
cost for completion of punchlist work

at the end of the project. The theory
asserted is that had the owner or their
representative inspected the contractors work properly during the performance of the work they would have
found the work was improperly done
or incomplete, thus eliminating the
need for punchlist work. Since the
punchlist work exists, this proves allegation of improper inspection and the
resulting damages are the cost of the
punchlist work. The second way the underinspection claim is used is to allow
the contractor to argue wrongful termination when they have been terminated for default because of
substandard work. Despite the number
of times the author and others heard
this type of claim asserted, none had
heard of this claim being litigated.
The Appeal of Tawazuh Commercial and Construction Co. Ltd. involved
construction of 40 kilometers of road
in Afghanistan [24]. The contractor was
ultimately terminated for default because of failure to perform its contract
obligations; failure to provide a remediation plan as required by the cure notice; and failure to perform in
accordance with the contract requirements. The contractor asserted, among
other defenses, that if the Corps of Engineers had performed adequate quality inspections throughout the project;
they should have corrected the situation earlier, thus preventing the default
termination.
The Armed Services Board of Contract Appeals (ASBCA) citing Amigo
Building Corp. stated that
It is well established that
the governments right to inspect
work generally does not relieve a
contractor of its obligations to perform, nor can the contractor properly relay on government
inspection for the discovery and
correction of any errors [23].
come to light earlier in the performance of its work. However, appellant would have us decide that the
governments alleged failure to perform an early adequate inspection
shifts the contract performance issues to the governments shoulders. This we cannot do. The
contract clauses and the relevant
law clearly establish that it was appellants legal responsibility to
maintain an adequate inspection
system to ensure that its work conformed to the contract requirements. The government proved
that appellant was in default and
appellant did not establish that the
default was excusable.
Tawazuh, like Amigo before it, lost
their argument that owner underinspection entitled them to additional
money and time to repair the substandard work, and/or excused the substandard work and deprived the owner
of the right to terminate for default.
However, the Navigant Construction
Forum believes it foreseeable that as
less experienced, less skilled contractors undertake to perform more complex projects, this type of claim will
occur more frequently.
Equipment Productivity Loss
Lost labor productivity claims in US
construction law are hardly new. Wunderlich Contracting Co. v. United States
involved a request for delay damages
and lost labor productivity arising from
contract issued in 1950 and completed
in 1951 [12]. Although the Wunderlich
joint venture did not prevail in this
case, their failure to recover was based
on lack of causation that is, they did
not establish the nexus between the
governments actions and the damages
sought not because the court rejected their theory of entitlement.
However, the Navigant Construction Forum survey revealed that
some contractors have started to assert
Based on this approach the ASBCA

concluded that
It is unfortunate that appellants failure to comply with the
contract requirements did not
34
equipment inefficiency claims. Such

claims attempt to establish a direct cost
ratio between labor costs and equipment costs using equation 1.
What contractors are attempting
to show is that for every labor cost dollar expended $x dollars was spent on
equipment cost. This equipment productivity cost is applied to labor productivity claims (whether total cost,
modified total cost, measured mile calculations or not). To calculate this type
of claim, first the contractor has to calculate the labor cost added to the base
scope cost, and then the added labor
cost is multiplied by the equipment
cost ration calculated by the formula
set forth above. It is noted that this
claim does not include the cost of small
tools and consumables, such cost being
added separately to the total claim.
While the claim is understandable
(because of its simplicity) and the
mathematics of the calculation are
easy to follow, there is no direct correlation between labor and equipment
cost. There is a strong likelihood that
when labor is less productive, that
equipment costs go up. However, increased equipment costs are much
more likely to increase either because
of idled equipment or equipment retained on site longer than anticipated,
resulting in increased equipment rental
or ownership costs on the project.
Despite the flaws inherent in this
new type of claim, the Navigant Construction Forum believes it will become more common as contractors
seek new ways to recover losses or less
sophisticated contactors become more
involved in claims.
Expanded General Condition Costs
Extended general condition costs,
frequently referred to as extended field
office overhead (FOOH) are a well accepted element of damages when a
contractor encounters excusable, compensable delay. The general rules governing extended FOOH cost recovery
Actual Equipment Cost = Equipment Cost Adder

Total Labor Cost
equation 1 Equipment Inefficiency Claim Equation
are fairly straight forward.
ents, etc.).
The problems with this new form

of claim are many
The contractor must prove they

encountered an excusable, compensable event as defined by the
terms of the contract.
The contractor must document
notice of delay was provided per
the contract.
The contractor must submit their
time extension request in accordance with the terms of the contract.
The contractor must demonstrate
that the event caused x days of
delay as required by the contract
and that there was no concurrent
delay. And,
The contractor must then document the daily FOOH cost after removing all non-time related FOOH
costs.
Assuming the contractor can show

all of the above, then they are generally entitled to a time extension and
delay damages (consisting of extended
FOOH and, perhaps, extended HOOH).
In response to the Navigant Construction Forum survey, a new variant
of this claim was identified. The expanded general conditions claim is not
grounded on compensable delay. This
new form of claim is a request for additional cost to add field resources in
order to complete the project on time.
At first blush, this sounds like an element of damages arising from either
directed or constructive acceleration
but no acceleration is being alleged by
the contractor.
After execution of the contract
and notice to proceed, the contractor
submits a change order proposal for
expanded general conditions on the
basis that the project is more complicated than they thought; is less fully
designed than anticipated; has more
design busts and flaws than normal; requires more coordination with third
parties than believed; will have more
changes than normal; etc. Any or all of
these allegations are then used to justify the addition of field resources (i.e.,
document control, project control,
project engineering staff, superintend-
The contractor has not proven entitlement to any of these allegations under the contract.
The contractor has not expended
any additional costs as a result of
any of these allegations. And,
There is not yet any cause and effect relationship between any of
the potential future problems the
contractor anticipates and the cost
the contractor is presently seeking.
In more general terms, this new

form of claim creatively front end
loads anticipated claim costs. As such,
there is a distinct possibility that the
contractor asserting this new form of
claim has walked inadvertently though
it may be into a false claim under either the US federal or a state statute.
The
Navigant
Construction
Forum believes that this new claim
will likely spread for a while; at least
until a court ruling concerning the false
claim potential is issued. If this claim is
found to be a false claim, then it will
slowly fade into the background as this
information gets around. If it is found
not to be a false claim (along the lines
of U.S. ex rel. Alva Bettis v. Odebrecht
Contractors of California, Inc.) where
the court found that the fraud-in-theinducement theory, on its own, did not
constitute a false claim) then this new
form of claim is likely to grow larger
and become more common [13].
Recommendations
Claimsmanship has not declined
over the past two decades and is projected to continue based upon this review of current trends. Based on
perception, the Navigant Construction
Forum offers the following recommendations for all stakeholders in the
construction industry.
For Owners
Since owners have more opportu-
nity to practice claimsmanship

when preparing the contract documents, owners need to spend
more time training their own staff
concerning the terms and conditions of their contracts and in contract administration. Recall that
one major international survey
showed that improper contract
administration is, in fact, the most
cause of disputes [40]. With appropriate and ongoing training,
this type of dispute should be
avoidable.
Since so many claims and disputes
arise from incomplete, poorly coordinated or flawed drawings and
specifications and from owner issued changes, owners are well advised to spend more time in
planning and design stages of the
project to get it right before bidding. If owners make certain that
all project stakeholders have adequate input to the planning and
design, then this should sharply reduce owner issued change orders
during construction, reducing in
turn the disputes that stem from
such changes.
Recognizing that no perfect set
of drawings and specifications exists, owners seeking to avoid
changes and disputes should implement biddability, constructability, claims prevention and
operability reviews before issuing
bidding documents, using an independent review team in order to
find and eliminate errors and mistakes and prevent the need for
owner issued changes during construction. An independent review team is one made up of
experienced construction and operations personnel who were not
part of the design team. This is
necessary because it is difficult in
the extreme for someone to review work they themselves performed.
Based on our experience, the Navigant Construction Forum understands that one of the primary
reasons end of the job claims are
so complicated and so difficult to
35
analyze and resolve is that too

many owners and contractors put
off settling delay claims until all
work is completed. Owners need
to train their staff to focus on
timely delay notice and act aggressively to resolve time extension requests and delay damages at or
near the time they occur. Owners
should not discourage contractors
from filing notices of change,
delay, etc., but should encourage
them to do so in order to identify
potential claims and disputes as
early as possible.
A knee jerk reaction of many owners (and their representatives)
when faced with a claim or dispute
is to automatically go into a selfpreservation mode. However, experience demonstrates that if both
the owner and the contractor can
maintain their focus on project
success, not party interest, and
seek out solutions to potential
problems, then there will be fewer
claims and disputes as jointly
crafted solutions tend to result in
negotiated change order settlements.
Owners considering crafting
unique risk assignment clauses
must keep the basic rules of risk
transfer in mind at all times. First,
all risk belongs to the owner, unless specifically assigned elsewhere in the contract, since the
owner has all the benefit of the
constructed project. Second, when
any risk is assigned in a contract,
that risk should be assigned to the
party best able to control risk if the
risk event occurs [47].
Project owners need to spend
more time with project delivery
scheduling, in order to avoid unrealistic scheduling requirements at
the time of bidding, as inappropriate schedules (either too short or
too long) cause claims and disputes.
For Contractors
36
Contractors must pay more atten-
tion to scheduling, notice, and

claim filing requirements lest they
lose their right to prosecute such
claims and recover time and cost.
Contractors need to train their
own staff in each of these areas
and provide refresher training routinely rather than run the risk of
losing their rights.
Contractors working on government contracts need to understand the implications of the FCA
and FERA; need to thoroughly examine and document all claimed
costs; and must understand the
legal significance and risk of certifying a claim to the government.
Based upon these cases discussed
in this research perspective contractors seeking recovery under
the differing site conditions clause
o Are at risk when they rely

upon straight lines interpretations between borings in
order to calculate soil transition or encounters with differing types of soils and/or rock.
o Are at risk by drawing conclusions or inferences from silence (i.e., the absence of
any groundwater information
from a series of borings may
no longer justify the assumption that no groundwater will
be encountered on the project). And,
o Information referred to bidding as being available upon
request may now be considered as information included
in the contract documents or
incorporated by reference.
Contractors must remember that
they cannot rely upon owner quality control inspections. Contractors
must keep in mind that owner inspections are solely for the benefit
of the owner, not the contractor.
Contractors are obligated to perform their own inspections.
Contractors seeking to be creative
with claims must seek out competent legal advice experienced with
construction law in order to avoid
pursuit of a claim that is un-
winnable. And,
Contractors trying out a new theory of entitlement on a public
works project must obtain legal
advice from attorneys familiar
with both US federal and State
False Claims Acts, in order to avoid
counterclaims of false claims from
the owner.
Conclusion
Owners and contractors seeking to
practice claimsmanship need to keep in
mind a paraphrase of one of Sir Arthur
Conan Doyles Sherlock Holmes quotations
What one man can invent,
another can circumvent!
At a time when owners and contractors say they want to discourage
disputes on construction projects and
find ways to deliver projects on time, in
budget, safely and with the required
quality by the contract, claimsmanship
seems counterproductive and wasteful. The recommendations set forth
above should help stakeholders
achieve their stated goals.
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City of Oakdale, ibid.
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Right Direction, E.C. Harris, London, May 28, 2012.
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73 Ct. Cl. 566, 578 (1932); Schmoll
v. U.S., 91 Ct. Cl. 1, 28 (1940); PCL
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Cl. 479, 484 (2002), affd, 96 Fed.
Appx. 672 (Fed. Cir. 2004).
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396, 424 (1993).
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and Maximizing Profitability, McGraw Hill Construction, Navigant
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Postscript: Unabsorbed Overhead

and the Eichleay Formula, 17
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(June 2003).
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Ness, Andrew D., The Future of
Construction Law and Claims,
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Workshop, AACE International,
Lake Tahoe, NV, March 2012.
No. 11-1614, May 11, 2012, First
Circuit.
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Claim Notice As A Defense To
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1867 WL 6457 (1867), 2 Transc.
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William F. Klingensmith, Inc. v.
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of Construction Engineering and
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September, 1993, American Society of Civil Engineers.
ABOUT THE AUTHOR

James G. Zack Jr.,
CFCC FAACE, is Executive Director of
Navigant Construction Forum of
Boulder, Colorado.
He can be contacted by sending email to: jim.zack@navigant.com
37
THE AACE INTERNATIONAL

2015 ELECTIONS
Have you cast your ballot yet?

The 2015-2016 AACE International Board of Directors online election is under way and the current board is issuing a reminder
to all eligible members to beat the March 15 deadline and cast votes for the incoming association leadership team. Ballots were
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Go here: https://eballot4.votenet.com/aacei/login.cfm ,or log onto the AACE website at www.aacei.org and click the election
icon that is posted on the homepage to view biographies of each candidate, photos, and each candidates goals for the oce they
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area is electing a Director Region candidate this election cycle. Individuals who were on the AACE roll as members as of Dec. 31,
2014, are eligible to vote in the current election.
VOTE NOW
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COSTENGINEERINGMARCH/APRIL 2015
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AACE INTERNATIONAL ONLINE STORE

more online at www.aacei.org
Skills and Knowledge of Cost
Engineering, 5th Edition, Revised
Scott J. Amos, Editor, 2007
This updated and expanded guide for
fundamentals is an excellent choice for anyone
interested in a concise reference to all aspects of
the profession. The new 5th edition includes
twenty-seven
chapters
on
estimating,
manufacturing and operating costs, scheduling,
planning progress and cost control, and much
more. This is a very useful book for those studying
for the certication exam. 450 pages
1595-02zip - Download - US$50.00 member/US$80.00 nonmember
Paper version available through our Amazon.com link
CCP Certification Study Guide,

1st Edition
Michael B. Pritchett, CCP, Editor, 2006
The AACE International CCP Certication Study
Guide provides an all-encompassing reference text
to prepare for the exam. The CCP Certication
Study Guide provides background information on
how to become certied; gives those studying for
the certication exam a single reference text that
includes theory, worked problems with answers,
references, and a full discussion of key topics;
allows students to maximize their study time; and
provides a concise overview of the fundamentals
of cost and project management.
PSP Certification Study Guide, 1st Edition

Peter W. Griesmyer, Editor, 2008
This study guide is intended to assist you in your
study and review of the overall topics as one step
toward successful Planning and Scheduling Professional certification. The outline provides a listing
of the terms you should know & topics for which
you should have a good understanding of how to
apply the concepts to solve problems. Each chapter also contains sample exercises, which test your
knowledge of that chapter's concepts. Additional
sample questions are provided in an appendix.
EVP Certification Study Guide,

2nd Edition
Ken Cressman, CCP EVP and Gary C. Humphreys,
Editors, 2009
This study guide is intended to assist you in your
study and review of the overall topics as one step
toward successful Earned Value Professional certification. The outline provides a listing of the terms
you should know & topics for which you should
have a good understanding of how to apply the
concepts to solve problems. Each chapter also contains sample exercises, which test your knowledge
of that chapter's concepts.
Paper Version available through our Amazon.com link
Cost Engineering
The international journal
of cost estimation,
cost/schedule control,
project management,
and total cost
management.
Subscriptions are
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International
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Please add US$8.00 for airmail
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Cost Engineers Notebook

This CD-ROM is an important reference for any
project or cost professional. It includes data and
procedures related to basic skills and knowledge
that all cost engineers should possess, extensive
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and papers in four subject areas: cost control,
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economic analysis and business planning.
4060-28zip - Download
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AACE International Recommended Practices

Cost Engineering Terminology; Cost Estimate
Classication System; Estimate Preparation Costs in
the Process Industries; Project Code of Accounts;
Required Skills and Knowledge of a Cost Engineer;
Roles and Duties of a Planning and Scheduling
Engineer; Protability Methods; plus many more.
The Total Cost Management Framework

John K. Hollmann, PE CCP, Editor, 2012
Paper Version available through Amazon.com
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Practice Guides
Guides (PPGs)
(PPGs)
Value; Earned Value Reporting; Applications of Earned
Value Project Management; and more.
PPG#6: Construction Cost Estimating, 3rd Ed.

Dr. Douglas D. Gransberg, PE CCP, and Carla Lopez
del Puerto, CCP, Editors, 2011
Covers: Recommended Practices; Estimating Theory;
Conceptual, Parametric, and Range Estimating; Estimating Factors and Indices; Estimating Material Costs
and Quantity Surveying; Estimating Labor Costs; Estimating Equipment Costs; Subcontracting Costs; Estimating Overhead and Indirect Costs; Prot,
Contingencies, and Mark-Ups; Estimating International Construction Costs; and more.
(PPGs) are a series of reference s that

consists of selected Cost Engineering
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Price per PPG:

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PPG#1: Contracts and Claims, 4th Ed.
James G. Zack Jr., Editor, 2008
Covers: Contract Administration; Management of
Construction Schedules; Schedule Control; Schedule
Float Ownership; Cost Control; Management of
Change; Cost Impacts; Productivity Impacts; Management and Analysis of Delay; Concurrent Delay Issues;
Pricing of Delay; and more.
PPG#2: Risk, 3rd Ed.

David C. Brady, P.Eng., Editor, 2012
Covers: Dictionary; Capital Investments; Cash Flow;
Competitive Bidding; Contingency Analysis; Contracts;
Cost Engineering; Currency Rates; Decision Trees; Economic Analysis; Escalation; Human Factors; Manufacturing; Research & Development; Safety & Health;
Schedule; Technological Risk; and Value Engineering.
PPG#3: Cost Engineering in Aerospace and

Aviation
Sarwar A. Samad, Editor, 1998
Covers: Aerospace and Aviation.
PPG#4: Planning and Scheduling, 3rd Ed.

Trevor X. Crawford, CCP, Editor, 2011
PPG#7: Cost Engineering in the Utility

Industries, 2nd Ed.
Dennis M. Thompson, Editor, 2007
Covers: Auditing; Cost Estimating; Cost Modeling;
Cost/Schedule Control; Generation Power Plant; Natural Gas Industry; Nuclear Power Plant; Other Energy
Related Topics; Planning and Scheduling; Project
Management; Utility Rates; and Utility Property Valuation.
PPG#8: Contingency, 3rd Ed.

Kul B. Uppal, PE CEP, Editor, 2010
PPG #15: Life-Cycle Cost Analysis

Dr. Carla Lopez del Puerto, CCP, and Dr. Douglas
D. Gransberg, PE CCP, Editors, 2012
Covers: Life-Cycle Cost Theory; Life-Cycle Cost Methods, Determining Discount Rate; Estimating Capital
Cost of Design and Construction; Estimating Operating Costs; Estimating Salvage/Residual Value; Estimating Sustainability; Life-Cycle Cost Risk Analysis; Life
-Cycle Cost Case Studies; Life-Cycle Cost Analysis in
the International Context
PPG #16: Cost Engineering in the

Global Environment, 2nd Ed.
Kul B. Uppal, PE, Editor, 2011
Covers: General Topics on International Projects; Applicable AACE International Recommended Practices;
Cost Estimating Methodology; Risk and Contingency;
and Miscellaneous Topics
PPG #17: Public Sector Estimating
PPG #10: Project Delivery Methods, 2nd Ed.
Covers: Basis of Estimates; Labor Costs; Overhead and

Profit; Soft Costs; Bid/Estimate Reconciliation; and
Change Orders
Dr. Douglas D. Gransberg, PE CCP, Tammy L. McCuen, and Keith Molenaar, Editors, 2008
Covers: Design-Bid-Build (DBB) DBB Estimating,
DBB Scheduling, DBB Project Management; Construction Management (CM) CM Estimating, CM
Scheduling, CM Project Management; Design-Build
(DB) DB Estimating, DB Scheduling, DB Project
Management; International Project Delivery; Constructability; and Partnering.
PPG #11: Environmental Remediation &

Decommissioning, 2nd Ed.
Richard A. Selg, CCP, Editor, 2009
Covers: Environmental Remediation Planning and
Scheduling Methodology; Cost Estimating, Project Controls, Cost Modeling, and Reporting; Contingency Management, Risk Analysis, and Environmental Regulations;
Benchmarking and Lessons Learned; Economics of Environmental and Waste Management; Cost-Effective
Waste Minimization and Pollution Prevention; Design,
Construction Practices, and Other Related Topics.
PPG #12: Construction Project Controls, 2nd Ed.

Dr. Douglas D. Gransberg, PE CCP,
and Eric Scheepbouwer, Editors, 2010
Covers: Introduction to Construction project Controls;
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PPG #13: Parametric and Conceptual

Estimating, 3rd Ed.
Larry R. Dysert, CCP CEP, and Todd W. Pickett, CCP
CEP, Editors, 2012
PPG#5: Earned Value, 2nd Ed.
Covers: Parametric/Conceptual Estimating; Classification; Methodology; Capacity Factoring; Process and

Non-Process Industries; and Systems
Covers: Why Use Earned Value?; Basics of Earned

Value; Cost/Schedule Control System Criteria; Actual
Physical Percent Complete; Productivity and Earned
Covers: Enterprise Management: General Imperatives and

Concerns; Asset Requirements Elicitation and Analysis;
Asset Planning and Investment Decision-Making; Asset Performance Assessment and Change Management; and Program Management.
Covers: General Topics On Contingency; Cost Estimating and Contingency; Risk Analysis and Contingency; and Other Related Topics.
Covers: Planning; Schedule Development; Schedule

Management/Control; and Classics.
Robert A. Marshall, Editor, 2007
PPG #14: Portfolio and Program Management,

2nd Ed.
Randy R. Rapp, PE CCP, Editor, 2007
Joseph L. Macaluso, CCP, Editor, 2007
PPG #18: Green Building, 2nd Ed.

Joseph L. Macaluso, CCP, Editor, 2012
Covers: Recognition of Affects and Economic Costs on
the Environment; Formulating Ways of Addressing
Green Building Strategies and Associated Economic
Costs; Specific Green Building Strategies and Project
Costs; Budgeting and Justifying the Cost of Sustainable
Practices; Evaluating Competing Sustainable Strategies:
Using Value Engineering; Evaluating Competing Sustainable Strategies: Other Techniques
PPG #19: Leadership and Management

of People
John J. Hannon, CEP, Editor, 2008
Covers: Leadership; Teams; Leadership Roles; Motivation; and Ethics.
PPG #20: Forensic Schedule Analysis

James G. Zack, Jr., CFCC, Editor, 2008
Covers: Recommended Practice No. 29R-03 Forensic
Schedule Analysis; Synopsis of Recommended Practice;
Basics of Schedule Delay Analysis; MIP-Observational
Static Gross; MIP-Observational Static Periodic; MIP-Observational Dynamic Contemporaneous As-Is; MIP-Observational Dynamic Contemporaneous Split;
MIP-Observational Dynamic Modified or Recreated; MIPModeled Additive Single Base; MIP-Modeled Additive
Multiple Base; MIP-Modeled Subtractive Single Simulation; Non-CPM Schedule Delay Analysis Techniques;
General Schedule Analysis Articles
PPG#21: Cost Engineering in the Process

Industries
Kul B. Uppal, PE CEP, Editor, 2009
Covers: General Topics on Process Industries; Cost Estimating Methodology; Project Management; International Projects; Scheduling; Construction Activities;
Risk Management; Project Controls; and Applicable
AACE International Recommended Practices.
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CALENDAROFEVENTS
MARCH 2015
25 CMAA Annual Awards Gala,
JUNE 2015
6 2-Day Winter Seminar,
Southern California Chapter of

Construction Management
Association (CMAA)
The Grand Conference Center
Long Beach, CA
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2015 Annual Meeting,
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MGM Grand
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Chinook-Calgary Section of
AACE International
The International Hotel
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Contact:
www.aaceicalgary.org
9-11 SPSIndustrial Automation
25-26 Precast Concrete

Conference,
Kuala Lumpur, Malaysia
Fair Guangzhou,
China Import and Export
Fair Complex,
Guangzhou, China
APRIL 2015
Contact:
6 Cost Estimating and Project
sps@china.messefrankfurt.com
12 Contractor Pre-Qualification All You Need to Know,

Association (CMAA)
Long Beach, CA
19 What Is Your Construction

Management EQ?,
Association (CMAA)
Long Beach, CA
Contact: johnk@trueventus.com
Control - Closing the Loop,

Cost Engineering
Hotel Ara
Zwijndrecht, the Netherlands
Contact:
www.costengineering.eu
MAY 2015
6 Cost Estimating and Project
Control - Closing the Loop,
Cost Engineering
Hotel Ara
Zwijndrecht, the Netherlands
Contact:
www.costengineering.eu
44
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Cost Engineering March-April 2015

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Cost Engineering March-April 2015

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THEJOURNALOFAACE INTERNATIONALTHEAUTHORITYFORTOTALCOSTMANAGEMENT

ARE VITAL FOR EFFECTIVE

13Calculating the As-Built Critical Path

24Trends in Construction Claims and Disputes

AACE International Board of Directors

AACE International 2015 Elections

Professional Services Directory

VICE PRESIDENT-TECHNICAL BOARD

VICE PRESIDENT-EDUCATION BOARD

AACE International - The Authority for Total Cost Management

VICE PRESIDENT-CERTIFICATION BOARD

VP- INTERNATIONAL REGIONS

VP- NORTH AMERICAN REGIONS

Policy Concerning Published Columns, Features, and Articles

COST ENGINEERING MARCH/APRIL2015

Soft Skills are Vital

Abstract: The industry is full of recommendations for good technical project

he industry is full of recommendations for good technical

are necessary to be effective, if the PM

COST ENGINEERING MARCH/APRIL 2015

mendations for these soft type skills,

What Are Soft Skills?

used to influence others in a way that

soft skills that he thought were missing

As Identified by Project Management

listening actively and effectively;

These are important skills that are

COST ENGINEERING MARCH/APRIL 2015

explaining how communication is a two

Suggested Soft Skills

Notice that this is not so dissimilar

Why Do Soft Skills Matter?

COSTENGINEERING MARCH/APRIL 2015

controls as the PC team. This is why it

early will be preserved through to the

Vital Soft Skills

COST ENGINEERING MARCH/APRIL 2015

cific details and provide little to no

COSTENGINEERING MARCH/APRIL 2015

great opportunities to build teams and

tion all issues.

message throughout the project. It

How to Develop and

the Jung theories to develop their own

As an example, personalities may

Figure 2 Myers-Briggs Preferences Graphic by CPP, Publisher of the MBTI

Figure 3 Please Understand Me Reference Book by David Keirsey

books serve to guide anyone into the full

COSTENGINEERING MARCH/APRIL 2015

AACE International Recommended Practice 11R-88, Required Skills and Knowledge of

Project Planning and Scheduling

ABOUT THE AUTHORS

Patrick C. Kelly, PSP,

FOR OTHER RESOURCES

AACE's Federal Agency Roundtable

Registration is now open at www.aacei.org and

COST ENGINEERING MARCH/APRIL 2015

Both on campus and online

Spring 2015 Semester: December 14

For more information, detailed course descriptions,

As-Built Critical Path

Abstract: The as-built critical path of a project schedule can be determined

he determination of the asbuilt critical path of a project

schedule analyses, as described in