This winter, construction companies are going to lose millions of dollars reacting to delays and impacts to their work caused by cold and inclement weather. But it doesn’t have to be that way for you if you know how to protect your right to compensation for project changes.
How it Happens
The imagination conjures up the most extreme possibility – the Storm of the Century. Certainly, a major weather event will delay and impact your project work. And it may even cause serious damage to your work. Moreover, someone has to clear the snow from your construction project, and if that someone is you, those costs can mount quickly.
The most common weather-related change, however, is the schedule shift. So often, a project is delayed for one reason or another unrelated to you, which means that your work is shifted to a later timeframe. When that work is shifted into winter months, it can result in all sorts of impacts and additional costs. Concrete, for example, requires mix additives, tenting, heaters, and blankets (among other things) to cure properly in winter months. If you were expecting a summer concrete pour, you would not have budgeted for all of that.
Winter weather brings all kinds of risks for delays, damages, and disputes. It’s important to know how to effectively combat these issues.
What to Look for in Your Contract
The most appropriate clause to zero in on if found in your construction contract is the limit on weather-related float days. Many modern contracts have a set number of days, whether 2, 5, 10 or whatever it may be, that you must calculate into your schedule as “expected” weather delays; this is the amount of time you have promised to accept as weather delays and still complete work on time. The next time you review a contract, take a look closely in the sections related to timing and substantial completion and chances are, you will see a clause like this.
The straightforward “no damages for delay” clause comes in to play in almost every weather-related delay claim. That clause typically states that, even though you may have been delayed or impacted from cold weather, you are not entitled to recover money damages for those delays except under specific circumstances. Essentially, this clause shifts to you the risk that weather will delay your work.
Another clause that can affect winter weather claims is “force majeure,” which is French for “oh boy, this is really, really bad!” In essence, a force majeure clause typically says that, in unforeseen circumstances that make performance commercially impracticable – such as the Storm of the Century – the parties can avoid or renegotiate their contract duties.
Any of those clauses (and others) could trip you up and cut off your recovery for winter-related costs, so here are a few tips to place yourself in a good position to recover any additional costs.
Protecting Yourself and Your Profit
Return to Baseline
For winter-damaged equipment or work, it may be enough simply to claim the replacement cost as damages. When delays or impacts are involved, however, you need to go see what you were entitled to before making your claim. That is, did the “baseline” schedule (as amended) entitle you to do your work in the summer or fall, but now you are forced to work in the winter because of delays? Or was your work sequenced after building close-in so that you were entitled to install your project work in a conditioned space, but now you must work in the freezing cold? Your contract will have the answer to what you were entitled to, and thus what you may recover as an impact or delay to your work.
The Pen is Mightier Than the “S” Word
You may have a strong urge to drop an expletive or twelve when a cold-weather change occurs. But the best first step is to give written notice to whoever is upstream from you in the chain of contracts for your construction project. Modern construction contracts typically have notice requirements that can cause you to completely waive your claim for weather-related changes if you don’t give timely notice. Check your change order clause to see what kind of notice you may need to give.
Don’t Forget the Eichleay
When you are seeking delay damages for cold-weather changes, remember to add a claim for home office overhead. That is, under the Eichleay line of cases, you can be entitled to recover the loss to your home office caused by delays on a project. When you have a project ongoing in the field, the income from that project goes in part to fund all of your home office expenses like insurance, rent, salaries, etc. When you are delayed on a project, that income is no longer funding your home office expenses, and you may be entitled to recover for that loss.
For more information, please contact Jeremy Wyatt at the Harrison Law Group.