It is risky if a stipulated price
contract provides no clear
baseline for determining what
constitutes a change in scope.
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refer to the wrong version. Too frequently, scope of work
documents are referenced with insufficient clarity, or some-times
they are even described as “attached,” but then they
are not actually attached. Bid qualifications may be incorpo-rated
by reference, in conflict with other contract documents,
or with ambiguity as to the extent of the qualifications. We
have seen design development documents incorporated by
reference, along with (inconsistent) specifications and draw-ings,
without any provisions to clarify which one takes pre-cedence.
And, of course, project specifications and drawings
may simply be incomplete at the contract date.
Use the right form of contract
It is often the case that work is contracted while the design
remains incomplete, particularly on complex industrial
projects. This is not in itself a problem. A contract based on
incomplete design carries certain risks. What is required is
clarity as to the baseline scope of work, and contract provi-sions
that clearly indicate what happens when the completed
design changes the construction cost (and schedule).
Particular forms of contract exist for this purpose; industri-al
construction owners have sophisticated contract forms that
address the allocation of such risks. Design-Build and EPC
(Engineering, Procurement and Construction) contracts are
intended for use where the design is incomplete – or where
the design is not even started. But contracts intended for use
in a traditional Design-Bid-Build scenario (i.e., where the
designer completes the design documents before the owner
seeks bids for construction), such as CCDC 2, respond poorly
to situations where the design is incomplete at the contract
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