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Betting on the Baseline (Available in Geoenvironmental Special Issue only)

by John M. Stolz, P.E., Assoc.; Jacobs Assoc., San Francisco,


Serial Information: Civil Engineering—ASCE, 1999, Vol. 69, Issue 2, Pg. 12A-16A


Document Type: Feature article

Abstract:

In construction contracts, new deductive differing site conditions (DSC) clauses provide for credits to owners when contractors encounter better-than-anticipated subsurface conditions. The deductive clause has ramifications that may outweigh its benefits, such as increasing owners' bid and administrative burdens, influencing the geotechnical baseline report, affecting contractors' bid strategies, and diluting the effectiveness of design- vs. performance-based specifications. Basically, the deductive concept seems fair, but since owners have control over establishing the baseline, is it really? It may cause more problems than it solves, especially if contractors consider the clause an owner's device for recovering change order or other costs. Some factors that must be considered are quantifying and compensating for better-than-anticipated conditions; establishing a credible, factual baseline against which the deductive DSC is measured; and allowing the specifications to capitalize on better-than-expected conditions. Even so, the clause will encourage contractors to include contingency for savings returned to owners. Consequently, deductive DSC clause use will increase both the number of disputes and owners' overall project costs.

Subject Headings: Contracts and subcontracts | Owners | Construction sites | Bids | Underground construction | Subsurface environment | Risk management

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