Library Courtyard Closeout: Unpriced Slab Removal and Delay Damages
A design-build firm has a USD 240,000 contract to renovate a public library courtyard, with 120 calendar days to substantial completion and liquidated damages of USD 500 per day. The contract requires written change orders before extra work and allows 10% retainage. At day 38, crews find a 300 mm reinforced concrete slab under the planting area that was not shown on the drawings. The client's representative says verbally to remove it and "settle it later." The firm performs the work, keeps a daily field memo, and does not submit a written change order. A 14-day rain delay follows; regional records show the period was the wettest in 25 years. At day 118, the client asks for five premium specimen trees to be added and refuses to discuss cost until closeout. At substantial completion on day 134, the client deducts USD 7,000 for delay and refuses the slab extra.
1. Assess the firm's entitlement to the slab extra and the delay deduction, and identify the procedural mistakes.
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The slab is a differing site condition: a 300 mm reinforced slab not shown on the drawings could not have been reasonably anticipated in the planting area. The verbal direction to remove it and settle later creates a factual basis for a change, but the contract requires written change orders before extra work, so the firm is exposed. The field memo helps prove the direction and the work, but it is not a substitute for a written notice. The firm should have sent a written notice within the contract's notice period, priced the work before proceeding or under protest, and reserved rights. On delay, the 14-day rain event may be excusable if it was abnormal and on the critical path, but the firm must show notice and schedule impact. At day 134, completion was 14 days late, so the maximum liquidated damages at USD 500/day is USD 7,000. If the rain delay is excusable, the deduction should be zero. The client cannot unilaterally deduct for delay without applying the contract's extension provisions.
2. Draft a closeout negotiation strategy, including the documents you would submit and how you would handle the client's request for five specimen trees.
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Submit a written change order request for the slab with the field memo, dated photos, daily reports, equipment tickets, disposal receipts, and a unit-price breakdown for removal, disposal, and backfill. State the contract clause relied on and request a time extension for the actual critical-path delay. Send a separate delay notice with regional weather records, the updated schedule, and a comparison to the 25-year record; ask the client to withdraw the USD 7,000 deduction or apply the excusable delay. For the five specimen trees, do not order or plant them until a signed change order covers cost, lead time, irrigation, and warranty. Offer a base bid with the original trees and an alternate for the specimens, with a clear price and schedule impact. Propose a closeout meeting with the owner, architect, and contractor; if refused, escalate to the contract's dispute resolution step and preserve lien and retainage rights. Release retainage only after the punch list and warranty documents are complete. Keep the negotiation factual and document every directive.