WHAT DO THEY MEAN, APPLIED TO PUBLIC CONSTRUCTION WORK?
"On Time" , "Within Budget", and "Of Good Workmanship"
are contract terms, peculiar to the construction industry; they are used,
often indiscriminately, when other definitions are or may be intended,
leading to misunderstandings, conflicts and claims, detrimental to any
private or public entity / authority with limited human and fiscal resources.
References to time, or "On Time" is customarily made as coinciding
with a stated Completion Date, or a date set for the beneficial occupancy
of any facility by the Owner. Time is an important contract consideration,
since it establishes fixed dates for the occurrence of certain events,
including completion. And, if during construction, a contractor can demonstrate
that it had no responsibility for any delay, it may be entitled to an
adjustment in contract time, extending the date for that contractor’s
performance or completion of work. Justification and amount of time extension
may be established from project records, facts, and documented events.
Where a project is significantly extended, claims for delay costs may
become significant and substantial.
"Float time" is a recognized construction business benefit,
asset or right, involved in scheduling performance of certain work or
trades, whereby a given activity or work may be performed, without delaying
the overall project. It has also been called "discretionary"
or "cushion" time. Interference with scheduled float time may
result in claims for delay or acceleration by the party being deprived
of this benefit.
"Within Budget" is generally meant that the actual, final costs
of the total project are within the estimated cost established for the
entire work, without increases, "extras", or claims for delay
or acceleration. It is a rare project, however, that comes within the
original budget established, without at least a contingent increase of
5-10% of the budget, for unanticipated costs and overruns, without fault.
Some of these added costs may result from items required by reviewing
or approving authorities, building inspectors, fire inspectors, bonding
and/or insurance rating entities, supply shortages, etc., and should be
"Of Good Workmanship" is intended to imply that all materials,
assemblies, trades and work performed adhere to an acceptable quality
standard. However, even average quality work may be the best workmanship
which that contractor is able to deliver. Where, however, superior or
exceptional work or quality is required, these specific definitions in
the construction contract documents and contract must supply them, in
order to avoid ambiguity or discretion as to what each bidder must provide.
Construction contracts must be no less skillfully prepared and managed,
than the construction designs and specifications themselves, in order
to produce the desired result in a finished project. Skill, knowledge
and experience are indispensable allies of construction-legal counsel
and the prudent public owner who utilizes these professionals.
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Author: J. NORMAN STARK is an Attorney-at-Law,
a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior
Designer, Planner and Senior Appraiser (ASA), admitted to practice law before
the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.),
the US Court of Appeals, and the United States Supreme Court. He has had
experience in business, Construction, Real Property, Litigation and Construction-Legal
Project and Crisis Management.