{"id":900117,"date":"2022-07-06T15:41:48","date_gmt":"2022-07-06T21:41:48","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900117"},"modified":"2022-07-06T15:41:55","modified_gmt":"2022-07-06T21:41:55","slug":"right-to-payment-following-nedd","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/right-to-payment-following-nedd\/","title":{"rendered":"Protect Your Right To Payment By Following Nedd"},"content":{"rendered":"\n<p>Denise Motta | <a href=\"https:\/\/www.grconstructionlawblog.com\/protect-your-right-to-payment-by-following-nedd\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Construction Law Blog<\/a><\/p>\n\n\n\n<p>In order to preserve your <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/substantial-performance-and-satisfaction\/\" target=\"_blank\" rel=\"noreferrer noopener\">right to payment<\/a>, you must satisfy the contractual requirements supporting a change order for the increased costs or time due to the delay. The key to the successful presentation of change order claims is educating your team on the following:<\/p>\n\n\n\n<p><strong>1.&nbsp; &nbsp; NOTICE<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Review the change order and notice provisions of your contracts. Make your contract searchable and insert the term \u201cNoti\u201d and look for the items listed below.<\/li><li>Who:&nbsp; Check the designated representative for notice.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>It may not be the project manager.<\/li><li>Confirm who can authorize the change order.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Is owner approval required?<\/li><li>Ensure that the party approving the change order has authority to do so.<\/li><li>What:&nbsp; Check for specific information required by the contract.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Provide&nbsp;ALL&nbsp;information available.<\/li><li>If certain information is not yet available, state that the information will be provided when available.<\/li><li>Reserve all rights to amend and submit additional information.<\/li><li><strong>Request both an increase to the Contract Sum and Contract Time.<\/strong><\/li><li>Make the request even if you do not believe the delay or time necessary will cause a significant impact.<\/li><li>When:&nbsp; Check the time deadline for notice.<\/li><li>Does the contract provide for waiver if notice is not provided?<\/li><li>How:&nbsp; Check the method for providing notice.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Does it require certified mail?<\/li><li>Is email sufficient?<\/li><li>If email is not proper notice, be sure to issue via the required method in addition to email.<\/li><li><strong>IF YOUR CUSTOMER DOES NOT ALLOW A TIME EXTENSION OR REJECTS YOUR NOTICE<\/strong>, respond and provide further notice that you consider the rejection a \u201cConstructive Acceleration\u201d and will be forced to incur overtime and other potential labor, material, and equipment costs.<\/li><\/ul>\n\n\n\n<p><strong>2.&nbsp; &nbsp; ENTITLEMENT<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Prepare and submit an entitlement packet that demonstrates your legal and factual entitlement to a change.<\/li><li><strong>Legal Entitlement:<\/strong>&nbsp;Review your contract for clauses that would allow for the recovery of delay and\/or acceleration costs, or look for common law options that may invalidate no-damages-for delay clauses such as the delay was \u201cbeyond the contemplation of the parties\u201d or if you were \u201c<strong>constructively<\/strong>&nbsp;accelerated\u201d.<\/li><li>Search your contract for the following terms:<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>\u201cExcusable Delay\u201d<\/li><li>Delay<\/li><li>God (Acts of God)<\/li><li>Epidemic<\/li><li>Quarantine<\/li><li>No Damages for Delay<\/li><li>\u201cTime Extension\u201d<\/li><li>\u201cSole Remedy\u201d<\/li><li>\u201cAccelerat\u201d \u2013 Acceleration damages are different from delay damages. If you request a time extension and are not granted the extension, you may have a claim for directed, or constructive acceleration.<sup>1<\/sup><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Factual Entitlement:<\/strong>&nbsp;Prepare a comparison demonstrating the impact on your baseline schedule from your planned schedule.<\/li><li>Supplement entitlement packet to substantiate the basis for the change order.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Track and document each day of delay through schedules, time sheets, daily reports, payroll documentation, or other project records.<\/li><li>Provide updated entitlement packet to support change order request as information is updated.<\/li><li>Save the entitlement packet and all supporting information where it can be easily located, updated, and shared.<\/li><\/ul>\n\n\n\n<p><strong>3.&nbsp; &nbsp; DAMAGES<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Track and document amount of actual costs incurred (to the extent possible).<\/li><li>Monetary Damages may include:<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Increased cost of materials<\/li><li>Increased cost of labor<\/li><li>Increased cost of equipment rental charges<\/li><li>Storage of materials<\/li><li>Additional supervision or field costs for the extended duration<\/li><li>Costs associated with de-mobilization and re-mobilization<\/li><li>Lost overhead and profit<\/li><li>Costs for extended general conditions, equipment costs, or rental costs<\/li><li>Additional bond or insurance premiums<\/li><li>Tax implications<\/li><li>Document and provide proof of&nbsp;ALL&nbsp;Expenses:<\/li><li><strong>Labor<\/strong>&nbsp;\u2013 Compare original estimated hours with actual hours delayed or spent in overtime.<\/li><li>Use daily time cards, certified payroll, daily reports, or a separate phase code in your job cost accounting to track actual labor delays and impacts.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Materials<\/strong>&nbsp;\u2013 Gather notices from suppliers relating to increased costs and delays. Gather the invoices and checks showing payment for any increased costs.<\/li><li><strong>Equipment<\/strong>&nbsp;\u2013 Gather proof of down-time hours through daily time cards, certified payroll, daily reports, or a separate phase code in your job cost accounting to track labor.<\/li><li>Be prepared to produce your rental agreement of proof of cost and payment for rental.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Overhead and Profit<\/strong>&nbsp;\u2013 Cite to contract section setting forth allowable OH&amp;P on changes.<\/li><li><strong>Storage, Subcontractor and Vendor Costs<\/strong>&nbsp;\u2013 Produce invoices and proof of payment for increased costs resulting from delays and acceleration.<\/li><\/ul>\n\n\n\n<p><strong>4.&nbsp; &nbsp; DON\u2019T WAIVE YOUR CLAIMS<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Check language in&nbsp;ALL&nbsp;lien waivers and&nbsp;ALL&nbsp;payment applications and&nbsp;ALL&nbsp;change orders to make sure (1) pending claims, (2) unpaid contract balances, and (3) unpaid retainage are not waived.<\/li><li>Be aware of potential releases included in online payment applications (Textura).<\/li><li>Confirm that contract does not provide that acceptance of payment is a waiver of all claims.<\/li><li>If it does, consider whether to accept payment.<\/li><li>Be aware claim deadlines.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Follow dispute resolution procedures in the contract (including time provisions).<\/li><li>Be aware of statute of limitations to file lawsuits.<\/li><li>Bond and lien claim deadlines.<\/li><\/ul>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><sup>1<\/sup>\u00a0A claim for constructive acceleration arises where (1) there is an excusable delay; (2) you properly request a time extension; (3) the request for extension was denied; (4) you were ordered to complete the project by the original completion date despite the excusable delay; and (5) you accelerated performance and incurred additional costs. A claim for directed acceleration arises where (1) you are ordered to accelerate (perform in a shorter period than originally allowed by the contract schedule); (2) the delays prompting the acceleration were excusable; and (3) you accelerated performance and incurred additional costs.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Denise Motta | Construction Law Blog In order to preserve your right to payment, you must satisfy the contractual requirements supporting a change order for the increased costs or time due to the delay. The key to the successful presentation of change order claims is educating your team on the following: 1.&nbsp; &nbsp; NOTICE Review&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/right-to-payment-following-nedd\/\">Continue reading <span class=\"screen-reader-text\">Protect Your Right To Payment By Following Nedd<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,358,11661],"class_list":["post-900117","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-change-order","tag-right-to-payment","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Protect Your Right To Payment By Following Nedd - Advise &amp; 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