Question 1

Are there means in the MMCD contract to deal with Force Majeure?

Accepted Answer

QUESTION

I find no reference to deal with situations of Force Majeure in the MMCD. The recent explosion of the Enbridge pipeline has created a situation where asphalt suppliers were issued a statement of Force Majeure by Fortis BC. We have no mechanism to deal with this under our MMCD contracts. Are there other means to deal with this in the MMCD contract?

COMMENT

There is no "Force Majeure" as such within the standard GCs. In addition there is also no clause in the Supplemental GCs to cover this event. The only clause that might be relevant to paying more for materials (you would have to evaluate given the specific facts) is 13.4.1. But that is a very tough bar to exceed.

Question 2

What percentage of overhead and profit is acceptable?

Accepted Answer

QUESTION

If a deleted item is a lump sum unit is the lost overhead and profit still applied to only 85% or does it need to be applied to 100% on lump sum items?

COMMENT

The CA is the interpreter of the contract in the first instance. (GC3.6.1)

The User Guide (Volume 1) Section 4 page 22 of 43 article 5.4.3 discusses contractor costs, saying GC10.1.1 gives general guidance, but that each contractor may have different “payroll burdens”. This User Guide discussion is worth looking at in detail, as well as GC10.1.1. (The User Guide is available as an electronic document from MMCD)

GC1.76 defines the Variance Threshold Percentage and references ‘unit price items”. This suggests that lump sum items are exempt from calculations using a variance threshold. Again, the CA should provide a ruling on this aspect of the contract. GC7.0 Changes contains the procedure for a Change Order. Valuation of the Change is set out in GC9.2.1.

Failing agreement, Force Account is a default calculation.

Question 3

What compensation are we entitled to if a client chooses to cancel our contract before it is completed?

Accepted Answer

QUESTION

I have entered into a MMCD contract with a client in BC. We have run into multiple items that extended the length of our project and the client is very unhappy about the cost of it and have not granted our company an extended time line. There was talk about cancelling our contract before being able to complete it.

COMMENT

GC16.2 and GC16.4 refer.

Question 4

Fire Hazard Rating increased to Extreme: Unavoidable Delay or Owner's Responsibility Delay?

Accepted Answer

QUESTION

During construction, the Fire Hazard Rating was increased to Extreme, and the District Fire Chief and the GM of Engineering issued a policy to all project managers that during extreme fire rating, all construction work was required to end at 3pm and a fire watch was to be implemented for 2 hours afterwards. Said contractor complied, and has now invoiced the Owner for the costs, but no time extension. The costs include labour for 1 worker, but also standby time for 2 machines. We are wondering if this should be considered Unavoidable Delay or Owner's Responsibility delays?

COMMENT

GC13.1.1 refers

Question 5

How does MMCD address issues relating to contaminated material discovered during construction?

Accepted Answer

QUESTION

How does MMCD address issues relating to contaminated material discovered during construction? Should it be cost to be borne by contractor or extra pay by owner?

COMMENT

GC12.2 to GC12.5 refer

Question 6

What is included in the Overhead portion of a Force Account?

Accepted Answer

QUESTION

The contractor has currently claimed missing overhead associated with approved Changes as well as unavoidable delays. We had agreed at the beginning of the project to include overhead costs associated with Change Orders in a review at the end of the project if those costs materialized. I am now assessing their claim.

Force Account rates include direct costs, overhead and profit but what is typically included in the overhead portion of the Force Account? Does this overhead portion include office overhead?
What is considered applicable in overhead costs when the Contractor is working Force Account and gets 10% markup on materials/subcontractor work?

Generally speaking, where do site overheads typically fall? Items like portable toilets, trailer heating, electricity, street cleaning, fences, etc? Where do staff overheads fall like Quality Coordinators, Project Managers, etc? They are also an overhead project cost.

COMMENT

GC 1.3.8 refers

Question 7

What is a common approach in dealing with Utility caused delays? Is the Contractor entitled to monetary compensation or only a time extension?

Accepted Answer

QUESTION

The contractor is on hold since the BC Hydro design was delayed, which now also delayed the required Telus design. We determined that this is an Owner caused delay since the design work was the responsibility of the Owner, or rather the consultant. On that basis, the contractor is submitting daily delay claims, which are reasonable. Generally, the Owner and consultant did not cause the delay but a 3rd party, in this case BC Hydro. With that, is the contractor entitled to monetary compensation or only eligible for a time extension? Further, what is a common approach in dealing with Utility caused delays?

COMMENTS

GC13.3.1 sets out the approach for unavoidable delays.

Question 8

Is a Change Order required for Force Account?

Accepted Answer

The Contract Administrator is the interpreter of the Contract Documents, and the judge both parties to the Contract (GC 3.6.1)

However, there are references in the General Conditions of the MMCD to Extra Work

The Contractor is invited to perform Extra Work by issuing a Contemplated Change Order or Field Memo.(GC 8.1.1)

Change Orders and Field Memos are covered in GC 9.3

The Contractor may accept or decline the Extra Work (GC 8.1.2) in a timely fashion (GC 8.1.3)

GC 8.2.1 requires a written Change Order or Field Memo to approve Extra Work

GC 9.2.2 says that if the Contractor is authorized by the Contract Administrator to perform Extra Work, absent agreement on valuation and price, then the method of valuation shall be Force Account

“Force Account” in the MMCD General Conditions is covered in GC 10.0

Question 9

Developing specifications for different jurisdictions: Do you recommend that we develop our own supplementary specifications as a crown corporation?

Accepted Answer

QUESTION

We are looking to adopt the MMCD documents for civil works projects related to our developments [in] BC. Since we work in many different jurisdictions, is it recommended that we develop our own supplementary specifications as other fixed owners (e.g., municipalities) do?

COMMENT

There is potential for each local government to have locally based supplementary specifications that reflect their individual preference for infrastructure details like street lighting, sidewalk/bikeway configuration, etc. As a result, MMCD would recommend that you request a list of compatible supplementaries (if any) from each jurisdiction, before issuing tenders for public infrastructure. The basic MMCD specifications and standard drawings will be a good basis for the core requirements of a contract. Adding local supplementaries to a local contract will ensure compatibility.

Question 10

Can a project be completed without a Contract Administrator?

Accepted Answer

QUESTION

On a project under $200,000, can a project be completed without a contract administrator?

COMMENT

The owner can appoint a Contract Administrator from their staff, but since the CA is in an inherent

However, because the CA is in a decision-making role, one should be appointed, and they should consult the GCs for the duties and procedures that are embedded in MMCD contracts.