Construction Contract Notice Letters

Background

Most construction contracts require written notice for changes, differing site conditions, extra work, or other events which may affect the contractor’s time and cost of performance. The process of giving “notice” is vital to triggering the contract mechanisms that allow the contractor to pursue additional time and cost and to reserve its rights to recover for any unforeseen but related impacts that may later arise.

As discussed in a recent Long International article, The Importance and Value of “Notice” Provisions in Construction Contracts,¹ failure to provide proper and timely notice may limit the contractor’s ability to recover its increased costs of performance. Some of the key factors required by standard contract form notice provisions are as follows:

1. Notice must be in writing;
2. Written notice must be served to a specific designated party;
3. Notice must be given as soon as the notifying party becomes aware of the circumstances of an impact event or condition;
4. Notice must be given within a defined time period;
5. Notice for time and additional cost impacts must be given if both are deemed involved;
6. Details of the actual or anticipated effects of any impacts, if practicable;
7. Estimates of the extent of any time and cost impact;
8. Supporting documentation must be submitted within a specified time frame (possible second notice period);
9. Specific schedule and work activities affected; and
10. Cause, effect, and length.

All of the contractually required information associated with a notice, as listed above, may not be immediately available when the event triggering a requirement for a notice occurs. A timely notice should still be provided regarding the event or problem with an indication that more detailed information will be provided at a later date.

To facilitate their preparation, sample notice letters are provided for the following events:

• Constructive change for additional work
• Nonpayment
• Directed acceleration
• Access delay
• Late or defective owner-furnished equipment or materials
• Differing site conditions
• Change directive
• Claim for extras in advance of work being performed
• Claim for extras after work was performed
• Request for extension of time and additional compensation
• Multiple problems
• Noncompliance notice to subcontractor
• Change order proposal transmittal letter
• Change order execution transmittal letter
• Request for time extension due to severe weather
• Request for CPM data if owner or construction manager is maintaining the schedule

. . . Download PDF article to view sample notice letters.

Should you have any questions regarding the issue of notice or the sample letters below, please contact Richard J. Long at (303) 972-2443

Long International provides expert claims analysis, dispute resolution, and project management services to the Process Plant Engineering and Construction industry worldwide. Our primary focus is on petroleum refining, petrochemical, chemical, oil and gas production, mining/mineral processing, power, cogeneration, and other process plant and industrial projects. We also have extensive experience in hospital, commercial and industrial building, pipeline, wastewater, highway and transit, heavy civil, microchip manufacturing, and airport projects.

Richard J. Long, P.E., is Founder and CEO of Long International, Inc. Mr. Long has over 40 years of U.S. and international engineering, construction, and management consulting experience involving construction contract disputes analysis and resolution, arbitration and litigation support and expert testimony, project management, engineering and construction management, cost and schedule control, and process engineering. As an internationally recognized expert in the analysis and resolution of complex construction disputes for over 30 years, Mr. Long has served as the lead expert on over 300 projects having claims ranging in size from US $100,000 to over US $2 billion. He has presented and published numerous articles on the subjects of claims analysis, entitlement issues, CPM schedule and damages analyses, and claims prevention. Mr. Long earned a B.S. in Chemical Engineering from the University of Pittsburgh in 1970 and an M.S. in Chemical and Petroleum Refining Engineering from the Colorado School of Mines in 1974.

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