DBIA Dispute Resolution and Claims Management 4 — Questions and Answers
Question 1: In a design-build contract, a 'differing site condition' claim is most commonly triggered when:
- The owner changes the project scope after NTP
- Subsurface conditions materially differ from those indicated in contract documents (Correct answer)
- The design-builder requests a value engineering change
- Weather delays exceed the contract's allowable threshold
Correct answer: Subsurface conditions materially differ from those indicated in contract documents
A differing site condition (Type I) arises when actual subsurface conditions materially differ from those represented in the contract documents.
Question 2: Which document format is most effective when a design-builder submits a formal Request for Equitable Adjustment (REA) to the owner?
- A short email summarizing the issue with a request for a meeting
- A verbal request during a progress meeting, followed by meeting minutes
- A detailed written submission with cost breakdown, schedule impact, and supporting documentation (Correct answer)
- A notice of intent to file a claim submitted to the surety
Correct answer: A detailed written submission with cost breakdown, schedule impact, and supporting documentation
An REA should be a formal, documented submission that includes cost impact, schedule analysis, and supporting records to substantiate the adjustment requested.
Question 3: Under DBIA standard contract forms, the 'notice of claim' provision primarily serves to:
- Automatically entitle the design-builder to additional compensation
- Preserve the owner's right to withhold retainage
- Alert the owner to investigate the issue while contemporaneous records are still available (Correct answer)
- Trigger the surety's performance bond obligation
Correct answer: Alert the owner to investigate the issue while contemporaneous records are still available
Timely notice of claim allows the owner to investigate and mitigate the situation while evidence and conditions are still fresh.
Question 4: A design-builder encounters an undisclosed utility line that causes a two-week delay. The FIRST action the design-builder should take is:
- File for arbitration immediately
- Stop all work and await owner direction
- Provide written notice to the owner within the contract's specified timeframe (Correct answer)
- Hire an independent utility locator and bill the owner
Correct answer: Provide written notice to the owner within the contract's specified timeframe
Most contracts require written notice of a claim-generating event within a specified period; failing to provide timely notice can forfeit the right to recover.
Question 5: The 'total cost' method of calculating damages is generally disfavored in design-build disputes because:
- It requires use of a certified public accountant
- It assumes all cost overruns are the owner's fault, which courts find unreliable (Correct answer)
- It is prohibited under DBIA standard contract forms
- It cannot account for schedule acceleration costs
Correct answer: It assumes all cost overruns are the owner's fault, which courts find unreliable
The total cost method is disfavored because it assumes the entire cost overrun is caused by the owner's actions, ignoring the design-builder's own inefficiencies or errors.
Question 6: In design-build arbitration, 'consolidation' of related claims from multiple parties (e.g., owner, DB, subcontractors) is significant because it:
- Automatically converts the dispute to litigation
- Eliminates the need for discovery
- Avoids inconsistent awards and reduces duplicative proceedings (Correct answer)
- Transfers liability to the general contractor
Correct answer: Avoids inconsistent awards and reduces duplicative proceedings
Consolidation allows all related claims to be heard together, preventing inconsistent rulings and streamlining what would otherwise be parallel proceedings.
Question 7: Which type of design-build project delivery risk is BEST addressed through a Dispute Review Board (DRB) established at project inception?
- Design errors discovered after substantial completion
- Recurring disagreements on scope, schedule, and compensation during construction (Correct answer)
- Post-completion warranty claims by the owner
- Subcontractor default on bonded work packages
Correct answer: Recurring disagreements on scope, schedule, and compensation during construction
DRBs are most effective for resolving ongoing disputes during construction before they escalate, as the board gains project familiarity over time.
DBIA Dispute Resolution and Claims Management 4
In a design-build contract, a 'differing site condition' claim is most commonly triggered when: