Cumulative Impact Claims – What are they all about?: 12/23/09

When Does a Contractor Make a Cumulative Impact Claim?

When you are on a job that has way too many change orders, a significant number of change orders that you really never anticipated would arise, you might be thinking about the potential of a “cumulative impact” claim.

Do you, as the contractor for this multiple change order job, have impacted productivity (performance time and efficiency)?

Generally speaking, a “cumulative impact claim” arises in favor of a contractor when the following occur:

• A significantly large number of changes;
• The changes have impact on productivity (performance time and efficiency);
• The impact flows from the synergy of the number and scope of changes;
• The contractor was unable at time of pricing each change order or directive to foresee the ripple-type effect of the multiplicity of changes; and
• The contractor did not knowingly waive the right to assert cumulative impact claims when negotiating changes.

When productivity on your job is getting out of whack, make sure you are cognizant that a large number of change orders have been demonstrated in various studies to be responsible for the type of disruption that happens between two or more change orders and basic work.  This is different than the local disruption due to the singular change order under review for pricing.  Make sure you don’t systematically sign a change order without a reservation of rights clause.  You don’t want to waive your right to present a cumulative impact claim.  You will need to be able to demonstrate that impacts outside the specific change order were being reserved for future consideration and equitable adjustment.

-Gene Backus