Question: We are building a shopping mall complex that consists of a large "anchor tenant" store, 3 adjacent "strip mall" type storefronts, and a free-standing convenience store at the end of the property. Our base contract scope of work includes all reinforced concrete foundations, slabs on grade, stub walls, and miscellaneous concrete curbs and mechanical pads that are shown within each building footprint. All follow-on concrete parking lot and landscape work is by others.
The Owner recently issued a VE (value engineering) Bulletin that deleted the free-standing convenience store portion of our contract scope. We prepared a detailed cost estimate and submitted that to the Owner in a deductive change order proposal. The Owner rejected our proposal because we did not credit back any of the overhead and profit associated with the deleted portion of the work. (Our base bid was a rip-and-read lump sum. We did not break out the individual costs of each structure in our number; either on the bid form or even in our in-house estimate spreadsheets).
We are second-generation concrete contractors and have never credited back overhead and profit for any deductive changes on any of our past projects. At a recent job site meeting with the architect, we were told the Owner is disappointed because he thought this whole VE exercise was going to result in some huge financial windfall. Is the Owner correct in demanding we credit back our overhead and profit?
Answer: It depends. If your project construction documents contain AIA (American Institute of Architects) document AIA 201-17 General Conditions of the Contract for Construction, then that is where the ground rules for additive and deductive change orders are likely to be found. We note here that the protocols for pricing deductive changes could have appeared in any number of places prior to bid time, e.g. in an Instruction to Bidders, in Supplemental Conditions, in the Division 1 front-end specifications, and so on. The key now is to find out where such protocols are written in the actual contract that you signed. In other words, contract changes, modifications, carve-outs and so on often are slipped into the final contract prepared by the Owner between bid time and the day you sign on the dotted line.
As an example, examine a copy of your signed contract. If it contains AIA 201-17, refer to Article 7 titled "Changes in the Work". Once you have found Article 7, look for section 7.3.8., which typically covers deductive changes to the work scope. More on this below.
This exact topic was explored when the ASCC Technical Division was preparing Position Statement #45 "Managing Concrete Projects: Concrete/Steel Price and Delivery Volatility Risks"--which became necessary after ASCC members reported problems getting fairly compensated for costs incurred associated with the COVID-19 pandemic, supply chain disruptions, and other problems that the concrete contractor cannot possibly control.
What we found was consistent with your experience over the years with deductive change orders and was stated as follows in Position Statement #45: "In accordance with AIA Document 201-17, § 7.3.8, it is customary for deductive changes to be the actual net cost, not including overhead and profit". This was based on AIA 201-17 section 7.3.8, which appears in unaltered (e.g. template default aka "customary") form as follows below:
We all should remember that when preparing the front-end construction contract documents, the Owner starts out with a set of base document templates and is then free to make any modifications, additions, carve-outs and so on from there. This is true not only with contract General Conditions, but with the AIA Masterspec templates for the project specifications as well. In theory, all construction front-end documents should be custom-tailored to each project.
Closer to home, the concrete industry specifications that typically apply to our work on a routine basis (e.g. ACI 117-10 Specification for Tolerances for Concrete Construction and Materials and ACI 301-20 Specifications for Concrete Construction, for example) contain Mandatory and Optional Requirement Checklists at the back end of each document so the specification writers can tailor these documents to suit each project on a custom, case-by-case basis.
Here's one example of risk transfer we found from another project where the Owner modified the default AIA 201-17 § 7.3.8 such that the concrete contractor was in fact obligated to rebate the overhead and profit dollars in deductive change order proposal credit amounts:
(N.B.: When considering the "actual net cost only" price rebate clause, we should recognize several key items, including any contractor lost opportunity costs and the timing of the Bulletin itself e.g. was the change issued a week after contract award...or was it issued a week before work on the deducted scope was supposed to start? What costs were incurred reviewing and pricing the deduct? Have any concrete trial batch costs been incurred before the Bulletin was issued? Have any long-lead items been ordered? Have any shop drawings been prepared? After all, "overhead" is simply shorthand for "the cost of doing business", some costs of which were likely incurred by the time the Bulletin was issued on your project. So--instead of reaping a windfall--the Owner may just discover that deleting the work turns out to be more expensive than keeping it in.)
The key takeaway here is that the concrete contractor's legal counsel should perform thorough pre-bid and post-bid, line-by-line reviews of all front-end construction contract documents to flush out any clause modifications or carve-out booby traps that might have been slipped in to transfer risk to the contractor. By the same token, the contractor's pre-bid estimating team should be reviewing every line in the Division 3 specifications, as well as those in the playbooks of all adjacent follow-on trades. You might even try and contact some of the other subcontractors on the project to see how they handled their deductive change proposals as well.
Insider's note: The AGC (Associated General Contractors of America) has published quite a comprehensive review and commentary on AIA 201-17 that explores several modifications, carve-outs, and risk-shifting booby traps that the AGC recommends be reviewed before contractors bid on projects that contain AIA 201-17. A link to the AGC document (there is no charge) titled "AGC's Commentary on the AIA A201 General terms and Conditions Document, 2017" is here:
AGC Commentary on the AIA 201 General Terms and Conditions Document
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Question: We are working on a project that features elevator core shear walls that are infested with large reinforcing steel bars--#11 and #18 bar sizes are the typical vertical bar marks. There are embedded steel weld plates located near the top of the walls intended to carry the future follow-on structural steel and metal deck floor system. In many cases, our field crew is having to bend the embed plate shear studs out of the way of the reinforcing steel bars in order to get the wall gang forms set in their proper location.
The project inspector is saying that the bent embed studs constitute a structural problem and is making us replace any embed plates that feature bent studs. As a result, we are getting backcharged by the embed fabricator for detailer overtime, fabrication shop overtime and trucking overtime costs incurred to get the replacement plates delivered to the job site in time for us to make our scheduled concrete placements. Our crews are then having to work overtime to replace the plates and get the wall panels set into place. It is not feasible for us to coordinate the work and install the reinforcing steel curtains in such a way as to outsmart the conflict between the studs and the steel bars. We cannot tie the plates into place on the outside wall face rebar curtains before setting the wall forms due to the large size of the plates--the plates must be bolted to the wall form panels. Is the inspector correct? Are the bent embed shear studs really a structural problem? We have searched our ACI reference library and cannot find any words of encouragement therein. Please advise.
Answer: It depends. To solve this one, we need to have a look in the other guy's playbook for guidance. In this case, we are talking about documents published by AISC (American Institute of Steel Construction) and AWS (American Welding Society). As we will see, the bending of steel shear studs fastened to the parent steel plates (or beam top flanges) via welding is simply a matter of degrees.
(N.B.: Part of the answer can be found by watching the metal deck crew install their work and then watching the inspector who follows right behind them. The next time you are on a SOMD (slab on metal deck) job, try to get up on the deck when the metal decking sheets are being attached to the top flanges of the structural steel floor beams with a weld gun. After the studs are shot through the decking onto the parent base metal (e.g. the top steel beam flanges), watch what the inspector does next).
According to AWS D1.1/D1.1M:2020 Structural Welding Code-Steel, the inspector first performs a visual inspection to confirm there has been a successful 360-degreee weld flash (fillet). Then, according to section 9.8.1 Visual Inspection, "if a visual inspection reveals any stud that does not show a full 360-degree flash or any stud that has been repaired by welding, such stud shall be bent to an angle of approximately 15 degrees from its original axis".
If you watch the inspectors evaluating the shear stud installation in sections of newly installed sheets of metal decking, you will likely see them using a 2-lb. hammer as their inspection instrument of choice to augment the visual inspection. The so-called "ring test" involves smacking the stud with the hammer and listening to make sure the result is the sweet sound of ringing steel. If the stud fails the ring test, then the hammer is typically then used to bend the stud to the required 15-degree angle as described above (sometimes the inspector bends the stud with a length of pipe).
AWS D1.1 section 9.8.3 Bent Stud Acceptance Criteria then tells us "The bent shear connectors...to be embedded in concrete...that show no signs of failure shall be acceptable for use and left in the bent position."
So--for shear studs--the magic number for acceptance without engineering review appears to be bends up to 15 degrees from the original axis. If your field crew is bending the studs more than 15 degrees, all may not be lost, since AWS D1.1 section 9.6.7.1 Bend Test describes prequalification testing whereby studs are bent between 30 to 90 degrees from their original axis in the shop. Your LDP should review this and advise if any studs bent more than 15 degrees constitute a structural problem. If the LDP determines the bent studs are a problem, it may be possible for additional studs to be welded to the embed plates to supplement the studs that were bent instead of trashing the entire embed plate assembly.
In similar fashion, the AISC Design Guide 23 Constructability of Structural Steel Buildings indicates that mislocated steel anchor rods can be field-bent to an offset of up to 15 degrees to correct "slight mislocations" as indicated below in Fig. 7-6:
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Question: We are trying to find a past ASCC VOICE column that discussed reinforcing steel at elevated temperatures. We found a recent VOICE article (Guidance #27, March 2024) that featured launch pad concrete, refractory concrete, and exploding concrete, but that's not the one we need. We are looking for the one that talked about the effectiveness of concrete cover. Please advise.
Answer: You are referring to an ASCC Hotline social media post about 16 months ago regarding fire testing and concrete cover. The source of that post was an excerpt from the ASTM Blue Bible, Chapter 25. To oversimplify enormously, if we subject a concrete wall placed with normal weight concrete (NWC), for example, to an ASTM standard fire test (ASTM E119-20, Standard Test Methods for Fire Tests of Building Construction and Materials), then--after 1 hour--the rebar with 1 inch of concrete cover on the applied heat side will reach a temperature of 800 degrees F. The rebar with 2 inches of concrete cover will reach a temperature of 400 degrees F. The rebar with 3 inches of cover--after 1 hour--will be hardly warm to the touch.
Since we are on the subject of hot rebar, ASCC Hotline callers know from our close study of ACI 301-20 Specifications for Concrete Construction that section 5.3.2.1(c) tells us "If temperature of reinforcement, embedments, or forms is greater than 120 degrees F, use a fine mist of water to moisten and cool hot surfaces. Remove standing water before placing concrete".
So the question then becomes "how hot would the ambient air temperature have to be in order for rebar bundles in direct sunlight to attain the temperature of 120 degrees F that causes the ACI 301 water misting to kick in? "
It might be possible for us to back into that answer, based on a derailment risk assessment study performed in Wyoming for the railroad industry. In that case, the "risk" part involved the possibility of the buckling of the steel railroad tracks boldly exposed to the sun. What the researchers found was that an ambient temperature of 103 degrees F resulted in a maximum steel rail temperature of 133 degrees F--a bump of 30 degrees F above ambient. So if the ambient temperature is 90 degrees F, would that then result in a rebar bundle reaching the ACI 301 maximum temperature of 120 degrees F before water misting is required?
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