FAQ.10

Question:

A contractor has submitted additional pricing for overtime work that was done prior to the issuance of substantial performance. It has been more than six months since this work was performed, so the question is, “Is there a time limit for submitting invoices of this nature?”

Short Answer:

In a CCDC 2 contract, for example, there is no specific time limit for submitting a claim for a contract change. General Condition GC 6.6 Claims For A Change In Contract Price states that “timely Notice in Writing” shall be given by the claiming party. In this particular case, if the “Client Supplementary Conditions” do not make specific reference to what “timely notice” constitutes, then there is no explicit time requirement, unless otherwise stated in other sections of the contract.

It is stated in the question that the overtime work took place before substantial performance and that more than six months have passed. There is no statement that the contract is deemed complete. Assuming that “timely notice” is not defined in the contract, some would consider that six months is not considered reasonable or timely notice. Obviously the contractor would argue otherwise.

Expanded Answer:

Usually, in CCDC 2 type contracts, General Condition GC 6.6 Claims For A Change In Contract Price is adjusted by providing finite time limits as to when a contractor is entitled to submit a claim. In some projects, it is also common to have a clause that will require the contractor to provide a “Final Release of Claims”, prior to providing final payment. This would be usually stated in an amended portion of General Condition GC 5.5 Final Payment, where an actual sample form may even be provided as part of an appendix to the General Conditions.

If there was ever any acknowledgement in writing by the owner or the consultant that overtime by a certain trade or general contractor was going to be considered, prior to the overtime work taking place, then the owner/consultant should review the claim and provide comments as to its validity or substantiation. If such communication took place in the form of verbal discussions, it may be more difficult to have the parties agree on the specifics or that overtime discussions did indeed take place.

In some instances, there might be a “good will” gesture by the owner, in entertaining a claim outside of the specific terms of the contract, for timely submission. When this is the case, the owner must be cautious to not set a precedent, especially if it occurs during the early stages of the work.

Note that determining what constitutes reasonable “timely notice” will likely differ from one project to another, depending upon project size, complexity, prior working relationships or other factors.”