These revised contracts contain significant modifications, but two major changes involve the change-order process and insurance.
The new contracts strive to resolve conflict quickly. To expedite claim resolution, a new step has been added in which a requested change is first labeled as a change proposal, not a change. The contractor must support the request for extra costs and time within 15 days of the initial change proposal and the engineer must make an initial recommendation to the owner with 30 days. The engineer’s decision is final unless the owner or contractor appeal and the parties begin negotiating resolution.
Under the revised contract, contractors are required to obtain pollution liability coverage and they are required to cover contamination caused or worsened by them. The revised contracts also expand the list of causal events that must be covered by Builder’s Risk insurance and clarify that coverage must be maintained until the work is completed, eliminating the requirement for coverage until the final payment is made. Finally, the purchaser of the Builder’s Risk policy is responsible to pay the deductible and supplemental conditions to the contract can dictate whether the owner or contractor purchases the insurance.
I anticipate that the EJCDC will issues more information about the changes later this month and I’ll keep you updated on the changes.