4 GBRs & Interptetative Reports_June 2011.ppt

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Geotechnical Baseline Reports,Interpretative Reports, Risk

Allocation/Risk CompensationMechanisms



Risk Allocation / Contract TypesOWNER TYPE OF CONTRACT CONTRACTOR

100%

0%

Turnkey (EPC)

Lump Sum (Fixed Price)

Lump Sum (Escalation)

Admeasurement

Target

Cost Reimbursable

Direct Labour

0%

100%



Risk Averse Clients Client wants ‘no’ risk

Contractor takes all risk and is expected to price allrisks.

Reliance on ‘unforeseen ground conditions’ Clause 12(or now FIDIC Clause 4.12)

Potentially adversarial for the ‘winning’ / successful’contractor if conditions different

Often bespoke conditions or amended standard form.

Issues Factual Data (plus requirement that Contractorprovides any additional for his purposes)



Risk Sharing Clients Issue GIR/GBR

Costs for different proportions of differing ground

Cost & Time for dealing with different ground. Conditions of Contract for unforeseen conditions

Dispute Review Board



Risk Taking Clients Acceptance of all risk and pay as you go

Price plus extra over for risk events.

Does anybody do this in civil engineering?



Requirements for UG WorksContract

Conditions of Contract

SpecificationsInsurance (Risk Sharing) Requirements

GDR – Geotechnical Data Report (Factual Report)

Ground Reference Conditions (Geotechnical

Interpretative Report – GIR)GBR – Geotechnical Baseline Report / Geotechnical

Baseline Conditions

Risk Register (Insurance is not a mitigation)



Practices GBR

GIR

GDR Risk Compensation

Dispute Resolution

Courts



Insurance Requirements A GBR/GIR is an insurance requirement and without

such a document insurance premiums may be higheror a project may require self insurance.

A GBR is required to provide a ‘realistic’ interpretationof the anticipated subsurface conditions. “Realistic”?

The GBR includes for the mean but also the expectedrange.

If risks are less than baseline or consistent withbaseline they belong to the Contractor

If risks are more adverse the Owner/ Client accepts therisks and compensates the Contractor accordingly.



1997 “Yellow Book” / 2007 “Gold

Book

http://books.google.com/books?id=OwSatweTeN4C&source=gbs_similarbooks

http://books.google.com/books?id=H3j_3yW-urwC&printsec=frontcover&source=gbs_ge_summary_r&cad=0



Expert Views Although a consistent and fair view is required

Owner’s are conservative. Risk is ‘overpriced’ anddows not need to be. Contingency ‘eaten up’



Conservatism / Protectionism GBRs do not represent the ground. Ground is not

described realistically.



All ‘claims’ are settled so no legal ruling on GBR. If asystem isn’t tested how do ‘we’ know if it works.



If GBR is not ‘realistic’ and does not really reflect theground this is akin to ‘gambling’



Unrealistic description of range of conditions and what may be expected resulting in ‘risk shifting’ andContractor taking risk anyway.



Is the GBR a legal document?



The GBR should be ‘straight and ‘honest’. If the GBR is wrong somebody eventually pays.



& a HK perspective



Ranges of Values



Baseline Conditions??



Results



Reallocation of Risk



Risk Compensation Payment for differing Ground Conditions

Time Compensation

Payment for differing Water Conditions



Other Mechanisms



Payment (Remeasurement) Measurement and payment for tunnel excavation

will be made according to the excavation classes whereset out in the Bill of Quantities.

The estimated quantities for each excavation classgiven in the Bill of Quantities are not ...an accurateindication of the quantity of work...the predictedand the actual length of each excavation class maydiffer due to geological conditions encountered in thecourse of Works.



Extraordinary Geological

Occurrence (EGO) Only exceptionally adverse and unexpected geological

conditions and/or an unexpected influx of water severely inexcess of the capacity of the facilities envisaged in thisSpecification, ...leaving no possibility of further advance by the

construction methods reasonably provided for by the Contract... No EGO will be acknowledged or accepted in the rear zones

If an EGO occurs, the Contractor shall without delay propose amethod ...to overcome the situation and undertake, with theapproval of the Engineer, all the necessary steps to expeditiouslyresume the tunnel excavation

The EGO provisions do not in any way release theContractor from his responsibility to excavate with caution



& Compensation (Time / Cost) If an EGO occurs, the approved measures shall be

reimbursed according to the relevant unit pricesand other price determination procedures provided for

in the Contract.

The Contractor’s programme shall includeallowances for EGO, and shall advise the allowancein the Schedule. The Contractor shall have no claimto an extension of time due to an EGO



Clause 12 / Clause 4.12

“Experienced Contractor”



4.12 In this Sub-Clause, “physical conditions” means natural physical

conditions and manmade and other physical obstructions andpollutants, which the Contractor encounters at the Site whenexecuting the Works, including sub-surface and hydrological

conditions but excluding climatic conditions. If the Contractor encounters adverse physical conditions which

he considers to have been Unforeseeable, the Contractorshall give notice to the Engineer as soon as practicable.

This notice shall describe the physical conditions, so that theycan be inspected by the Engineer, and shall set out the reasons

why the Contractor considers them to be Unforeseeable.The Contractor shall continue executing the Works



LTA CoC (Current?) Adverse Physical Conditions 12.2 If, during the execution of the Works, the Contractor

shall encounter physical conditions, other than weatherconditions and effects due to weather conditions on theSite, or artificial obstructions, which conditions orobstructions could not have been reasonably foreseen byan experienced contractor, the Contractor shallforthwith give written notice thereof to the Engineer and if,in the opinion of the Engineer, such conditions or

artificial obstructions could not have been reasonablyforeseen by an experienced contractor, then the Engineermay grant such time extension as is reasonable ...such sumsas may be reasonable...



Information Geotechnical Data

11.2 The Factual Geotechnical Report is not intended torepresent to the Contractor the nature of the soil

conditions he will encounter in executing the Works. Theuse of the information and the interpretation of it isentirely the Contractor’s responsibility. The Authoritymakes no warranty for the accuracy or otherwise of the

Report and shall not be responsible for any loss, expense ordamage suffered by the Contractor arising from the resultsof geotechnical data made available to the Contractor.



Private Developer



Baseline



Rates



Time



Water



Recent Example 2000 holes

Several months of study

12 boreholes Bid in 28 days



Report, Ground Evaluation Process Based on data and evaluation

Typically the result of several disciplines

Is it always done? and how much is passed on to ‘savetime’ ? Consequences of passing on the chore?



OUTPUTS

PROCESS

INPUTS

SITE INVESTIGATION

EXECUTION

SITE INVESTIGATION

PROCUREMENT

SITE INVESTIGATION

DESIGN

DESIGN / CONSTRUCTION

REQUIREMENTS

GEOTECHNICAL

INTERPRETATIVE REPORT

GEOTECHNICAL BASELINE

REPORT

INTERPRETATION

DESIGNCONSIDERATIONS

CONSTRUCTION / RISKCONSIDERATIONS

SITE INVESTIGATION DATA



COST

Risk propotional to (1/data)

Cost of additiaonl data

$ opt

Data opt LEVEL OF DATA



Report Dependencies The GBR and GIR are the end product of a process.

The quality of both depend on the initial requirementsdefinition and site investigations.

This is often not a ‘one stop shop’.

What if geological / geotechnical data/information isnot realised?

In any event somebody will do an interpretation. The owner, the owner’s consultant, the contractor, the

investigating team.



Moving On & Quality What ever mechanism for risk allocation is used how

is ‘contract certainty’ maintained.

ISO 9000 requires ‘continuing improvement’ but a‘baseline’ is fixed.



“Changes” What if GBR is wrong / inappropriate due todata/draughting?

How is an EGO incorporated if it happens more than once?

What are the consequences if the ground ‘blows the budget’

Changes to baselines and contractual / governanceimplications

Cost / Contract Certainty – ‘wishful thinking’ or ‘starkreality’, ‘comfort factor’, ‘hope’.



Summary Geotechnical baselines

Geotechnical Interpretative reports

Contact Conditions “up front” Payment mechanisms

Being ‘straight’ about ground conditions

Time for process no matter what mechanism is used

What about changing the contract?

4 GBRs & Interptetative Reports_June 2011.ppt

Documents

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