Geotechnical Baseline Reports, Interpretative R eports, Risk Allocation/Risk Compensation Mechanisms
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Geotechnical Baseline Reports,Interpretative Reports, Risk
Allocation/Risk CompensationMechanisms
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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%
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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)
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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
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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?
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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)
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Practices GBR
GIR
GDR Risk Compensation
Dispute Resolution
Courts
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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.
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1997 “Yellow Book” / 2007 “Gold
Book
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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’
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Conservatism / Protectionism GBRs do not represent the ground. Ground is not
described realistically.
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All ‘claims’ are settled so no legal ruling on GBR. If asystem isn’t tested how do ‘we’ know if it works.
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If GBR is not ‘realistic’ and does not really reflect theground this is akin to ‘gambling’
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Unrealistic description of range of conditions and what may be expected resulting in ‘risk shifting’ andContractor taking risk anyway.
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Is the GBR a legal document?
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The GBR should be ‘straight and ‘honest’. If the GBR is wrong somebody eventually pays.
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& a HK perspective
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Ranges of Values
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Baseline Conditions??
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Results
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Reallocation of Risk
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Risk Compensation Payment for differing Ground Conditions
Time Compensation
Payment for differing Water Conditions
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Other Mechanisms
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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.
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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
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& 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
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Clause 12 / Clause 4.12
“Experienced Contractor”
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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
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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...
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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.
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Private Developer
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Baseline
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Rates
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Time
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Water
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Recent Example 2000 holes
Several months of study
12 boreholes Bid in 28 days
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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?
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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
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COST
Risk propotional to (1/data)
Cost of additiaonl data
$ opt
Data opt LEVEL OF DATA
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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.
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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.
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“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’.
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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?