Notice deadlines: the clock that nobody on the owner's side is watching

Almost every construction agreement has a notice clause. The contractor must tell the owner, in writing, within a stated number of days of discovering a condition that may lead to a change in cost or time. Miss the deadline and the claim may be waived. The clause exists to protect the owner.

On most CM at risk projects, nobody on the owner's side is counting the days. The contractor's project manager knows the clause. The owner's representative has read it once. The clock runs, expires, and the change order is negotiated as if it had never existed.

What a notice clause actually requires

Under most AIA A201 based general conditions, a party seeking an adjustment must give notice within a defined period after the event giving rise to the claim, often twenty one days, though the number varies and should be checked in your contract. Unforeseen conditions usually have a shorter, separate window, sometimes fourteen days, and sometimes a requirement that the condition be left undisturbed until observed.

Notice is not the same as a PCO. A PCO is a priced proposal. Notice is a written statement that a condition exists and that the contractor reserves the right to seek an adjustment. Many contractors send a short notice letter first and the PCO weeks later. Many others skip the letter and send the PCO, which may or may not count as notice depending on the contract wording and the timing.

Why the owner's side loses track

The owner's representative usually sees a change for the first time when the PCO arrives. By then the event that started the clock may be weeks old. The RFI was answered, the field found the condition, the superintendent mentioned it in a meeting, and none of that was tied to a date in the owner's register.

Procore and similar platforms log RFIs and change events on the contractor's side, with the contractor's dates. The owner is reading someone else's clock. If the owner does not record the date of discovery independently, the owner cannot say whether notice was timely.

The three dates that matter

Every change entry in the owner's register should carry the date the condition was first discovered or first raised, the date written notice was received, and the date the PCO arrived. With those three dates and the contract's notice period, the owner can see at a glance whether the clock was met. Without them, the question cannot be answered.

A fictional example of a missed clock

Take a fictional $48 million community college science building. During excavation the contractor hits a concrete slab from a demolished structure that was not on the survey. The superintendent notes it in the daily log on a Tuesday. The contractor keeps digging, removes the slab, and submits a PCO for $84,000 five weeks later.

The contract requires notice within fourteen days and asks that the condition be left undisturbed for observation. Neither happened. The owner's representative, seeing the PCO for the first time, negotiates it down to $71,000 and recommends approval. Nobody asks about the dates. The owner has a valid contract defense and never knows it.

The point is not that the owner should refuse to pay. Sometimes the right answer is to pay anyway, because the condition was real and the relationship matters. The point is that it should be a decision, made with the dates in view, not an oversight.

Turning the clause into a field

A notice clause only works if it is turned into something a register can check. That means a notice period stored once, per contract, and a discovery date stored on every change. The register can then compute the deadline and flag any entry where notice arrived after it, or where no notice date has been recorded at all.

That is what Costwitness does with the notice period from the owner's GMP contract. It does not decide whether to enforce the clause. It shows the owner which changes arrived late, so the owner can decide.

In the product

Change order register, GMP baseline, Monthly owner report. Free tool: Change Order Exposure, Pre-GMP Readiness Score.

Keep reading

Earlier: From PCO to executed change order: the lifecycle owners should track. Later: Unclassified change orders and the thirty day rule. All articles on change orders.