Randall Essex, PE, GE is a tunnelling and risk management consultant with 48 years’ experience providing design, construction engineering, and disputes resolution services for approximately 200 underground projects. He holds two Master’ degrees from the U. of California, Berkeley and is a registered Professional Engineer in multiple states in the U.S.  His Australasia experience includes the Second Manapouri Tailrace Tunnel Project in New Zealand, the Grasberg Mine in New Guinea, the MTR Blue Line in Kuala Lumpur, and roadway tunnel projects in Sydney, Brisbane, Melbourne, and Adelaide.  Randy is a former Vice President and Executive Council member to the International Tunneling Association and is a member of the Dispute Resolution Board Foundation.  With a focus on the avoidance and resolution of construction disputes, he led the development of the American Society of Civil Engineers’ Manual of Practice 154 (2022) on Geotechnical Baseline Reports and two predecessor publications (1997, 2007), is a principal author of the UK’s 2023 CIRIA C807 Guideline for GBRs, and was an ITA reviewer of the 2019 FIDIC Emerald Book.  

The management of subsurface risks – GBR lessons learned and forgotten

 

For competitively bid projects, the financial risks associated with subsurface conditions may be the single greatest challenge the parties face.  The Employer wants a desired outcome for a fixed price.  The Contractor, who wants to stay in business, will seek financial relief if its tender costs are exceeded.  In the 1970s, US contractors were given site “data” as their sole basis for tendering underground projects.  They filed claims if the encountered conditions were more adverse than (their interpretation of) the data.  Contractors bid optimistically, and when claims were filed, litigation spiraled.  The law firms made lots of money, but the contracting parties suffered financially, reputationally, or both.  To stop the growing litigation trend, the US underground industry developed new contracting practices, one of which was a Geotechnical Baseline Report (GBR). 

 

The GBR provides for a fair contract.  It establishes baseline assumptions of certain anticipated physical and behavioural conditions that the parties use to price the work and help avoid and resolve disputes.  The Employer is responsible for compensating the Contractor for the actual conditions encountered, whether known at the time of tender or not.  Conversely, the Contractor is only entitled to additional compensation if it can demonstrate that encountered conditions were more adverse than those portrayed in the contract.    

 

The GBR baselines are the only contractual interpretations and apply to all bidders.  Provisional baselines can address “known unknowns” so that quantity variations are resolved through contract administration, not claims. More collaborative procurement models can facilitate a jointly produced GBR that reflects the actual means and methods as well as agreed risk allocations that are reflected in the tender price.

 

For the last 40 years, the speaker has served a primary role in the advancement of GBRs primarily in the US and has supported efforts to extend their use internationally.  Under the speaker’s leadership, three GBR guideline documents were published by the American Society of Civil Engineers in 1997, 2007, and 2022.  The US industry was engaged in manuscript reviews and workshops at each stage to ensure that recommendations reflected an industry consensus.  The committee members were adjusted through time to maximize the input of experience and lessons learned.

 

The history of the development of these guideline documents will be reviewed, focusing on what was broken, and what was needed to “fix it.”  Other topics will include: why and how GBRs have improved the management of subsurface construction risk; preferred methods for presenting physical and behavioural baselines; and key lessons learned and forgotten through time.  Excerpts from the 2022 publication will highlight the latest approaches that serve the purpose, objectives, and efficiency of a GBR, including: content organization; the importance of understanding project constraints and latitudes; page count recommendations; the skill sets required to properly author a GBR and why; and how a GBR is incorporated into different forms of contract around the world. Finally, a look to the future will be offered.