The role of the resident engineer, or owner’s representative, is typically defined as the field liaison between the owner and the contractor or contractors during construction. The resident engineer’s responsibility is to monitor the construction process so that the project is completed as designed based upon the owner’s plans and specifications. The resident engineer’s actual role, however, is much greater than this: the resident engineer is a manager of risk throughout the construction lifecycle. Allegations of fraud, misconduct, waste and abuse, and subsequent litigation in the construction industry are commonplace today; mitigating the risk presented by these allegations in addition to completing the project as originally designed is the most important role that a qualified, competent resident engineer must undertake. During the course of the job, a resident engineer must make a wide range of technical and nontechnical judgment decisions on a daily basis, often requiring him or her to be an arbitrator, an interpreter of specifications, and the final judge on many issues. Out of the hundreds of decisions the resident engineer will make over the course of a construction project, however, which ones stand to put the owner, the resident engineer’s firm, and/or the resident engineer themselves at great professional and financial risk? The purpose of this paper is to inform less-experienced resident engineers the importance of identifying, analyzing, and responding to specific project risks and also college and university faculty to stress the importance of teaching risk management topics in civil engineering courses and/or curricula. Resident engineers should be made aware of the owner’s rights contained in the contract audit clause, a provision typically found in the general conditions section of cost-reimbursable contracts. When evoked, the contract audit clause presents a powerful tool for the owner to access any and all documents pertaining to the project, including information from the contractor s , subcontractors, lower-tier subcontractors, and suppliers for a stipulated period of time after final payment to the contractor has been administered. While the astute resident engineer may realize early on that a troubled project will likely be audited after completion, other times finished projects are selected on a purely random basis based upon standard owner policy, or the requirement of a local city ordinance or government oversight committee. Either way, before beginning an assignment, the resident engineer must be made aware that his or her project could be audited. In addition to maintaining copious records of all transactions and events that occur during construction, the resident engineer needs to consider how seemingly normal ethical decisions could appear to be unethical from the eyes of an external third-party auditor. Another section of the general conditions all resident engineers should familiarize themselves with is liquidated damages LDs . These are inserted into some construction contracts to
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