Top 5 Things You Should Do to Be Ready for a Construction Claim
The number of construction claims continues to rise as projects become more complex and contract structures increasingly intricate. Avoiding a potential claim situation is best achieved by implementing proper contract administration, ensuring the accuracy of contract documents and agreeing to a fair and appropriate amount of contractual risk. The following practices can also help you be prepared in the event a dispute situation arises.
1. Archive Key Email Correspondence
With a significant amount of project communication occurring via email, it’s important to flag and archive key emails to and from your clients that highlight issues and concerns, owner acknowledged delays, late engineering, delays in owner furnished equipment deliveries, etc. This will make it easier than searching through tens of thousands of emails.
2. Record & Issue Meeting Minutes
Each meeting with your client should be documented and issued to all participants. Be sure to document any noteworthy client statements and directives. You should also note the meeting date, time, location and participants. This will protect you from a “he said, she said” situation at the end of a project and potentially strengthen depositions conducted by legal counsel.
3. State the Facts in Project Reports
Many project managers feel pressured by clients to avoid drawing attention to issues and concerns in project reports for fear of alarming executive sponsors, lenders and key stakeholders. After all, client project team members have bosses too. However, your job as a project manager is to ensure effective administration of the contract and protect the interests of your organization. This includes documenting issues and concerns in each report and eliminating the “you never notified us” counter-argument.
4. Include Impact Assessments
Contractors are typically good about generating change orders in a timely manner, issuing RFI’s, managing access issues and identifying contractor interference. However, they often fail to take the time to assess, quantify and document the resulting impacts. It’s easy to get caught up in recovering costs for the immediately known work, but you should also make sure that the secondary and long-term potential impacts are considered or captured as well.
5. Maintain a Consistent Schedule Framework
Almost every major claim package includes a schedule analysis identifying areas where the client caused delays or productivity impacts. This is particularly important in a cumulative impact of change analysis. The strength of any schedule analysis rests in the ability to efficiently analyze the evolution of the schedule from the original contract baseline. By maintaining consistent activity codes, developing and maintaining a basis of schedule document, archiving your monthly native schedule files and tracking your critical path changes over time, you will be in a much better place to analyze any impacts.
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