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ABSTRACT:
Delay claims management in construction is the predominant key to the success of any project in today's litigious world. A successful delay claims management program includes organization expertise that covers the three basic claims scenarios: claims prevention, claims preparation, and claims defense. Each of these scenarios requires a skilled staff who are trained in the proper claims analysis and preparation techniques. In this article, the author discusses the three claims scenarios and presents a step-by-step approach to properly analyze a construction claim.
Key Words: claims, construction, contract documents, project management
In today's litigious world, when construction claims occur (and they will), claims analysis and preparation are the keys to the success of any project. A successful claims management program requires a skilled staff who are trained in the proper claims analysis techniques.
A claim is usually initiated only after a contractor perceives that he/she has been wronged in some way, either by losing money or productive time. For favorable settlements of construction disputes and/or claims, it is important for contractors and their surety and liability carriers to work together as a team in developing a comprehensive claims management program that covers the three basic claims scenarios:
claims prevention;
claims preparation; and
claims defense.
A claims prevention program begins with the careful preparation of contract documents. Incomplete drawings and ambiguous technical specifications are the most common causes of construction claims. Complete, clear, detailed, and specific contract documents, along with a comprehensive work plan that contains defined deliverables and milestones, are the basis of a claims prevention program. It is important to define alternatives up front, including any additional time or money that may be required if a milestone is not met. Avoiding claims through a properly established prevention program is less costly than the preparation and defense of claims.
To avoid construction delay claims, the work plan (developed during the planning phase) needs to be distributed to all concerned parties for their review and input. The assigned project manager should make the development of the construction schedule a team effort, and should include everyone from top management through supervisory and trade groups. An organization breakdown structure (OBS) should be used to define responsibilities. Offsite activities such as the production of design documents, review...