Construction claims in capital projects are on the rise and they need to be managed like the many other project management processes. Those involved in analyzing, preparing, submitting, presenting, and negotiating construction claims understand that a key requirement of construction claims is the need to issue timely claim notices as set in the contract agreement. This requires adopting a proactive approach that will make the organization ready for submitting claim notices as soon as a claim event occurs.
In general, for a construction project, 39 most common claim events include events such as Acts of God, Acts of Government, Actual and Constructive Acceleration, Adverse Weather, Cardinal Change, Commercial Impracticability/ Performance, Commercial Impracticability/ Supply, Constructive Change, Defective Specifications, Delay of Approvals, Delayed Issuance of Change Orders, Delayed Notice to Proceed, Destruction of Work, Destruction of Materials, Differing Site Conditions, Early Completion Prevented, Impossibility of Performance, Improper Inspection, Inadequate Supervision, Inadequate Utilities, Interference, Labor Shortage, Lack of Access, Lack of Information or Decision, Lack of Permits, Lack of Right of Way, Late Drawings, Defective Material, Payments Not Made, Scheduling Difficulties, Stacking of Trades, Strikes, Nominated Subcontractor Delay, Superior Knowledge/ Misrepresentation, Supplier Delay, Suspension of Work/Delay among others.
The PMWeb Project Management Information System (PMIS) will be used to support the claims management requirement by implementing a process to capture the particulars of all those claim events as soon as they occur. PMWeb Custom Form Builder will be used to create an occurrence report form for each specific claim event. The form will usually have two parts, the first part will be used to capture the particulars of the occurred claim event as soon as it occurs. This will be usually completed by the field team member who will usually first notice the possible claim event. In addition, to complete the template, the project team member needs to add pictures, videos, and other documents that support the reported claim event. When this is completed, the project team member will submit the form which will automatically pick the predefined workflow steps to whom the form will be sent.
The same claim occurrence form will be received by the organization’s claim management or quantity surveyors team. Those could include the contracts and commercial team members who could be located at the project site or the company head office, within the same country or in another country, or the team members of a third-party consultant who is responsible for providing the claim management services for the project or the organization as an overall. Those qualified team members will review the form and complete the second part of the form which will be used to identify the follow-on actions to be taken to submit the formal claim notice as required by the contract agreement. The form workflow will transmit the completed claims occurrence form to the project team member who is responsible to issue the claim notice.
It should be noted that the claim occurrence report is an internal form and should never be shared with the project owner or any of his authorized representatives. The contractor will need to follow what is set in the contract agreement for providing the claim notice. The first approach is to have the claim notice letter predefined as one of the letter templates available in the PMWeb correspondence module. This will enable the contractor to formally issue the claim notice using the right contractual wording while complying with the project’s claim notification requirement as set in the contract agreement. Similar to all PMWeb modules, documents can be uploaded and attached to the Claim Notice letter template as well as relevant PMWeb records can be linked. In addition, a workflow will be assigned to formalize the steps for submitting, reviewing, and internally approving the Claim Notice before it is printed, signed, and formally submitted to the project owner or the authorized representative as set in the contract.
The other option is to use the PMWeb Potential Change Order module to issue the claim notice. Of course, the default name of the form will be changed to reflect this change in terminology. The output version of the form can be designed to match the required claim notice form as set in the project management plan. Similar to all PMWeb modules, documents can be uploaded and attached to the Potential Change form as well as relevant PMWeb records can be linked. In addition, a workflow will be assigned to formalize the steps for submitting, reviewing, and internally approving the Potential Change before it is printed, signed, and formally submitted to the project owner or the authorized representative as set in the contract.
Project Management Information System like PMWeb provides the contractor with the power for adopting a proactive claim notice process that not only helps the contractor to anticipate construction claims and be ready to respond to those claims when they occur, in the most agile and comprehensive approach but also provides a real-time monitor and report on all submitted construction claims and extension of time requests. In addition, having this proactive claim management solution implemented across the complete projects’ portfolio will provide senior management with a real-time solution to monitor, evaluate and report claim notices across all of their projects.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with more than 35-year service record providing project management and controls services to over 100 projects with a total value of over the US $5 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment and Shopping Malls, Oil and Gas Plants and Refineries, and Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training, and business development.
Bassam is a frequent speaker on topics relating to Project Management, Strategic Project Management, and Project Management Personal Skills. Over the past 35 years, he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe, and South America. He has written more than 250 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP), and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.