It should come as no surprise that the number of construction claims continue to increase 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.
These are critical practices for reducing the probability of entering a dispute, but what should you be doing during project execution to be prepared in the event a dispute situation arises?
1. Archive Key Email Correspondence
With a significant amount of communication on a project occurring via email, it is important that you 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 well documented and issued to all participants. Be sure to document any noteworthy statements made by your client, and any client directives. Also, be sure to 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 made by legal counsel.
3. State the Facts in Project Reports
Many project managers feel pressured by clients not to draw 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 also. However, your job as a project manager is to ensure effective administration of the contract and protect the interest of your organization. This means 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 is easy to get caught up in recovering costs for the immediately known work that the secondary and long-term potential impacts are not considered or captured.
5. Maintain a Consistent Schedule Framework
Almost every major claim package comes complete with 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.
What other good practices do you put in place during project execution to be prepared for a dispute situation?
Learn more about Nexus PMG’s Construction Claim services.