CLAIMS AVOIDANCE ON CONSTRUCTION PROJECTS

Here are ten recommendations to help you avert disputes, claims and litigation on your construction projects.

1. Hire experienced design professionals.

Demand complete and adequate contract plans and specifications. Require the designer or independent consultant to perform a constructability review of the plans and specifications before receiving contractor bids; errors, omissions and conflicts in the plans and specifications are one of the leading causes of disputes, change orders and claims later on.

2. Provide the designers sufficient time and budget.

Give the design team enough time to consider existing site conditions and all aspects of the project's design, so that changes and discrepancies can be minimized along the way. Also provide an adequate budget to allow the designer to perform the required construction-phase services. (Fast-track projects should include additional allocations for extra design staff to work out problems and conflicts during the construction phase.)

3. Provide competent, experienced field personnel.

They will deal with the general contractor, resolving problems quickly and completely as they arise. Don't postpone dealing with problems and delays until the end of the project; keep the lines of communication open!

4. Require the use of CPM scheduling techniques.

Demand that the contractor (as part of the contract) monitor the schedule and update it on a regular basis - usually monthly.

5. Promptly review shop drawings and submittals.

Prioritize the review of shop drawings and submittals based on the construction schedule and on site field needs. Respond promptly to the contractor's requests for information during construction.

6. Maintain thorough project records.

Document all discussions, directives and changes in writing, and then share that written documentation with the appropriate people.

7. Make sure that everyone understands the contractual notice provisions.

Owners, contractors, designers, etc., must be aware of the notice provisions in contract documents, including how, when and to whom notice of problems must be given. When notice is given, immediately begin to accumulate and organize claim "issue files" with the facts and documentation that may be necessary to resolve disputes later on.

8. Implement job-site procedures to review claims and disputes that cannot be resolved during the normal course of project management.

Non-binding dispute procedures, such as the use of mediation or dispute-review panels, can be effective in resolving claims without resorting to litigation.

9. Cost figures included in claims and change orders should be carefully prepared and reviewed.

A causal link between claim issues and their impact on the project's cost and schedule must be established through discussions and negotiations.

10. Prepare for every negotiation as if it's the last.

Dispute resolution often fails because one of the parties is unprepared or has not demonstrated the proof required to support claim entitlement or damages. If dispute resolution becomes necessary, all parties must be prepared, being aware of the exact circumstances, contract specifications and conditions that led to the problem.

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