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Construction Claims & Disputes | Potential Mistakes in Project Direction

Construction Claims & Disputes | Potential Mistakes in Project Direction

Several common mistakes to be aware of before managing your next project.
 

Project managers often find themselves working with a tight budget to deliver a project which they know possesses major risks of over expenditure. A lot can go wrong as these projects unfold, resulting in a need to make claims and make up for losses.

It’s important to be aware of potential mistakes when managing a project. Below are a few examples of common issues that can arise during a project.

There is no budget for a claims professional

The obvious consequence here would be having to either draft the claims in-house, which will add to the ever-increasing pressure on the project team, or appointing the cheapest third party available—regardless of how capable they are—to try and resolve the situation. Either way, this would lead to starting the project off on the wrong foot.

Not having contemporary records of the tender negotiation process

The tender seems to be a grey area, and you cannot retrieve the pricing assumptions and various tender iterations that may or may not have been issued to the client, i.e. you cannot establish your cost baseline position.

It is unlikely you would have undergone a claims readiness review before submitting your BAFO

This would have identified those areas where changes are likely to occur and, therefore, prepared you to grab the opportunity to maximize your revenue.

You have a baseline which took ages to get approved

This was never tested for claims readiness, and you find out that no matter how many changes you have been issued with to date, the dreaded float seems to absorb them all.

You have next to no method statements

Additionally, the ones in existence cannot be used to exhibit the methodology changes that led to increased operational costs. For the client, a hole in the ground is a hole in the ground, and if you cannot justify your original intent for digging it, how can you say there was a change?

Your planner did not issue regular program updates

Or perhaps worse, they accepted the changes dictated (formally or not) by the engineer just to stay away from the firing line.

Not having daily site reports

The budget was so tight you could not afford all the staff you would have wanted on site. How can you re-create your as-built program?

Many of the changes that came about (via client or engineer) are not yet formalized

The constant argument you get is, “This is part of your scope…”—the specifications are so wide it makes you pull your hair out.

The design issued by the engineer is incomplete

You are now left with spending un-budgeted amounts for design development, under the disguise of “as built drawings,” which the engineer insists upon.

Your supply chain is (rightfully) delaying delivery on account of delayed payments

Or maybe they’ve received no payments at all. After all, how can you continue to manage the financial Grand Canyon on the project and still pay your bills on time? This is where culpability and concurrency start to creep in, and there is little you can do to control them.

Conclusion

All of the above are common mistakes and problems, but with expert assistance you can deliver your claims and get that revenue recognized in the books by the end of the financial year, so you can have a chance to breathe and spend time with your loved ones.

Interested in learning more?

Contact resources@jsheld.com and we will connect you with a member of our team. You can also reach our main office at 516-621-2900.

 
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