Construction Claims Management
Construction projects are complex and uncertain requiring specialized designs, detailed planning, specifications, effective management, expert supervision and co-ordination, and high-risk construction methods. They have long construction periods, involve many parties, and require the integration of different work components. This complexity can lead to many kinds of conflicts between the parties involved which mostly converts into the Claims. Thus, claims are very common in construction industry even more so than any other industry.
How claims arise?
As damages occur due to failures of a party to fulfill their obligations as stated in a Contract, Construction claims arise. Generally, all contracts define the primary relationship among parties including general and special conditions, schedules, design, drawings, specifications etc.
Misunderstanding and misinterpretation of certain clauses of contract can lead to disputes and thus forming the basis of all claims in construction projects. Disagreements and changes in the contract that can cause claims include the following.
- Delay drawing and material supply
- Delay in starting work, completing work and site handling
- Delay in making payments
- Work done but not paid for
- Refund of deposit made for maintenance
- Extension of time limit and loss due to extra overheads on that account
- Losses incurred on account of idle machinery labor
- Losses incurred due to design errors or inadequate information related to design.
- Losses due to inadequate or incomplete specifications and change in work scope
- Losses due to inadequate bid information and its preparation
- Losses due to changes or inefficiency in construction plans and specifications
- Losses due to extra variations or items
- Losses due to not getting a completion grant by the engineer
- Losses due to engineer’s partiality or unrealistic expectations
- Losses due to poor management and administration at the site
- Losses due to ambiguities in contract and difference in its interpretation
- Losses due to Inadequate investigation of site,
- Losses due to unbalanced bidding,
- Losses due to coating very low rates in the Tender,
- Losses due to changes made without approval of owner
- Losses due to financial failure of the contractor,
- Losses due to technical inadequacy of the contractor,
- Losses due to Poor quality of construction work and use of wrong equipment,
- Losses due to Failure to follow authorized procedures,
- Losses due to inadequacies in Employers’ construction knowledge
- Losses due to Strikes by Workers,
- Losses due to Stoppage of Work by workers,
- Losses due to Failure of parties to cooperate with each other in the performance of the work.
- Losses due to Accidents,
- Losses due to Natural Calamity,
- Losses due to Increase in Material / Fuel Cost,
- Losses due to Court intervention,
- Losses due to Weather conditions,
- Losses due to Unforeseen ground conditions