Construction Contract Claims Avoidance and Resolution

Construction Contract Claims Avoidance and Resolution

The objective of this presentation is to demonstrate that problem free (minimal) project delivery is possible through real example and a review of project management techniques. In reviewing Public Works statistics vis a vis the effort in time and money to defend against claims it is certainly more prudent to put the effort into contract administration as a preventative effort rather than engaging in a non-productive rearguard action. Statistics developed by the University of Texas in Houston USA. Indicate that 20% of all project funds are expended in legal action. I suspect this cost is incurred mainly in the area of pursuing claims and disputes through the court process.

As defined within the contract and as practised on site the role of the parties is confrontational. Add to this the practise of Adownloading@ responsibility, through the use of exculpatory clauses, for effective project delivery to the company least able to deal with the error, omission or oversight and you have a recipe for legal conflict.

As you will note from the course calendar, the focus is on the various contract participants’ rights and responsibilities in the project implementation process, claims resolution, as well as how to present your arguments both pro and con in an effort to avoid or to minimize the impact of the potential claim on the project.

Objective

To familiarize participants with the various contract claim avoidance techniques from the initial contract selection that will provide the best chance for their organization to successfully complete the desired project as well as the steps along the project delivery process where the incidence of claims can be minimized

Objective

To familiarize participants with the various contract claim avoidance techniques from the initial contract selection that will provide the best chance for their organization to successfully complete the desired project as well as the steps along the project delivery process where the incidence of claims can be minimized

Target Audience

This seminar is relevant to all personnel of organizations active in procuring or delivering construction services, including private and public owners, consultants and contractors, financial institutions, bonding and insurance companies. It will be of particular benefit to all engineers, architects, construction managers, project managers, and other professionals who want to have a better understanding of the various procurement options in order to provide knowledgeable advice to their decision makers.

Course Outcome

As an Owner you will learn:

the benefits and risks for the various construction project implementation contracts
to recognize which implementation strategy has the least risk for your organization.
to recognize unbalanced bids, underbids and bid errors
to recognize/avoid potential claims
to realistically assess the inherent costs for exculpatory clauses (transferring responsibility to other contracting party)
to assess your own responsibility for the contractor’s delay and cost overruns
to evaluate your own damages for contractor caused delays
As a Contractor or Subcontractor you will learn:

to understand the allocation of risk within the various construction contract options
the need for the preparation of an estimate that can support payment requests for change orders and progress draws
the need to organize and manage project information
to recognize/look for claim resolution provisions in a contract before submitting your bid
to recognize exculpatory clauses and their potential impacts
to present more effective change orders and claims
As a Design Professional, Project and Construction Manager you will learn:

your role as the interpreter of the contract
the risks/benefits inherent in the various construction contract options
how to manage progress payments, contract changes, and the shop drawing approval process to mitigate problems
how to manage and the need for an inspection/commissioning process in the context of claims
how to analyze and respond to a contractor’s claim

The objective of this presentation is to demonstrate that problem free (minimal) project delivery is possible through real example and a review of project management techniques. In reviewing Public Works statistics vis a vis the effort in time and money to defend against claims it is certainly more prudent to put the effort into contract administration as a preventative effort rather than engaging in a non-productive rearguard action. Statistics developed by the University of Texas in Houston USA. Indicate that 20% of all project funds are expended in legal action. I suspect this cost is incurred mainly in the area of pursuing claims and disputes through the court process.

As defined within the contract and as practised on site the role of the parties is confrontational. Add to this the practise of Adownloading@ responsibility, through the use of exculpatory clauses, for effective project delivery to the company least able to deal with the error, omission or oversight and you have a recipe for legal conflict.

As you will note from the course calendar, the focus is on the various contract participants’ rights and responsibilities in the project implementation process, claims resolution, as well as how to present your arguments both pro and con in an effort to avoid or to minimize the impact of the potential claim on the project.

Course Outline

Day 1

* Registration and Coffee
* Welcome and Introduction
* Introduction by Seminar Attendees Giving Course Expectations
* Introductory Exercise
* Quality Project Delivery-problem identification
* Review of exercise findings
* Refreshment and Networking Break
* Background Construction Industry Claims and Disputes
* Design-Build Contract Model - a review of process to build Design-Build Team
* Lunch Break
* Project delivery experience of a large governmental design-build organization using standard design-bid-construct program/project delivery
* Exercise - Developing Non-Adversarial Contracts - Review findings from Introductory exercise, a role of “engineer under the contract� errors and omissions, design changes, unit price clause and information provided by “owner/consultant�to determine if there is a better way to achieve the desired results
* Review and tabulation of results/suggestions
* Refreshment and Networking Break
* Bid Process
* Do’s and don’ts and trying to avoid awarding contract to company that makes the most mistakes!
* Open Discussion
* Adjournment

Day 2

* Project Risk Management
* Refreshment and Networking Break
* Claim Prevention Management
* Lunch Break
* Detection and Analysis of Claims
* Contract Delivery
* Initial site meeting using partnering approach
* Communication Links
* Roles and Responsibilities
* Score Keeping-Schedules
* Refreshment and Networking Break
* Change Orders, Delays and Claims
* Review of process and need for success from point of owner/consultant/contractor
* Exercise - Partnering
* Adjournment

Day 3

* The Claim and Dispute Environment
* Claim Avoidance Techniques
* Dispute Resolution Techniques
* Videos on arbitration and mediation will be shown followed by discussion.
* Networking and Refreshment Break
* Dispute Resolution Techniques (continued)
* Exercise - Value Engineering/Value for Money
* Lunch Break
* Case Studies
* Arbitration Exercises (using fact based model) - five different cases will be looked at and arbitration panels will be set up from participants. Coaching on roles will be provided.
* Arbitration findings are given to participants.
* Networking and Refreshment Break
* Summary
* Review of participants expectations Review of lecture concepts and exercise findings
* Open Forum-Questions and Answers
* Formal Adjournment of Seminar

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