Construction Claim Types

In construction claims are usually classified by “CAUSE” and ” ENTITLEMENT”:

– Major changes by Employer

– Entitlement – Delays

– Interruptions and disruptions

– Differing site conditions

– Defective specs and design shortfalls

– Accelerations  

CHANGES BY EMPLOYER-1

–  These are usually referred to as constructive and convenient changes, that are mainly due to extra works or excessive inspection of the Works.

– They are usually initiated by an action or inaction by the Employer or Engineer.

– They are usually resulting in a benefit to the Employer that exceeds the deliverables of the agreement.

– They tend always to increase the cost of the works done.

– Extra Works (i.e. (a) Engineer or Employer, poor justification while rejecting material and equipment submittals, (b) Engineer, poor or uncoordinated response to RFI’s, (c) Employer or Engineer poor understanding of drawings and specs, (d) Employer poor understanding of his privileges and deliverables expected from second party under the agreement, (e) Employer exceeds his rights to inspect the works and inspectors performance, (f) No tolerances or strictly low ones applied against those noted in the contract.

DELAYS-2 –

Delay is defined to occur when an activity takes longer than the planned duration to complete.

To recover or mitigate the delay it is a must to:

– Affect the critical path by either increasing durations along the planned critical path or by

– Delaying the completion of non-critical activities enough to create a new critical path

Due to “Failure to commence”:

– Employer fails to hand over the site

– Employer fails to complete the designs

– Employer fails to coordinate with service providers

– Employer fails to obtain a bldg. permit

– Employer fails to give right of way for  pre-scheduled activities.

Due to “Approvals”:

– Employer or his Consultant failure to provide submittal approvals on time

– Employer or his Consultant providing unreasonable or poorly justified rejection of submittals.

Due to “Adverse Weather”:

– Weather conditions are adverse or hostile.

– Weather conditions are unusual for the time of year

Due to “Continued Changes”:

– These are usually initiated by a variation order or site instructions.

– They are usually requested to proceed immediately and in others after proper financial approval.

– Usually within physical limits due to subsequent works.

– With all above Issuance of formal VO might also be with delay.

– The impact of the works requested on the original program of works.

INTERRUPTIONS AND DISRUPTIONS – 3

It usually occurs when the performance conditions expected at the time of tendering materially/substantially defer from those encountered during the actual execution to a point that “cost of performance” for the contractor is increased due to:

– Contractor’s plan of work alteration.

– Contractor work, equipment and crew hours is increased.

Another form of disruption is the actual “Suspension of Works”:

– Via issuing a Stop work order be it based on site limited issues or contractual issues,

– Via delaying inspections.

– Via providing Employer furnished equipment or accessories.

– Via delay or failure to respond to RFI’s.

– Via suspended manufacturing.

-Via authorities not due to contractor negligence.

ACCELERATION OF WORKS-4 –

“Escalation” occurs when a task is performed in a shorter time frame than originally planned based on request by the Client.

– Escalation usually entails added overheads due to increased resources.

It can also be due to:

– Increased extra work orders or VO’s without time extension.

DEFERRING SITE CONDITIONS-5

Best practice is a term used always in contracts to:

– Reduce bid conditions

– Allocate risk of site conditions to the Employer

– Encourages bidders to rely on the information provided.

Almost always actual site conditions differ from those indicated in the contract, i.e. and for example:

– Presence of Rock or boulders while not shown on documents,

– Underground utilities presence in areas not predefined.

– Actual elevation of natural ground compared to Datum.

–  Actual plot limits defer than those on documentation certificate.

DEFECTIVE SPECIFICATIONS-6

Elements of the project has been performed by the contractor per the contract documents and specifications but those elements ” do not function together” as required, i.e.:

– In cases where drift is not accounted for especially for high rise buildings,

– Thermal steel is not considered especially if post tensioning method is adopted for slab construction.

Errors and Omissions are usually due to:

– Answers to questions arising from the documents are not found within the contract documents.

– Provisions of the contract are not accurate.

– Contractor requests for information are responded to with incorrect or contradicting replies.

ENTITLEMENT-7

Executable but none compensable, usually due to:

– Acts of government orders or decrees without compensation clearly stated.

– Fires, floods, epidemics or quarantine restrictions.

– Embargoes.

– Wars

Executable but compensable, usually due to:

– Shortfalls by the Employer . These usually entitle the Contractor to both an extension of time and an increase in the contract price.

None executable and none compensable, usually due to:

– Poor Performance

– Poor Coordination and Planning

– Late Performance by Subscon.

– Delay in Procurement and/or out of Specification Procurement even if the Change is Accepted by Employer.

– Defective Works.

 

Thanks to Mr.Mohammed Tanbouz

Insaat projelerinde claim nedir?

Insaat sektorunde genel olarak Claim su sekilde tanimlanir: ” The term is used as an application, request for entitlements under the contract terms and conditions.” Bu durumu baska sekilde yorumlayanlar da var aslinda, Employer ile Contractor arasindaki kagit duellosu, masada para kazanma yontemi,  Employer ve Contractor’in ego savasi vb.  Bu kadar tanim yapildigina gore  Claim yapmak sanat ister durumu kacinilmazdir, peki nedir Claim’i olusturan genel durumlar dersek:

– Entitlement for an extension of time.

– Entitlement for non fulfillment of one party to an obligation under the terms of the agreement.

– Entitlement to the recovery of incurred costs.

– Entitlement against additional payments due to legal preceding.

– Entitlement to additional funds.

Claim yapmanin dogurdugu farkli sonuclar vardir elbette;

– Overall loss of focus on what is important during the life cycle of the project.

– Risk of no new project award in the near future from the same Client.

– Waste of time while preparing and participating in resolution and litigation.

– Increased costs.

– Irrational responses and behavior and thus destroyed personal relations.

– Loss of control on outcome.

–  And of course entitlement to above mentioned events.

 

Ref: Mohammed Tanbouz