Home » Two essentials for improving construction contract claims

Two essentials for improving construction contract claims

Posted by Simon Forsterling | 15 January 2018 | Construction & Infrastructure

By Simon Forsterling | Nexus Law Group Principal – Sydney

In the example below, there are two essential changes from the original to the modified claim wording:

  1. Strip out emotional content

It would be an unusual construction project if site team members from each of the parties didn’t butt heads at least a couple of times throughout the job. An inevitable result are feelings of frustration and resentment, which can work their way into submissions. This isn’t professional and is not conducive to prompt, fair and reasonable assessment of claims.

  1. The claim should stand alone

Valuable or complex claims most likely won’t be determined by the day to day project managers from the site. They will probably be passed up the hierarchy onto someone in head office to assess, who doesn’t have the project managers’ detailed knowledge of the site, or the time and inclination to properly review site files to obtain it.

The easier the claim is to read, the better. Anyone should be able to read it and quickly understand what is being claimed and the basis for entitlement. There will always be other documents that help set out background establish entitlement, but as far as possible the claim should stand on its own.

Very frequently, the person preparing a claim is so tied up in the project, with such a hugely detailed knowledge of the intricacies of it, that the essence of the claim can get lost in the detail. Get someone who knows the industry, but doesn’t have a detailed knowledge of the project to read the claim before it is submitted. If they can’t understand it, and aren’t convinced by it, there’s a fair chance that it could be improved. If you don’t have someone you can rely on, I’ll help you. Get in contact by email [email protected]

Example

Consider a simple claim for an extension of time under a construction only contract. The contractor is responsible for electrical reticulation. The lead time on light poles is 6 weeks. An order for the poles can’t be made until the final approved electrical design is issued by the client, and installation of the light poles is on the critical path for on-time completion of the project. This is the claim that is submitted:

The delay has been caused by electrical design, which the Contractor has told the Principal that it needs a number of times by no later than 24 March. It seems that the Principal’s Representative either doesn’t care or simply lacks the intelligence to comprehend that delay in receipt of the approved plans will delay the project. During the site meeting of 20 March, the Principal promised to provide approved electrical design by Friday 24 March, but it wasn’t provided until 7 April. The Contractor claims two weeks extension of time.

It is not clear from this wording why the Contractor should be entitled to an extension of time.

This is a lot clearer:

In order to achieve the Date for Completion, Light Pole installation needs to start by no later than 5 May (refer to Rev B program). There is a lead time on light poles of 6 weeks, which means that the order must be placed by no later than 24 March to avoid delay to the Date for Completion. An order can not be placed by the Contractor until the Principal provides its approved design for the light poles.

As the Principal did not provide its approved design for the light poles until 7 April, the order will not be able to be placed until then. This means there has been a delay in placing the order from 24 March until 7 April, a delay of 10 working days. As installation of the light poles is on the critical path of the project, the Date for Completion will be delayed by 10 working days as well, and the Contractor claims a 10 working day extension of time.

If you have any questions, contact Simon Forsterling at [email protected]

 

This article first appeared on simonforsterling.com

 

This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.

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