Construction delay claim management: a better strategic approach

Published by Massimoluigi Casinelli on

No matter what best practices of project controls are put in place, unfortunately delay and disruption especially on large and/or complex projects are almost inevitable…and most construction claims are delay-based.

Introduction

It is documented that claims are constantly increasing in the construction industry and yet the best practices of project management / controls. On the other hand, many construction claims are schedule delay based. Schedule “delay” is also at base of claims regarding the loss of productivity.

Working on the preparation of construction delay claims, I have often observed two aspects:

  • a lack of integration between planning & scheduling and contract administration, in particular  in regards of communication process, and  
  • a inadequacy of the document controls system

The above factors lead the Contractor to submit claims not well documented, in particular for those based on “delay”, where CPM-based schedules play a fundamental role for forensic planning.

that a lack of integration between planning & scheduling and contract administration and related communication processes, combined with the inadequacy of the document controls system, lead the Contractor to submit claims not well documented, in particular for those based on “delay”, where CPM-based schedules play a fundamental role for forensic planning.

I believe that much more effort should be dedicated since the tender stage and during the initial project development stage, when the project controls plan, risk management plan and procurement plan will be fully developed and implemented; at this stage, also a specific claim management plan/strategy should be defined and developed taking into account a best integration among the processes hereafter described, in order to increase the effectiveness of claim management.

Objectives

Management of delay claims and/or loss of productivity (disruption) requires a more integrated process between project controls and contract management.

In case of large and/or complex projects there might be the need of a dedicated team in claim management, composed of appropriate construction professionals.

The basis of an effective claim management are three interrelated processes:

A. The development and periodic update of a comprehensive master programme (i.e. project baseline schedule) in compliance with the contractual requirement, but also to specific “technical” requirements in order to be effectively used in forensic planning, in particular in the most frequent case of concurrent delays.

B. The setting up and maintenance of a “project archive” which allows tracking all events and information regarding the project progress; the need of a project contemporaneous recording system is widely recognized a key component for claim management; in my experience, as project controls manager/consultant, an additional effort should be undertaken to get a better integration between project archive and planning & scheduling system, and this can be achieved by empathizing specific functions already exiting in some advanced project management tools.

C. An accurate communication process, in accordance with contract requirements, which requires a periodic planning (monthly or bi-weekly) of the communications to be prepared and processed towards the Client (project owner) and / or to the sub-contractor, regarding the events potentially impacting the schedule and /or the project progress, RFI (requests for information), submission of potential changes (required by the owner or proposed by the contractor) and, of course, the communication of the detected delays (i.e. notice of delay) to be promptly notified (as prescribed by contract) to the Client. A key component of communication process is obviously the change management procedure. 

Conclusions

I believe therefore that is necessary to strength the three processes above described, through the full implementation of claim and contract management procedures, integrated with project controls system and based on international best practices.

I would be glad to receive any comment on this post.

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Massimoluigi Casinelli

I am a chartered civil engineer and certified CCP (cost engineering and total cost management) at AACE International, with thirty years of experience in project management of the construction sector. I deliver expert planning, programme management and project controls on multibillions-Euro infrastructure programmes, including highways and railways, metro, air terminals and complex buildings (commercial, residential, schools), with some experience in oil & gas and power. I worked in advanced contexts of project management (from matrix organizations of EPC contractors to large employers organized to manage complex capital projects), by undertaking various roles in the field of project management / controls and contract management; this diverse range of experiences allowed me to gain knowledge on the various components of project controls (schedule, cost estimating, budgeting and cost control, progress and performance measurement, risk and claim management). I am an Italian citizen, currently in Italy.

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