Why Construction Claims Occur and How to Prevent Them

Construction has always been a risky business; however, today's construction marketplace contains risk elements that relate to responsibilities and performance issues defined by the contract as well as outside factors that impinge on the performance of the field work. These risks can cause substantial increase in time and cost of contract performance if not adequately mitigated. Thus, claims for increased time of performance and increased direct and indirect costs may be inevitable on complex engineering and construction projects. This text identifies the most common reasons why construction claims occur and what owners and contractors can and should do to prevent them. Topics discussed include the following:· Situations causing costly claims· Why construction disputes occur and how to promote early and amicable settlements· Assessment of problems associated with poor project management performance· Typical problems leading to delays, cost overruns, and claims on process plant and offshore oil & gas projects· Claims prevention-early mitigation steps· Project reviews· Site investigation· Claims mitigation during construction· Cost control for the project manager· Effective change order management· Keys to successful major project execution· Project team motivators and demotivators· Claims can be mitigated if the owner coordinates and cooperates on multi-prime construction projects· Commercial awareness training for EPC projects· Contractor's risk analysis to reduce the risk of claims· Owner and contractor guidelines to prevent claims· Construction claims analysis checklist