By Steve Rizer
A prerequisite for successful project management is “claims consciousness,” an active familiarity with and awareness of potential claim situations, Joseph McManus and Karlee Blank of McManus Darden & Felsen LLP (MD&F) wrote in “Claim Identification and Notification,” a special report that WPL Publishing recently released. “This does not mean the contractor should seek every possible opportunity to earn extra revenue. It does mean the contractor should be aware of the potential risks associated with claims and that one of its highest priorities should be proper management of these risks.”
In the report, MD&F Partner McManus and Blank, a law clerk for the Washington, D.C.-based firm, stressed that proper claims management begins with early identification of a claim. “The contractor must be able to recognize and identify a claim situation when it first develops, not after it has become a controversy.”
Prompt identification and notification are imperative for complying with contractual requirements, the authors stated. “If the contractor does not recognize a situation or waits too long to take actions, any and all rights to claim can be lost.”
Although identification of a claims situation often is automatic via a change order from an owner or a directive from an engineer, most claims situations “arise out of subtle differences in field conditions, from jobsite delays, or as a result of differences in contract interpretation. In every instance, a claim situation must be recognized and identified as soon as it occurs.”
The report includes a list of 20 general circumstances that typically cause claims and change orders. Such circumstances involve the following: additional work not specified in contract documents; work required to be performed in one particular method when specifications allow two or more methods; relocation of existing work due to lack of coordination, information, or other factors; differing site conditions; defective specifications; an owner’s failure to disclose information; among other things. The report also contains an extensive discussion of various contract document notice provisions and considerations when choosing which to comply with.
“Claim Identification and Notification,” available free of charge to ConstructionPro Network members, is the first in a series of WPL reports focusing on construction contract claims, changes, and dispute resolution. WPL will publish additional reports on this subject over the next several months. Members can access the report at http://constructionpronet.com/Book-Construction-Contract-Claims-ThirdEdition.aspx.