Claims administration can be tedious. And many personnel view the activity as “unproductive.” This does not mean, however, that it is unimportant. The careful administration of the claims process protects a contractor’s rights under the contract and preserves the profit margin on a job. The claims procedure under federal government contracts is particularly formal. Failure to comply will deprive a court or administrative board of jurisdiction to hear an appeal from the denial of the claim by a government contracting officer. The contractor is essentially left without a remedy. One contractor recently faced dismissal from court because the contractor had revised the amount of its claim (reduced it, in fact) without recertifying the accuracy and completeness of the claim.
The contractor in question survived the challenge, but there is a lesson here. A contractor must
designate an individual responsible for monitoring and administering the claims process, assuring compliance with the terms of the contract as well as applicable administrative regulations. This activity will more than pay for itself by protecting the contractor’s rights and remedies under the contract. Featured in next week's issue of Construction Claims Advisor:
- Claim Amount Altered Without Recertification
- Delay Properly Apportioned Between Owner and Contractor
- Surety that Bonded Prime and Sub Not Allowed to Allocate Claim