Construction claims are a tricky pickle. It has often been the root cause of construction companies, contracting businesses, and other associated businesses going broke, bankrupt, and defunct. This has caused unemployment for sure and also added to the pressure already brewing in the industry.
Contractors are under a lot of pressure. They face the pressure of reporting each thing accurately when in fact the whole construction team is responsible for making sure everything on the site is done accurately and properly without any hiccups or blockages.
The construction industry is unfortunately a tough one to work in. It is one of the worst industries to even work in. Every professional here suffers from a sort of stress-related disease, blood pressure, physical injury, and trauma due to the nature of the work.
With a lot of disability claims filed, the number of construction claims being filed is also rising. That is no doubt a sign of concern because, without construction companies and contractors, new homes and buildings cannot be made.
Should contractors properly identify claims and their situations correctly?
Contractors must identify the situations properly where there is an entitlement to additional payment claims. The same goes for additional time claims.
From the employers’ perspective, identifying these situations early on means they can take the needed steps to avert claims. Moreover, they can also make the needed provisions for added expenses.
As a consequence, it is essential for proper project management that everyone involved in construction projects examines what is happening on the project. They should also identify claims in the best possible timeframe. Here are some frequent causes of claims:
Payment for work that is either additional, charged, or both
On measurable contracts, work is valued against the rates agreed. Contractors will be paid for the work which was carried out. Among them are changes made to the original work scope. What however should be considered are circumstances causing abortive work, reworks, or mobilizing additional resources. Remeasuring them in re-measurable contracts does not compensate them.
Quantum experts explain that a single price for the work to be conducted is agreed in advance. This is done on a lump sum contract. Changes require individual evaluation to calculate any changes made to the contract price.
Sometimes, variations are formally acknowledged to prevent a claim from being made. However, changes are frequently brought in on the instructions of contractors. They do it without properly acknowledging the variations. The consequence? the parties affected must submit the required notices and follow up with a claim for additional payments.
Time extensions
If delays affect the time agreed for completion, contractors should consider a time extension. Monitoring actual progress against planned progress is fundamental. So are identifying events that could affect the completion time.
In either case, dispute avoidance professionals need to check whether the event causing delays is something where a time extension is permissible by the contract. If the contract allows it then the parties involved should submit the needed notices and follow up with a verified claim.
Contractors must submit claims based on time extensions. They should be substantiated based on evidence of entitlement to a time extension. They should not base it on when they need a time extension to avoid delay damages. Hence early identification of claims is necessary.
Costs due to prolongation
Circumstances causing a rise to a time extension will usually carry an entitlement to claim for additional expenses of loss and costs. Submitting claims for costs due to prolongation comes either with time extension claims or as a claim that is associated yet separate. Putting them forward as soon as possible is key. No one should leave them until the project’s end.
Acceleration expenses
Those circumstances creating a time extension usually carry an entitlement claim for additional expenses of loss and expense. This happens during the extended period when contractors are obliged to maintain time-related resources on the site. They also need to maintain head office overheads too.
Prolongation claims experts explain that engineers will usually pressurize contractors to undertake acceleration measures without agreeing to the rising cost. Contractors in this regard must make their position clear.
They should agree on acceleration measures and the nature of expenses before they undertake any measures for acceleration. Otherwise, they may not be able to have any subsequent claims agreed upon.
Disruption-induced expenses and delays
Disruption happens when an event where the employer causes the contractor to work in a less effective manner. Thus the employer is held responsible. The situation can cause a requirement for additional resources or time to help achieve a target.
This causes a delay. It does not help complete the project on time. The situation warrants a time extension. Identifying these claims gives them more chances of success if they are timely detected.
Conclusion
Construction claims and other claims can be wrongly claimed and identified. Sometimes the affected parties may not find enough evidence to warrant a claim. Claims experts are available to help identify causes and sources for the claim to be substantiated.
