No one can argue that having better chances in winning a claim depends on how fast an organization can react and be ready for the claim. Being fast is not limited for giving the right formal notices as required by the contract agreement but also being fast in documenting and collecting the particulars of the claim.
The Most Common Reasons of Construction Claims
Project Management Information System (PMIS) like PMWeb is used today by many organizations to better manage their construction claims. PMWeb is used to issue the claim notices using predefined contractually correct letters, capture daily reports, meeting minutes and other claim related project communications, storing documents that supports claim submissions among others.
In this article, we will show how PMWeb will be used to formalize the implementation of what will be called as Occurrence Report. This is a document template that the content will be specific for each possible reason of a construction claim. The manual, “Construction Claims Organization System” by Robert S. Brams and Christopher Lerner have identified 39 headings that details some of the most common reasons of construction claims.
1. Acts of God
2. Acts of Government
3. Actual Acceleration
4. Adverse Weather
6. Cardinal Change
7. Commercial Impracticability/ Performance
8. Commercial Impracticability/ Supply
9. Constructive Acceleration
10. Constructive Change
11. Defective Specifications
12. Delay of Approvals
13. Delayed Issuance of Change Orders
14. Delayed Notice to Proceed
15. Destruction of Work
16. Destruction of Materials
17. Differing Site Conditions
18. Early Completion Prevented
19. Impossibility of Performance
20. Improper Inspection
21. Inadequate Supervision
22. Inadequate Utilities
24. Labor Shortage
25. Lack of Access
26. Lack of Information or Decision
27. Lack of Permits
28. Lack of Right of Way
29. Late Drawings
30. Late, Defective Material, Etc.
31. Payments Not Made
32. Scheduling Difficulties
33. Stacking of Trades
35. Subcontractor Delay
36. Superior Knowledge/ Misrepresentation
37. Supplier Delay
38. Suspension of Work/Delay
39. War and Other Hostilities
A data list will be created in PMWeb to capture those 39 claim reasons and others to make them standard across all claim related communications. Those could include the Occurrence Report, notice letters, RFI, potential change orders, change orders, daily reports, risk register among others. The claim reasons list can be expanded if the organization has identified additional claim reasons that could be relevant to their projects. For example, the correspondence module below shows how one of the correspondence communications was assigned the construction claim reason it belongs to. Of course, the organization can develop more attributes that can help in better managing and reporting on the project information.
The Occurrence Report: Capturing the Facts
The “Construction Claims Organization System” manual has proposed the content of the Occurrence Report for each claim reason. Each Occurrence Report has two sections, the first is to identify the information that needs to be captured by the field supervisor or site engineer whenever one the possible claims occur while the second is to capture the Project Management Analysis and Action List. Of course, the organization might decide to have more sections in the Occurrence Report depending on the information to be captured and by who.
The list of information and actions to be captured in the first section of the Occurrence Report could differ from one claim reason to another. For example, for the Occurrence Report for Differing Site Conditions, the first section will include the following details:
1. A warning for the Site Supervisor for not disturbing the site condition until he/she have notified the project stakeholders of the condition.
2. The location of the differing site condition.
3. Description of the condition along with photographs of the condition
4. When the condition was first observed
5. Who observed the condition
6. Describe how the condition affected the current work
7. Describe how the condition could affect future work
8. Whether the project owner or authorized representative are aware of how the condition would impact the work
9. If the condition delayed or disrupted the workforce or resulted the work to be done inefficiently
10. If the condition would require the use of additional labor, equipment, material or supervisory efforts
11. Where any materials lost or damaged due to this condition
Using PMWeb What-You-See-Is-What-You-Get (WYSIWYG) Custom Form Builder, the organization can create their own list of actions and queries that the Site Supervisor or the Site Engineer needs to document as soon as this claim reason do occur. The form below is just an example of how section A of the occurrence report for the Differing Site Condition could be. It should be noted that many of the fields that includes locations, resources, dates among other standard contents will be picked up from predefined list to reduce the chances of data entry error as well as expedite the process of data capturing.
Since PMWeb is a zero-foot-print application, this means that the same form can be also be accessed from any web browser including those of smart phones. In other words, the field supervisor can complete the Occurrence Report on the field using his/her iPad or any other smart phone device. This also allows capturing content for the form by either typing it in or saying it and have the speech-to-text recognition to type it in.
Using the attachment command the Field Supervisor can take pictures or videos of the differing site condition and upload those to the Occurrence Report. In addition, the Field Supervisor can attach documents that are stored in PMWeb document management repository like drawings, specifications among others that are relevant to the site condition. Further, other PMWeb records like daily reports, timesheets, RFI among others can be linked to the Occurrence Report.
When the Field Supervisor completes Section A of the Occurrence Report, he/she will use the predefined workflow to submit the same form to the designated project management team member to perform the needed analysis and take the needed actions. The workflow assigned for the same Occurrence Report, that is, Differing Site Conditions, could include predefined conditions to branch out and involve other team members in the review process depending on the actual content of the form. In others, there will be no time wasted in figuring out who show be involved in this process.
The Occurrence Report: Analyzing and Responding
The same Occurrence Report will have section B, Project Management Analysis and Action List. Using the PMWeb security levels, access to section B can be restricted only to the authorized users. Similarly, section B has pre-defined queries and actions that need to be taken. Those could include for example:
1. After reviewing section A, what additional facts to be considered and added
2. Determine the schedule impact of the condition
3. Confirm if the conditions of contract states that the occurred site condition is considered as unforeseen conditions
4. Review the variation, dispute and notices requirement of the contract
5. Decide whether to submit a potential change order, formal notice of a claim or both (Those are also forms that should be ready to use using PMWeb own forms or custom forms)
6. Confirm if the project owner or any of his authorized representatives has made any statements or taken any actions that the reviewer believes constitute an admission of fault, liability or responsibility in any way for the delay, added cost or other impact resulting from this occurrence. If this has happened, then all details need to be provided.
7. Attach any supportive documents or facts to support the claim using the Attachment command.
The Occurrence Report: Real-Time Reporting
Similar to all other processes managed in PMWeb, real-time logs and reports of all those occurrence reports by category can be produced to track their status. A real-time dashboard can be also created to summarize the status of all those occurrence reports summarized by the 39 most common reasons of construction claims. The organization can also have a real-time dashboard that will analyze and report those occurrence reports across their complete projects portfolio. The indicative schematic chart below explains this real-time dashboard concept that allows management to drilldown to the source of the reported claim.
The Occurrence Report: Business Intelligence
In addition, the use of Business Intelligence (BI) applications like MS Power BI, Qlik, Tableau among others provide the project management team with the ability to analyze the information captured in the Occurrence Reports across on a single project or all projects that the organization is involved with to analyze trends and identify correlation between the different project events. As an example, the BI report shown below is used by an organization to analyze the trends of change orders on projects that are they are executing.
In other words, technology not only will help organizations in reducing the massive volume of data and information that they fail to capture in a complete and integrated forms, but will also help in improving the chances to win due claims and additional scope of work by ensuring that the needed information to support the organization’s request for contract adjustment is done in the right format, at the right time by the right project team member.