How would you control Claims in Construction?

In general, the word Claim means a Subcontractor's request/demand submitted in order to obtain additional payment or compensation of any kind including those related to Extension of time falling outside the provisions of the Subcontract Terms and Conditions.

Claims normally arise from actual or assumed defaults of the terms of the Subcontract that the Main Contractor has entered into with the Subcontractor.

Claims are distinct from payment for Changes in the Work, which will be dealt with according to the Variations & Subcontract Amendments procedure.

Without prejudice to any express provision of the subcontract, any notice of claim by the subcontractor for a scheduled provisional turnover date and/or for any adjustment to the Subcontract price under this subcontract shall be submitted in writing to the construction engineer as soon as practicable, and in any event, not later than thirty (30) Days after the occurrence of the event or circumstance giving rise to such claims. Within thirty (30) Days from the said notification, the subcontractor shall submit all supporting documents substantiating the Claim.

Claims are recorded on the corresponding Claims Register and allocated a progressive number for each Subcontract. The Subcontractor shall submit two copies of the claim with all enclosures. The Main Contractor shall notify the Owner, as and when the Subcontractor identifies a Claim, which has a time/cost impact. Claim shall be dealt with and managed in accordance with the following unless otherwise specified by the Construction Manager.

When the claim can be clearly rejected because it is not consistent with related terms of the Subcontract or other requirements, the Construction Manager will reject it directly (after taking advice from the Site Project Control Manager and Lead Construction Engineers) and notify the Subcontractor in writing of this rejection.

When the claim being dealt with appears to be justified, on the basis of the Construction Manager's evaluation, the procedure will be as follows. 

The Construction Manager shall :

• Prepare together with the assistance of the responsible Site Project Control Manager and Area Construction Superintendent, an accurate analysis of the claim assisted by the Discipline Superintendent and Discipline Field Engineer.

• Prepare the cost and time analysis for the overall handling of the claim. In preparing this analysis the Construction Manager will be assisted by the Site Project Control Manager.

• Express his recommendation and/or suggestions as to how to resolve the claim, and the amount payable (if any) against the claim.

• Analyze the claim from the contractual point of view, on the basis of the examination made by the Site Project Control Manager and Area Construction Superintendent.

• Reject the claim if necessary, subsequent to discussions with the Site Project Control Manager and Area Construction Superintendent with the assistance of other members of the Site Organization.

• Request further studies, if deemed necessary, to be carried out by the Site Organization in order to better define all the various aspects of the claim

• Define the impact on the cost and/or schedule of the whole Project on the basis of the cost and time estimation prepared at the Site

• Collect the whole file of the claim to be approved or rejected. The file shall contain all the necessary drawings/sketches, references to specifications, and any other documents with a complete analysis of the reasons for the acceptance/rejection and the cost of the proposed claim.

Once a month, the Construction Manager shall issue to the Project Manager a copy of the Claims Report completed with the following 

Information under the 'Notes';

• Status of each claim
• Comments and/or recommendations to resolve the claim.

The Construction Manager is responsible for the recording and handling of the Claims Register and Claims Report.