Construction is quite a complex project, and to complete it successfully, proper construction management is needed. Management of all the resources, like labor, material equipment, contractors, engineers, etc., is inevitable. Only then a construction project can be successful.

But sometimes the management is so insufficient that numerous issues arise, which are the main reasons for the construction claims like the bond claims, mechanic lien claims, delay claims, etc. In this article, you will learn about construction claims and the reasons for them.

What Is a Construction Claim?

A claim is a dispute caused by one party requesting something from the opposite party. Various reasons can serve as the precursor to the claims, and almost every project faces a claim.

Construction claims are quite different from the change order. In the change order, both parties are in agreement, whereas in the claim, one party does not agree with the other, which results in further negotiation, mediation, arbitration, and litigation.

Construction claims can be turned into the change order if both parties negotiate effectively and agree; otherwise, proper resolution of the claim is needed.

What Are The Causes Of The Construction Project Management Claims?

Although there are various causes of construction claims, it is usually recommended to treat the root cause, which is to avoid these from the early stages. It was reported that most of the time, construction claims mainly occur during the project's construction phase. That is why it is recommended that construction management should be done effectively from the start.

The following can be some causes of the construction claims:

•     Site handover delay

•     Delay in drawing supply

•     Any design error occurred

•     Any severe weather condition

•     Injuries to the labor due to accidents

•     Frequent changes in plans or designs

•     Loss of equipment or faults in equipment

•     Delays in the payments can lead to construction lien

•     Due to some other legal issues etc.

Construction Claim Procedure According To FIDIC Redbook

FIDIC contracts hold importance when it comes to construction contracts as they are consulted all over the world regarding agreements. They have various contracts that were created keeping in mind the multiple types of construction and installation projects, so there are standard principles to follow whenever any agreement occurs.

One of the essential contracts is the FIDIC Redbook 1999 edition, based on the "Condition of Contract for Construction for Building and Engineering Works."

According to this contract, the construction work Is solely based on the design made by the employer. Generally, in the projects, the work is done according to the contractors, but here the work is based on the design provided by the employer. Moreover, the payment is made every month based on the sum of items of work.

Steps Of Construction Project Management Claims

The following steps take place in Construction claims management:

•     Prevention Of The Claim

Prevention of the claims is the first step, and this starts from the initial phase of the project. All the necessary information is documented, like the initial contracts, plans, or design, so the claims can be prevented.

•     Pursuing Of The Claim

In this step, first of all, the claim is identified in which the claim is analyzed with the help of contract documents and its scope. After complete analysis, the claim quantification happens in which cost and the time impact are calculated, and a cost is estimated.

•     Resolution Of The Claim

After all the steps and analysis of the claims comes the resolution part. Although it is best to negotiate the claim if that does not happen, further steps like mediation, arbitration, and litigation take place.

Running Construction Projects Smoothly

Construction claims like delays or mechanic liens are part of the projects, and construction projects can often face these. Managing these effectively and treating the root cause essential for the construction project to run smoothly.