CONSTRUCTION CLAIMS APPROACH – The ELDERMAN WAY

Throughout the years, we have worked on many successful projects, which allowed us to develop a thorough understanding of the construction industry and the importance of the contracting process.  We can therefore advise Contractors early on whether their intended claim is viable, as the level of detail contained in their contract administration will ensure the success or failure of a claim.  The same level of detail in the contract administration of the Client’s agents has the potential to either prevent problems or determine the success of the Client’s defense against a claim. In this instance we can advise the Client in advance to prepare for possible additional costs should the Contractor’s claim appear likely to be successful. Contractors and Clients will therefore be able to make informed decisions on whether to proceed with a claim or the defense thereof if the identified risk indicates the outcome to be successful or otherwise.

Most construction claims are about time, e.g. Extension of the Time for Completion, or money, e.g.  Additional Payment related to Extensions of Time, Prolongation Costs, Disruption Costs or the value of Variations / Change Orders, or both.

The ELDERMAN can prepare or defend the Construction Claim, based entirely on the contractual facts, including all analyses right through from the Cause & Effect analysis to the Presentation and Negotiation of the Claim.

The ELDERMAN has developed detailed techniques to establish whether a claim is valid and lawful, either when compiling the claim on behalf of a Contractor or making a determination on behalf of the Client / Owner / Principal Agent / Resident Engineer.  These techniques examine the following:

CAUSE of an Event

EFFECT of the Event

ENTITLEMENT to an Extension of Time and Additional Payment

SUBSTANTIATION of the entire Claim

Due to the complex nature of Construction Contract Claims, The ELDERMAN acquired the requisite detailed knowledge of different market sectors, as well as the diverse contract documents in order to establish the facts. The results are therefore thorough, robust claim submissions and comprehensive determinations defending against claims.  Our methodology includes the following processes:

  • Cause and Effect analysis
  • Contractual analysis
  • Critical path analysis
  • Change order / Variation analysis
  • Time delay analysis
  • Preparation and Presentation of the claim / determination
  • Negotiation of the claim

CAUSE AND EFFECT ANALYSIS

In order to determine the exact cause of an event, it is critical that complete information is provided, as missing information may result in changing conclusions that are reached.  Determining the real cause will also lead to the exact, quantifiable effect of the event.  With our understanding of the construction process, gained from many years of international experience, we can utilize the cause and effect analysis to either compile a robust claim to prove the contractor’s entitlements, or reach a determination on behalf of the client that would be easily defended should it become necessary. 

CONTRACTUAL ANALYSIS

All standard construction contracts stipulate the responsibilities, rights and entitlements of the Client / Project Owner and the Contractor.  When contract clauses are changed or adjusted by either party, it complicates the interpretation of the contractual provisions for rightful entitlement, even when both parties have agreed to such changes or adjustments.

Most Construction Contract Claims entail either a claim for an Extension of Time, or for Additional Payment, or both.  A forensic analysis of all relevant contract documents is therefore critical to either establish a claim and determine the Contractor’s entitlement thereto, or to compile the determination of the claim on behalf of the Client / Project Owner. 

The quality more than the quantity of documents to be reviewed will inevitably determine whether the review will be fairly simple or whether large amounts of data are to be analyzed.  The ELDERMAN has the required construction and contractual knowledge to determine the facts through a detailed review of all documents to ensure the best results for Contractors or Clients.

CRITICAL PATH ANALYSIS

The critical path determines the shortest time period to complete even the most complex projects.  The ELDERMAN uses Impact as Planned or Forward and Backward analyses and other methods to determine when and why a project is delayed and who is responsible for such delay.  Records and programs or schedules are examined in detail to determine which activities caused the delay and whether any steps could have been taken to prevent or minimize such delay.  The critical path analysis enables The ELDERMAN to confirm the Contractor’s entitlement to an Extension of Time and / or Additional Payment, or to protect the Client’s interests by determining whether the liability to remain on program was with the Contractor.

CHANGE ORDER / VARIATION ANALYSIS

More and more projects are started on site without a completed design, as clients insist that contracts are signed, and work started.  This creates many opportunities for the Contractor to claim for changes or variations from work either not included in the original scope of works or changed as a result of design development.

The ELDERMAN has vast experience on large-scale complex projects involving international consultants over various continents.  Our global experience taught us to identify changes and / or variations from the contract documents and to ensure that all parties receive their contractual entitlement through proven substantiation of either the Contractor’s claim or the Client’s determination of such claim.

TIME DELAY ANALYSIS

Activities can be delayed for many reasons and in different ways.  Materials can arrive late on site, installation can take longer than anticipated or labor is not available when needed, all resulting in a delay to the program.  A detailed delay analysis is undertaken by The ELDERMAN to determine the cause and effect of the delay.  Once liability is established, the Contractor can be advised on whether to proceed with the claim, or the Client will be able to make an informed decision on how to defend a claim already received.

PREPARATION AND PRESENTATION OF THE CLAIM or DETERMINATION

Upon completion of the Cause and Effect Analysis, Contractual Analysis, Critical Path Analysis, Change Order / Variation analysis and Time Delay analysis, The ELDERMAN will compile a detailed and comprehensive claim on behalf of the Contractor.  Alternatively, a thorough determination will enable the Client to renounce the contractor’s claim and protect his interests.

Our comprehensive reports are easy to read and understand, containing complete information to ensure the Contractor’s entitlement or the Client’s protection against liability.  Should it be necessary, we also present our reports to third party persons such as Board members.

NEGOTIATION OF THE CLAIM

An additional service provided by The ELDERMAN to act as Independent Consultant only at the request of our client, irrespective of whether we are engaged by the Contractor or the Client / Project Owner or his agents.