Welcome to the new issue of Grow Your Knowledge Newsletter where you get free, ready to use, actionable, clear information regarding FIDIC Contracts and Construction Claims.

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Today at a Glance;

➤   Term of the Week

➤   One Tweet

➤   Preparing Change in Scope related Claims

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TERM of the WEEK

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ONE TWEET

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No construction project is perfectly designed, managed or executed.

 

As a consequence, scope changes are inevitable.

 

Changes in the scope of work are a primary basis for claims pursued by Contractors against Employers.

 

Preparing effective “change in scope” related claims is more important than ever.

 

Crux Insight Report published by HKA also confirms that.

 

After;

   ➤  Analyzing the causes

   ➤  Quantifying the impacts

of claims and disputes on major capital and infrastructure projects in 100 countries.

 

The report states that;

   ➤   “Change in Scope” was the leading cause of claims and disputes.

 

It means learning the steps of well-prepared “change in scope” claims is

   ➤   crucial today, and,

   ➤   will be crucial in the future

 

Let’s make it more clear.

 

You should follow these steps.

Step #1:  Establish that the “Work is out of Scope”

Step #2:  Learn what your contract says about the Claiming Procedure

Step #3:  Pay attention to the Notice Requirements

Step #4:  Demonstrate the Factual Evidence

Step #5:  Quantify the Claim

 

Step #1: Establish that the “Work is out of the Scope”

The contract defines the scope of works that the Contractor is required to undertake.

 

You should establish that the work is beyond the consideration of the contract documents.

 

However, the technical description of the works as contained in the contract documents may contain various ambiguities, gaps and contradictions.

 

In order to determine the correct extent of your obligations it will be necessary to apply the principles of Contract Interpretation.

 

 

Step #2:   Learn what your contract says about the Claiming Procedure

Before beginning to prepare the claim, you should know what your contract says about change in scope related claims.

You should;

   ➤  Review the terms of the Contract

   ➤  Identify the rights of the Contractor under the Contract

 

 

Step #3:   Pay attention to the Notice Requirements

You should understand and comply with the Notice Requirements, such as;

   ➤  Timing of the Notice

   ➤  The information it should contain

   ➤  To whom it should be sent

   ➤  The proper way of providing Notice

 

Step #4: Demonstrate the Factual Evidence

You should show the information to support the claims, such as;

   ➤  Proof of cause

   ➤  Calculations

   ➤  Project Specific Forms

 

Step #5:   Quantify the Claim

You should determine the acceptable methods for pricing by reviewing the contract.

 

The contract should always serve as the primary basis for determining the acceptable methods for the pricing of change orders.

 

Specific methods can be used to quantify these costs;

   ➤  Actual Costs

   ➤  Total Cost Method

   ➤  Modified Total Cost Method

   ➤  Jury Verdict Method

   ➤  Quantum Meruit

 

Step #6:   Submit your completed claims with all the supporting documentation 

 

Accurate records and supporting documentation is vital for effective claims.

 

Proper documentation will form;

   ➤  well substantiated

   ➤  robust

   ➤  effective

claims.

 

After performing these steps you can submit your claim.

 

Every claim has unique needs.

 

Build your own claim preparation system.

Formulate the effective claim and present it in a professional way.