GYK Newsletter – Subcontractor’s Claims

 

Subcontractor’s claims are pretty routine in construction projects.

 

If you are a Subcontractor you should know the ways of preparing and submitting the effective claim.

To achieve that, you should clearly answer these 3 questions;

 

1.   How will I COMPLY with the “Notice Requirements” ?

 

2.   How will I PREPARE and SUBMIT the “Effective Claim” ?

 

3.   How will I RESPOND to the “Contractor’s Determination” ?

 

 

Answer 1:  COMPLYING with the NOTICE REQUIREMENTS

 

You should understand the “Notice Requirements” by;

 

➤   Reviewing the Contract

➤   Determining the related Clause(s)

➤   Learning the prerequisites

and comply with the Notice Requirements by giving Notice;

 

➤   In writing

➤   To a selected party

➤   Within a time period after you became aware or should have been aware of the event

➤   Estimating the extent of any time and cost impact

➤   Including the supporting documentation

➤   Identifying the Works affected

Under the FIDIC Conditions of Subcontract for Construction;

 

➤   You should give Notice of Claim within 21 days after you became aware or should have become aware of the claim related event

 

 

Answer 2:  PREPARING and SUBMITTING the EFFECTIVE CLAIM

 

You should prepare the effective claim by;

 

➤   Accurately defining the “Cause” of the claim event

➤   Perfectly explaining the “Effect” of the claim event

➤   Correctly establishing the “Contractual/Legal Entitlement”

➤   Sufficiently “Substantiating” the claim

And you should;

➤   Submit your completed claims with all the supporting documentation

 

 

Under the FIDIC Conditions of Subcontract for Construction;

➤   You should give the “Fully Detailed Claim” within 35 days after you became aware or should have become aware of the claim related event

 

 

Answer 3:  RESPONDING to the CONTRACTOR’S DETERMINATION

 

You have to be active in additional stages, such as;

 

➤   Contractor’s Consultation

➤   Contractor’s Determination

➤   Contractor’s Notification

 

– Contractor’s Consultation –

 

You should participate in the consultation process.

 

If the agreement is ACHIEVED;

 

➤ You should give effect to the agreement 

If the agreement is NOT ACHIEVED;

 

➤ You should be ready for the determination process

 

 

– Contractor’s Determination –

 

After the Contractor’s assessment your claim will be;

 

➤   Approved, or,

➤   Rejected, or,

➤   Accepted with reduced quantum

Under the FIDIC Conditions of Subcontract for Construction;

 

➤   the Contractor should make a fair decision within 49 days after receiving the Fully Detailed Claim

 

– Contractor’s Notification –

 

After being notified by the Contractor;

 

If you are SATISFIED with the determination;

 

➤   You should execute the determination

If you are DISSATISFIED with the determination;

 

➤   You should give a Notice of Dissatisfaction

 

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