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Prepare construction claim? Heres a few tips….

There are a variety of ways to prepare a claim.

No format works in every instance. However, the format we will present below is one of the most used. It has a lot of advantages. For example, it’s similar to how a court would require the information, and it’s also practical to have different parties work on the claim. Which is normally how a claim is created, you need the input of different specialists.

The format uses a “top-down” approach. (Contract to Impact) however, it’s customary for analysis to be done from the “bottom up.” The claim has a number of goals. It should present sufficient facts to show entitlement as well as the time and level of compensation requested.  Clearly the claim will be scrutinized, probably by a number of parties, so it should be able to demonstrate evidence for those recommendations.

Executive Summary

The intention of the Executive Summary is to inform the owner’s executive of the general information they need to know, a description of the project, what took place and what the claimant wants, and importantly, why the contractor is entitled to the claim.

Introduction

The Introduction section is to give the reader some general background with enough detail so they can understand the presentation that is to follow. As a rule of thumb, the Introduction should be limited to 4 pages.

Contract Representations

The Contract Representations section is vital. Its inclusion is to establish the owner’s contract representations relied upon by the contractor in preparing its bid and plan for performing the work. It is a necessary step as it establishes the foundation for the baseline from which all differences are measured.

Contractors Plan

The Contractor’s Plan section is to provide evidence of the contractor’s  reliance on the contract representations. It should establish that the contract was reasonable, and demonstrate the contractor’s anticipated means and methods, schedule and cost estimate. It shows the reader how the contractor planned to deliver their contractual obligations. An accurate and complete plan is necessary to show the reader that there is a baseline to measure against, in terms of compensation.

Actual Conditions

The Actual Conditions section is to show that the actual conditions in the project differed significantly from the owner’s representations. This section is important to explain how the reality was different to the original plan or representation of the owner.  

Legal Entitlement

With Legal Entitlement the goal is to convince the reader that the contractor has the legal right under the contract to recover compensation and/or receive a time extension as a result of the actual conditions encountered when compared with the represented action. Ultimately, it’s to show the owner’s lawyer that the contractor will be successful if the claim is litigated.

Qualification of Claim

The Quantification of Claim section is to present cost and time, provide evidence that shows that the claimed events caused the contractor to incur additional costs and time. We present what was represented, and what we felt was actual, and now we provide the evidence of what was actual to support our claim.

Formal Statement

The purpose of the Formal Statement of Claim section is to formally request to be put in the same position that the contractor would have been in if the issue presented in the claim hadn’t been a factor. When complex claims are involved with multiple issues, a general overview summary should be provided showing the relationship and division between the issues and claims, and segregating or explaining any overlap between them.

 

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Kenzie Claims Assistant