One common request that I get from my contractor clients is to determine whether a client has a legitimate claim for additional time and money due to impacts arising out of a project. While each situation is unique, there are typically four steps a contractor should take to evaluate a potential claim or dispute:
- Analyze your contract: You would be surprised how many contractors skip this step. It is impossible to make any conclusions about a contractor’s potential claim without a detailed review and analysis of the pertinent contract(s). Whether it’s pay-if-paid provisions or no-damage-for-delay clauses, the contract will dictate what relief is available to a contractor.
- Interview the project manager: Given the fact-specific nature of most construction disputes, I always request to meet with my contractor client’s project manager. The PM can provide the context of the issues that may be impacting a contractor’s ability to timely and efficiently complete its work. During this meeting, I may also ask about the events that led to the dispute. This meeting will also allow me to determine my contractor client’s objectives with the dispute which may affect my initial assessment.
- Review key documents: There is one unavoidable truth to construction disputes–documents created during construction of a project frequently serve as a record of what happened and more times than not, those documents must be reviewed to understand how the project got to its current state. With that in mind, the most significant documents to review first (other than the contract) include limited key formal correspondence and e-mails between the contractor and the subcontractor and/or the owner regarding the issue(s) that led to the dispute. If the initial documents do not provide a clear picture of what likely happened at the project, other documents should also be reviewed, including daily reports, meeting minutes, the baseline schedule and any schedule updates, and job-cost documents.
- Outline potential issues: Once the above information has been compiled from interviews and the documents, it’s time to create a report with an initial analysis of the potential claim. In the report, I provide my initial findings, including the potential amount of recovery of time and/or money, the likelihood of recovering more time and/or money, and potential strategies for resolving the claim or dispute without engaging in years of litigation (though, sometimes that can’t be avoided).
Once the above four steps have been completed, my contractor clients can make an educated decision whether to pursue a claim against the project owner or others participating in the construction of a project.