Other Contractors claims are amount payable to the Contractor over and above the contractual sum for various reasons the Contractor believes he is entitled to (other than NT and EOT/EOC). Most of the contractors’ resort to additional claims, sometimes on flimsy reasons.
The best way to control the contractual claim is to ensure that the Contract is simple and clear on all the apparent occurrences in any project. Every time we come across a claim, we need to check back on the gaps in the standard Contract and make sure the same is dealt with efficiently in the Contract, for the next Project. Such imbibing the learning will eventually narrow down the potential for any future claim.
So long the Contract is comprehensive and clearly identifies the roles and responsibilities and captures most of the what-if situations likely to arise, there cannot be any claim from the Contractor, and these claims will be dealt as entitlements or subject to rejection. The claims usually come when there is a lack of clarity or wrong English/ sentence formation, leading to multiple interpretations or some of the aspects have not been dealt at all. The Contractor will always take stand as to what is not given in the Contract is not part of his scope or covered in the contractual sum. One may resort to best industry practices or convention or IS codes etc., but at the end of the day it is only a post-mortem so should be avoided. From that perspective, the Contract becomes highly critical and needs to capture all the What if situations and simple with absolute clarity.
One of the reasons for such claims is that the battery limits between the civil contractor and MEP contractor are not dealt properly. For example, the scope of horizontally closing the vertical MEP shafts lies under no one’s scope, hence the MEP works are delayed, and we end up incurring additional cost. It is essential that the execution process is detailed, and the scope is rightfully captured between the vendors.
So, the claims for this discussion has been dealt with in 2 parts;
Rule 7.14
(Rule 7.14)Following process shall be followed for evaluation and approval of Contractors claims other than VO for NT items and EOT/EOC (Rule 7.14)
- All contractual claims from the NSC contractor need to be routed through the GC as the first person to evaluate and recommend to the GM office in discussion with the site QS team, who shall validate the same in the context of the Contract and events.
- Similarly, the claim by GC should be evaluated by the site QS team and sent to GM office.
- GM office shall initiate a joint discussion with the commercial department and evaluate the claim thoroughly.
- If there is merit in the case, the GM and the commercial department can take a joint decision and recommend the outcome using the VO process.
- VO shall be issued once the same has been approved as per the process.
- Once an issue is dealt, it must be backed by the amendment to the existing Contract to deal with similar situations occurring in the future and amend the standard contract template for future projects.
Rule 7.15
(Rule 7.15)Following best practices shall be followed for evaluation and approval of Contractors claims other than VO for NT items and EOT/EOC
- Since we have already dealt in detail concerning VO or EOT/EOC, the other claims have to be evaluated carefully as these emerge from the gaps in the contract/understanding.
-
This might require asking a few right questions as under;
- What is the root cause of this claim?
- When this claim came into the knowledge of the Contractor?
- What prevented the Contractor from notifying the event at the time of occurrence?
- Is it emerging out of a lack of clarity in the contract language?
- Are there established conventions / IS codes/ Best practices/ Past incidents in other projects which we can use to justify why the Contractor is not entitled to the same?
- Is the cost claimed justified?
- Are there enough back-ups and supporting documents to show that the Contractor took all correct decisions and actions, and he is not responsible for the cost?
- Could the cost have been averted had the Contractor or Client taken actions at the right time?
- Is this due to the indirect impact of NT or EOT- If so, deal in there, not here?
- Finding out genuine justification to showcase why Client is not obligated to accept this.
- Timely notification of such claim has greater authenticity than any claim coming after a lag which is likely to be a fabricated one.
- Many a times, the Contractors resort to such claims to cover up their operational inefficiencies and consequent site-level losses and use other claims as a mechanism to cover the losses.
- We have to make sure the Contractor is not encouraged to resort to such claims by detailing the Contract adequately and making sure we pick up the indication given by Contractor and pre-empting the discussion on this as it comes to our knowledge.
- If any approval for other claims, the scope and responsibility and expected outcome of the action for which cost is incurred, should be clearly defined and agreed upon.