WORKSHOP OBJECTIVES 

Claims and disputes can have a disruptive effect on any construction project.  To diminish this effect, the purpose of this workshop is:

1. To share with the participants the positive and practical steps that can be taken both at the outset and during the course of a contract to prevent and minimise the number of claims. These steps can do much to reduce the potential sources of disputes that can so easily have a damaging effect on the project and the progress of work.
2. To share with the participants the methods and techniques for dealing with any claims that do arise – techniques directed at the early and sensible resolution of claims so they do not result in bitter disputes that are costly in time, effort, and money.

Dr. AlBahar, President of PROMIS, Project Management Engineering Systems, is an expert in construction contracts and claims analysis and project management tools and techniques. His recent consulting work is focusing on analysis of delay claims using CPM schedules and amicable settlement of disputes between Clients and Contractors. Dr. AlBahar is a frequent regional and international speaker on all subjects related to project management, construction contracts, tendering procedures, claims analysis and evaluation, contract administration and management, and value engineering.

Dr. AlBahar is a registered arbitrator in the Emirate of Dubai, U.A.E., the State of Kuwait, and was a full time professor at Kuwait University where he taught project management, contracts and specifications, construction management, construction methods, surveying, legal, social and ethical aspects of engineering. He was formerly a marketing and business development manager for Morrison Knudsen Corporation in San Francisco, California

Dr. AlBahar has conducted over 500 public and in-house training courses in the last 25 years on subjects related to contracts, claims, project management, PMP Exam Preparation Workshops, value engineering, budgeting and cost estimating and effective project administrative procedures. His most recent consulting agreement, and as part of team, was to review and rewrite the General Conditions of Contracts and Consultancy Agreement (both General and Particular) for Dubai Municipality and Public Works in Abu Dhabi. He is a Contract Advisor for Qatar Petroleum, Doha, Qatar.

DAY ONE

INTRODUCTION TO CLAIMS 

• What is a Claim?
• Claims must be analyzed Thoroughly
• Reasons for Claims
• Classification of Claims
• Managing the Claim Process
• Conditions Inviting Claims
• Claims Control & Avoidance
• Early Warning Signs for Potential Claims – Watch for the Clues!!!!

TYPES OF CONSTRUCTION CLAIMS 

• Changes and Variations (quantity, manner, performance, and scope of work)
• Impact Claims (methods of construction and schedule of the work, delays, interruptions, disruptions of planned work)
• Performance / Quality of Work Claims

TYPICAL MAJOR CLAIMS AND CAUSES

• Allocation or sharing of construction risks
• Known and known/unknown risks
• Expressed vs. implied contract terms
• Delays and concurrent delays
• Acceleration (directed vs. constructive)
• Impact on productivity (loss of productivity by contractor)
• Changes/modifications and variations and extra work
• Time requested but not granted
• Adverse physical conditions
• Payment issue
• Competency of owner management

RECOGNIZING AND DOCUMENTING CLAIMS IN EPC CONTRACTS 

COST ANALYSIS 

• Need for Detailed Budget
• Budget vs. Actual
• Variance Analysis

TIME ANALYSIS 

• As-Planned Schedule
• Monitoring job progress
• Compared to Actual
• Reasons for Difference
• Delay analysis and documentation

 EVENT ANALYSIS 

• What happened?
• Cause and Effect Analysis
• Why, and whose Fault is it?
• Problem solving delay events

OWNER REPRESENTATIVE’S ACTIONS OR IN-ACTIONS 

• Untimely Action
• Erroneous Action
• Interpretation of Contract
• Liability of the Engineer
• Liability of Employer, or Owner

 PRESERVING CONTRACTOR'S CLAIMS RIGHTS 

• Timely Notice
• Thirty-Day Follow-Up
• Documentation
• Reservations of Rights

THE PRINCIPAL CONTRACT CLAUSES THAT APPLY TO THE PRESENTATION AND DEFENCE OF CONSTRUCTION CLAIMS IN EPC CONTRACTS 

Variations / Change Orders

• Differing Site Conditions / Adverse Physical Conditions
• Extra Work
• Site Access
• Time Extensions
• Suspensions of Work
• Delay, Disruption, and Acceleration
• Negotiation and pricing variation orders

DAY TWO

TYPICAL MAJOR CLAIMS UNDER CONTRACT CLAUSES 

DELAYS 

• Force Majeure
• Suspension of Work
• Excusable and Inexcusable Delay
• Compensable Delay
• Concurrent Delay
• Inefficiency and Disruption
• Calculation of Time
• Delay Analysis Using CPM Computer Program

ACCELERATION 

• Directed or Ordered Acceleration
• Constructive
• Elements and Defences
• Avoiding the Claim

CHANGES/VARIATIONS AND EXTRA WORK 

• Directed Variations
• Constructive Variations
• Defective Plans and Specifications
• Ambiguous Specifications
• Impossibility of Performance
• Owner Nondisclosure
• Contract is “AT LARGE” – What does it mean?
• Obligations and Rights of the Contractor when the project is recognized “at large”

ADVERSE PHYSICAL CONDITIONS 

• General Principles
• Notice Requirements
• Unforeseen Conditions
• Owner Furnished Information
• Contractor Right to Delay
• Recovery Rights

DAY THREE

CLAIMS DEFENCE, ANALYSIS, AND NEGOTIATION

CLAIMS DEFENSES 

• Early Contract Planning – your life saver!
• Early Recognition and Analysis
• Demanding Engineer’s Response
• Isolating the Issues
• Time Impact Analysis
• Cost Exposure Analysis
• Factual Defences
• Legal Defences
• Tactical Considerations

ANALYZING THE CLAIM 

• Contractual Entitlement
• Cause and Effect
• Length
• Accuracy and Content
• Need for Clarity
• Use of Charts and CPM Networks

CONTRACTUAL ENTITLEMENT FOR CLAIMS 

• Dispute over the applicability of express contract terms
• Dispute over implied contract terms
• Entitlement from the Owner’s perspective
• Entitlement from the Contractor’s perspective
• Entitlement from a third party perspective
• General recovery theories
• Payment issues

DAY FOUR

ANALYZING DELAY & E.O.T. ENTITLEMENT 

• Critical Path Method (CPM)
• As Planned, As Built, and As Adjusted Schedules
• Window or “Snap shot” Approach for Delay Analysis and E.O.T. Entitlement
• Using CPM to Prove or Disprove Delay
• Attacking a CPM Schedule
• Determination of Concurrent Delays
• Excusable and non-Excusable Delays
• Compensable and non-Compensable Delays

ANALYZING , QUANTIFICATION & PRICING OF DAMAGES 

• Actual vs. Estimated Costs
• Reasonable Costs
• Detailed Proof of Costs
• Auditing Cost Records
• Total Cost Claims
• Labour
• Equipment
• Material Costs
• Subcontractor Costs
• Overhead, both Job Site and Home Office Overheads
• Delay / Extension of Time and Prolongation Costs

CLAIM PREPARATION, SUBMISSION AND PRESENTATION 

• Understanding the Purpose of the Claim
• Record Keeping
• Documentation
• Coordination of the Collection of Factual Data
• Detail of the Claim Submission
• Contents of the Claim Submission
• Format of the Claim Submission
• Variation Order Request
• Letter Report of the Claim
• Arbitration Demand
• Expert Report
• Contents of the Claims Submission
  • Executive Summary
  • Project Background
  • Issue Analysis (Factual)
  • Liability / Responsibility (Contractual Entitlement)
  • Schedule Impact Analysis
  • Damages (Compensation Pricing $)
  • Supporting Documents
• Initial Draft of Claim
• Final Draft of Claim

COUNTER-CLAIMS BY OWNERS 

• Liquidated Damages/Penalties
• Termination for Default
• Breach of Contract
• Defective Work
• Design Liability Claim

DAY FIVE

NEGOTIATING A SETTLEMENT 

• Specifying Your Goals and Strategy
• Preparing with Care
• The Good Faith is Essential
• Understanding Your Opponent
• The Art of Listening
• Skills of Contract Negotiations Techniques
• Contract Negotiation Strategies and Tactics
• Negotiating Terms and Conditions
• Negotiating the Final Price
• Making the Deal
• Documenting the Negotiation and Agreement

ALTERNATIVE DISPUTE RESOLUTION (ADR) 

• Mediation or Conciliation
• Arbitration – is it the solution?
• Litigation – stay away from it! 
• Available Arbitration Forum – A Brief Overview:
  • Local Arbitration
  • ICC – International Chamber of Commerce in Paris
  • London Court of International Arbitration
  • GCC Arbitration Center in Bahrain

ARBITRATION PROCEDURES

INTRODUCTION 

• Definition and Terms
• Parties must agree
• What is Arbitrable
• Language and Law
• Standard Arbitration Clause as per FIDIC Conditions of Contract

THE NATURE OF ARBITRATION 

• General principles
• Multi-party arbitrations
• Binding arbitration agreements
• The jurisdiction of the arbitrator
• The award and reasons

ADVANTAGES AND DISADVANTAGES 

• Compared to Mediation & Litigation
• Other Dispute Resolution

ARBITRATION RULES 

• Administrator and Delegation of Duties
• Initiation under an Arbitration Provision in a Contract
• Applicable Procedures
• Administrative Conference, Preliminary Hearing, and Mediation Conference
• Fixing of locale
• Qualifications of an Arbitrator
• Appointment of Neutral Arbitrator by Party-Appointed Arbitrators of Parties
• Disclosure and Challenge Procedure
• Attendance at Hearings
•  Order of Proceedings and Communication with Arbitrator
• Inspection or Investigation
• Extensions of Time
• Time, Form and Scope of Award
• Award upon Settlement
• Release of Documents for Judicial Proceedings
• Applications to Court and Exclusion of Liability
• Neutral Arbitrator’s Compensation
• Interpretation and Application of Rules

SELECTION OF ARBITRATORS 

• Party Arbitrators
• Selecting the Neutral
• Must be independent
• Challenges
• Pre-Hearing Role

THE POWER AND RESPONSIBILITIES OF THE ARBITRATOR  

• Relevant skill and experience
• Impartiality
• General powers and duties
• Civil engineering professionals and the use of specialist knowledge

AWARDS AND DECISIONS 

• Secrecy of Deliberations
• Majority Vote Requirement
• Dissents and Separate Opinions
• Interim and Final Awards
• Formalities
• Reconsiderations

APPEALS / ENFORCEMENT 

• Limited Role of Courts
• Will Not reverse for mere error

HOW TO WIN

• Careful Advance Planning
• Know the law before you start
• Frame the issues properly
• Prove the facts
• Demonstrative Evidence
• Make your Case believable