Web-Based Project Management Solutions Revolutionize Enterprise Project Management: Managing Claims Part 2
Written by Bassam Samman, PMP, PSP, EVP, GPM
This article continues our discussion of how web-based project management solutions can enhance a project team’s ability to manage construction claims. Here we’ll cover the remaining tasks and processes that PMWeb helps facilitate.
- Maintain a Log of All Project Documents, including Drawings, Specifications, Agreements, Bill of Quantities, etc.
All construction claims need to take into consideration the different documents related to the construction contract, whether they’re part of the original contract documents or are subsequent documents issued during the project’s life. Given this, Web-based project management solutions like PMWeb allow all such documents and their related source materials to be efficiently captured and stored in the PMIS.
- Capture the Details of All Material, Drawings, Equipment, and other Submittal Items
One frequent reason for claims on engineering and construction projects is the delayed approval of material samples, shop drawings, method statements, and other submittal items. Delaying the approval of these submittals will result in delayed material procurement, fabrication, and installation; therefore, projects should have a detailed submittal schedule log for all items that are required by the contract. An example of a submittal schedule created in PMWeb is shown below.
For each submittal, the log needs to capture all of the particulars related to the item, such as specification section, type, and other details. Each submittal item also needs to be linked to the schedule activity that it will affect, and on some projects, the project schedule will have a unique activity for each submittal item. Additionally, the submittal document can be attached to the submittal item, which might be a shop drawing, material brochure, photos of the material sample, BIM model files, etc.
- Capture the Details of Important Project Communications
In addition to submittals, many other types of project communications are typically used in construction claims. These communications include Requests For Information (RFI), Daily Reports, Access Permits, Snag Lists, Requests for Inspection, etc. Leading web-based project management solutions like PMWeb not only include ready-made document templates for all of these communications, but also offer a custom form builder to create any additional document templates that might be needed.
The custom form builder can create virtually any type of template a team might need to capture communications data. Capturing this data in the proper form and format, with all supportive materials attached, provides the claim team with immediate traceability to the data source when reports and delay analysis are performed.
- Document All Claim-Related and other Meeting Minutes, including Claim Settlement Negotiation Meetings
Outside of the many meetings held during a project’s life cycle, there will be numerous additional meetings held to address claims. These meetings can be held to discuss actions for preparing the claim submission, allow stakeholders to provide input on the claim, negotiate claim settlements, etc. All of these claim-related meeting minutes must be captured in order to document the actions to be taken, the parties responsible for the actions, when the actions need to be completed, and when they become completed. An example of a template used to capture meeting minutes in PMWeb is shown below.
- Enforce a Reliable and Proactive Action-Management Process
In addition to the actions identified in the meeting minutes, the team responsible for responding to construction claims will usually need to take specific actions and ensure these actions are completed in a timely and comprehensive manner. PMWeb’s Action Management module shown below is used to capture these actions and their associated responsibilities.
- Quantifying the Claim: Cost
Although most contracts require the contractor to use the bill of quantities’ unit rates for all change orders, when a claim is submitted sometimes new claim headings are used that were not part of the original contract. To deal with this, PMWeb offers a cost estimating module that estimates the cost of each claim heading.
The cost estimating module also links to a cost database of manpower and equipment resources, so the organization’s own rates can be used. These include regular rates as well as rates for overtime and work done over holidays and weekends.
Additionally, the cost database can capture the bill of quantities’ rates from current and past contracts, which the organization might need to justify the rates included in the claim submission.
- Quantifying the Claim: Schedule
Nearly every construction claim has some kind of time extension associated with it. There are different techniques for analyzing the time impact of a delay and determining whether a time extension is excusable or not—and if it’s excusable, whether it entails any compensation. The analysis will also detail if the delay is on the critical path or not and if the delay is concurrent or not.
Although most contractors use Oracle Primavera P6 for creating and maintaining their project schedules as well as for creating the delay analysis, they still need to document all of the delay analysis details, along with the needed justifications. PMWeb’s custom form builder can create a document template to capture these delay analysis details.
- Compile and Present the Claim’s Cost and Time Submission
Change order document templates are often used to submit all possible claims. The change order document usually shows a breakdown of the additional work covered by the claim, along with the claimed adjustment to the project’s completion date. PMWeb can be used to easily add those details, providing the organization with an immediate report on total submitted claims and their status.
- Create a Variety of Tabular and Graphic Reports to Support Claim Management
If it’s presented in the proper format, the information captured in the PMWeb database can prove invaluable for both the project and claim teams. For example, it can provide a log of all RFIs, Submittals, Permits, Non-Compliance Notices, Transmittals, Change Orders, Claims, and other tabular data. In comparison, it’s been estimated that on average organizations waste more than 60% of their time trying to collect, add, verify, and present such information using MS XLS.
- Use BI Applications to Visualize and Analyze Captured Data to Identify Claims Trends and Issues
Over the past few years, the capabilities of Business Intelligence (BI) and data visualization tools, such as Tableau, Qlik Sense, and MS Power BI, have massively increased. These applications make it easy for individuals to analyze big data to determine trends in performance, possible sources of deviations, and other valuable functions. For example, those tools can be used to analyze the reasons behind a Request for Information (RFI), the time it took to respond, and the volume of RFIs submitted. This will enable the claim team to immediately identify what RFIs were associated with specific claim topics.
Another example would be to identify the reviews and approvals of the different parties working on the project or identify the changes that affected the project and which location(s) they impacted. How this data is analyzed and displayed is up to the claims team and depends on what they want to visualize and understand.
Based on my 35-plus years in this profession, I don’t think that anything has significantly changed about construction claims. In all claims, the claimant must prove they are entitled to the claim based on the contract agreement clauses. To do this, they must provide the justifications and supportive documents to confirm the incidents cited in the claim submission. They also need to quantify the claim’s time and cost impacts and provide the supportive analysis and documentation to prove these estimates. Furthermore, they need to submit the claim in a format that’s easily understood by the counter party, so they can make an informed decision about whether or not to grant the claim submission.
To this end, the latest web-based project management solutions can drastically improve the efficiency of claim management. Whether it’s capturing the needed data, locating the needed documents, analyzing the captured information, or presenting the claim in a professional format, these applications are a powerful tool for effectively managing every facet of the process.