Best Practices

CONSTRUCTION CLAIMS and DISPUTES – Subject Series Summary

January 8, 2014 By George T McLaughlin PMP CCM

Construction Claims and Disputes is the most popular subject on Project Professionals and has been for several years. Further, it is the most requested line of services provided by McLaughlin & McLaughlin. M&M are project management practitioners (in the field) and, yes, we practice what we preach. Further, our choice of topics for Project Professionals posts is driven by and reflective of practical and current issues. This is not esoteric, academic or hypothetical “stuff”.

This summary update provides readers with an overview of prior posts and provides a baseline for future posts that will follow on a timely basis. Initially, this Subject Series, Construction Claims and Disputes, was posted during January 2011 through August 2013. During the past several years, greater than 25% of views by visitors have been to this Subject Series.

Ideally this Subject Series provides a starting point to investigate best practice on many planning and execution features of construction claims and disputes.

Construction Claims and Disputes (Part 0) – This introduction formats the discussion with definitions, claim categories and key industry references. This post is consistent with M&M experience in many years of professional services.

The Overview (Part 1) –Part 1 updates Part 0, the introduction.

Construction Claims Management Planning (Part 2) – This is the most popular post in this (most popular) Subject Series. Construction claims (or the risk of claims) can and should be professionally managed. View this process as a piece of project (execution) planning [link]. This post outlines elements of a Construction Claims Management Plan. Further, it addresses elements of defining a Claim Strategy. Stakeholders include Owners, Prime Contractors and Subcontractors. Do not miss this post.

Current Project Professionals Posts (Part 3) – Claims are organized into four general categories. These categories are consistent with the frequency of occurrence, methods of management and other key managerial considerations. The categories are

Scope of Work, Changed Work or Variations
Delay and Acceleration, Time-Related
Disruption / Productivity (usually labor/labour)
Terms and Conditions.

Pricing Construction Claims (Part 4) – This post addresses the… Think you know how to price your (or other’s) claims? Andrew (Andy) Ness, 2012-13 Chair, ABA Forum on the Construction Industry probably disagrees with your answer. Read this post and consider Andy’s position as well as other considerations regarding claim pricing/damages. The content of the recent ABA book on the subject is covered.

Pricing Construction Claims (continued) (Part 5) – Are construction claims and disputes “all about the money?” Some believe this to be the case. This post (Part 5) expands on Part 4 by addressing pricing and citing additional references.

Scope of Work – Baseline (Part 6) – It is widely believed and accepted that Scope of Work and/or Changed Work is the single largest source of claims and disputes in engineering and construction (as well as many other contracted services). In order to establish departures from the baseline scope of work, you must be able to define the applicable baseline. This post cites various sources for baseline definition,

Scope of Work – Plans and Specifications (Part 7) – Several industry sources (publications) are used to elaborate on execution and contracting strategies that rely on plans and specifications as a major component of scope or work definition. This discussion includes typical contract documents and contract provisions wherein scope of work, services, supply and / or facilities is / are defined. Suggestions for configuration and change management in the field are included.

Other Subject Series that are both relevant and popular include:

Going forward, we will post other features of CONSTRUCTION CLAIMS and DISPUTES.

My we wish you the best of luck and let us all attempt to confront and deal with these and other project management challenges. It is crucial that recognition and anticipation of these issues occur during initiation and planning. However, the recognition and management should continue through execution, controlling and closeout.

Please note that McLaughlin and McLaughlin [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in dispute resolution and litigation support. The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.

Filed Under: Claims, Featured, General, Projects, Uncategorized Tagged With: Best Practice, Best Practices, Construction Contract Claims, George T. McLaughlin PMP, Notice of Recognition, PMBOK, PMI, Productivity Management, Progress, Progress Assessment, Project Management, Project Management Plan, Recognition, Schedule Specification, Scope of Work Management, Stakeholder Managment, www.mclaughlinandmclaughlin.com

PROJECT PROFESSIONALS POSTING RESUMPTION

January 2, 2014 By George T McLaughlin PMP CCM

McLaughlin and McLaughlin [M&M] is pleased to announce that they will resume postings at their blog, Project Professionals. Since mid-2013, M&M has been heavily involved with several large assignments [Construction claims regarding several power plant projects]. Now that workload permits, new blog postings will be offered.

M&M wishes to remind followers (new and ongoing) that there are many offerings at the Project Professional site. They are organized by what we call Subject Series.

These Subject Series are:

M&M will resume with additional posts in the Subject Series Construction Claims and Disputes. This Subject Series focuses on methodologies, process, reference resources, techniques and other practical advice regarding the preparation, evaluating and managing construction claims and disputes.

We hope that you will find these existing and new posts informative and relevant.

We wish you the best of luck in this New Year.

Please note that McLaughlin and McLaughlin [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in dispute resolution and litigation support. The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: Best Practice, Best Practices, Construction Claims, Construction claims and disputes, Construction Contract Planning and Scheduling, Engineering and Construction Disputes, Forecasting, McLaughlin & McLaughlin, Notice of Recognition, PMBOK, Productivity, Productivity Management, Progress, Progress Assessment, Project Execution Plan, Project Execution Planning, Project Management, Project Management Institute (PMI), Project Management Planning, Recognition, Schedule Specification, Stakeholder Management, Stakeholders, Ways of Working, www.mclaughlinandmclaughlin.com

MANAGING RISK OF DELAY – Managing Contractor Schedules (Part 13)

September 28, 2013 By George T McLaughlin PMP CCM

This McLaughlin & McLaughlin post is the thirteenth (13^th) in a series of discussions regarding various aspects of time management as it relates to the risk of delay. This post addresses managerial considerations for dealing with schedules prepared by contractors and submitted to owners or their agents (construction managers, managing contractors, advisors, etc.).

Recently, Mr. Chris Carson authored an excellent article titled “Dealing with Contractors Schedules That Cannot be Approved.” This fine article was published in COST Engineering(September/October 2013).

This article contains excellent advice for project teams regarding schedule management.

Mr. Carson’s article is, in reality two articles in one. While Mr. Carson’s article presents a methodology for problematic situations (which he calls DSAB), the preamble and initial discussion for this article is highly useful and applicable to project management teams as they address the frontend of project planning and execution. This post summarizes the sage advice provided by Mr. Carson regarding frontend project management challenges as they relate to scheduling and time management. [Read more…]

Filed Under: Claims, Featured, Projects, Uncategorized Tagged With: AACE International, Best Practice, Best Practices, Construction Contract Claim, Construction Contract Planning, Construction Contract Planning and Scheduling, Contractor Schedules, Delay, Earned Value Management, George T. McLaughlin PMP, Managing risk of delay, Productivity Management, Progress Reporting, Project Execution Plan, Project Execution Planning, Risk of Delay, Schedule Update, Time Management, Time Management Strategy, www.mclaughlinandmclaughlin.com

CONSTRUCTION CLAIMS and DISPUTES – (Part 3)

March 4, 2013 By George T McLaughlin PMP CCM

Current Project Professionals Posts

McLaughlin & McLaughlin’s Project Professionals post is the third in a Subject Series. Construction Claims and Disputes which are (will be) discussions regarding managerial challenges in potential and actual construction claims situations. In this series, we focus on the managerial aspects of construction claims and disputes management. This summary discussion addresses the many posts that have been presented in the past and are at the Subject Series tab of Project Professionals.

In the engineering and construction industry, claims and disputes take many forms and focus on many topics. For simplicity of discussion, we will use the follow the following categories:

Scope of Work, Changed Work or Variations
Delay and Acceleration, Time-Related
Disruption / Productivity (usually labor/labour)
Terms and Conditions (and other subjects).

McLaughlin & McLaughlin’s Project Professionals has posted (or published) greater than 60 posts regarding one or more aspects of Construction Claims and Disputes.

The balance of this post identifies the Subject Series and posts that are at Project Professionals and are relevant to construction claims and disputes. [Read more…]

Filed Under: Claims, Featured, General, Projects Tagged With: Best Practice, Best Practices, Construction claims and disputes, Construction Claims Management, Construction Claims Management Plan, Construction Contract Claims, Construction Project Management, Delay, Disruption/productivity, EPC Project Management, Free Issue Equipment, Free Issue Materials, George T. McLaughlin PMP, McLaughlin & McLaughlin, Project Execution Plan, Project Execution Planning, Project Management, Project Planning, www.mclaughlinandmclaughlin.com

PROJECT PLANNING (Part 4)

February 15, 2013 By George T McLaughlin PMP CCM

Summary of Posts

This summary update provides readers with an overview of prior posts regarding Project Planning and provides a baseline for future posts that will follow on a timely basis.

There are two applicable Subject Series. One Subject Series, PROJECT MANAGEMENT CHALLENGES was posted during June through September 2011. Since that time, blog readership has increased very significantly.

The other Subject Series, PROJECT PLANNING was started in late 2012. This Subject Series is ongoing and new posts will occur in the upcoming weeks and months. Readers are encouraged to subscribe to automatic update notification.

This summary is very brief and simply serves as an index for readers to follow. Of course, detailed descriptions are contained in the individual posts.

Ideally these Subject Series provide a starting point to investigate best practice on many planning and execution features of project management. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Project Planning, Projects Tagged With: Best Practice, Best Practices, Construction Contract Planning and Scheduling, Earned Value Management, Forecasting, George T. McLaughlin PMP, GSA Construction Claims, McLaughlin & McLaughlin, Notice of Recognition, PMBOK, Productivity Management, Progress, Progress Assessment, Project Execution Plan, Project Execution Planning, Project Management Institute (PMI), Project Management Plan, Project Planning, Recognition, Schedule Specifications, Stakeholder Management, Stakeholders Management, www.mclaughlinandmclaughlin.com

CONSTRUCTION CLAIMS and DISPUTES – (Part 2)

February 6, 2013 By George T McLaughlin PMP CCM

Construction Claims Management Planning

This post is the second in a Subject Series Construction Claims and Disputes which are (will be) discussions regarding managerial challenges in potential and actual construction claims situations. In this series, we focus on the managerial aspects of construction claims and disputes management. This post addresses the planning, a key managerial requirement in all project work. First plan it, and then do (execute) the work. The notion is consistent with the old adage “An ounce of prevention [in this case management] is worth a pound of cure.” In that regard, litigation on a large and complex project can cost millions USD in expenses to pursue and may have tens of millions USD at issue.

Yes, construction claims and disputes can and should be managed. This is particularly true of large and complex projects.

Prospective Construction Claims Management refers to the managerial approach and planning for managing the risks (and options, opportunities, etc.) during project execution through project close-out related to claims.

Retrospective Construction Claims Management (development, presentation and defending) will be addressed in another post.

Claims Avoidance – There is a myth that construction claims can be avoided. Experience shows that this is just a myth, since it relies on controlling the activities of others. These others may be in an adversarial posture or position. Hence, control cannot be readily achieved. [Read more…]

Filed Under: Claims, Featured, Productivity, Projects Tagged With: Best Practice, Best Practices, Construction claims and disputes, Construction Claims Management, Construction Claims Management Plan, Construction Contract Claims, Construction Project Management, Delay, Disruption, EPC Project Management, Free Issue Equipment, Free Issue Materials, Free Issue Scaffolding, George T. McLaughlin PMP, GSA Construction Claims, McLaughlin & McLaughlin, Project Execution Planning, Project Management, Project Planning, Temporary Power, www.mclaughlinandmclaughlin.com

CONSTRUCTION CLAIMS AND DISPUTES – (Part 1)

January 22, 2013 By George T McLaughlin PMP CCM

This McLaughlin & McLaughlin post is an introduction to an ongoing Subject Series regarding Construction Claims and Disputes in engineering, procurement and construction industry.

OVERVIEW

In relation to construction claims and disputes it is important for all readers, contributors, participants and others regarding the general subject of claims and disputes to be equally informed. This discussion is directed toward engineering and construction claims and disputes.

In the engineering and construction industry, contract claims and disputes are common issues. They occur between: owners and contractors (prime), contractors and their subcontractors, contractors and (their) vendors, and at other contractual interfaces. Resolution of the claims and disputes can be a costly, disruptive and aggravating process for all parties.

PROJECT PLANNING – Managerial Challenges (Part 3)

January 8, 2013 By George T McLaughlin PMP CCM

PROJECT PLANNING – Managerial Challenges(Part 3)

Project Initiation – Contractor

This post is the third in a series of discussions regarding managerial challenges in project management situations. In this series, we focus heavily on the managerial aspects of program / project planning and management. This post addresses the starting point or initiation of the project. Part 2 discussed Project Initiation in general. This post [Part 3] addresses considerations that are unique to contractors.

Owners often view contractors as a homogenous group or homogenous within the contractor’s own organization. This perception is not correct, at least for contractors of any size or diversity.

Why does the same contractor behave differently on one job relative to another? Why does a contractor bid differently relative to past practices or experiences? Why is the contractor’s price so high on this bid when it was so low on another bid? We expected the contractor to be competitive and they are not. Another scenario, we expected the contractor to not be competitive; but, they have the best proposal and bid. There are many potential reasons. The answer may reside in the project initiation process.

PROJECT PLANNING – Managerial Considerations (Part 1)

December 20, 2012 By George T McLaughlin PMP CCM

Introduction

After a long period [since March 2012] of inactivity, McLaughlin and McLaughlin is pleased to resume posting activity in this blog. Project Professionals is intended to offer advice and tips regarding various aspects of Program and Project Management. For a statement of blog Objectives and Goals, please follow this link.

During this inactive period, M&M has been performing two time-consuming assignments. One is program management support work on large Canadian oil sands investment/expansion program. The second is a construction claim on an international power plant project.

In considering the general topic of project planning, consider the following question. Why do so many projects experience serious negative issues, if not failure, when project planning has been pursued? Often the answer is that the plans are defective or ignored. Alignment, implementation and updating are essential features. Good quality plans must be developed and implemented. Often, this is not the case.

[Continued] [Read more…]

Filed Under: Claims, Featured, General, Projects, Uncategorized Tagged With: Best Practices, Chartered Institute of Building (CIOB), Doctor Harold Kerzner, Earned Value Management, McLaughlin & McLaughlin, PMBOK, Preliminary Project Scope Statement, Project Charter, Project Execution Plan, Project Execution Planning, Project Initiation, Project Management Institute (PMI), Project Planning, Project Sponsor, US Army Corps of Engineers (USACE), www.mclaughlinandmclaughlin.com

Labor/Labour Productivity – Overtime Impacts (Part 11)

October 22, 2011 By George T McLaughlin PMP CCM

PLANNING CONSIDERATIONS

This is the eleventh posting regarding labor/labour productivity and disruption. This contribution provides managerial considerations or issues regarding the impact of overtime on labor productivity. The Subject Series can be viewed here.

Two key points:

“The project plan is needed as a baseline to calculate the expected cost and time performance (cost estimate or price and the project schedule)”
“Time and cost forecasts must be evaluated and adjusted if the project plan execution changes and overtime is introduced, increased or reduced.”

Project planning is one of the major challenges for program and project management teams. Past posts have discussed many aspects of project planning. The series regarding Project Management Challenges is here. Part 5 of this series is particularly relevant or germane to the discussion regarding the impact of overtime on labor productivity in this post.

The impact of overtime on labor productivity is a relevant and serious consideration in many aspects of program and project management. Understanding the impact on labor/labour productivity and cost due to overtime is an essential skill related to both planning and forensic analyses. Remember, the impact on productivity applies to all hours worked, not just the hours associated with premium time costs. Hence, often the productivity impact is more costly than the premium time compensation component of the payroll costs.

Perhaps more importantly the impact on the schedule duration must consider the planned and forecasted progress using the proper productivity. As overtime is introduced, progress may well be impacted. The time impact of more work hours per week is mitigated or offset by the lowered productivity.

The impact of overtime on labor/labour productivity is not limited to construction field labor. It presents in engineering, construction management, programming, consulting and other professional man-hours. [Read more…]

Filed Under: Claims, Featured, General, Productivity, Projects Tagged With: Best Practice, Best Practices, Construction Contract Claims, Construction Contract Planning and Scheduling, Field Labor Productivity, George T. McLaughlin PMP, Labor/Labour productivity, Managing risk of delay, McLaughlin & McLaughlin, Overtime impacts of productivity, Productivity Management, Project Execution Planning, Project Management Plan, Project Planning, Risk of Delay, www.mclaughlinandmclaughlin.com

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