Due to the nature of construction contracts, some variances can be expected and should be accounted for the in scope of the project. The scope of a project may need to change due to site conditions or the timeline may need adjusting to accommodate requested changes by the owner or unexpected events. Construction claims arise when one of the contracted parties believes the conduct of the other entity entitles them to receive damages. Smolin has years of experience both preparing and defending construction claims. Our qualified professionals include forensic accountants, auditors and investigators that work tirelessly to provide clients with the specific support they need.
Delay of construction claims are among the most common types of construction claims. Although the idea that construction was delayed is simple at first glance, delayed construction claims can be the most complicated to navigate. While some delay should be accounted for in the scope and timeline of the project, there are many issues that may result in a project not being completed in a timely manner including:
The first step in all delay of construction claims is to analyze the contract and the issue to determine both the scope and if the claim has merit based on the specifics of the contract. A part of this analysis is determining the root cause of the delay which may be vastly different than it appears at first glance. If a claim is verified to have merit, the next step is to determine the financial or time adjustment the claimant is entitled to. Often enough, Eichleary formula is used to calculate delay damages.
Often, there are multiple parties associated with construction projects. It is common for design to be done by one entity while construction is done by another. Additional third parties may include architects, attorneys, vendors, contractors, insurance companies and financial institutions who might have been involved with outlining and designing the project. Despite the best efforts of all involved, defects in design or in the construction of those designs do occur. These types of construction claims require that investigators identify the root cause of the design or construction issue, quantify costs and determine damages when they are applicable. Common design issues can be attributed to:
The issues above can result in design issues that are structural or cosmetic and can significantly impact both the cost and timeline of a project. When quantifying costs, a qualified construction claim professional will need to evaluate both the damages associated with the defect and the additional cost of resolving the problem.
Labor is a key component of any construction project. During the planning phase, productivity standards are generally set based on industry standards and professional knowledge. When laborers fail to meet those productivity standards, a project may run behind schedule and above budget. Common causes of productivity claims include:
Productivity claims require professional expertise and investigational skills. In order to support or defend a productivity claim, a construction claim consultant must:
Site condition construction claims address the fact that the condition of the work site was not as expected. This issue may be the result of a material difference between the state of the site at the time of contract execution and the start of construction. Site issues may either be foreseeable due to inaccurate information or unforeseeable, such as unknown underground conditions. Common types of site condition claims include:
The first step in site condition claims is to understand how the contract specifies site condition issues will be addressed. In many cases, one or both parties assume the risk of unknown site conditions.
Failing to consult a construction claim professional can have a significant financial impact for your company. Construction claims, particularly those that have moved to litigation, require expertise, a thorough understanding of contract law and professional forensic support in order to protect your organization and achieve the best outcome. Choosing to pursue or defend a claim without professional assistance will likely place your company in a poor negotiating position.