Appendix D: Claim Management Systemunder FIDIC Forms

D.1 Claim Management Team Responsibilities

Comment: This is an example of an arrangement of a Contractor’s Claim Man-agement System that can be used by employers and/or engineers with necessaryadjustments. Every project is different in terms of its size, price, time, country andrisk, so the number of employees must be adjusted accordingly. There should beone individual employee (or a team) dealing with the particular categories suchas, for example, claim administration and quantification, design, time schedule(programme), contract interpretation, monthly statements, invoicing, insurance,subcontractors, employer’s claims and mutual claims in a joint venture. Dailycoordination meetings may be necessary in large projects where numerous sitemanagers and claim managers need to share information as openly and efficiently aspossible. Legal support may also be necessary in particular situations. Furthermore,it is difficult to hire professional claim managers in many countries so lawyerssometimes step into this function.

E=Employee

D.1.1 E1 – Project manager

Examples of responsibilities:

E1 is primarily responsible for identifying all factors that have an impact on timeand price during the project.

E1 is responsible for claim management as a whole, i.e. mainly for claim identi-fication, keeping contemporary records, coordination of the team, early warn-ings, analysis of claims, decisions regarding the claim notice, consultation withthe engineer or the employer, notification and submission (quantification) ofclaims.

International Construction Contract Law, First Edition. Lukas Klee.© 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.

Appendix D: Claim Management System under FIDIC Forms 479

E1 is responsible for documentation, quantification and calculation of the valueof claims for an extension of time for completion and additional payment (forthe claim submission and enforcement).

E1 is responsible for deadlines (i.e. mainly for notification and submission ofclaims).

E1 is responsible for proper and efficient claim management organisation and del-egates responsibility for the purpose of efficient claim management.

E1 is responsible for coordination and consultation within the consortium(joint-venture).

E1 is responsible for the time schedule (programme), progress reports andmonthly statements and updating as per the contract.

E1 is responsible for proper and formal correspondence (i.e. mainly for notifica-tion and submission of claims).

D.1.2 E2 – Design and time schedule (Programme)

Examples of responsibilities:

E2 is responsible for identifying all factors that have an impact on time and pricerelated to the design and time schedule, i.e. mainly for claim identification andkeeping of contemporary records.

E2 is responsible for monitoring and analysing the design works – mainly withregard to possible defects and respective claims.

E2 is responsible for the identification of the defects in the terms of reference(mainly the tender design, drawings, specifications, bill of quantities andemployer requirements).

E2 is responsible for time schedule up-dating due to EOT claim notifications andsubmissions (quantification).

E2 is responsible for the preparation and coordination of inputs for the updatedtime schedule.

Based on these inputs, the site manager prepares and updates the time scheduleand adjusts it according to the engineer’s requirements.

D.1.3 E3 – Site manager

Examples of responsibilities:

E3 is responsible for identifying all factors that have impact on time and price dur-ing the project. Everything must be documented and contemporary evidencekept.

480 Appendix D: Claim Management System under FIDIC Forms

E3 prepares necessary materials and documents for E1 to enable proper coordi-nation of the team, early warnings, analysis of the claims, decision of the claimnotice, consultation with the engineer or employer, notification and submission(quantification) of claims.

E3 is responsible for preparation of the documents and records for claim quan-tification and EOT evaluation/quantification (in cooperation with E2).

E3 is responsible for timely claim notification.E3 is responsible for preparation of the documents and records for progress

reports.E3 is responsible for the preparation of documents and records for proper formal

correspondence (i.e. mainly for notification and submission of claims).

D.1.4 E4 – Contract Interpretation, Monthly Statements,Invoicing, Insurance, Subcontractors, Employer’s Claims,Mutual Claims in a Joint Venture

Examples of responsibilities:

E4 is responsible for identifying all factors that have an impact on time and pricerelated to monthly statements, invoicing, insurance and subcontractors.

E4 is responsible for claim quantification (in cooperation with E3 for E1), i.e.mainly claims for additional payment including mutual damages compen-sation, cost of suspension, delay, disruption, termination and the effects ofvariation (such as acceleration and prolongation).

E4 is responsible for contract interpretation.E4 is responsible for claim management in terms of cost control and payments

(monthly statements, invoicing, and so on).E4 is responsible for insurance claim management.E4 is responsible for subcontractor claim management.E4 is responsible for employer claim management defense.E4 is responsible for mutual claims in a joint venture.

D.1.5 E5 – Administrative support

Examples of responsibilities:

E5 is responsible for the evidence of claims and administrative support for theteam.

E5 is responsible for systematic and clear evidence of letters and contemporaryrecords.

Appendix D: Claim Management System under FIDIC Forms 481

D.2 Claim Management Processes

Claim Identification

Early Warning

Claim Analysis

Claim Event

ContractualClaims

Claims underGoverning Law

Communicationwithin

Project Team

Analysis

Strategicanalysis

Contemporary Records

Claim Identification

Before theClaim Event

Contemporary Records

Claim Notice Decision

Negotiation with the Engineer/Employer

Claim Notice

Claim Submission (Quantification)

Engineer’s Response

Request forAdditional Details

Engineer’sDisapproval

28 days afterClaim Event at latest

DisputeEngineer’s Approval

In case of the lack ofIdentification before theClaim Event

42 days afterClaim Event atlatest - a FullyDetailed Claimor an InterimClaim

42 days afterClaimSubmissionat latest

482 Appendix D: Claim Management System under FIDIC Forms

D.3 Table of Contractor’s claims under FIDIC CONS

Clause in FIDIC CONS 20.1 Contractor’s claims

1.9 Delayed drawings or instructions2.1 Right of access to the site4.7 Setting out4.12 Unforeseeable physical conditions4.24 Fossils7.4 Testing8.4 Extension of time for completion8.5 Delays caused by authorities8.9 Consequences of suspension10.2 Taking over of parts of the works10.3 Interference with tests on completion11.8 Contractor to search12 Measurement and evaluation12.4 Omissions13.2 Value engineering13.3 Variation procedure13.7 Adjustments for changes in legislation14.4 Schedule of payments14.8 Delayed payment16.1 Contractor’s entitlement to suspend work16.4 Payment on termination17.1 Indemnities17.4 Consequences of employer’s risk18.1 General requirements for insurances19.4 Consequences of force majeure19.6 Optional termination, payment and release

D.4 Table of Employer’s claims under FIDIC CONS

Clause in FIDIC CONS 2.5 Employer’s claims

4.19 Electricity, water and gas4.20 Employer’s equipment and free-issue material7.5 Rejection7.6 Remedial work8.6 Rate of progress8.7 Delay damages9.4 Failure to pass tests on completion10.2 Taking over of parts of the works

Appendix D: Claim Management System under FIDIC Forms 483

Clause in FIDIC CONS 2.5 Employer’s claims

11.3 Extension of defects notification period11.4 Failure to remedy defects13.7 Adjustments for changes in legislation15.3 Valuation at date of termination15.4 Payment after termination17.1 Indemnities18.1 General requirements for insurance18.2 Insurance for works and contractor’s equipment