Construction Claims Mitigation

Through Early Contractor Involvement

FEATURED PAPER

By Dr. Moustafa Abu Dief, CFCC™, MCIOB, MCInst.CES

Contracts and Claims Consultant,
Dar Alriyadh, KSA

and

Ahmed Elsayed

Scheduling Civil Engineer Architect house
Riyadh, KSA
Master of Civil Engineering candidate
Altınbaş Üniversitesi Turkey

Abstract

Construction claims are causing various disputes in the projects and significant number of projects are not completed as per the signed contract but they are closed by dispute resolution procedure either to be presented to the litigation system or an alternative dispute resolution mechanism. Therefore, it is crucial to eliminate the disputes through the prevention of the claims causes which shall certainly mitigating the construction claims. The mitigation efforts vary in different form of contracts and dealing with the prevention with claims causes is the most efficient approach for the contracts and dealing with the prevention with claims causes is the most efficient approach for mitigation success. This paper is discussing the Early Contractor Involvement as an effective approach to prevent the causes of the claim related to different project trades like design, commercial, an extension of time, termination claims. The paper discusses also the ECI contract preparation, implementation, and it is providing the recommendations for the ECI success and the impact on the construction claims domain.

1. Introduction

Early contractor involvement (ECI) is an approach applied in construction procurement that enables the contractor early engagement in the project prior to completing the design phase. This approach ECI can be applied in different types of contracts including Limp-sum Guaranteed Maximum Price contract, Construction Management Contract, and Managing Contractor. The ECI approach entails an early contractor engagement with an agreed payment including also overhead cost, preliminaries, and profit margin. Because the contractor is engaged in an early stage where the project design is not completed and the project amount is not finalized. ECI This method of engagement can be contracted for the different endeavour, as it may be for the construction phase only, or can be agreed for design and build or the employer may engage the contractor for design finalization and then build the facility. Therefore, the fees may be agreed based on a lump-sum basis.

2. Benefits for early contractor Involvement.

The ECI approach entails different advantages as shown in figure 1.

• Enables the long lead items procurement which saves time as the order is placed while the design phase is yet to be completed and it also early identifies the risks pertinent to long lead items availability and time for delivery.
• The contractor can start working in distinct work portions while the design phase is ongoing, ECI is the best approach to link the project design phase with the construction phase (Löwit and Dostálová, 2014)
• During the design phase, the contractor is adding value through past experience sharing, value engineering, and constructability verification which mitigates the claims classified under potential changes.
• Contractor engagement can verify the cost elements which increases the cost estimation certainty as the contractor is consulting the sub-contractors and disciplines suppliers.
• Overall project duration is compressed due to the fast track approach for being working on the site and procurement while the design phase is yet to be completed.
• The ECI phase provides awareness and the quired information about the project to the parties. It enables joint coordination and workshops to refine the scope and project plan for the project constraints ahead of the construction phase.
• The level of contractor realization is increased by the ECI approach which eliminates risks and enrich the contractor planning for the construction phase.
• It is viable that ECI ensures that no commitment by the employer for final scope or final cost or legal engagement with the ECI phase contractor related to the construction phase.

Previous studies concluded that the prime advantages are:  the advanced business relationship between the practitioners, the contractor design inputs, early risk identification, improved resource management and contract preparation which eliminates claims and ensures project success (Rahman and Alhassan, 2012).

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How to cite this paper: Abu Dief, M. I. and Elsayed, A. (2020). Construction Claims Mitigation Through Early Contractor Involvement; PM World Journal, Vol. IX, Issue V, May.  Available online at https://pmworldlibrary.net/wp-content/uploads/2020/05/pmwj93-May2020-Ismail-Elsayed-Construction-Claims-Mitigation-Through-Early-Contractor-Involvement.pdf

About the Authors

Dr. Eng. Moustafa Ismail, _CFCC^TM_{, MCIOB, MCInstCES}

Egypt- Kingdom of Saudi Arabia

Dr. Eng. Moustafa Abu Dief. CFCC™, CCP, PMP^®, MCIOB, RMP, MInst.CES. Certified Forensic Claims Consultant and he is a Certified Arbitrator with over 30 years of experience in the field in Egypt and Saudi Arabia, mainly in contract and claims domain. Moustafa is delivering training courses in Claims, FIDIC, NEC3 contracts, Forensic cost claims and dispute resolution management. Moustafa, can be contacted at the following: https://www.linkedin.com/in/moustafa-ismail-ph-d-cfcc-mcinstces-mciob-rmp-pmp-ficcp-ccp-93798a16/  moustafa1_ismail@yahoo.com

Ahmed Ahmed Elsayed

Istanbul, Turkey

Ahmed Elsayed is a scheduling civil engineer at Architect house, Riyadh, Kingdom of Saudi Arabia; he is a Master of Civil Engineering candidate at Altınbaş Üniversitesi Turkey. https://www.linkedin.com/in/ahmed-moustafa-1b69988b/  http://www.altinbas.edu.tr/tr ——- email — ahmed.elsayed@ogr.altinbas.edu.tr