A Simple Format for a Construction Claim The prior newsletter discussed the documentation that should be maintained for a construction project. This article will discuss how that documentation should be incorporated into a construction claim. First, it is necessary to discuss what must be established to prevail on a claim. For the purpose of this article, a construction claim is a demand for payment of additional compensation, adjustment adjustment of the parties' respective contract obligations, or any other change in the contract compensation or terms. In presenting a disputed claim to the party with whom you are contracting it is necessary to establish the other party's liability for the claim (often referred to as "entitlement" and that the amount of the damages sought (often referred to as "!uantum" are correct. enerally, if you are unable to establish both aspects of the claim you will not prevail. Thus, establishing liability liability and damages of are e!ual importance. #onetheless, #onetheless, many claimants focus on the entitlement issues with the end result being that the damages are not properly established. $roving entitlement to prevail on a claim is generally a matter of ma%ing a correct legal interpretation interpretation of whether not the the facts as applied applied to the relevant relevant contractual provisions allow the recovery of additional additional compensation. &s a practical matter the provisions of the construction contract incorporate the plans and specifications. Therefore, the proper legal interpretation of the plans and specifications is essential. The actual analysis of the facts that entitle a claimant to recover the etra costs typically includes an objective review of the scheduling, plans, specifications, building codes and standards of the industry. any claim presentations include epert opinions. opinions. )bviously, the application of the facts to the relevant contract provisions must be made on a case*by*case basis and is beyond the scope of this article. +stablishing the !uantum aspect of the claim also re!uires an objective analysis of the costs associated with the additional wor%. If the contract does not establish a method for determining the additional costs (e.g. T, the claimant should rely on cost accounting principals to !uantify the damages. The type of claim will generally dictate the method for calculating damages. -owever, the types of costs c osts that are considered include home office overhead, job site overhead, material costs, labor costs and e!uipment costs. )nce again such a discussion cannot be properly treated in this article. The remainder of this article will discuss the general format of a construction claim and set forth where the project documentation should be incorporated. enerally, a claim should be presented in the following order /over sheet &ll but the smallest claim should be presented in a bound pac%age. Three ring binders are preferable for freedom in gathering and refining the supporting documentation. documentation. 0hile not critical to prevailing on a claim, a cover sheet and inde at the front of the claim presents a professional appearance. +ecutive 1ummary sheet The eecutive summary is intended to be a short and concise overview of the nature of the claim and why the other party should be obligated to grant the claim. The eecutive summary should be a page or less and should be followed by a 2ist of +ach 1eparate /laim. The &ctual /laim &nalysis Typically, a construction claim will be comprised of a number of individual claims that re!uire re!uire separate analysis of the basis for entitlement and the amount of the damages that are being sought. The body of the claim should include a separate section for each individual claim. The review should include the following
/laim 3 4 $rovide a simple descriptive title for each claim. &. 1ummary of /laim 5riefly describe the basis for the claim and the amount sought. 5. 6nderlying facts This section should include a brief summary of the relevant facts that support the claim. /. +ntitlement &nalysis This section should include the rationale behind your contention that the contract, including the plans and specifications, allows for the additional compensation you see%. &dditionally, this section should set forth an analysis that applies the relevant facts to the contract provisions and any other legal basis for prevailing on the claim. 7. 8uantum /alculation &nalysis The eact amount of the additional costs that are being sought should be set forth in this section. The section should set forth the actual calculation that is the basis for the amount sought. For eample, if the +ichealy formula is used to determine home office overhead, the actual formula should be set forth in this section. In addition, the legal rationale and9or accounting rationale for using that particular formula for calculating home office overhead should be discussed. +. Factual 1upport for /laim The net section should list all the relevant documents that support the claim. /ontract $rovisions That 1upport +ntitlement and 8uantum /alculation The relevant contract provisions should be set forth in this section. /hronology of +vents and /orrespondence In a columnar format, the %ey date and then a description of what occurred on that date should be set forth. :ey dates should, at a minimum, include (a when the claim wor% was discovered, (b when the claim wor% was reported, (c when the claim wor% was started, and (d when the claim wor% was completed. 2ist of documents relating to the claim In this section list all the documents that support the claim. The documents should include (i specifications, (ii drawings, (iii relevant correspondence, (iv clarifications and re!uests for information schedules, (v change order and ;FI logs, (vi photographs, (vii schedules, and (viii any other relevant documents. F. &ttachments +ach claim should be supported by separate copies of the relevant specifications, drawings, clarifications9re!uests for information, schedules, job diaries, ;FI change order logs, submittal logs, correspondence and similar documentation. /onclusion The claim format set forth in this article is a general outline of what should be included in a claim. The actual format should be modified to present the claim in a persuasive manner.
1ince many contracts re!uire the claim to be submitted in a particular format at a particular time and updated on a particular, set schedule, you should review your contract to determine what contractual obligations eist. If you fail to follow the contractual mandates relevant to the claim presentation, your claim may be barred. Therefore, if the contract mandates the format of the claim you should follow those re!uirements. If you are ineperienced in preparing a claim document you should see% the guidance of competent consultants who speciali
