Services - Dispute Avoidance

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Transparency will provide evidence of costs

It is therefore critical that preparation, positioning, defence and rebuttal of contract claims starts during the procurement and contract strategy stage of any project. The engagement model and specific terms and conditions that form part of the agreement must include access to and copies of information that may be required to evaluate and assess any entitlements. In other words, consideration of the evidence as to costs, resources and delays to the intended programme should not be left until the end of the project or until receipt of a claim. The terms and conditions at the outset should provide for early consideration of the facts occurring throughout the project duration. As an alternative a properly managed cost plus model may be considered.

Once appropriate terms and conditions are put in place, that provide for transparency as to costs, resources and programme activity, the next stage is to ensure that the project is set up to effectively manage the defence, rebuttal and preparation and submission of claims or alternatively properly manage the proper costs allocated to a project if a cost plus model is used.

This will include consideration of evidence and records surrounding matters such as costs, resources, intended versus actual build programmes, critical path analysis and reasons for delay, acceleration measures, acceleration costs, contract commentary and correspondence in respect of contract entitlement or otherwise.

Transparency will inform appropriate resolution strategies

With these measures in place all claim entitlements or properly incurred costs can be spotted early and appropriate resolution strategies can be considered and established to avoid formal disputes.

For projects without these measures in place, specific contract audits can be carried out to establish what needs to be done to properly evaluate claims and minimise the exposure to the time consuming and costly dispute resolution process. Ultimately claims need to be managed, resolved and a final outcome and overall agreement concluded.

Right measures, right time

But to avoid the bolting horse, the stable door needs to be closed. The right measures in place at the right time, i.e. at the procurement and contract strategy phase, mitigates the risk of spiralling project costs and time consuming retrospective activity in resolving submitted claims. The right measures at the right time and management of those measures will assist in dispute avoidance.

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