Making sure that entitlements for delays and changes are protected is the lifeblood of any contractor. The risk here is existential to the organisation and many contractors have gone bankrupt because they failed to manage their changes properly. Having the appropriate processes in place for managing construction delays and changes not only protects you but can easily double the slim margins when done right. Imagine making 6% instead of 3%? I’m going to focus in this article on time impacts with a follow-up article that covers change more broadly.
Protect your margins by making progressive claims
Progressive delay claims are about safeguarding your entitlement. They help to provide a clear and contemporary view of delays and help to minimise confusion and potential blame which is particularly important once a project is on-site and the team becomes bombarded with noise.
Whether it is design changes, preceding trades, COVID impacts or additional scope requests, what may seem like an innocuous change could in fact have major ramifications elsewhere. For example, small changes in design that have little cost in the way of materials and labour often have huge delay implications. Then it comes to changing the value in the time delay often outweighs the value in the labour/materials by several times.
There is always going to be a lot of change & delay
It is easy to blame chaos and a loss of money on large amounts of change and client issues. Seemingly minor decisions and changes quickly escalate into something major with adverse effects on both cost and time.
Instead of seeing change as a reason for the chaos. It should be seen as an inevitable part of project delivery. It is also an opportunity for contractors to improve their revenues as the scope expands.
Substantiation is everything when making a strong claim
To make a strong claim you must make sure it is substantiated. A good case must have detailed records and evidence to support your claim. The most important document that is often overlooked is having strong shift reports to help you show what people were doing, when and why.
The next step involves you proving how they were delayed in relation to the claim being made. This is done using regular high-quality programme updates which include impacts known to date and described in a detailed narrative. It is often advantageous to agree to the delays incurred with the client every month as part of the programme submission process.
All parties involved in the issue should provide this level of evidence including sub-contractors and the wider design team or else they could leave themselves open when it comes to recovering any compensation from the resulting claim.
Good Change Management doesn’t happen by accident
Good change management is the basis of all claims. Good change management doesn’t happen by accident. It’s too easy to leave things until the end of the project when the evidence and administer them in one big batch. But really that’s much too late. The full reasoning supporting the claim can become far too sketchy and vital evidence and granular detail may be lost. You want to give your claim the best chance of success so tackling it when it’s fresh in your mind and gathering the evidence close to the time the event happened is the best way to build your case.
You don’t have to look far to see the legacy of construction delays being mishandled and left to the last minute with an almost annual swath of write-downs coming to light when contractors publish their annual results.