Claims, delays and large cost overruns are almost considered inevitable for major construction projects. Whether it be from unforeseen circumstances or through conflict between teams, these unbudgeted costs cause delays and disruption. As the industry continues to work toward post-pandemic recovery, it will be forced to adapt and implement technology to solve problems, including contract and claim disputes.

When examining projects with disputes and claims, a common theme arises: miscommunication. With scheduling and cost pressures from clients, design teams are encouraged to complete their work and start procurement processes immediately, before consultation with other teams. This means that contractors are unable to fully understand the project scope and risks before preparing estimates and schedules. When a contractual dispute does arise, it is difficult to quantify and substantiate it correctly, which puts consultants in a dilemma. Coordinated technology can create systems that mitigate errors and delays, reducing the number of disputes and claims that arise throughout the process.

New solutions

Traditionally, the construction industry has been reluctant to implement technology due to expensive software, varying platforms and a lack of training. With the pandemic accelerating digital adoption and remote work, the industry has been forced to adopt technologies and solutions that allow projects to continue despite new regulations. With solutions ranging from scheduling to site monitoring programs, construction teams are now able to collaborate from remote locations. This has benefited the claims industry, as teams are able to coordinate on projects in real time and track changes throughout the project lifecycle.

For contracts and claims, the priority is avoiding inconsistencies between bidding and actual information. Disputes lead to project disruption that can be time-consuming and expensive to settle, which is critical to avoid as the industry attempts to recover after the pandemic. While at face value, new technologies may seem costly and tedious to implement, the early use of coordinated design technology will lead to improved efficiency and information flow. This allows project teams to clearly understand the scope of work, and accurately price and schedule the project, leading to fewer disruptions. With improved information, budget overruns and disputes can be avoided. If they do arise, they can be settled quickly and at the correct cost.

Universal technology

Across the construction supply chain, the use of technology has progressed at different paces. Design consultants first introduced CAD and BIM coordination, but this stand-alone platform was often poorly organized with other team members. Contractors have progressed to using technology for estimates and schedules, but these efforts also remain uncoordinated. Improving contract and claim processes is reliant on the industry’s ability to create universal solutions. This will help with collaboration, especially if the industry continues to work remotely. It will also save the industry time, as data doesn’t need to be translated through various platforms to meet the diverse needs of the sectors.

To encourage adoption, solutions need to come from the top down and be implemented early. As trades are historically slower at adopting technology, it's imperative to ensure buy-in from them before signing any contracts. One solution that has been discussed for the industry is blockchain. Blockchain can register and track changes digitally to designs, project timelines or costs. Disputes often arise when two parties are unable to reach an agreement because of misinterpretation of information. With a record of when, and by who, the changes were made, there is a higher level of transparency among teams. In the event of disputes, claims can be resolved quickly by reviewing the ledger.

The use of shared design platforms can help prepare coordinated information and provide early identification of potential clashes. Successful contract administration depends on transmitting coordinated information to all teams for each stage of the construction process. This allows for accurate and detailed estimates and schedules early in the project lifecycle. During the construction phase, contractors and subcontractors can monitor the projected spend and schedule against actual data, identifying issues as they arise. This helps clients become aware of problems within the contractual notification periods and can help them determine if the extra cost has merit. To avoid costly disputes, early, detailed identification and notification is needed to provide cost certainty for owners and contractors.

Meeting expectations

It is imperative that construction firms, project managers and contractors meet clients’ fast-track requirements, but it must be done without the risk of budget overruns and claims. The construction industry has been slow to implement new technological solutions in the past, but the pandemic has changed the landscape. Now, firms are being forced to innovate to continue projects in spite of new regulations. This represents a unique opportunity to use coordinated technology and software solutions throughout the project lifecycle to mitigate claims, delays and large cost overruns, while coordinating with different sectors and teams.