CE-545 - Term Paper Final Report - Waleed Mazhar Kalhoro - Construction Mngt. - WK

NED University of Engineering and Technology, Karachi
Civil Engineering Department
CE-545
Construction Claim Management
Term Paper
Claims in the Construction Industry of Pakistan Issues on the Contractor side and Recommendations
for Improvement
Prepared by:
Mr. Waleed Mazhar Kalhoro/CE-107
Course Instructor:
Prof. Rizwam Ul Haque Farooqui
Abstract
This study was carried out to highlight the issues faced by contractors in Pakistani
construction industry and recommend plausible solution for such. In this study it was found
that there are three major that prevails in Pakistani Construction industry. They are poor and
insufficient documentation, secondly concerned individual with innate knowledge of site
work play mere or no part in generating claims and lastly communication barrier stalls the
claim management pace and entail huge cost. Therefore its recommended that step for
better site work documentation, encouraging concerned people to play their part in claim
preparation and better communication amid Contractors and Engineers should be taken to
scrap of such issues in Pakistani construction industry.
ii
TABLE OF CONTENTS
TITLE PAGE
ABSTRACT
TABLE OF CONTENTS
i
ii
iii
Chapter 1: Introduction
1.1 Scope
1.2 Objective
1.3 Methodology
1.4 Limits and Exclusions
1.5 Term Paper Timeline
1-2
1
1
1
1
2
Chapter 2: Literature Review

2.1 Introduction
2.2 Issues amid Claims
2.2.1 Record keeping and Documentation
2.2.2 Contract Knowledge
2.2.3 Change Orders
2.2.4 Planning and Schedules
2.2.5 Future relations concerns
2.3 Claim Management
2.3.1 Record Keeping and Documentation
2.3.2 Notification of Change
2.3.3 Contract
2.3.4 Planning and Schedules
2.3.5 Proactive Action
3-12
3-4
4-7
4-5
5
6-7
7
7
8-12
8-9
9
9-10
10-11
11-12
Chapter 3: Methodology
3.1 Record keeping
3.2 Change Order
3.3 Contract Knowledge
3.4 Claim Preparation
12-15
12-13
13-14
14
14-15
Chapter 4: Data Analysis

4.1 Mean
4.2 Standard Deviation
4.3 Importance Index
15-16
15
15-16
16
Chapter 5: Results and Discussion

5.1 Record keeping
5.2 Extent of use of project documentation
5.3 Change Order
5.5 Claims Preparation
5.5.1 Responsibility of Claim preparation
5.5.2 Time Involved in preparing Claim
5.5.3. Cost of preparing claim
5.5.4 Reasons for Delay in Claim preparation
17-24
17-18
18-19
19-21
21-22
22-24
22
22-23
23
24
Chapter 6: Conclusion and Recommendations
24-25
APPENDIX A
APPENDIX B
REFERENCES
26-30
31-40
41
iii
Claims in the Construction Industry of Pakistan
1. Term Paper Introduction

1.1 Project Scope
Identifying the reasons behind claim generation and its respective preparation issues
from Contractors perspective in Pakistan construction industry.
1.2 Objective
In the study we will identify reasons incurred by Pakistani contractor for claim
generation and simultaneously study the issues that lingers contractors in the midst of
claim preparation.
1.3 Methodology
1. Firstly Literature Review will be carried out to identify skill and attributes.
2. A questionnaire will be developed, and response will be sought from contractors
3. Statistical analysis will follow to evaluate respondents response; coherence will be
evaluated and key issues will be highlighted.
4. Conclusion will be drawn as per analysis.
5. Recommendation will cease the term paper.
1.4 Limits and Exclusion
Study will be limited to Contractor working within Karachi only.
Statistical analysis will include Mean, Standard Deviation, and Importance Index.
1.5 Plausible Table of Content

The chronology of Content can be estimated as follow
1. Abstract
2. Literature Review
3. Methodology
4. Result Compilation/Statistical Analysis
5. Analysis and Discussion
6. Conclusion
1.6 Term Paper Time Line
2
Exhibit 1Term Paper Timeline
2. Literature Review
2.1 Introduction
The term "construction claim" is commonly referred as any application by the contractor
for payment that arises other than under the ordinary contract payment procedures.
Potential of claims rises when the contractor incurs additional costs and/or there is a delay
amid his contract. The clam is an instrument used by contractors to request more time
and/or money. Claims can also originate with the owner and are defined as the assertion
of right to payment arising under the contract for neglect or delay on the part of the
contractor (Jergeas & Hartman, 1994).
Claims may arise during a construction project from numerous reasons. Such reason
include: (Jergeas & Hartman, 1994)
Increase in scope of work pertaining to changes, extras and errors.
Insufficient bid information
Faulty and/or late owner-supplied equipment and material
Inferior quality of drawings and/or specifications, giving rise to ambiguities in contract

requirements.
Insufficient time for bid preparation
Stop-and-go operations because of lack of coordination, design information,

equipment, or material
Work in congested areas and overcrowding
Acceleration to regain schedule
Inadequate investigation before bidding

3
Unbalanced bidding and underestimation.
Authors Dickmann and Nelson have found that the most common causes for a contract
claim are design changes and errors. A comprehensive analysis of claims indicates that 46%
resulted from design errors. An additional 26% were due to either discretionary or
mandatory changes. Thus 72% of all contract claims can be traced to design changes, extra
work, and errors (Jergeas & Hartman, 1994).
Contractors normally adopt a claims-conscious attitude and utilize claims as a profit center
(Hassanein & El Nemr, 2008).
2.2 Issues amid Claims
2.2.1
Record Keeping and Documentation
Contractors generally fail to protect their contractual position in the case of a claim. This
situation arises from failure to completely understand and actively manage the contract,
or failure to keep proper records (Jergeas & Hartman, 1994).
Maintain proper job records on a timely manner including time sheets, diary records,
reports, photographs, records of labors and weather and its effect on progress, progress
of the construction, site instructions, etc. (Zaneldin, 2006).
Proper documentation is imperative for Contractor as they eventually allow them to justify
and quantify requests for adjustment to the contract price and/or duration. Generally it
has been observed that most Contractors dislike paperwork an attitude easily
understood, but difficult to defend in litigation or arbitration. Notice provisions in
contracts are often neglected, extra work is routinely performed without written
authorization (on a limited scale), change orders are not qualified, erroneous or biased
4
minutes of site meetings are not objected to, self-serving letters are left unanswered,
written notes of important telephone conversations or verbal instructions are rarely
maintained, and contractual defaults by the owner are not documented or confirmed by
letter. (Jergeas & Hartman, 1994).
In a research conducted in the UK concerning the reasons for consultants' rejection of
contractors' claims, one of the main causes were poor information systems and
documentation practices by contractors (Vidogah & Ndekugri, 1997).
A cultural factor has been identified as a possible cause for the lack of notification and
documentation in construction sector, namely the "fear of consultant phenomenon"
(Hassanein & El Nemr, 2008).
2.2.2
Contract Knowledge
All too often contractors do not read the contract document before bidding and, in many
instances, not even when they execute the document. Its imperative that contractors'
site superintendent should fully review the contract documents and compare them with
those that were bid; (Jergeas & Hartman, 1994).
A significant number of contractors do not quote a contract clause when preparing a claim
(Hassanein & El Nemr, 2008)
In the event of ambiguity, the courts of most jurisdictions will decide against the author
of a contract, this was assumed to stem form their lack of knowledge with contract and
its relevant clauses (Hassanein & El Nemr, 2008).
2.2.3
Change Orders
Change order claims constitute the majority of claims in the industrial sector, as they
represent approximately 54 percent of the total number of claims (Hassanein & El Nemr,
2008).
Site supervisors should not develop the habit of waiving claim rights by negotiating and
signing off on change orders that pay part of the extra costs. If the site superintendent
cannot assess in detail the aforementioned impact costs at the time of issue, contractors
must consider indicating that the change only covers the direct costs incurred in
performing the work and should formally preserve their right to recover other costs
associated with the added work at a later date (Jergeas & Hartman, 1994).
Have signed change orders before starting doing these changes on site (Zaneldin, 2006).
Oral change order have to contractual weight (Hassanein & El Nemr, 2008). The
relationship between oral change orders and documentation is that frequent verbal
instructions with no supporting documentation bar the contractor from recovering the
associated incurred expenses (Hassanein & El Nemr, 2008).
Two Canadian construction lawyers advise contractors to include the following two
qualifications in the change-order quotation to preserve the contractor's right to bring the
impact claim of the cumulative effect of change orders later (Jergeas & Hartman, 1994):
'We hereby reserve all our rights to claim subsequently for the costs, of any nature
whatsoever, other than direct costs, associated with the performance of this extra work
and the delays which may result. (Blaikie 1986)
"The above price does not include any impact or delay costs that may result from this
change in the work or from the cumulative effect of this and other changes, and the right
to claim such costs is hereby reserved." (Kenny 1990).
2.2.4
Planning and Schedules
Finishing a project on schedule is a difficult task to accomplish in the uncertain, complex,

multiparty, and dynamic environment of construction projects (Zaneldin, 2006)
Planning is pivotal amid project, and must be based on clearly defined objectives. With
proper planning, adequate resources are timely available, adequate time is allowed for
each activity. Planning and scheduling should be cost effective, simple, and practical
(Jergeas & Hartman, 1994).
Scheduling techniques range from simple hand-drawn bar charts to computerized
network analysis. The most suitable presentation of schedules for contractors is the bar
chart, which should be based on the critical path method (CPM) (Jergeas & Hartman,
1994).
2.2.5
Future relation concerns
Contractors sometimes waive their contractual rights due to fear of bruising their business
relations with the owners and consultants, which could affect their chances as candidates
for future potential projects (Hassanein & El Nemr, 2008). Fear of losing bargaining power
of the Client and the Engineers, were highlighted as limits of the external environment
(Klee, 2013).
2.3 Claim Management

1. Record Keeping and Documentation
Records and documentation play a very important role in the settlement of contract claims
(Chovichien, n.d.). "The paperwork" is an important part of project management and
claims have to be solved in formal way (Klee, 2013).
Contractors must establish and maintain a good record-keeping system that documents
job progress and problems as they occur. Such a record system should monitor cost, time,
scope, and quality. Daily-progress reports should be kept and should indicate the date,
weather and temperature, type of work in progress and quantities produced, and
hindrance to job progress and by whom. Photographs and video films (in cases where not
prevented by contract documents) should be taken on a routine basis (dated and with
commentary) to show construction progress, site conditions, and particular problems
encountered (Jergeas & Hartman, 1994).
One of the most important tools for proper documentation management is the use of
daily records from the site team, particularly if these documents were signed by the
consultant (Hassanein & El Nemr, 2008).
Record should be maintained in form of memoranda pertaining to conversations,
inspections, directions, or observations. Further records of correspondence between
parties to the contract; minutes of weekly job-site meetings and other meetings; notes of
telephone conversations, progress-billing certificates and all data submitted to support
such requests; cost and productivity reports; delivery reports of owner-supplied material
and equipment; diaries; job schedules (periodically updated); transmittals; drawings and
8
specifications; shop drawings; vendors' drawings and specifications; change orders and
associated documentation; inspection reports; and accident and site safety reports
(Jergeas & Hartman, 1994).
Another form of record management is that of information technology system within the
organization. Electronic document management systems allow information stored in
different forms to be linked and accessed in a flexible manner (Vidogah & Ndekugri, 1997).
It is recommended that contract awareness should not be restricted to high-level site
management, but should be directed to site engineers directly dealing with the consultant
or owner's representative (Hassanein & El Nemr, 2008).
2. Notification of Change
Construction claim notification involves alerting the other party a potential problem in a
manner that is non-adverserial. Time limit requirements are very crucial and critical
(Chovichien, n.d.). An initial letter of a claim notice to the other should be concise, clear,
simple, conciliatory, and cooperative. It should indicate the problem and alert the other
party of the potential increase in time or cost (Kululanga, et al., 2001)
3. Contract
Articles in the section of the contract entitled "General Conditions" dealing with the
following matters should be considered to ensure the contract is complete with respect
to the terms and conditions to have a dispute mechanism (Jergeas & Hartman, 1994):
a. Changes/extras
b. Disputes
c. Disclaimer
9
d. Authority/roles/definitions
e. Soil/sit conditions
f. Delay
g. Payment
h. Notice provisions.
To enhance the chances of success, contractors submitting claims must closely follow the
steps stipulated in the contract conditions, provide a breakdown of alleged additional
costs and time, and present sufficient documentation (Zaneldin, 2006).
Clauses regarding the requirements for documenting minutes of meetings as well as
exchanged correspondence should be included in contracts. In case of either party's
failure to fulfill such contract requirements, it should be clearly stated that the party at
fault must waive its right regarding the matter in request (Hassanein & El Nemr, 2008).
Have a clearly written contract with no ambiguity, read the contract several times before
signing it, to understand any unclear clauses, its advised that a third party should be asked
to read contract documents before the bidding stage. Use special contracting provisions
and practices that have been used on past projects, which proved to be successful in
avoiding and resolving disputes during construction (Zaneldin, 2006).
4. Planning and Schedules
The regular updates and issuance of the schedule to the owner is a very effective
communication tool and is generally considered to satisfy the legal requirements for
providing notice of problems and associated delays (Jergeas & Hartman, 1994).
10
The schedule can be used to determine the impact of changes to the plan and to establish
a cause-and-effect relationship in a claim situation, i.e. the impact of delays, reduced or
increased resources, scope changes, resequencing and other workflow changes to current
activities (Jergeas & Hartman, 1994).
5. Proactive Action
Contractors' site supervisors and project managers should consider the following
proactive steps to protect contractors' interests and reduce liability (Jergeas & Hartman,
1994):
1. Request appropriate extension of time whenever significant events occur which may
entitle you to an extension of time and make it clear who pays for the costs of
extended duration.
2. Make it clear who pays for acceleration.
3. Respond as quickly as possible to every complaint initiated by the owner.
4. Analyze job progress in detail prior to any job-site-progress meetings that are held.
Such meetings should be used as a forum for discussing and notifying potential or
current delays, extra work, etc.
5. Record in detail all delays and man-hours lost, conflicts, and discrepancies. Inform the
owner when delays occur so that the contractor does not incur responsibility due to
lack of information.
6. Carefully read all correspondence and minutes of meetings and promptly record any
disagreements you may have with them.
11
7. Obtain written confirmation of all oral directives issued by the owner or engineer. If
they do not confirm in writing, the contractor should write a confirmation letter to
them.
8. Forward any significant information received from or sent to the owner to senior
management so that they can keep current with the project and determine if further
specific activity is required
9. Wait for authorization before proceeding with changes and extras. Without proper
directive to do such work, contractors will typically be deemed to be a volunteer in the
performance of the extra work and may not be paid.
10. Qualify the basis of, and limitations to, the pricing of your change.
Gregorc and Weiner (2009) mention that within a project of certain value there should be
a resident Claim Manager on the project team. This specialist would be responsible for CM
(Klee, 2013).
3. Methodology
3.1 Record Keeping
To ascertain proper paperwork amid construction endeavor, we asked whether they had
defined, isolated and tangible procedure of maintaining site paperwork.
In order to evaluate contractor keenness in timely maintenance of daily reports and other
related paper works pertaining to site works, we asked them to rate their answer on scale
of 1-4, with 1-never, 2-sometimes, 3-mostly and 4-always
In order to evaluate the extent of how many time contractors did lose their claim (given
any claim was ever filled) or faced difficulties in defending their claims in litigation,
12
pertaining to insufficient data provided at their end, we asked contractor to rate such
instance on a Likert scale of 1-5. Where 1-Always, 2-mostly lost/ faced difficulties, 3-Never
filled any claim, 4-few times lost/faced difficulties and 5-Never.
Further we inquired of contractor of any electronic document management system
(EDMS) or any software of same essence.
Lastly contractor were asked to rate extent of use of Project documentation while
preparing claim, for this reason 12 different documents were rated on a scale of 1-4, with
1-never used, 2-sometime used, 3-moderatly used and 4-always used.
3.2 Change Orders
In order to evaluate the frequency of change order received from client, we asked
contractor to rate the extent of such frequency on scale of 1-4, where 1-never received, 2sometimes received, 3-most of times, 4-all the times.
Contactor were also asked whether they used to issue notification before commencing
work on change order, oral change order or any other change exercised.
We also inquired contractors of any oral change order and their respective frequency,
similarly the responses were rated on scale of 1-4, with 1-never received, 2-sometimes
received, 3-most of times, 4-all the times.
Further we evaluated the extent to which contractor succeeded in defending such oral
change amid claims, similarly the responses were rate on a scale of 1-4, with 1-never
defended, 2-sometimes defended, 3-most of times defended and 4-always defended.
13
Were there any occasions where contractor waived it right by signing of change order
without explicitly mentioning cost and time repercussion, for such we asked contactors in
affirmation or negation.
We asked contractors to rate the extent to which they study and analyze bidding
documents. Reponses were evaluated on percentage of document studied, i.e. 0-30%, 30%50%, 50%-80% and 80%-100%.
In order to evaluate the contractors knowledge pertaining to bidding documents, we
asked them whether they had included the claim clause when filing such claims.
The preparation and evaluation of claims require some effort and skill on the part of the
contractor. Naturally the level of skill and experience applied to the claims management
function can determine the success or failure of the claim (Vidogah & Ndekugri, 1997).
In order to evaluate the extent to which different entities of contractors involved during
claim management, we asked contractor to rate the involvement of each professional on
a Likert scale of 1-5.
Where 1-no involvement, 2-meagre involvement, 3-no concerned, 4-moderate
involvement and 5-total involvement
Preparation of claims is a tedious process. For such reason contractors tend to leave claims
until project completion (Vidogah & Ndekugri, 1997). With that in mind contractors were
asked to rate eight aspects of the claims preparation process in term of time involved,
14
responses were evaluated on a scale of 1-4, with 1-readily available 2-minimum time
required, 3-moderate amount of time, 4-huge amount of time.
Further contractor were asked to rate the cost incurred pertaining to acquisition of
different information, for that reason similar 8 aspect were rated on scale of 1-4, with 1very cheap, 2-meagre cost 3-substantial cost 4-very costly.
Reason for delay amid claim preparation were also evaluated, for this reason 10 reason
were rated on a scale of 1-4, with 1-not responsible, 2-mere responsible, 3-moderately
responsible and 4-very much responsible.
4. Data Analysis
Statistical analysis included Mean, Standard Deviation, and Importance Index.
4.1 Mean
Mean ranking (where applicable) was calculated for each case, using following expression.
Calculation of mean was of prime importance in calculating importance index, which
would ultimately rank particular options under various heads.
=
Where;
ai= Rank by each respondent.
4.2 Standard Deviation
Standard Deviation evaluates the extent of variation or dispersion from the average.
Following expression is used for the purpose
=
[( ) ]
15
Where
= Standard Deviation
= mean
X = Individual Rank by respondents.
4.3 Importance Index
Information incurred from respondent was used to develop an Importance Index (II). In
calculating Importance Index (II) mean and standard deviation were calculated. Numerical
score of each option from various heads were converted into relative importance index to
assess the relative ranking.
The importance index will be calculated using following calculation
, (0
1)
Where
w=
average weighting given to each factor by the respondent, in our
different heads were evaluated on scale of 1-5, and 1-4, for case where scale was 1-5, 1
being least respective rank 5 being most respective rank, similar is the case for scale of
1-4 scale.
A=
the highest weighting; and
N=
the total number of respondents
16
5. Results and Discussion

5.1 Record Keeping
As part of my research I intended to know to what extent, contractors austerely maintain
daily reports and other paperwork related to site work, upon research it was found out
that 47% of contractors never or sometimes
TIMELY_MAINTAIN
maintain such documents. In the absence of

any
tangible,
concrete
and
Never
12%
Always
35%
timely
Sometim
es
35%
maintained data indigenous to site, this fact

could be established with certainty that any
Mostly
18%
resulting efforts will prove to be tedious and

in worst case scenario futile to defend contractors claim. However this condition is
balanced , but such condition cant be classified as promising because basic site paperwork
are essential and pivotal when it comes to claims, especially in Contractors perspective.
In continuum with previous discussion, Contractors were also inquired about instances
where they failed to defend their claim pertaining to insufficient data, the results
advocates for previous discussion. The
INSUFFICIENT DATA
biggest number amid this paradigm is where
Few
Always
times
Lost
lost/face
12% Mostly
d
Lost/face
difficultie
d
s
difficultie
29%
s
Never
24%
filled a
claim
35%
contractors never filed a claim, this situation

could be traced back to our previous
discussion where almost half of time
contactors
dont
maintain
timely
site
paperwork, and in such situation where

17
contractor lack the prove, filling a claim would be adding insult to injury. Upon research
36% of Contractor always lost or mostly faced difficulties proving their claim, such situation
is another testament to previous discussion. Holistically speaking its a 70-30 ratio where
contractor lost or faced difficulties amid proving their claim.
Lastly we inquired is there were any
EDMS
Electronic Document Management System
Yes
18%
or any sort prevalent amid contractors, and

results were no different than previous
situation, 82% of the contractors asked,
answered in negation of any EDM system
No
82%
prevailing in their company, with so much

complexity and huge quantum of information, contractor should seek an EDM system to
timely and prudently maintain there documentation, which could yield favorable
outcomes for them and even result in profitability.
5.2 Extent of use of project documentation
One needs tangible data to substantiate it claims. Therefore in order to substantiate their
claim contractors were asked to rate the extent of usage of particular project
documentation. Results indicate that revised drawings, conditions of contract and
specifications are most intensely used documentation. It is fair to say all these
documentation are drafted during the phase where conflicts are minimal or absent, such
documents are based on assumption and by the book, referring such documents while
preparing a claim will not be wise decision, because any claim that arises is because of the
18
disparity amid whats written and whats been done, and since youre not using any
documents to highlight the second part which whats been done, you cant balance the
situation and resultantly will face backlash when preparing and defending a claim. Results
show that contractors merely used site diaries and minutes of site meeting to substantiate
their claims, and such information is most useful in defending what actually happened on
site.
Document
Importance Index Rank
Bill of quantity
0.779
4
Claim documentation
0.691
10
Minutes of Site meetings
0.721
10
Schedules
0.750
7
Photographs
0.765
6
Site Diaries
0.691
10
Conditions of Contract
0.853
2
Correspondence
0.779
4
Daily Diaries
0.662
12
Records of Delay and Disturbance
0.721
8
Specification
0.794
3
Revised Drawings
0.912
1
5.3 Change Orders

Change
order
are
integral
part
of
construction business, there is hardly a

project where contractors dont taste the
medicine of change order. Upon research
94% of contractors received a change order
differing
in
frequency.
Such
fact
19
CHANGE_ORDER
Never
received
All the
6%
times
received
24%
sometim
Most of
the times
received
23%
es
received
47%
adamants that there is a dire need to establish a protocol where contractors are at better
place to defend any discrepancies resulting from change orders.
Another nightmare for contractors are Oral Change orders, there frequency is no more
different or should I say more than formal
OCO_RECEIVED
change orders. It is evident that there was no

contractor who did not received an oral
change order, all contractors asked, did
received an oral change order with differing
frequencies. Further we also enquired to
All the
times
received
30%
sometim
es
received
35%
Most of
the times
received
35%
what extent were such change orders defended successfully, results depicts that 88% of
contractor never or sometimes defended their oral change orders. 29% of never defending
oral change order is quite evident and self-explanatory however 59% of contractors stating
that they sometimes succeed in defending their change oral change order, was further
enquired and they stated that only payments
OCO_DEFENDED
were reimbursed on the basis on quantum
Most of
the times
Never
defended
defended
12%
29%
sometim
esdefend
ed
59%
majeure. Thus its imperative that contractors

should seek a formal change order, however
pertaining to local hiccups contractor cant
afford such a luxury pertaining to social and
time issues.
20
Further contractor were asked, were there any
WAIVING_CLAUSE
occasions where they waived their right by

signing of change order without explicitly
Yes
24%
mentioning cost and time repercussion, results

are promising with 76% of contractors answering
No
76%
in negation.
Studying bidding documents is tedious yet imperative job, upon research this fact was
established that 47% of Contractors study about
BID STUDYING
50% of the bidding documents, with 12% on
80%100%
24%
0%-30%
12%
documents such dismal study of bid documents

30%-50%
35%
50%-80%
29%
contractors only studying 0-30% of bidding
from substantial amount of contractors is

alarming
and
astonishing,
such
inferior
information of bidding document lead contractors

into Claim dilemma. Again relevant situation is
balanced, but balanced is not an option here
CLAIM CLAUSE
ADDITION
contract bid documents are core document and

every other contemporary document finds its
foundation on bid documents, therefore
contractors must show resolve on studying bids
21
NO
35%
Yes
65%
documents to their fullest. Also 65% of contractors add a claim clause when preparing a claim,
and 35% dont. Such number should be higher.
5.5.1
Responsibility of Claim preparation
Contractors rated different entities amid contractors on the extent to which they play a part
in preparing a claim. Results indicates that claim managers and project manager are the most
enthusiast in preparing a claim, while site engineer is least involved in preparing a claim.
Project Manager even though heads the project, but he doesnt have any firsthand
information of site work similar is the case with Claim Manager, he is completely alien to site
work, still they are mostly involved in preparing a claim, on the other hand site engineer who
has firsthand and indigenous information pertain to site work is least used when preparing a
claim, such a situation is self-explanatory where most suited individual is absent in the process
of claim preparation and individuals with merge and alien knowledge are most enthusiast
while preparing a claim.
Staff
Project Manager
0.282
2
Project Quantity Surveyor
0.211
5
Head Office-based Quantity Surveyor
0.236
3
Site Engineer
0.166
7
Claim Manager
0.283
1
External Claim Consultants
0.186
6
Others
0.236
3
5.5.2
Time Involved in preparing Claim
Time is of essence, so is the case while preparing a claim. Contractors were asked to rate the
extent of time involved in preparing claim. Results indicate that most time consuming aspect
22
of preparing claim are responses to architect/Engineers request for information and

quantifying claim, indicating lack of timely correspondence amid engineer and contractor and
also lack of specific knowledge of quantifying claim. Interpretation of contract took the least
amount of time, referring to innate knowledge contractors possess about contract.
Aspect of Claim preparation
Identifying relevant information
0.721
6
Identifying sources of information
0.779
3
Retrieving relevant information
0.706
7
Archiving relevant information
0.725
5
Interpretation of contract and justifying claim
0.686
8
Responses to architect/engineers request for information
0.804
2
Quantifying claims
0.824
1
Prepare claim documentation for claims
0.745
4
5.5.3 Cost of preparing Claim
Cost is something that imparts everybody and money is something that everybody holds most
dear. For that reason contractors were asked to indicate which aspects of claim preparation
entails the most cost. Results depicts that quantifying claim and responses to
architect/Engineers request for information are the most costly and preparing
documentation for presentation are cheapest. Such result are coherent with above
discussion, things taking the most time, are the things requiring the most capital while
preparing a claim.
Aspect of Claim preparation
0.647
5
0.603
6
0.691
3
0.691
3
0.603
6
0.706
2
Quantifying claims
0.721
1
Prepare claim documentation for claims
0.544
8
23
5.5.4
Reasons for Delay in Claim Preparation
Analysis shows that most responsible reasons for delays are awaiting responses from
architect/engineer, poor records and lack of contemporary records, in that order.
Reason for delay in preparing claim
Importance Index
Lack of resources
0.676
Showing cause and effect
0.721
Lack of contemporary records
0.765
Poor records
0.809
Identifying and retrieving information
0.765
Awaiting responses from architect/engineer
0.868
Time limitations
0.706
Others
0.544
Rank
7
5
3
2
3
1
6
8
6. Conclusion and Recommendation

During the course of research, this fact could be established with certainty that
contractors have issues pertaining to claims and their respective management, however
the essence of issues of point of debate. Some issues are inherent to construction industry
in Pakistan, yet some issues could be rectified with proper and austere efforts. Upon
research it was found that contractor faced three essential issues concerning claim
management;
1. Poor or no documentation of site work, only documentation would not suffice here,
real issue is their timely maintenance.
2. Lack of communication amid Engineer/Architect and Contractor, once again timely
communication is imperative.
3. Lastly concerned individuals are not enthusiastically while preparing claim for instance
in our research Project Managers and Claim Manager were intensely involved in
24
preparing claims and site engineer , individual with indigenous knowledge of site is
least involved.
Therefore its recommended that issues highlighted above should be catered for with
following recommendation is curbing such issues. In order to eradicate the ever
lingering menace of poor and insufficient documentation, contractors should establish
a program that should motivate concerned individuals to maintain austere site
documentation. An EDM system could aide in this regard as Contraction Industry is on
the road of spurt and complexity.
Further, concerned individuals should be allowed to play their pivotal part while
preparing claim, as they possess first hand and innate knowledge pertaining to site
work. Lastly more efficient way of communication should be established amid
Contractors and Engineers, and if necessary such communication should be bound by
some contractual provisions, violation of such should be punishable by law.
25
Appendix A
Claims in the Construction Industry of Pakistan Issues on the

Contractor side and Recommendations for Improvement
In the study we will identify reasons incurred by Pakistani contractor for claim generation and simultaneously study the
issues that lingers contractors in the midst of claim preparation.
Name
Designation
Company
Current Project
Record Keeping
Do you timely maintain daily reports and other related paper works pertaining to site works
o Never
o Sometimes
o Mostly
o Always
On how many instances you lost or faced difficulties to defend your claim for insufficient data provided?
o Always Lost
o Mostly lost/faced
o Never filed a
difficulties
claims
o Few times
lost/faced
difficulties
o Never lost
Is there a prevalent electronic document management system or any sort in your organization?
o Yes
o No
Rate the extent to which following project documentation were used while preparing claim
1.
Bills of Quantity
o Never used
2.
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
Site diaries
o Never used
7.
o Moderately used
Photographs
o Never used
6.
o Sometimes used
Schedules
o Never used
5.
o Always used
Minutes of Site meeting
o Never used
4.
o Moderately used
Claim Documentation
o Never used
3.
o Sometimes used
Conditions of Contract
o Never used
26

8.
Correspondence
o Never used
9.
Appendix A
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
o Sometimes used
o Moderately used
o Always used
Daily diaries
o Never used
10. Records of Delay and disturbance
o Never used
11. Specification
o Never used
12. Revised Drawings
o Never used
Change Orders
State the extent of frequency of Change Orders received from Owner/Engineer
o Never received
o Sometimes received
o Most of the times
o All the time
State the extent of frequency of Oral Change Orders received from Owner/Engineer
o Never received
o Sometimes received
o Most of the times
o All the time
How many times were you able to defend such oral change orders during claims?
o Never defended
o Sometimes
Most of the times

Always defended
defended
Were there any occasions where you as a contractor waived your right by signing of change order without explicitly
mentioning cost and time repercussion?
o Yes
o No
Contract Knowledge
Rate the extent to which you thoroughly study bidding documents
o 0-30%
o 30%-50
o 50%-80%
Do you add claim clause from the contract when filing a claim?
o No
o Yes
27
o 80%-100%.
Appendix A
Claim Preparation
Rate the extent of involvement of following entities of contractors involved during claim preparation.
Project Manager
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Project Quantity Surveyor
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Head office based quantity surveyor
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Site Engineer
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Claim Manager
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
External Claim Consultants
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Others Involved
o No
Involvement
o Meagre
Involvement
o Not
o Moderate
Concerned
o Total
Involvement
involvement
Rate the flowing eight aspects of the claims preparation processes in term of time involved
1.
o Readily available
2.
o Moderate time
required
o Readily available
3.
o Minimum time
required
o Minimum time
o Moderate time
required
required
28
o Huge amount of
time required
o Huge amount of
time required
o Readily available
Appendix A
o Minimum time
o Moderate time
required
4.
o Moderate time required

o Huge amount of time required
Quantifying claims
o Minimum time required

8.

7.
time required

6.
o Huge amount of

5.
required
Moderate time required

Prepare claim documents for presentation
Rate the cost incurred pertaining to acquisition of different information to prepare claim
o Very cheap
o Meagre cost
o Substantial cost
o Very costly
o Meagre cost
o Substantial cost
o Very costly
o Meagre cost
o Substantial cost
o Very costly
o Meagre cost
o Substantial cost
o Very costly
o Substantial cost
o Very costly
o Meagre cost
o Substantial cost
o Very costly
o Meagre cost
o Substantial cost
o Very costly
o Substantial cost
o Very costly
o Very cheap
o Very cheap
o Very cheap
o Very cheap
o Meagre cost
o Very cheap
Quantifying claims
o Very cheap
Prepare claim documents for presentation
o Very cheap
o Meagre cost
29
Appendix A
Rate the following 10 reason for delay in claim preparation

Lack of resources
o Not responsible
o Mere responsible
o Moderately
o Mere responsible
o Moderately
o Mere responsible
o Moderately
o Mere responsible
o Moderately
responsible
o Very much
responsible
Showing cause and effect
o Not responsible
responsible
o Very much
responsible
Lack of contemporary records
o Not responsible
responsible
o Very much
responsible
Poor records
o Not responsible
responsible
o Very much
responsible
Identifying and retrieving information
o Not responsible
o Moderately
o Mere responsible
responsible
o Very much
responsible
Awaiting responses from architect/engineer
o Not responsible
o Mere responsible
o Moderately
o Mere responsible
o Moderately
o Mere responsible
o Moderately
responsible
o Very much
responsible
Time limitations
o Not responsible
responsible
o Very much
responsible
Other
o Not responsible
responsible
30
o Very much
responsible
Appendix B
Respondents (Contractors) Response Compilation

Timely
maintain
Always
Sometimes
Always
Sometimes
Never
Always
Always
Mostly
Sometimes
10
Always
11
Sometimes
12
Sometimes
13
Mostly
14
Never
15
Mostly
Insufficient
data
Few times
lost/faced
difficulties
Mostly
Lost/faced
difficulties
Never filled
a claim
Never filled
a claim
Always
Lost
Never filled
a claim
Few times
lost/faced
difficulties
Few times
lost/faced
difficulties
Mostly
Lost/faced
difficulties
Never filled
a claim
Mostly
Lost/faced
difficulties
Never filled
a claim
Never filled
a claim
Mostly
Lost/faced
difficulties
Few times
lost/faced
difficulties
EDMS
BOQ
Claim
Documentation
Minutes
Site
Meeting
Schedules
Photographs
Site
Diaries
Contract
Condition
Correspondence
Daily
diaries
Delay
records
No
Always
used
Always used
Never Used
Always
used
Never Used
Sometimes
Used
Always used
Always used
Always
used
Sometimes
Used
No
Moderately
Used
Moderately
Used
Always
used
Always
used
Always used
Sometimes
Used
Always used
Moderately
Used
Sometimes
Used
Always
used
Moderately
Used
Sometimes
Used
Never
Used
Always
used
Sometimes
Used
Moderately
Used
Sometimes
Used
Moderately
Used
Sometimes
Used
Moderately
Used
Sometimes
Used
Moderately
Used
Sometimes
Used
Sometimes
Used
Always
used
Always used
Always used
Moderately
Used
Moderately
Used
Moderately
Used
Moderately
Used
Always used
Always used
Moderately
Used
Sometimes
Used
Never
Used
Sometimes
Used
Moderately
Used
Sometimes
Used
Never
Used
Moderately
Used
No
No
No
No
Always used
Always used
Sometimes
Used
Sometimes
Used
Always used
Always
used
Always
used
Sometimes
Used
Sometimes
Used
Yes
Moderately
Used
Always used
Always
used
Always
used
Always used
Always
used
Always used
Always used
Always
used
Always
used
Yes
Sometimes
Used
Moderately
Used
Always
used
Moderately
Used
Always used
Sometimes
Used
Moderately
Used
Always used
Moderately
Used
Always
used
No
Always
used
Always used
Sometimes
Used
Sometimes
Used
Never Used
Sometimes
Used
Moderately
Used
Sometimes
Used
Sometimes
Used
Never
Used
No
Always
used
Never Used
Always
used
Always
used
Sometimes
Used
Sometimes
Used
Moderately
Used
Moderately
Used
Sometimes
Used
Always
used
No
Sometimes
Used
Sometimes
Used
Sometimes
Used
Sometimes
Used
Moderately
Used
Moderately
Used
Moderately
Used
Moderately
Used
Moderately
Used
Moderately
Used
Sometimes
Used
Always
used
Moderately
Used
Moderately
Used
Moderately
Used
Sometimes
Used
Always
used
Sometimes
Used
Moderately
Used
Never
Used
Moderately
Used
Moderately
Used
Always
used
No
Yes
Sometimes
Used
Moderately
Used
Never Used
Sometimes
Used
Always used
Never Used
Always used
No
Always
used
Never Used
Sometimes
Used
Never
Used
Always used
Sometimes
Used
Always used
Sometimes
Used
Sometimes
Used
Moderately
Used
No
Always
used
Moderately
Used
Always
used
Always
used
Always used
Moderately
Used
Always used
Always used
Moderately
Used
Moderately
Used
31
16
Always
17
Sometimes
Few times
lost/faced
difficulties
Always
Lost
Appendix B
No
Always
used
Always used
Always
used
Always
used
Always used
Always
used
Always used
Always used
Always
used
Always
used
No
Always
used
Always used
Sometimes
Used
Sometimes
Used
Sometimes
Used
Moderately
Used
Moderately
Used
Never Used
Always
used
Never
Used
Specification
Revised
drawing
Change
Order
All the
times
received
Always used
Always used
Moderately
Used
Always used
Always used
Always used
Sometimes
Used
Always used
Sometimes
Used
Sometimes
Used
Always used
Always used
Always used
Moderately
Used
Moderately
Used
Always used
sometimes
received
Sometimes
Used
Always used
All the
times
received
10
Always used
Moderately
Used
sometimes
received
11
Moderately
Used
Moderately
Used
12
Sometimes
Used
Always used
13
Sometimes
Used
Moderately
Used
sometimes
received
All the
times
received
Most of
the times
received
Never
received
Most of
the times
received
Most of
the times
received
Most of
the times
received
sometimes
received
sometimes
received
OCO
recieved
All the
times
received
All the
times
received
OCO
defened
CO
clause
Bidding
study
Clause
Claim
Project
Manager
Project
QC
Headoffice
QC
Site
engineer
Claim
Manager
Sometimes
defended
No
80%-100%
Yes
Moderate
Involvement
Total
Involvement
Meagre
Involvement
Total
Involvement
Meagre
Involvement
Sometimes
defended
No
80%-100%
Yes
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Total
Involvement
Total
Involvement
Most of the
times defended
Yes
30%-50%
NO
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Never
defended
No
30%-50%
NO
Meagre
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Meagre
Involvement
Sometimes
defended
No
0%-30%
Yes
No
Involvement
Moderate
Involvement
No
Involvement
Not
Concerned
Meagre
Involvement
Sometimes
defended
No
50%-80%
Yes
Total
Involvement
Total
Involvement
Total
Involvement
Moderate
Involvement
Total
Involvement
Sometimes
defended
No
50%-80%
Yes
Total
Involvement
Not
Concerned
Moderate
Involvement
Total
Involvement
Total
Involvement
Sometimes
defended
No
50%-80%
NO
Moderate
Involvement
Moderate
Involvement
Total
Involvement
Moderate
Involvement
Total
Involvement
Never
defended
No
0%-30%
Yes
Not
Concerned
Moderate
Involvement
Meagre
Involvement
Total
Involvement
Meagre
Involvement
Never
defended
No
50%-80%
NO
Not
Concerned
Meagre
Involvement
Moderate
Involvement
Meagre
Involvement
No
Involvement
sometimes
received
Most of the
times defended
Yes
30%-50%
Yes
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
sometimes
received
Most of
the times
received
Never
defended
No
30%-50%
NO
Not
Concerned
Moderate
Involvement
Meagre
Involvement
Total
Involvement
Moderate
Involvement
Sometimes
defended
Yes
30%-50%
Yes
Total
Involvement
Total
Involvement
Moderate
Involvement
Moderate
Involvement
Total
Involvement
sometimes
received
All the
times
received
sometimes
received
Most of
the times
received
Most of
the times
received
Most of
the times
received
All the
times
received
Most of
the times
received
32
14
Moderately
Used
Always used
15
Always used
Always used
16
Always used
Always used
17
Always used
Always used
Claim
Consultants
Others
involved
Moderate
Involvement
Not
Concerned
Total
Involvement
Meagre
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
No
Involvement
Meagre
Involvement
Not
Concerned
Meagre
Involvement
Moderate
Involvement
Total
Involvement
Moderate
Involvement
Not
Concerned
Not
Concerned
Total
Involvement
Not
Concerned
10
Moderate
Involvement
No
Involvement
11
Moderate
Involvement
Moderate
Involvement
sometimes
received
sometimes
received
sometimes
received
All the
times
received
Identify
info
moderate
time
required
moderate
time
required
minimum
time
required
huge
time
required
moderate
time
required
moderate
time
required
moderate
time
required
minimum
time
required
moderate
time
required
huge
time
required
moderate
time
required
Appendix B
Most of
the times
received
sometimes
received
sometimes
received
All the
times
received
Identify
sources
huge time
required
moderate
time
required
moderate
time
required
huge time
required
moderate
time
required
minimum
time
required
huge time
required
moderate
time
required
moderate
time
required
moderate
time
required
minimum
time
required
Sometimes
defended
Sometimes
defended
Sometimes
defended
Never
defended
Retrieve
info
huge
time
required
moderate
time
required
minimum
time
required
minimum
time
required
moderate
time
required
moderate
time
required
huge
time
required
minimum
time
required
moderate
time
required
moderate
time
required
moderate
time
required
Yes
30%-50%
NO
No
80%-100%
Yes
No
80%-100%
Yes
No
50%-80%
Yes
No
Involvement
No
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Total
Involvement
Not
Concerned
Total
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Moderate
Involvement
Total
Involvement
Total
Involvement
Moderate
Involvement
No
Involvement
Moderate
Involvement
Meagre
Involvement
Total
Involvement
Meagre
Involvement
Identify
info_1
Identify
sources_1
Retrieve
info_1
very cheap
very cheap
Substantial
cost
Substantial
cost
very costly
Substantial
cost
Substantial
cost
meagre cost
Substantial
cost
Substantial
cost
Substantial
cost
Substantial
cost
meagre
cost
meagre cost
Substantial
cost
meagre
cost
Substantial
cost
meagre
cost
huge time
required
Substantial
cost
Substantial
cost
Substantial
cost
Archiving
info
moderate
time
required
Interpretation
_contract
Architect
response
Claim
quantifying
minimum time
required
huge time
required
huge time
required
huge time
required
huge time
required
huge time
required
huge time
required
huge time
required
moderate time
required
moderate
time
required
moderate
time
required
moderate time
required
huge time
required
huge time
required
moderate time
required
moderate
time
required
huge time
required
huge time
required
huge time
required
huge time
required
minimum
time
required
moderate
time
required
moderate
time
required
huge time
required
huge time
required
moderate
time
required
huge time
required
huge time
required
Substantial
cost
meagre cost
Substantial
cost
huge time
required
moderate time
required
huge time
required
huge time
required
huge time
required
Substantial
cost
Substantial
cost
Substantial
cost
moderate time
required
huge time
required
huge time
required
Substantial
cost
meagre cost
meagre
cost
moderate time
required
moderate
time
required
moderate
time
required
Substantial
cost
Substantial
cost
Substantial
cost
moderate
time
required
moderate
time
required
minimum
time
required
moderate
time
required
moderate
time
required
moderate
time
required
33
Prepare
claim
moderate
time
required
moderate
time
required
moderate
time
required
minimum
time
required
minimum
time
required
moderate
time
required
moderate
time
required
moderate
time
required
12
Moderate
Involvement
No
Involvement
13
Moderate
Involvement
Meagre
Involvement
14
Total
Involvement
No
Involvement
15
Moderate
Involvement
No
Involvement
16
Not
Concerned
Meagre
Involvement
17
Moderate
Involvement
Not
Concerned
1
2
3
4
5
6
7
8
9
10
11
12
Archiving
info_1
Substantial
cost
Substantial
cost
meagre
cost
meagre
cost
Substantial
cost
Substantial
cost
meagre
cost
very costly
Substantial
cost
meagre
cost
Substantial
cost
very costly
Interpretation
contract_1
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
readily
available
huge time
required
readily
available
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
Architect
response_1
meagre cost
very costly
Substantial
cost
Substantial
cost
Substantial
cost
meagre
cost
meagre
cost
very costly
meagre cost
meagre cost
very cheap
meagre cost
meagre cost
very cheap
meagre cost
Substantial
cost
Substantial
cost
Appendix B
very costly
Quantifying
claim_1
Substantial
cost
Substantial
cost
Substantial
cost
Substantial
cost
Substantial
cost
Substantial
cost
very costly
very costly
Substantial
cost
meagre
cost
Substantial
cost
Substantial
cost
Substantial
cost
Substantial
cost
meagre
cost
Substantial
cost
Substantial
cost
meagre
cost
Prepare
claim_1
meagre
cost
very cheap
meagre
cost
Substantial
cost
meagre
cost
meagre
cost
Substantial
cost
meagre
cost
meagre
cost
Substantial
cost
Substantial
cost
very cheap
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
Lack
resources
very much
responsible
very much
responsible
moderately
responsible
mere
responsible
mere
responsible
moderately
responsible
moderately
responsible
Not
responsible
very much
responsible
very much
responsible
mere
responsible
moderately
responsible
moderate time
required
moderate time
required
minimum time
required
moderate time
required
moderate time
required
minimum time
requried
Showing
Cause
effect
mere
responsible
moderately
responsible
very much
responsible
very much
responsible
mere
responsible
mere
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
very much
responsible
34
moderate
time
required
minimum
time
required
moderate
time
required
moderate
time
required
Substantial
cost
Substantial
cost
meagre
cost
huge time
required
huge time
required
meagre
cost
meagre cost
Substantial
cost
huge time
required
huge time
required
huge time
required
Substantial
cost
very cheap
very costly
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
moderate
time
required
meagre
cost
very cheap
very cheap
meagre
cost
Substantial
cost
Substantial
cost
huge time
required
huge time
required
Substantial
cost
Substantial
cost
Substantial
cost
Architect
response
very much
responsible
very much
responsible
very much
responsible
very much
responsible
moderately
responsible
very much
responsible
very much
responsible
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
very much
responsible
Time
limitation
moderately
responsible
very much
responsible
moderately
responsible
moderately
responsible
mere
responsible
moderately
responsible
very much
responsible
mere
responsible
moderately
responsible
very much
responsible
mere
responsible
moderately
responsible
Others
Not
responsible
moderately
responsible
moderately
responsible
moderately
responsible
mere
responsible
mere
responsible
mere
responsible
mere
responsible
moderately
responsible
mere
responsible
moderately
responsible
Not
responsible
Lack
Contemporary
records
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
mere
responsible
moderately
responsible
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
mere
responsible
mere
responsible
Poor
records
very much
responsible
very much
responsible
mere
responsible
moderately
responsible
moderately
responsible
very much
responsible
very much
responsible
mere
responsible
moderately
responsible
very much
responsible
Not
responsible
very much
responsible
Identifying
Retrieving
info
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
very much
responsible
moderately
responsible
moderately
responsible
very much
responsible
mere
responsible
moderately
responsible
moderately
responsible

13
14
15
16
17
Substantial
cost
Substantial
cost
very cheap
Substantial
cost
Substantial
cost
very costly
very costly
meagre cost
meagre cost
meagre cost
meagre
cost
meagre
cost
meagre
cost
Substantial
cost
Substantial
cost
Appendix B
very costly
Substantial
cost
meagre
cost
Substantial
cost
meagre
cost
Substantial
cost
meagre
cost
meagre
cost
Substantial
cost
very cheap
very much
responsible
Not
responsible
mere
responsible
mere
responsible
mere
responsible
moderately
responsible
mere
responsible
moderately
responsible
mere
responsible
moderately
responsible
35
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
very much
responsible
very much
responsible
very much
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
mere
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
moderately
responsible
mere
responsible
moderately
responsible
very much
responsible
mere
responsible
mere
responsible
mere
responsible
moderately
responsible
moderately
responsible
mere
responsible
moderately
responsible
mere
responsible
mere
responsible
Not
responsible
Appendix B
Respondent Data Analysis

B.1 Records Keeping
Timely maintain
Frequency
Percent
Never
Cumulative Percent
11.8
11.8
35.3
47.1
Mostly
17.6
64.7
Always
35.3
100.0
Total
17
100.0
Sometimes
Timely maintain
Frequency
Percent
Always Lost
Mostly Lost/faced
difficulties
Never filled a claim
Few times lost/faced
difficulties
Total
Cumulative Percent
11.8
11.8
23.5
35.3
35.3
70.6
29.4
100.0
17
100
EDMS
Frequency
Percent
Cumulative Percent
Yes
17.6
17.6
No
14
82.4
100.0
Total
17
100.0
36
Appendix B
B.2 Extent of use of project documentation
BOQ
Claim_Documentation
Minutes_Site_Meeting
Schedules
Photographs
Site_Diaries
Contract_Conditions
Correspondence
Daily_diaries
Delay_records
Specification
Revised_drawings
Mean
Importance Index
Rank
17
17
17
17
17
17
17
17
17
17
17
17
3.1176
2.7647
2.8824
3.0000
3.0588
2.7647
3.4118
3.1176
2.6471
2.8824
3.1765
3.6471
0.779
0.691
0.721
0.750
0.765
0.691
0.853
0.779
0.662
0.721
0.794
0.912
4
10
10
7
6
10
2
4
12
8
3
1
B.3 Change Orders
Change Order Received

Frequency
Percent
Cumulative Percent
5.9
5.9
47.1
52.9
23.5
76.5
23.5
100.0
17
100.0
Never received
sometimes received
Most of the times received
All the times received
Total
Oral Change Order

Frequency
Percent
Cumulative Percent
sometimes received
35.3
35.3
Most of the times received
35.3
70.6
All the times received
29.4
100.0
Total
17
100.0
37
Appendix B
OCO Defended
Frequency
Percent
Cumulative Percent
29.4
29.4
10
58.8
88.2
11.8
100.0
17
100.0
Never defended
Sometimes defended
Most of the times defended
Total
Waive Clause
Frequency
Percent
Cumulative
Percent
Yes
23.5
23.5
No
13
76.5
100.0
Total
17
100.0
B.4 Contract Knowledge

Studying Bidding Document
Frequency
Percent
Cumulative Percent
0%-30%
11.8
11.8
30%-50%
35.3
47.1
50%-80%
29.4
76.5
23.5
100.0
17
100.0
80%-100%
Total
Contract Clause Addition

Frequency
Percent
Cumulative Percent
Yes
11
64.7
64.7
NO
35.3
100.0
Total
17
100.0
38
Appendix B
B.5 Claim Preparation individual involvement
Project_Manager
Project_QC
Headoffice_QC
Site_engineer
Claim_Manager
Claim_Consultants
Others_involved
Mean
Importance Index
Rank
17
3.3529
0.282
17
3.8824
0.211
17
3.4706
0.236
17
4.2353
0.166
17
3.5882
0.283
17
3.8824
0.186
17
2.4706
0.236
Time Involved
identify_info
identify_sources
retrieve_info
archiving_info
interpratation_contract
architect_response
Claim_quantifying
prepare_claim
Mean
Importance Index
Rank
17
2.8824
0.721
17
3.1176
0.779
17
2.8235
0.706
17
2.1765
0.725
17
2.0588
0.686
17
2.4118
0.804
17
2.4706
0.824
17
2.2353
0.745
Mean
Importance Index
Rank
17
2.5882
0.647
17
2.4118
0.603
17
2.7647
0.691
17
2.7647
0.691
17
2.4118
0.603
17
2.8235
0.706
17
2.8824
0.721
17
2.1765
0.544
Cost entailed
identify_info
identify_sources
retrieve_info
archiving_info
interpratation_contract
architect_response
Claim_quantifying
prepare_claim
39
Appendix B
Reason in Claim Delay

N
Mean
Importance Index
Rank
lack_resources
17
2.7059
0.676
Showing_cause_effect
17
2.8824
0.721
Lack_contemporary_records
17
3.0588
0.765
Poor_records
17
3.2353
0.809
Identifying_retriving_info
17
3.0588
0.765
achitect_response
17
3.4706
0.868
time_limitation
17
2.8235
0.706
Others
17
2.1765
0.544
40
References
Chovichien, K. T. (n.d.). Contractor's Construction Claims and Claim Management Process.
Hassanein , A., & El Nemr, W. (2008). Claims management in the. Engineering, Construction and
Architectural Management, 15(5), 456-469.
Jergeas, G., & Hartman, F. (1994). Contractors' Construction-Claims Avoidance. Journal of Construction
Engineer, 120(3), 553-560.
Klee, L. (2013). Management of Contractors Claims in.
Kululanga, G., Kutocha, W., McCaffer, R., & Edum-Fotwe, F. (2001). Construction Contractors' Claim Process
Framework. Journal of Construction Engineering and Management, 127(4), 309-314.
Vidogah, W., & Ndekugri, I. (1997). IMPROVING MANAGEMENT OF CLAIMS: Contractor's Perspective.
Journal of Management in Engineering, 13(5), 37-44.
Zaneldin, E. K. (2006). Construction claims in United Arab Emirates: Types, causes and frequency. (24 (2006)).
41

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NED University of Engineering and Technology, Karachi

Civil Engineering Department

Chapter 2: Literature Review

Chapter 4: Data Analysis

Chapter 5: Results and Discussion

Chapter 6: Conclusion and Recommendations

Claims in the Construction Industry of Pakistan

1. Term Paper Introduction

Study will be limited to Contractor working within Karachi only.

Claims in the Construction Industry of Pakistan

1.5 Plausible Table of Content

Claims in the Construction Industry of Pakistan

Increase in scope of work pertaining to changes, extras and errors.

Insufficient bid information

Faulty and/or late owner-supplied equipment and material

Inferior quality of drawings and/or specifications, giving rise to ambiguities in contract

Insufficient time for bid preparation

Stop-and-go operations because of lack of coordination, design information,

Work in congested areas and overcrowding

Acceleration to regain schedule

Inadequate investigation before bidding

Claims in the Construction Industry of Pakistan

Unbalanced bidding and underestimation.

Record Keeping and Documentation

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Planning and Schedules

Finishing a project on schedule is a difficult task to accomplish in the uncertain, complex,

Future relation concerns

Claims in the Construction Industry of Pakistan

2.3 Claim Management

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

Claims in the Construction Industry of Pakistan

average weighting given to each factor by the respondent, in our

the highest weighting; and

the total number of respondents

Claims in the Construction Industry of Pakistan

5. Results and Discussion

maintain such documents. In the absence of

maintained data indigenous to site, this fact

resulting efforts will prove to be tedious and

contractors never filed a claim, this situation

paperwork, and in such situation where

Claims in the Construction Industry of Pakistan

or any sort prevalent amid contractors, and

prevailing in their company, with so much

Claims in the Construction Industry of Pakistan

5.3 Change Orders

construction business, there is hardly a

Claims in the Construction Industry of Pakistan

change orders. It is evident that there was no

majeure. Thus its imperative that contractors

Claims in the Construction Industry of Pakistan

Further contractor were asked, were there any

occasions where they waived their right by

mentioning cost and time repercussion, results