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Claim Management in Mobility Projects

14. September 2012

Autor: Christopher Köhler | CARNEADES Webseite (Claim Management)

New mobility projects, like construction of subways, fully automatic driverless metro systems, mainline railways and suburban train projects, are on their way currently on their all over the world. The implementations of such projects involve complex technologies, the management of various interfacing systems and tight time schedules. Not surprisingly, those projects are therefore often harmed by obstructions and hindrances leading to claims between the projects participants. We have talked to Tobias Voigt, managing director of CARNEADES Claim Management, on implications and challenges of Claim Management for mobility projects.

- Mr. Voigt, what is the difference in CARNEADES Claim and Contract Management?

We are delivering claim services since several years now. Of course, Contract and Claim Management is based on contracts and documents − now doubt about that. But successful Contract and Claim Management is focused especially on the people acting in the project. These are the persons who make decisions necessary for effective Claim Management. To set up efficient strategies under such perspective (including negotiation management) − that is the main advantage of the CARNEADES know-how, which was gained in a vast number of projects with disturbed execution where we provided our help. However, success in such fields is only guaranteed if you pay special attention also on the more general services covering all common challenges in regard of Contract and Claim Management. We are for instance quite rigid in terms of documentation management and all other necessary basics in Contract and Claim Management.

- Which areas of business does CARNEADES serve?

With Claim and Contract Management services we are engaged in mobility projects like construction of subway and metro lines, mainline railways or other infrastructure projects. We are also dealing with energy projects like power plant erection, substations, grids, offshore wind farms. Another basis are services for plant construction and engineering projects for the chemical industry. We provide our services all over the world. Often we are concerned with special model contracts, like FIDIC© or NEC (New Engineering Contract).

(FIDIC© is a registered trademark of FIDIC − International Federation of Consulting Engineers)

- What is so special about Claim Management under FIDIC© contracts?

Every claim notice has to be submitted within defined limited time periods, which elapse very shortly after the event giving rise to the claim (28 days in general). This requires an appropriate Claim Management organization, both on Employer's and Contractor's side. For the Contractor it is to avoid preclusion of the claim due to being time barred − for the Employer to track the deadlines to evaluate Contractor's claims correctly and to avoid additional costs. We offer a lot of documentation related tools in this regard, e.g. on Microsoft Sharepoint© basis.

(Microsoft Sharepoint© is a registered trademark of Microsoft Corporation.)

- What is Claim Management in the mobility sector like, are there special implications?

Always when project disturbances touch safety related works, like for Automatic Train Control Systems for instance, the impact often is much higher then commonly known and expected. According to the CENELEC© standards, several iterations in the implementation process have to be repeated after a change (e.g. expert evaluation). This causes much higher additional costs compared to a design change for a sugar refinery for instance. In addition, often much more critical documentation is involved. This demands top skills in Claim Management, which are offered by our company.

(CENELEC© is a registered trademark of the European Committee for Electrotechnical Standardization)

- In a mobility project, like a driverless metro system for instance, what are major areas of concern in Claim Management?

Quite often we are engaged in discussions about application of liquidated damages due to delay in project execution. But, a significant factor for project success is the handling of interface relationships. Negative influences in this regard can already be mitigated by an appropriate tendering concept in terms of Contract Management. But also on supplier's side, a strict follow up of requirements of interfacing will assure that one is only liable for own tasks. This can be assured by a comprehensive Contract and Claim Management system. Our company offers supporting correspondence tools in this regard, all for assuring Claim Management documentation without gaps. Throughout the numerous mobility projects we have accompanied in Claim Management, we have gained significant special experience, knowledge and skills in this regard.

- Why should we apply Claim Management in a mobility project?

I have highlighted the advantages of our services already within my previous answers. But to sum it up: A Claim Manager who successfully defends against a request for liquidated damages mounting up to 10 % of the contract price delivers the same value contribution like all other project staff striving to reach the same amount of margin with the project in total. In addition, mobility projects are often of very complex technology, requiring significant project management efforts. Therefore such projects are very vulnerable by extension of project execution time, as time related costs mount up in the millions very fast due to this circumstance in case of hindrances or obstructions. This is a clear demand for Claim Management.

- How can we improve our Claim Management skills?

We always recommend attending one of our Claim Management seminars and workshops. There, participants are guided through all Claim Management basics, as the topic often is very new for them, especially for pure engineering oriented staff. Special advanced programs serve the needs of experienced attendees. However, even more effective is the implementation of individually designed in-house trainings for Claim Management. This offers the opportunity to train people exactly in the project environment which challenges them in everyday work. This goes along with a significant higher identification with the topic of Claim Management and shows directly implementation possibilities for the participating staff. The feed back for our trainings are always excellent.

Mr. Voigt, we thank you for taking the time.

Link: Please inform yourself about the CARNEADES Claim Management!

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