Contract Management

Proper contract management is an integral part of any construction contract. Contemporary resolution of conflicts must be the goal of each contract avoiding long processes of contract closure for pending claims / disputes.
Disputes between the parties whether for claims in a contract or the change orders by the Client must be resolved as soon as possiblein order to minimize the impact on the project. It is a known fact that the late resolution of a conflict has as consequences cost overruns for the project and delays in the construction.
Disputes are generated between the parties not only in regard to the validity of the claim, but also with regard to the quantification of the claim.
I&PM Consulting Services provides the services related to contract management for a Client or Contractor differentiating between the following service alternatives:

  • Continuous contract management during the execution phase
  • Identification, preparation, quantification or advice of specific claims
  • Analysis of contractual technical risks and development of mitigation measures

1. Permanent Contract management during the execution stage

Contractual management is complex and often requires a combination of engineer and lawyer, specifically the experience in construction engineering, analysis of construction contracts, analytical capacity and clear and concise communication with the parties involved. I&PM Consulting Services is able to extract the relevant information from the claim and communicate it to both the lawyers and the counterpart.
Our investigations are detailed and exhaustive in order to distinguish the truth from accusations. Our consulting experience provides credibility to the lawyers and management of our client, so that they can define the strategy based on a good knowledge of the subject.
This service includes the management of change orders or claims supporting project management in contract management. Close communication is established with the decision makers including the strategy discussions during the duration of the project / contract.
The permanent consultancy is the accompaniment of I&PM Consulting Services in the contractual technical management to the project management during the execution phase that includes:

  • Review of contractual documentation
  • Review and advice on contractual correspondence
  • Management of change orders or claims
  • Claims identification
  • Analysis of technical contractual risks

2. Identification, Elaboration, Quantification or Advice of Specific Claims

Contractual technical supportis provided for a specific contractual problem to a contractor or client, which may be for a project in the execution phase or a project in operation that requires a forensic analysis of the execution phase.The areas that may require this support are:

  • Finding of evidence – Identification of claims
  • Review of a claim prepared by the client or contractor (Evaluation)
  • Preparing a claim
  • Schedule Delays & Disruptions
  • Quantification of damages
  • Impacts on productivity
  • Construction Defect Analysis
  • Litigation, Arbitration, Adjudication & Mediation Support
  • Consulting Experts
  • Differing Site Conditions
  • Expert witness services
  • Support, advice in a negotiation process or during a mediation procedure

We can assist in identifying, quantifying and substantiating impacts on a construction project. As a result, some of the questions our experts would raise could include:

  • What conditions existed prior to contract execution?
  • What conditions were stipulated within the contract documents?
  • Did the actual condition differ from the planned (contractual) condition?
  • Were the actual conditions reasonably unforeseeable?
  • Was a party’s interpretation of the planned condition reasonable?
  • Was there actual damage that resulted from the unforeseen condition?

3. Damage Quantification

Construction claims are the result of cost overruns, time delays or construction defects. Often the most contentious aspect of a claim is the discrepancy between parties’ quantification of the damages claim associated with construction claims. This is a complex area as the various aspects of the project such as the estimate, the real cost, scheduling, sequencing and project management have to be considered.

The services we provide include:

  • Cause and effect analysis
  • Claim evaluation and quantification
  • Direct damages (labor / material / equipment / subcontract) evaluation
  • Extended project costs (general conditions / general requirements) assessment
  • Labor productivity loss / disruption evaluations
  • Cost escalation calculations
  • Home office overhead and indirect costs evaluation

3.1. Labor Productivity Loss

Damages resulting from loss of labor productivity can be difficult to identify and quantify. Lack of (a) project control systems or (b) proper documentation can make productivity calculations challenging. Proving productivity loss requires expertise and insight into planned and actual performance expectations. I&PM Consulting Services can assist clients in evaluating and quantifying productivity or efficiency loss claims.

We can prepare and analyze claims and/or negotiated on behalf of our clients on matters involving labor efficiency and productivity loss.

3.2. Differing Site Condition

Unforeseen or unanticipated conditions often occurs on construction projects. Accordingly, damages resulting from differing site condition can be difficult to substantiate and quantify. While contractual provisions may identify the means by which a party will communicate or document a differing site condition, understanding what should have been reasonably anticipated may be a challenge. Proving and quantifying impacts resulting from differing site condition requires experts that understand what ought to have been reasonably anticipated. We can assist clients in evaluating and quantifying differing site condition claims.

4. Análisis de riesgos contractuales técnicos y desarrollo de mitigaciones

One issue that does not yet have the required relevance is the sensitivity and probability analysis of contractual risks, either in the pre-contract signing phase, before the start of the construction stage or during the construction stage. If done, it is punctual, as there is no planned follow-up.

I&PM Consulting Services offers assistance in the identification or mitigation of these contractual risks. The identification of contractual risks is not limited to identified individual risks, but also to the interaction of these risks with other risks in the contract and the contractual and technical clauses in general.

The same applies to contract changes during execution that at first glance or short term can be positive for the contractor or client, but can create risks that previously did not exist, generating a new risk.

It is the cumulative effect of individual issues that can seriously affect the cost and time of the project. For this reason, the control systems to document and manage these changes are crucial for any project.

The discrepancy in the quantification of the claim between the parties is also an underestimated aspect and the evaluation of the quantification by an independent third party should be part of the evaluation to define the next steps in a litigation (mediation, arbitration, courts). On the basis of its vast knowledge of projects, I & PM Consulting Services provides a well-founded third opinion.

Our experience allows us to offer our clients an overview of the contractual technical risk associated with the contract.

Mediation and Litigation Support Services

For a dispute to be resolved, you need information that is clear, concise and objective. The vision and analysis of a third party helps to better understand the case. We analyze the specific situations of each dispute individually and provide an objective, technical and contractual evaluation, which also considers the position of the counterpart, being an indispensable analysis for the resolution of disputes.

I&PM Consulting Services analysis includes an exhaustive review of all documentation pertinent to the relevant dispute. Through our forensic investigation of contracts, schedules, bid estimates, design documents, job cost reports, change orders and correspondence, our experts thoroughly evaluate the issues surrounding your dispute.

Pre-construction phase

The preconstruction phase has become increasingly complex. Each construction project has inherent opportunities, benefits, risks and pitfalls. At this stage the correct and relevant decisions are the key factors for success. Client’s faces various project delivery possibilities. Relevant areas are the permitting process that is becoming more and more complex and time consuming as well as the budgeting and estimating process during the initial project development. I&PM Consulting Services assists the parties to avoid common estimating and budgeting pitfalls.

Various players are involved such as contractors, subcontractors and design professionals who must be able to provide their services under a variety of scenarios. I&PM Consulting Services will interact between these parties and assist our client’s to manage this phase. Our goal is to reduce risks inherent in this phase of the construction process by the provision of the following:

  • Pre-construction planning and coordination
  • Assistance in ProcurementProcess
  • Tender Review • Pro-active Risk Management
  • Development of Conceptual Budgets
  • Cash Flow Forecast • Value Engineering
  • Advice and Drafting of Sub-Contracts

1. Constructability Review / Engineering Assistance

Engineering assistance consists primarily in reviewing the design based on our extensive field experience of numerous construction projects focused on the constructability, design optimization and interfaces between the various participants in the implementation of the project.

Value engineering (VE) must improve value without sacrificing quality or function. We will put together a team who analyzes project plans, schedules and requirements. Creative solutions in design, program and construction method can lead to significant project savings in both construction and operation costs.

The Constructability Review will check the viability of a project and is performed to determine and improve the construction plans and specifications in order to prevent during construction on-site problems. Our evaluations include safety, quality, productivity, schedule and project cost.

2. Análisis de la Licitación

I&PM Consulting Services assesses the accuracy and completeness of construction plans and specifications and validates schedules and budgets. A tender review looks for document inconsistencies and completeness, potential liability, coordination issues, and missed details, amongst other things. Such reviews also identify ambiguities and contract clauses that contribute to unnecessary construction change orders, disputes, and poor relationship between contractor, owner, designer, and other parties involved in the process.

3. Salud & Seguridad

Health & Safety is a fundamental part of any project. The requirements and standard are continuously increasing. A productivity loss and increased cost are the consequences.

I&PM Consulting Services assists in defining the right requirements minimizing the impact on the project without compromising Health & Safety.

4. Quality Assurance / Quality Control

Tight construction schedules can have an impact on quality as the contractor is focused on achieving the contractual milestone rather than primarily focusing on quality assurance. Repair work before hand over or a long, costly punch list is the consequence. Therefore, in the pre-construction phase: a) the standard for QA/QC have to be well documented by the client and b) the contractor has to be aware at this stage of the impact for the project of the QA/QC requirements.

I&PM Consulting Services team can review the QA/QC requirements and documentation indicating shortfalls and improvements.

5. Procurement Support

Commonly the specifications and project requirements are defined by engineering firms which also advise on procurement. Our experience of having worked directly on various construction projects knowing the local and international market enables us to support clients on procurements aspects either by reviewing specifications or by advising on specific suppliers or subcontractors.

Our expertise allows us also to assist you in the definition of the scope of a subcontract, especially when interfaces with other parties occur

5.1. Subcontracts

I&PM Consulting Services assists in identifying subcontractors and reviews the subcontract, analyses the scope and interfaces with other participants of the project

5.2. Materials

Have you chosen the right material? What standard is to be achieved or is required? Is the material available in the local market or how far away is it from the client’s project? Is transport an issue?

Criteria such as these are to be considered when defining the material requirements. I&PM Consulting Services reviews the requirements providing its clients with a summary report and list of measures or improvements

6. Interfaces

Interface Management is crucial for a successful project. Independent if you are a client or contractor pitfalls in the interface management will lead to delays and increases in cost. I&PM Consulting Services assists the parties identifying interfaces and improving the allocation of scope and responsibilities for each partner. A well-defined interface reduces discussions between the parties

7. Estimate Review

I&PM Consulting Services experience in having constructed various infrastructure projects gives its clients and contractors the opportunity to reduce the risk of cost increase as our experts have been involved in all phases of a project. Our local market knowledge combined with our international expertise gives certainty in our client’s cost estimate.

The estimate review will highlight shortfalls and opportunities in our client’s project which will be summarized in a report

7.1. Cost Escalation Analysis

Cost escalation and analysis of currency developments can determine, whether a project is successful. Therefore, a detail analysis of possible developments should be part of any estimate or budgeting process. I&PM Consulting Services prepares an analysis of possible development and assists in defining currencies for increasing our client’s competiveness or reducing risk

8. Contract Review

Contracts are usually drafted to shift risk down to lower tiered parties. I&PM Consulting Services recognizes this trend and provides analysis and recommendations to attorneys, clients and contractors on how risk can be mitigated. The contract review includes a detailed analysis of contract documents, contract schedule, change orders and directives, requests for information, and pertinent correspondence. The claim and conflict resolution process will be reviewed considering the interest of each party. Key issues identified will be discussed with proposed solutions from our experience of previous projects.

I&PM Consulting Services calls this phase also proactive claim management as any claim management should start before construction

9. Risk Identification

A continuous, integrated risk management process is essential for successful project execution.

I&PM Consulting Services executes a “Probability Assessment” and a “Sensitivity Analysis” which identifies and evaluates project risks, manages risk registers, facilitate qualitative risk assessments, conduct quantitative risk analyses, and develop risk mitigation strategies and plans. The qualitative risk assessments can be developed for clients or contractors and those assessments are integrated into robust, quantitative cost and schedule risk analysis which are the basis to monitor and mitigate any risks accordingly

10. Contract Negotiation

The negotiation process is becoming more and more extensive with continuous modifications to the Contract draft which has consequences and implies changes all over the Contract. Our experience in having negotiated a variety of Contracts as well as participated in the execution phase gives ourselves the possibility to highlight to client and contractor consequences of these adjustments.

Construction Phase

Construction projects involve a great deal of time and capital, almost every project is unique as it has to be adjusted to the geographical conditions as well as to the requirements of the various participants and the project itself. Standardization can only be achieved in certain areas and is limited. Therefore, effective construction management is required to complete the projects within the established time line to meet cost limitations and quality requirements. Construction sites have to be cost effective, therefore core competencies such as coordinating the job site, controlling cost and managing risk are indispensable for a project’s success.

1. Construction / Project Management

I&PM Consulting Services main goal is to advise and assist construction project managers either as Owner’s or as Contractor’s advisor to avoid common pitfalls and reduce the risk inherent in the construction process.

The right team to manage a project is crucial to its success. I&PM Consulting Services staff has gathered construction project management experience over years and in different countries being able to identify issues, advice and resolve conflicts early assisting our client’s project management team at any stage of the construction process. Proven ability and expertise of having managed complex projects enables us establish priorities, coordinate activities to ensure that projects are delivered on time and within the budget.

Our approach includes assistance in the permitting process in order to avoid future changes to approved permits reducing the implementation time of your project as well as minimizing design and construction costs, and project delivery time.

Our expertise complements your team in the following areas:

  • Proper pre-project planning
  • Permitting process
  • Continuous contract and risk management
  • Cost controlling
  • Project scheduling follow up and review
  • Review of construction productivity
  • Assistance in construction claims
  • Review and optimization of the construction technology

2. Procurement Support

Our international, and specific market knowledge in Chile and Peru combined with our network with suppliers and specialized contractors gives us the capability to advise and assist clients and contractors in selecting the supplier or (sub-)contractor for the job.

3. Interface Management

Interfaces become more and more relevant in the construction industry as: a) clients become more reluctant to assign the work to a single contractor, or b) the interfaces are not clearly defined as the status of the design does not allow a detailed work allocation. Different interpretations between the parties of the allocated scope as well as interferences during execution have an impact on time and cost.

I&PM Consulting Services experience which it has gained through working on numerous complex projects helps to resolve the various interferences by proposing solutions and defining responsibilities.

4. Revisión del Contrato

Construction contracts consist of the general and specific contract conditions, Owner’s requirements, specifications and drawings which are all linked and interact among themselves.

I&PM Consulting Services expertise allows us to provide a summary of the relevant contractual aspects, highlight or identify critical aspects at the start of a project or give general advice at any stage of construction for specific aspects.

Either for clients or contractors I&PM Consulting Services can review and analyze contractors’ applications for payment or claims.

5. Audits

I&PM Consulting Services performs construction and engineering inspections. Our experts monitor and inspect all aspects of the construction progress as it develops throughout the duration of the project. The audit includes:

  • Project Documentation completeness
  • Design/construction contract compliance
  • Organization
  • On-site Quality Assurance and Control
    • Submittal Review
    • Site Inspection
    • Construction Defects
    • Final and Substantial Completion Inspection
    • Project Meetings
  • Schedule analysis and impact resolution
  • Project cost analysis
  • Change order / claims management

Also a full inspection of a project is advisable although it is possible to audit specific areas.

6. Risk Management

Construction is a risky, high-stakes business. The magnitude of risk involved for owners, contractors and engineers increases the possibility of negative impacts and damages on projects. It is important to identify, prevent and mitigate potential costly delays and disruptions before the project is impacted. I&PM Consulting Services risk management assists our clients by identifying and analyzing potential risks that may occur throughout the construction process by performing risk assessments to prevent and mitigate costly potential delays and disruptions.

Our experts will help you to make informed decisions and keep your project moving forward. Specifically, I&PM Consulting Services expertise can support you in the following areas:

6.1. Risk Identification

The identification of a risk is the first step to mitigate any impact in cost and time. The risk identification should occur as early as possible during the implementation of a project. Ideally the risk should be identified before it occurs as it allows the party to take measures eliminating or minimizing the impact in the execution of the project.

6.2. Probability Assessments

An integral step in the process of risk management is the probability assessment of the various events and scenarios that can have a positive or negative impact on project progress. A probability assessment is one step that will improve the project’s risk profile and enable informed decision making with regard to project strategy. The results of the probability assessment allow the client or contractor to define an effective risk management plan with the respective measures and actions required to ensure the completion of the project. Knowing and monitoring a risk is essential to reduce or avoid the risk. Contingencies in cost and time can be defined at an early stage of the project.

I&PM Consulting Services assistance can be:

  • Contract analysis
  • Determination of favorable and unfavorable outcomes
  • Calculation of probability of success for various events
  • Formulation of risk mitigation plan
  • Development of a risk register
  • Periodic review of project risk register

6.3. Sensitivity Risk Analysis

Sensitivity analysis should not be mixed with the probability analysis and should be performed independently. The sensitivity analysis is focused on analyzing the relevant factors of a decision and impact of the decision on a project. By analyzing the sensitivity of a decision, you as client will be able to determine if you are focusing on solving the right problems.

The sensitivity analysis is an integral part of our risk management.

6.4. International Risk Evaluation

Construction projects are being more complex and the magnitude of risk involved for owners, contractors and engineers increases the possibility of negative impacts on projects. Being a client or contractor working on international construction projects increases your risk being encountered in a new country or environment.

I&PM Consulting Services reduce its client’s risk by identifying and analyzing potential international risks that may occur throughout the construction process. Our experts perform international risk assessments on construction projects to assist our clients in preventing and mitigating costly potential delays and disruptions.

6.5. Cost Escalation Analysis

Delays in the project implementation or simply long-term projects combined with international market developments, can cause inflation of material price which leads to disputes between clients and contractors. While material and labor escalation clauses are a contractual tool to account for pricing adjustments due to these changes, the lack of such a clause requires a retroactive analysis of the real impact of material escalation or labor cost to quantify material or labor cost adjustments in a manner equitable to both owners and contractors.

A material cost analysis is a helpful tool in the claim quantification and management as it is an objective tool for dispute avoidance and claims mitigation if used proactively.

6.6. Risk Monitoring

Construction risks should be monitored, tracked and controlled during the execution of the project as they can be costly and time consuming for your organization and your clients.

I&PM Consulting Services has extensive knowledge in (a) identifying and overseeing construction risk in order to mitigate claims and disputes as well as (b) assisting in the implementation of a mitigation plan, if an identified risk event occurs.

6.7. Program Forecasting

The accuracy and completeness of a time schedule with all information related to the project and performance indicators as well as resources allocation is essential for the success of a project.

I&PM Consulting Services will review your program, its quality and give guidance in areas where improvements are required and identify risk associated with the program. You as client will be able to plan your resources with more efficiency and manage material deliveries and subcontractors as per your requirements.

7. Cost to Complete

Continuous cost control forms part of every project but most of the time the information received is late and pro-active measures are prevented leading to reactive counter-measures. Failure to closely monitor and implement project schedule, cost control, contractual payment requirements by the construction team invariably leads to cost increases.

I&PM Consulting Servicesservices give its clients the opportunity to identify and determine required expenditures earlier so that upcoming shortfalls are known and measures can be taken. In parallel efficient management of project income is crucially combined with timely payments and cash-flow management. Here we focus on the contractual provisions which are the basis for payments and we advise on methods of retrieving the required information. A schedule is prepared as result of the findings.

8. Insurance Claims

Insurance claims are lengthy claims where resolutions and decisions by the insurance companies takes time and is cost intensive for the client or contractor.

I&PM Consulting Services helps to prepare and structure the insurance documentation in such a way that proper records are elaborated and easy to understand for the loss adjuster. Our experience assists in understanding and interpreting the insurance policy considering on one side its broad coverage and on the other side its exclusions, exceptions to the exclusions and supplemental endorsements.