January 18, 2008

On-call Contracts
On-call contracts allow an owner to mobilize professional services quickly and easily under pre-negotiated terms and conditions. The owner may require services due to an urgent matter, or because the owner is unable to provide or perform those services internally. For an owner who needs to engage a construction claims consultant, the benefits of having an on-call contract in place include:

• Technical expertise
• Bench strength and flexibility
• Commitments as-needed for service
• Accelerated procurement and authorization
• Independent and objective assessments
• Validation of pending and planned actions

Technical Expertise
Construction disputes and the involved parties have evolved over recent years. Claims are no longer brought on the back of a napkin or resolved with a handshake. Contractors use sophisticated scheduling and cost programs to calculate claims. Methods for prosecuting and analyzing claims are published and established throughout the industry. In most cases it takes a skilled and experienced claims analysis team to review a claim or to make recommendations on how potential project delays can be mitigated with as little impact as possible. For owners in the midst of major capital construction programs, these services and expertise do not typically reside in house. Instead, a small number of firms specializing in exactly this kind of service have sprouted up in the industry. Hence, today’s owner often engages such consultants for the critical and time-sensitive service of claims evaluation.

Furthermore, the likelihood is that a dispute may elude resolution at the field level and instead escalate to some form of alternative resolution, settlement discussions, or formal litigation. The experienced claims consulting firm has the technical experts on staff who can make the initial evaluations and recommendations, as well as the formal presentations and expert testimony that may be required during the resolution process.

Bench Strength and Flexibility
Construction claims never come at a convenient time. Furthermore, the demands of the project usually require answers and findings just as participants are trying to comprehend all of the positions, issues or nuances of a dispute. One reason may be that a project owner just does not have experienced people immediately available to quickly respond or perform the detailed analysis that is necessary to provide a comprehensive response. An on-call contract with a qualified consultant enables an owner to solve these staffing issues. A consultant’s team of skilled analysts can be quickly mobilized to perform a wide range of tasks, including assistance with review of contractor records to support for a formal dispute resolution process. By engaging the on-call claims consultant through the issuance of a task order initiating the required tasks, the owner has access to the resources needed while minimizing the distraction to the project participants from their focus on the project.

Construction disputes emerge in many forms and are based on a wide variety of causes. They also come at all stages of the construction process. The timing and type of dispute resolution and avoidance services that a project owner may need are unpredictable. The owner may require on-site investigations, financial assessments of issues, and guidance for its staff. A properly drafted on-call services contract allows the procurer of services to have the flexibility that will be necessary to expeditiously and effectively resolve a dispute with the proper resources at the right time.

Commitments as-needed for Service
Today’s owner manages capital budgets that have little or no margin for error. Operations budgets have also been trimmed, so an owner doesn’t have the luxury of staff members who are available and ready to respond when the next claim arises. In fact, most agencies budgets have been cut over the years and employees find themselves doing more with fewer hours. Some owners with an infrequent construction program may only see only a handful of disputes over a long period of time. However, when a dispute arises, the prospect of successful resolution requires that it be analyzed promptly. An on-call contract is a commitment to pay for services only if they are used. The staff and services are of the highest quality offered in the industry. Answers are arrived at quickly and without wasted effort. This allows an owner to obtain the services as soon as needed and in a cost-effective fashion.

Accelerated Procurement and Authorization
The timing of disputes and claims is unpredictable. However, when a claim or an issue of time extension arises, answers are required quickly to avoid impacting the progress on the unaffected work. The formal RFP process does not support the quick engagement of a qualified claims consultant. The RFP has to be written and reviewed by many internal parties within the owner’s organization for required approvals. Then the RFP has to be issued, proposals submitted and reviewed, and interviews held before a final selection can be made by the owner. It is not uncommon that such a process can take six months to a year. Some disputes simply do not allow for a long procurement period. Critical decisions of time and money are pending, and dispute resolution deadlines may be established. In an on-call contract, the RFP process is already complete, the consultant has been selected and is on board, and the rates have been established prior to the owner’s urgent need for services. The only remaining step that is necessary for the claims consultant to commence activity is the scope of the specific assignment, the budget authorization, and the schedule for the task deliverables. Frequently, this authorization can be accomplished in less than a day.

Independent and Objective Assessments
Parties involved in disputes tend to see things from their own perspective and bias. It’s only natural. One would expect that all project participants would have pride in their actions and defend their position. These positions can polarize the parties, elevate tensions, cloud judgment and impede settlement. An independent assessment of a dispute — at any stage of the construction process — can help lift the fog and provide the parties with a perspective that will resolve the dispute as quickly and cost-effectively as possible.

Validation of Pending and Planned Actions
In today’s environment, construction disputes are more expensive than ever. A planned action by the owner involved in a dispute may have such serious consequences that owners feel an assurance or confirmation by an independent claims consultant is necessary before the action is taken. Similarly, recommendations for settlement can be supported and validated by a claims consultant, particularly when large amounts of money are at stake in the settlement of a claim. Stewards of the public’s money are typically not eager to cut a check without some assurances that the award is supportable and reasonable. An experienced construction claims consultant can provide the third-party assessment that is required to help the owner lead the settlement through the award approval process.

Conclusion
An on-call contract provides an owner with skilled and experienced resources at a moment’s notice as needed. The claims consultant is a valuable tool for an owner to have at its disposal to analyze, resolve and support dispute resolution.