Once the Procuring Authority has assessed the merits of a claim and it has satisfied itself that the claim has merits, it should aim to accept the claim as quickly as possible. Whenever possible, the relationship between the parties should not be affected by a drawn-out claim, nor should the parties spend unnecessary amounts of money in disagreement or dispute about a claim that should be accepted by the Procuring Authority. Management of disputes is detailed in Chapter 5 (Disputes).
The management of scope changes needs to be undertaken efficiently to minimise adverse impacts on the project while at the same time preserving value for money. It is important to classify scope changes and develop a framework to ensure minor changes can be dealt with efficiently while significant changes (e.g. addition of a new airport runway) undergo a robust review to ensure value for money.
Where the parties cannot agree to the merits of a claim or the consequences (including compensation payable or additional time) the parties should work together to come to a solution.
EXAMPLE Working in partnership to avoid disputes The Brabo I Light Rail project in Belgium was connected to the wider network of Antwerp, resulting in increased usage and maintenance requirements of some sections of the project. The Project Company and Procuring Authority worked together to estimate the additional costs, avoiding any disagreements. For more information, see the Brabo I Light Rail Case Study. |
It is also important that the Procuring Authority understands the impact that cash flow risk may have on the Project Company's or its contractor's behaviour in dealing with claims. From a Project Company's perspective, there is a strong preference for having claims assessed as quickly as possible, even at the risk that only part of its claim is successful. Conversely, where a claims process is delayed (and particularly where similar claims continue to be made and not assessed) the Project Company may become entrenched in its position. This highlights the importance of dealing with claims and opening a direct line of communication as quickly as possible. Project Company cash flow risks are detailed in Chapter 6 (Insolvency), which details guidance on the financial status of Project Companies prior to insolvency.
Having effective governance structures in place to process and approve claims quickly will be key. Guidance on governance is detailed in Section 2.1 (Contract management team set-up) and Section 3.3 (Performance monitoring) (with respect to other government stakeholders that are not the Procuring Authority, such as a ministry of finance or equivalent government agency).