The Project Manager must ensure that Company’s project team understands the requirements
of the contract and that both parties, the Company and the Client both adhere to
it. Familiarity with the pertinent contractual terms and conditions is essential
for project personnel to recognize their contract rights and duties.
After contract award the Project Manager should assemble the project leadership team
to review the contract, the change process and the type of records that need to be
maintained. Actions by the Client which disrupt or hinder Company’s ability to perform
under the explicit or implicit contractual requirements to Company's detriment are
grounds for Company to request compensation and/ or extensions in time from the Client
through the change order process. One should not expend additional monies to mitigate
client delays without the client's formal instruction. The Project Manager is responsible
to ensure that the Project Team has the necessary dedication, personnel and resources
to effectively administer change order preparation and processing. The Project Manager
is also responsible to form a Claims Management Team when circumstances warrant as
2.2. Timely Client Change Order Notification
Project Management Teams are expected to limit the number of claims on a project
by insisting upon the timely issue of formal Client Change Orders during the course
of project execution, when the negotiating position is the strongest. Allowing disagreements
to be tabled until the end of the project results in the Company having to negotiate
from a position of weakness, increases the difficulty to locate contemporaneous cost
and schedule information to justify our entitlements, and has a detrimental impact
on cash flow and the predictability of job profit. In addition to potential cost
impact, all notifications must address potential schedule impact or at a minimum
reserving our right to evaluate the cumulative effect of multiple changes. Cost and
schedule mitigation steps must be highly visible, documented, and performed with
the full involvement of our client.
2.3. Client Satisfaction
Project teams are not normally authorized to unilaterally make concessions to Clients
in an effort to improve client satisfaction. The expectation is for Clients to abide
by the express and implied contractual terms and in the same manner Client expects
Company to abide by them. Therefore the Company delivers on its contractual obligations
and likewise expects the Client to do so as well.
2.4. Approval to Proceed
Project Management Teams must do everything within their power and the limitations
of the contract to obtain formal client change orders for variations in work scope.
2.5. Client Change Order Register
Client Change Order Registers are to be maintained on every project and should be
included as a part of monthly Company internal project reports. In addition to approved
Client Change Orders, these Client Change Order Registers are to include all Client
Change Orders that have been denied or which remain unresolved with the client. Furthermore,
each project is expected to conduct a weekly internal meeting to review the status
of Client Change Orders.
2.6. Claims Management Escalation
Client Change Orders or other matters which can not be agreed between Company and
the client within a reasonable time frame should be elevated to Company Executive
Management for review.
2.7. Claims Strategy Development
In the event that satisfactory closure can not be reached with the customer, the
Project Manager is responsible for developing a Claims Strategy for review by Executive