Many construction projects involve acrimonious legal fights over the contractor’s variation claims or change orders. Some of these battles drag on for months, even years, after the project is finished. They take a huge amount of time, effort and cost. Can these disputes be avoided?

In my career I’ve been involved with over 120 construction projects in various roles, from site engineer, to project manager, project director, and general manager of the construction division. On almost every project we lodged variation claims for both cost increases and delays. 99% of these claims were settled with the client without resorting to outside intervention or legal help. In most cases we agreed amounts which were more than satisfactory for us. Sure, on some occasions we had to concede when we were wrong, once or twice we were beaten on a technicality, and sometimes we looked at the bigger picture on the project where it was beneficial to allow the client a win in return for the benefits of other variation claims we settled. Some of our contracts nearly doubled in value because of variation claims, and some had extension of times agreed of several months. Despite these many and sizable claims we remained on good terms with our clients and their team, continuing to be employed on their next construction projects.

Now winning these variation claims and changes was often vital for us, and without the wins many of the construction projects may have ended in a loss, or we would have finished beyond the original agreed project completion date which would have resulted in delay penalties or damages paid to the client.

I was personally involved with many of these claims, some claims were at my instigation, some I put together from scratch, many I provided input and advice to those preparing the claim, and most I argued the merits of the variation claim with the client’s team.

So I find it alien that some project managers leave the preparation of variation claims entirely to their quantity surveyors, contract administrators, or other people in their team. Some contractors even pass variation claims directly to external legal teams to put the claim together. Now I’m not saying that these people aren’t capable of preparing variation claims, but I believe that project managers should play an active part in the process.
​
I’ve written several construction books, and I find it interesting that my book ‘Construction Claims: A Short Guide for Contractors’ sells the least copies of them all, and sells only one tenth, sometimes fewer, of the copies of my top selling book, ‘Successful Construction Project Management: The Practical Guide’. Now at first I was concerned that my claims book wasn’t great. I know that there are more detailed claims books on the market, but I tried to make my book an easy read that gave a general overview to variation claims. Fortunately the claims book has received some good reviews. So why are there so few sales? I realise now that having a better title may have helped! But looking at the other construction claims and construction contract books I’m surprised to see that they also sell as poorly as my claims book, while there are many general construction management books that sell equally well, even sometimes better than my top seller. Obviously reading books about variation claims is not high on the priority list for project managers. Is it because they are boring, maybe because project managers believe that they already have a good understanding of the topic, or because project managers believe that all contractual matters should be left in the hands of others?

But, this is where many of the problems arise on construction projects. Why many projects end in protracted litigation. Why many contractors lose money on construction projects. And why many clients and contractors have sour relationships. It certainly does not need to be this way.

It is vital that project managers (site managers, construction managers, site agents) have a good understanding of variation claims.

1. Work on a construction variation claim and change order doesn’t start when the event causing the claim happens, it should start before work even begins on the project. It’s vital for project managers to understand the contract documents. These set out the rights and obligations of both the contractor and the client. Failure to fulfil these obligations gives rise to a claim from the other party. Indeed many opportunities to lodge a variation claim are missed because project managers don’t read and understand their contract documents. But the contract document also sets out the steps and the timing required to lodge the claim. Failure to follow these steps could invalidate the claim. An introduction to construction variation claims for construction project managers Video 4 - Reasons claims are rejected
2. Now some project managers are of the opinion that spotting a claim should be the responsibility of their contract administrators and quantity surveyors. Why? Many of these people aren’t even full time on the project, they often aren’t at the ‘coal face’ and aren’t aware of the day to day issues and changes happening on the project – or if they are it’s often after the fact. Realising that a claim event has arisen is a team affair, and the more people looking for claim opportunities (and I mean legitimate variation claims) the less likely that they’ll be missed, or only detected when it’s too late to claim.
3. But that’s not even where the problems begin. A variation claim requires substantiation. There’s often extensive records, which may include; daily diaries, project reports, construction schedules, information required schedules, early warnings, emails, drawing issue logs, site information requests, weather records, project meeting minutes, and more, that are vital to substantiating claims. Yet regrettably, much of these records and information is missing, or is of a poor quality, often containing conflicting information, or even information that is more beneficial to dismissing the variation claim. Ensuring that all these records are maintained, that they are an accurate representation, and that the information is consistent and unambiguous, is definitely part of the project manager’s role. All of this paperwork starts from the day the construction project is awarded, indeed it actually starts back when the request to price the project was received from the client. Documents That Will Make Your Construction Variation Claim Successful
4. But, just as important as having information ready to lodge a variation claim, it’s equally important to have the information available, and to follow the correct contractual procedures to avoid, and to defend claims lodged by subcontractors or the client. Far too often project managers don’t follow the correct contractual procedures which opens the contractor up to a claims against them from subcontractors.
5. Often changes and delays have knock-on effects. It is important to understand these knock-on impacts, and take them into account when formalising the cost and time impacts of the change or delay. Far too often contractors claim for the direct impacts of the variation and then belatedly discover other impacts which they hadn’t allowed for. Those directly involved with the day-to-day activities of the project are best placed to understand the full time and cost impacts of the variation event. Understanding the real cost of delays on your construction project
6. It is important that project managers understand the logic and the background of the variation claim. They are often the first person that the client’s team discusses the variation claim with, so their ability to present the facts supporting the variation claim in a logical manner is a vital step to winning the variation claim. Presenting the wrong arguments and facts, or failing to have an understanding of the claim, can undo the hard work that’s gone into preparing the claim. Negotiating a construction variation claim – read this first to improve your success
7. Of course the contractor’s project manager must also ensure that variation claims submitted in their name are legitimate. Spurious and poorly thought out claims can harm the contractor’s reputation, it can damage relationships with the client, and it could even damage the project manager’s own reputation. When Contractors Can’t Claim a Delay From Their Client on Construction Projects
8. Furthermore, sometimes having a sound contractual knowledge can mean that the project manager is able to provide the client sufficient early warning to avoid the variation claim arising. Variation claims may appear to be lucrative for contractors, but they take time and effort to put together. Sometimes, there are more benefits to finishing the construction project on time with minimal changes and interruptions. How To Avoid Claims On Your Construction Projects

I believe that it is essential for all project managers to have a sound contractual knowledge, not only to be able to prepare variation claims, but also to be able to avoid claims.

I always enjoyed preparing variation claims, arguing their merits and winning the claims. I found it a very satisfying part of my job.

​This article is adapted from information in the author’s popular books: 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide' and 'Construction Project Management: Tips and Insights'
'Construction Claims: A Short Guide for Contractors' is another of Paul's useful books.
Paul has recently published 'Construction Management: From Project Concept to completion'.
These books are available on Amazon and other online book stores.
Paul publishes articles regularly on LinkedIn and his website. 

Paul writes regular articles for other websites, gives lectures, mentors, and is available for podcasts and interviews.
​
© 2017 This article is not to be reproduced for commercial purposes without written permission from the author.

​Will you know if your construction project is in trouble?

This seems a silly question and many will answer that it’s obvious – a construction project is going badly when it’s running late and falling behind schedule and it’s losing money. Yet even when a project is finished late or loses money this is often only detected when the project is almost finished – when it’s usually too late to take corrective action.

Yet these aren’t the only metrics that we should be judging a construction project’s success. Recently a student wrote to me on LinkedIn to ask for help with a project that was looking at the parameters that would highlight when a project was distressed. He had decided that if the actual man-hours expended on the project were more than the planned man-hours it would be an indication the project was distressed. Now I explained that this was only one test, and it was a bit like going to a doctor and having your blood pressure tested. High or low blood pressure is indicative that there is a health problem, but having normal blood pressure doesn’t mean that you are healthy. In fact even if the blood pressure reading is high, there might not be a health problem, because there could be other factors giving the high reading, such as; the doctor didn’t carry out the test correctly, or you had just finished a session at the gym, or you were stressed because you had a job interview straight after the visit to the doctors.

Indeed, whether a construction project is distressed, or going badly, would also depend on your relationship with the project. Different project stakeholders view the project outcomes differently, and it depends on the impacts on them. So for instance, a client might be far less concerned about the contractor losing money than the contractor would obviously be. But, the fact that the contractor is losing money is often a result of other factors which might eventually negatively impact the construction project for the client. Certainly, if the contractor loses so much money that they become bankrupt before the project is completed, then it should definitely concern the client – although many clients would ignore this potential problem until it was too late.

Project cost reports, updated project budgets and construction schedule updates are all valuable and essential indicators of the health of the project. However, it is important to understand these reports and to ensure that they’ve been prepared correctly. It’s then vital to take the proper corrective actions to fix the problem. Unfortunately many of these reports are issued sometime after the event, meaning that time has elapsed and the problem could have become worse.

As mentioned above, there are several other indicators that a project is in trouble. Studying these metrics could uncover the underlying causes of problems on your construction project.
Is your project in trouble? Would you know?
​​Who Else Wants More Profitable Construction Projects?

​In construction, we depend on good people. Regrettably, there are many poorly skilled and unmotivated people in construction. Part of the reason is that sometimes people employed for construction projects are paid poorly, are transient workers, are poorly educated and have little motivation to stay in the industry. Construction is often not seen as a career of choice, and some end up in construction because that’s the only work they can get.

Part of these problems is related to the cyclical nature of the construction business, with short cycles of plenty of work followed by sharp downturns when work is scarce. Society often places more emphasis on sports stars, lawyers and doctors, but, in general, tradespeople and contractors are looked down on. Being in construction isn’t easy with many construction projects working long hours, sometimes in adverse weather conditions. People are expected to work far from home and away from families.
​
But, construction companies must also take some responsibility for poor quality employees. Contractors often employ the ‘wrong people’ focusing on cheap labor rather that the best person for the job. People aren’t trained, they aren’t trusted, they aren’t directed properly and some contractors take their employees for granted. Often Project Managers are focussed purely on the work at hand and don’t even notice others in the team.

Construction wages often make up a significant portion of project costs and even a small improvement in productivity can make a big difference to a contractor’s profits. But, a well-motivated and skilled workforce will deliver other benefits which could include; improved construction equipment productivity, less damages to construction machinery, better quality which reduces the amount of rework and less management and supervision time. But, employees can also make, or destroy, company reputations.
How poor labour productivity impacts the success of your project.
What poor employment practices have you found? How did they impact you, or your project.

​Paul Netscher has written several easy-to-read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
Visit to read more.
The books are available in paper and ebook from most online stores including Amazon.

​We are shaped by the way we were brought up, what our parents taught us and what we learned from our teachers and mentors. Many people are shaped by the history of their country, and some even bear scars and hate because of it. History can teach us many good things, but used incorrectly, or manipulated it can be damaging. Unfortunately even today, countries are prepared to go to war based on historical inaccuracies.

So also in construction, how we did previous projects can serve as a valuable lesson, but sometimes it can be a hindrance. What we learned from our managers and the people that worked around us can serve as valuable experience, but sometimes it can also be detrimental. This is my story Paul Netscher

​We always do it like this!
Don’t you hate it when you propose a different construction method and someone says no, it’s not necessary to change, since we always do it like this? How quickly is innovation stifled!

Sure the previous way may have worked – but was it the best solution? Anyway, are those methods appropriate to the new project? Every project is unique in many respects.
We cannot automatically assume what worked before is the best solution now. Don’t let your history blind you, or indeed the history of another person deter you, or give you the wrong sense of how things should be done.

What we can learn from history
Our construction projects can supply much useful data, especially when it comes to pricing our next project. This data includes:

1. The cost of doing things.
2. The time taken to complete certain tasks.
3. Which subcontractors and suppliers produced good quality and were reliable.
4. Which types of projects are profitable.
5. Mistakes to avoid.
6. What we did right and how we can replicate it
7. Which clients to avoid.
8. The company’s strengths and weaknesses.

But, all of these can change with time and a different location. That good subcontractor may not be reliable on your next construction project, and conditions could be different on your next project which causes tasks to cost more money and take longer to complete. ​Where do estimators get their prices?

But is history always reported correctly?
I’m sure the history most of us learned at school has changed? But how is this possible – history is history and can’t change? Unfortunately people view history from different perspectives, and the hero in one person’s version of history could be the villain in another’s version of the same historical event. Most history school books are distorted in some way to give the version of history that suits the current values and norms, which are often dictated by the government of the day. So too in construction, we have to understand how reliable the history is that we are getting.

The history of past construction projects is often distorted by who is telling the story. After all, the project manager is always quick to blame the estimator for errors that were made in the pricing document which cost the project money. The estimator will blame the project manager for a poor project result. Project managers are quick to claim that they and the construction methods selected were the reason for a project’s success, when a large proportion of the success could be ascribed to the project price and construction schedule having ‘fat’. In fact, maybe the project could have been even more successful if other construction methods were chosen, if another more diligent project team had managed the project. Using that same project team, that appeared successful, on another construction project sometimes leads to problems which then surprise management.

Of course the client’s team will blame the contractor when a project goes wrong when problems could be due to their own project team. Not understanding these problems could mean they are replicated on the next construction project. Your Construction Project is in Trouble – Who are you Going to Blame?

It is important that facts are recorded accurately so that there can be no debate about what went wrong and what mistakes were made. It’s important that systems are in place to monitor and record the health of a project. That reports and meeting minutes are accurate. That facts don’t get changed or go missing. But of course it is equally important to question and analyse the data that’s presented, so that inaccuracies are detected.

Does what worked on the past construction project apply to our new project?

​The Vikings won many battles with axes and swords, swiftly moving along rivers in their longboats. Well the strategy that worked (which was cutting-edge then) isn’t going to work today because the world has changed.

​We need to take what we learned from our past construction projects and apply them sensibly to our new project. We need to understand what’s different with our new construction project. Every project is different in some way, with a different; team, client, contract conditions, specifications, design details, weather conditions, topography, ground conditions, etc. Even the company’s circumstances may have changed, and of course things even change in the country with financial conditions varying and the availability of materials, skills and finance differing. We need to take what worked on previous projects and adapt it to suit the different conditions. Even identical construction projects probably won’t cost exactly the same!

​It’s always important to learn from our past mistakes, even from the mistakes of others. Regrettably, we all make mistakes, we’ll all make the wrong decision sometime. The sad thing is when we don’t learn from these mistakes.

But, we cannot accept that history is always right, or what worked on the last construction project will be the best solution on our next project. We have to be prepared to ask questions, to try new solutions.

​The history of our next project is in our hands. We owe it to those following to ensure that the facts are accurately recorded on our project. That when things go wrong that the blame is accurately apportioned – not so that those who caused the problem can be punished or victimised, but rather so that everyone can learn from the mistake and not repeat it again. The truth shouldn’t be hidden, nor should it be dressed-up as something it wasn’t. We need to ensure that we have reliable reporting systems in place and that the data inputted is accurate.

But when we use these facts in pricing our next project, or to plan our next project, we must understand not only the reliability of the historical facts, but also understand what is right for our new project, what is applicable and what should be used. Don’t Submit Your Construction Price (estimate/tender) Proposal Until You Get These Questions Answered On A Site Visit

We cannot be blind to the history of our past methods and projects, because there are often valuable lessons to be learned. But, we also cannot let this same history dictate the methods and planning of our new projects. We have to be open to new ideas and methods.
​
So next time you decide on a construction method or action, ask yourself if your decisions are being influenced by history alone, or have you put real thought into selecting the best and most appropriate methods based on the current situation.

Next time don’t be so quick to squash innovative ideas by saying we always do it like this or, it worked on our last construction project. Let’s also consider new technology and innovative solutions. Let’s always look at new ways to shape the future of our project. Our project does not have to be a victim of our history, but also let’s not make the same mistakes that occurred on other projects. How you can make your next construction project more successful. 

​Construction companies are constantly dealing with very complex projects that require intricate and thorough planning to ensure they are executed and completed successfully. Therefore, project management should be a crucial part of every construction project as it helps team members understand client expectations in the beginning and deliver accordingly once the project is in full swing.
 
For that to happen, they require effective communication and collaboration, which is something that good project management can make happen. A construction project manager needs to plan, organize, schedule, coordinate and supervise projects, as well as take care of the budget so that every task can be completed seamlessly and effectively. Here’s how construction companies are using project management software to plan, build and manage complicated projects.

Initiating the Project

Initiation is the most important part of every construction project, as it includes determining whether a project is feasible. A construction project manager, together with the stakeholders, needs to create the business case for the new project and go through every possible detail to evaluate whether it represents a good opportunity.
 
A feasibility study is often designed for everyone to be sure that they should move forward with the project. If the conclusion is to start the project, they create a project initiation document that outlines the business case and the entire plan for the construction.
 
Planning the Project
 
The planning phase of the project is crucial as in this stage a construction project management plan is created that every team member must follow. Apart from scope documents that outline goals, objectives, deliverables, schedule, costs, and all the resources, the plan needs to contain a visual representation of the project that will provide everyone with a checklist for the tasks to be completed. This is called a work breakdown structure (WBS), and its purpose is to break the project into small, easily digestible chunks. planning your construction project
 
During the planning stage, a project manager should also create a risk management plan for more effective risk mitigation. A communication plan is created so that everyone can stay on the same page and work together towards achieving the common goal.

​Executing the Project
 
After making the construction project management plan construction can begin. The project manager makes sure that the proper resources are assigned to the project and that the tasks are executed properly. They also make sure that the schedule is followed and regularly updated.
 
Monitoring the Project
 
The project manager must monitor the project progress to make sure that everything is going smoothly and that every construction worker’s performance is at the highest possible level. Apart from controlling the project’s progress, they also need to work closely with the stakeholders, especially those responsible for the safety at the construction site.
 
Completing the Project
 
When the construction project is completed, the project manager creates the construction project report. They evaluate everything that was completed and analyze and evaluate mistakes and failures as well as the successes. If anything was left, it is evaluated as well, after which the final budget is calculated. Will your construction project be 100% complete when it's finished?

If you want your construction company to be successful, you cannot rely only on paper documents and Excel sheets to plan and manage your projects, especially when it comes to very complicated ones. You need to use tools that will enable you to turn your projects into successful ones, which is why you need to utilize project management software.
 
This software will help you with scheduling and with eliminating potential risks that may occur during the construction. Among numerous features, one of the best ones is the option for creating Gantt charts, which provide you with a clear insight into your project and helps you allocate resources, assign tasks and meet all your deadlines.
 
You can also create task dependencies, which will save you time, and you can track time on your projects, so that you know exactly how long every task will take. With project management software, you can better organize your activities and even get real-time snapshots of them, so that you can effectively monitor the construction work and make better decisions, especially when something needs to be done quickly.
 
The allocation of resources is very simple with this software, as the features provide transparency, so that everyone knows what they are responsible for and when they should perform their assigned tasks. Project reports and financial summaries can be created with just a few clicks, which saves considerable time (time which is often in short supply).
 
Perhaps the most notable features of project management software are communication and collaboration features. Without these, construction projects might not be as successful as should be. The construction team needs to be able to seamlessly work together towards achieving the project goals. They need to be able to communicate in real-time, not only among themselves, but also with clients and other companies.
 
This software enables them to do so, as it is cloud-based, where every piece of information can be accessed anytime and anywhere. This kind of faster collaboration leads to better decisions and helps with making every effort pay off.
 
As you can see, construction companies can benefit considerably from utilizing simple project management software. If you are thinking about getting one, make sure that it is cloud-based, that it easily integrates with other types of software that you are already using or plan on using, that it has an intuitive interface and enables you to easily collaborate with multiple teams, and, most importantly, that it is reliable.

​Paul Netscher has written several easy-to-read books for owners, contractors, construction managers, construction supervisors and foremen. They cover all aspects of construction management and are filled with tips and insights.
Visit to read more.
The books are available in paper and ebook from most online stores including Amazon.

​"100% recommended. Great reading. It’s a real rear case where “what” and “how” to construct integrated with “why”, “when”, “where”. An easy manner of writing is making content understandable for construction managers to extend their capabilities in financial and investments fundamentals. At the same time its a unique input to improve the knowledge in the area of engineering and construction for those, who are concentrated on project management concepts only." (Reader Amazon.com) *****

Many construction projects are doomed to fail long before construction even begins. They are the wrong project, built in the wrong place at the wrong time. The design is inadequate, the budget is wrong, a poor team is selected and investigations are incomplete. Some projects are poorly managed and others aren’t finished properly. At any stage your project can go wrong if it’s not managed correctly!

Filled with invaluable tips, insights and advice, this easy to read book takes you from project inception, where the owner decides what they want, where they want it and how much they can pay.  To planning, appointing the project team, investigations, budgeting, the design process, selecting the right contractor, preliminary work, construction, and finally, commissioning and project completion. Chapters also cover project scheduling, important financial aspects and contractual arrangements. 

Whether you are planning to build a new home, preparing to renovate and extend your house, launching a new project as a seasoned property developer, perhaps a project manager who manages projects on a daily basis, or maybe you are just starting in the construction profession, you will find this book filled with valuable information to help you plan, monitor and manage each project phase to ensure your project is a success.
​
Get your copy of this indispensable guide; Construction Management: From Project Concept to Completion, from Amazon and other online stores, available in paper or ebook.
The author’s previous books have been favourably received by those new to the construction industry as well as seasoned professionals. Reviews include: “this is the best book on project management I have read” and “this book is fun to read and full of examples of what to be aware of with project management”.