Archive for the ‘Uncategorized’ Category

Crisis for Gulf Construction Companies?

Let’s take a look at what has been happening in the Gulf construction market recently.

Drake & Skull announced plans for a major restructuring after suffering losses in 2016 of AED 787M, an improvement on 2015 when they lost AED 939M. A few weeks ago 8,000 employees of the 40 year old company Saudi Oger received letters announcing that 31st July 2017 will be their last day at work. The company apparently owes $3.5Bn to Saudi banks. Arabtec needed a cash injection early this year too after announcing losses of AED 3.4Bn in 2016. In 2015 the losses were reported at AED 2.35Bn. In March last year Al Jaber missed a debt repayment of AED16.2Bn which had been put in place in 2014 to restructure the company and in August, they announced the sale of their share in ALEC and the Shangri-La Hotel Abu Dhabi to finance yet another restructuring exercise. Then there’s the fall out between Al Habtoor and Leighton, the list goes on and this is just the tip of the iceberg for the Gulf construction industry…the small sub-contractors, sub sub-contractors and suppliers don’t make news in the financial press.

What is going on with contractors in the Gulf? Is there no work?


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The Preliminaries to the Claim – Top Tips Paper for Download!

The object of a claim document is to convince the respondent that the claimant is entitled to an award and the quantum of the award. It must also be remembered that the onus is on the claimant to prove his case.

To help this objective it is vitally important to ensure that any reviewer of the claim who is not familiar with the project or the circumstances of the claim may properly understand the claim.


To achieve this, we must ensure that the document includes all the information that is necessary for a proper understanding of the matter and the document must lead the reader to a logical conclusion. Failure to comply with these two key points will at best lead to delays in settling the claim or, in the worst case, a rejection of the claim.

Much of this can be achieved by working through the claim and presenting the various subjects that need to be dealt with in a logical order. The following paper therefore discusses the order in which the ‘front end’ or, as I like to refer to it, ‘the preliminaries to the claim’, may be presented and what information should be included within the various sections therein…Read the full Top Tips paper, The Preliminaries to the Claim.

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4 Essential Elements and 4 Key Points to Successful Claim Writing

As we enter into a new year, I thought it would be appropriate to post a blog on what I consider to be the most important elements and criteria for construction claims and responses.

In my experience, failure to take these matters into account when compiling a claim is the main reason for claims being rejected and failure to deal with them appropriately when preparing a response to a claim is the main reason for contentions or disputes. In summary then:

The 4 essential elements to be included in a good claim or response are:

  1. Cause – What happened?
  2. Effect – What effect did the cause have on the project in terms or time/and or money?
  3. Entitlement – Does the contract or the law provide entitlement to compensation?
  4. Substantiation – Every part of a narrative or calculations needs to be substantiated.

It may help you to remember the essential elements by way of the acronym CEES (Cause, Effect, Entitlement and Substantiation).

The 4 key points to remember when compiling a claim or response document are:

  1. Make the reader’s job as easy and as pleasant as possible
  2. Ensure that the submission is a stand-alone document
  3. Assume that the reviewer has no prior knowledge of the project or circumstances
  4. Irrelevant information should not be included in the document.

If you have a good case and you remember these points when compiling claims or response, you have a good chance of success.

Finally, I would like to wish our blog readers a happy, healthy and prosperous new year and to encourage everyone to contribute to our blog posts in 2015. Let’s start now…

What are the common mistakes you see when reviewing claims? What are the things that you struggle with when writing a claim or response document? What tools and techniques have helped you to write successful claims in the past? Comment below…

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Insights from Qatar | Evaluating Variations on Lump Sum Contracts

I have just returned from presenting our 2-Day Construction Claims Intensive Training Course in Qatar where one delegate raised a question in connection with lump-sum contracts and items included in the bills of quantities, but not shown on the drawings.

The question was ‘if something is included in the bill of quantities but not required, can the Engineer omit the price included in the bill of quantities for this item?’

Obviously, to provide an accurate answer, it would be necessary to study the contract documents, their order of precedence and the precise wording of the contract. If we assume however that the usual provisions apply whereby the Contractor is obliged to construct the works in accordance with the contract documents, but the bills of quantities are stated to comprise only an estimate of the works and may not be relied on, the answer is quite simple but often misunderstood.

Simply put, the bill of quantities in such circumstances is merely a breakdown of the Contract Price, which may be used to evaluate interim payment applications and variations and may not be regarded as being an accurate document. The scope of works may thus, only be derived from the drawings and specifications. If, therefore something is measured in the bill of quantities but not shown on the drawings or in the specifications, then it is not included within the Contract Price. The Engineer may not therefore omit something that is simply not there in the first place.

A good way to argue this case with such an engineer is to ask if you may be paid for items shown on the drawings but not in the bill of quantities. I am sure that in such a case, the Engineer will immediately refer to the conditions that state that the bills and quantities are not to be relied on and deny your request.

We have published a couple of case studies that have relevance to this subject, which we would be happy to share with you on request.


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You, Claims Class and Social Media

Claims Class prides itself on relationships. We pride ourselves on existing relationships with our Distance Learning students, our relationships with past Intensive Training Course delegates and relationships with everyone and anyone we come into contact with who may enquire about our courses.

Why? Because it is YOU who can help US learn what we are doing well and what we need to improve.

So what have we done? We have established a presence on Linked In and Facebook. We want to make it as easy as possible for you to interact with us so we can continue to enhance the level of education and training we provide. Plus, by ‘liking’ our Facebook page and ‘Following’ us on Linked In, you may well just benefit from our free Top Tips Papers, complimentary copies of Andy’s Book and price reductions on our courses…

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