Appropriately designed and implemented internal controls that target contract compliance and recordkeeping can help contractors protect their rights to recover and preserve evidence that claims have occurred. A properly utilized accounting system designed for contractors, in addition to proper job costing, will also help a contractor prove damages. CFMs must also understand and be able to identify situations that might lead to a claim and ensure that PMs and superintendents do, too.

This article will provide general information about how contractors can avoid and effectively manage contract claims.

Before pursuing a claim, contractors should seek guidance from experienced construction attorneys, as many factors – from the contract itself, to whether the contract owner is a governmental or private entity, to the laws in the jurisdiction that govern the claim – can vary significantly.