In the intricate world of turnkey projects, particularly in the energy sector, the management of contractor’s claims under termination and dissolution of contract is a critical yet often overlooked aspect. A recent study published in the journal ‘مهندسی و مدیریت ساخت’ (Engineering and Construction Management) sheds light on this complex issue, offering insights that could reshape how contractors and employers approach disputes and claims.
Amir Momeni, a Master of Project & Construction Management from Islamic Azad University in Ardestan, Iran, led the research. Momeni’s work focuses on the management of contractor’s claims in EPC/Turnkey projects according to the FIDIC (International Federation of Consulting Engineers) contract conditions, particularly under scenarios of contract termination and dissolution.
The study highlights the increasing complexity of construction projects, exacerbated by factors such as meteorological conditions, political instability, and the intricacies of international agreements. These factors often lead to disputes, claims, and even contract termination, resulting in significant financial and temporal impacts on projects.
“In such a situation, it is obvious that the existence of a management system in accordance with international standards has a significant role in identifying the existing claims,” Momeni explains. His research emphasizes the need for a robust system to manage claims effectively, thereby avoiding disputes and facilitating smoother project execution.
Momeni’s approach is both innovative and practical. By relying on PMBOK (Project Management Body of Knowledge) guidelines and collecting interviews and questionnaires from experts in civil engineering projects, the study aims to provide a comprehensive understanding of claims management. Additionally, the use of system dynamics modeling allows for a more accurate and practical analysis of claims, ensuring that contractors can better protect their rights in cases of termination and suspension.
The commercial implications for the energy sector are substantial. Effective claims management can lead to reduced project delays, lower costs, and improved relationships between contractors and employers. As Momeni notes, “the contractor can keep his rights in terms of termination and suspension, and is more prepared to receive his lost salary.”
The study’s findings could shape future developments in the field by promoting the adoption of international standards and advanced modeling techniques in claims management. This could lead to more efficient project execution, reduced litigation, and ultimately, more successful turnkey projects in the energy sector.
As the construction industry continues to evolve, the insights provided by Momeni’s research offer a valuable contribution to the ongoing dialogue on claims management. For professionals in the energy sector, this study serves as a reminder of the importance of proactive claims management and the potential benefits of adopting a systematic approach to dispute resolution.