CLAIMS MANAGEMENT – TIME & COST OVERRUN

How to handle activities (scope) deemed necessary for successful project execution but somehow omitted in the original contract.

In this case, work required for execution but not originally included in the contract, should become a change order. Fortunately, this type of discrepancy is usually found out quite ahead of its execution. Consequently, the VO w.r.t. time and cost needs to be settled and contractor and client would normally have enough advance notice to take into account the related impact. If something is added to the original time schedule, it will impact the time only if it falls on the current longest path or if it does not fall on the longest path but needs resources from other tasks on the longest path. In either case, additional work will almost definitely impact the costs. Now, if the VO (on the longest path) is settled well in time then the impact on time and costs is the least (equaling that which is directly dictated by the VO) and overruns will begin accumulating otherwise.

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