Claim management in EPC-Projects : A case study of claim causes and claim management during plant installation

Abstract: When several parties are involved in a construction project are conflicts inevitable, and when one party feel that another party are not following their work according to the agreed contract, can they issue a claim. Claim management and causes of claims has been addressed by previous research, but there is lack of attention to study claim management specifically in EPC-projects. The purpose of this thesis is to shed some light on claim management and identify cause of change claims, specifically in the context of EPC-projects. A case study was conducted within an organisation that executes complex plant EPC-projects, where several parties are involved. This thesis has applied tools of root cause analysis in order to identify the causes of change claims, and conducted focus groups and semi-structured interviews to better understand problems associated with claim management and how the relationship between two parties affects claims. The thesis concludes that the most common root causes to sub-contractor change claims are related to design where not enough information for design input has been provided, or related to installation where sub-contractors issue change claims in order to fix conflicts caused by themselves. Other major root causes are related to insufficient instructions provided by the principal organisation or requests of changes by one party. The thesis also concludes that claims during plant installation are avoided since more time is required for settling an official claim. Poor documentation is a major reason why the settlement of official claims requires more time. Further does this thesis conclude that the relationship between two parties does not affect claims, and in contrast might the relationship benefit from claims if causes are treated properly.