Project organisations usually have a portfolio of contracts being executed at any one time. Risks often materialise within these contracts which can lead to claims and disputes, with consequential impact on margin and working capital
Failure to act promptly undermines contract objectives, threatens the implementation of business strategy and diverts management focus. In extreme cases, this may lead to working capital constraints, refinancing challenges or insolvency.
How our Claims Governance offering can help
To avoid this happening, HKA can collaborate with you to achieve the intended benefits from your contracts. We do so by designing and implementing a robust Claims Governance Framework. Founded on our combined in-depth knowledge of governance, claims and dispute experience, our Claims Governance offer draws on industry performance benchmarks and can be delivered through a digital platform to minimise margin erosion across your portfolio of contracts.
This will provide effective oversight, transparency and facilitate team collaboration so you can:
Better understand how contractual risks manifest themselves, thereby providing a basis for improvements in future contracts.
Identify contracts that require enhanced oversight early on.
Minimise margin erosion and improve performance across your contracts.
HKA’s Claims Governance work instils an ethos of collaborative working and innovative thinking and will help clients gain confidence in their ability to manage a complex portfolio of claims, with each claim potentially being at a different stage of its life cycle.
Read about the overarching claims governance benefits and the outputs from our support by downloading our Claims Governance brochure.
Example Case Studies
Framework to manage commercial risk
Issue
Our African client was faced with a problematic power plant development project. Delays starting early into the project meant the client was faced with c.US$15bn worth of claims, and an average of 50 new claims being notified every month. The client needed a trusted advisor to augment capability for the structured management of claims.
What we did
We assessed the client’s existing technical and commercial management arrangements on the project. We then designed and implemented a Claims Governance Framework providing oversight and management of claims. We augmented the capability of the client team by providing formal and on the job training in the management and assessment of claims.
Outcomes
The Claims Governance framework provided transparency over the process which enabled the client to have a better understanding of exposure to commercial risk and to be able to identify claims that had been significantly overstated. This has enabled us to support the client close out c.US$.13 billion worth of claims, with a settled value of US$ 600 million.
Claims governance providing improved team collaboration
Issue
Our Middle Eastern client had a US$17.5 billion portfolio of projects, which was exposed to claims of circa US$2.5 billion. To address this financial exposure, the client required external expertise to help govern and manage claims on an initial batch of significant claims.
What we did
HKA conducted commercial reviews of the various work packages to assess compliance with the contract requirements, variations and claims procedures. We then designed and implemented a Claims Governance framework, containing a suite of standardised procedures, process flows, contractual templates and guidance notes which improved the operational delivery of projects. This provided a unified approach to claims evaluation enabling commercial and corporate risks to be managed more effectively, provided a structured peer review process, and a claim monitoring tool to provide monthly KPI data.
Outcomes
By instituting a Claims Governance framework HKA has been able to help the client save in excess of US$130 million from a claim exposure of US$350 million across 23 projects, including settlement of numerous major final accounts. The framework has also provided improved collaboration due to a better joint understanding of risk, timely resolution of claims, and increased confidence in cost reporting.
