Managing Risk, Claims & Difficult Conversations

Welcome

Hello, and welcome. This is Super Structures General Contractors — a national general contractor headquartered in Powhatan, Virginia — here to help you and your clients build something that lasts. We're glad you're with us, and we look forward to connecting with you.

Alright, Managing Risk, Claims & Difficult Conversations. Don't let the plain title fool you. Here's the part that actually matters on the job: Claims are avoided by notice, documentation, and early conversations — and when they can't be avoided, the same three things are how you win them. Learn it well and most disputes never become disputes, and the ones that do are settled on your record instead of your memory.

Every project carries risk: design gaps, unknown site conditions, weather, owner changes, sub failure, price escalation, late decisions, and the owner's own financing. None of it is unusual, and none of it is the PM's fault. The PM's job is to see it, name it, and manage it under the contract — and to keep the relationships intact while doing so.

The risk register

A simple list, reviewed monthly alongside the cost report: each risk, its likelihood, its cost and schedule impact, the mitigation (what we're doing about it), the owner of the action, and the status. New risks get added as they appear — the geotechnical report that looks thin, the sub whose billing is slow, the owner decision that is three weeks overdue. Retired risks get closed with a note. The register drives the forecast's exposure items and gives leadership a one-page view of what could hurt the job before it does.

Notice is the rule you cannot skip

Nearly every contract requires written notice of a change, delay, or differing site condition within a set period — often 7 to 21 days from when the contractor knew or should have known — and failure to give notice can waive the claim entirely, regardless of merit. Notice is not aggressive; it is a contract procedure, and sophisticated owners expect it. Send it short, factual, and on time: what happened, when, where, which contract clause applies, and that you are evaluating the cost and schedule impact and will follow with pricing. Send it to the people the contract names, by the method the contract names. When in doubt about whether something is a change, give notice; you can always withdraw it.

Documentation

Daily logs with manpower and weather; dated photos; schedule updates that show the critical path each month; RFI and submittal logs with turnaround times; meeting minutes; correspondence; and separate cost tracking for the affected work from the day it begins — a dedicated cost code, time and material tickets signed daily by the owner's representative where the contract allows. A claim without contemporaneous records is a story; with them it's a case. The discipline is building the record every day, not reconstructing it when the dispute arrives.

The difficult conversation

Most disputes start as problems that were avoidable with a conversation held two months earlier. Hold it early, in person if possible, with the facts, the contract language, and a proposed resolution. Lead with the shared goal — finishing the building — and the problem, not the blame. Listen for what the other side actually needs; an owner who cannot approve a change this quarter may be able to approve a schedule extension today. Follow up in writing the same day, summarizing what was agreed and what remains open.

Going Deeper (Intermediate)

Know the types of claims your team is likely to see: changes (directed in writing, and constructive — where the owner's actions changed the work without a formal order), differing site conditions (both the "not as shown" and the "unusual for the area" kinds), delays (excusable, compensable, and concurrent, each with different remedies), acceleration (directed or constructive, when the owner refuses a justified extension but demands the date), and defective specifications. Each has elements you have to prove — entitlement under the contract, causation, and quantum (the cost) — and the documentation should be built with those elements in mind.

Know the dispute ladder in your contract: negotiation between project leads, escalation to executives, mediation, then arbitration or litigation. Most disputes should be resolved on the first two steps, and the PM's documentation is what makes that possible — a clean record lets the executives settle on facts rather than positions.

Advanced / Pro-Level

Pros manage sub risk as carefully as owner risk. A sub that's slow to bill, behind on payroll, losing manpower, or getting calls from its suppliers is a default risk, and a documented notice-to-cure process, the contractual right to supplement their workforce, and a default plan exist before the collapse — including who would finish the scope and at what cost. They understand contingent payment clauses and their state's prompt-payment and lien laws, and they manage lien waivers so the owner never receives a lien from a sub's supplier. They involve counsel early, before positions harden, for anything that could become a formal claim — a one-hour call at the start is cheaper than a motion later.

They also know when to settle. A disputed $80,000 change on a profitable relationship is not worth a $200,000 legal fight and a lost client; a large delay claim with a clean record may be worth pursuing through the ladder. The decision is made on the numbers, the record, and the relationship, not on pride — and the PM brings leadership the facts to make it.

Practice Challenge

The structural drawings issued for construction conflict with the architectural drawings at the elevator shaft, and your steel sub needs an answer in five days or fabrication stops. What do you do? (Answer: issue a priority RFI today with the conflict, the schedule impact date, and a proposed solution; send written notice to the owner that a potential change and delay exists pending the response; log it in the risk register and the change log; and track the steel sub's costs if the answer is late.)

In Practice

A PM who sends a two-paragraph notice the week a problem appears, tracks the cost on its own code, and sits down with the owner's rep before the pricing is final settles the change in a month and keeps the relationship. A PM who waits "so we don't upset the owner" waives the claim, upsets the owner anyway when the number finally surfaces, and spends closeout arguing from memory.

Common Mistakes to Avoid

• Missing the contract's notice deadline
• Treating notice as a hostile act instead of a procedure
• Relying on memory instead of logs, photos, and schedule updates
• Mixing claim costs into the base cost codes so they can never be separated
• Letting a problem fester until it's a claim instead of a conversation

Takeaway: Claims are avoided by notice, documentation, and early conversations — and when they can't be avoided, the same three things are how you win them.

Educational content — not legal, accounting, or contractual advice. Follow your contract's specific procedures and deadlines and consult your attorney and CPA as needed.