Claims Administration
The organized handling of contract claims, including their intake, evaluation and decision, and formal notification of the results to the involved parties.
Key Points
- Manages formal requests for adjustment under a contract when the buyer and seller disagree.
- Typical steps: receive and log the claim, assess it against contract terms and evidence, issue a decision, and communicate outcomes within required timeframes.
- Relies on strong documentation and traceability for audits and potential negotiation, mediation, arbitration, or litigation.
- Results may include approved change orders or equitable adjustments, denial of the claim, and updates to project records and baselines.
Example
A contractor files a claim for extra payment due to differing site conditions. The project team records the claim, reviews contract clauses on site conditions, analyzes cost and schedule impacts, renders a written decision, and formally communicates the outcome to the contractor, with next steps and timelines for appeal.
PMP Example Question
During execution, a seller submits a formal request for additional payment due to scope ambiguity. You log the request, evaluate it against contract terms, issue a decision, and notify the seller in writing. What process are you performing?
- Claims administration
- Contract change control
- Conduct Procurements
- Procurement performance review
Correct Answer: A — Claims administration
Explanation: Claims administration is the process of receiving, deciding on, and formally communicating outcomes for contract claims.
