Avoiding legal disputes in public procurement is one of the biggest challenges faced by companies that work with complex contracts, especially in the engineering, infrastructure, and construction sectors. 

When not properly handled, disputes end up evolving into lengthy, costly legal disputes with a high potential for friction between the contracting party and the contracted party.

But the scenario can be different when the company adopts a clear claims management strategy, based on good technical, legal and business .

In this article, you'll understand how this management can be key to avoiding legal disputes, preserving the economic and financial balance of contracts, and improving the overall performance of projects.

What are contractual claims and why do they generate legal disputes?

In medium- and large-scale infrastructure contracts, whether public or private, events often occur that significantly alter the originally agreed terms. When these events directly impact costs, deadlines, or scope of execution, they often give rise to what are known as contractual disputes.

A claim, request, or economic-financial rebalancing study is a formal request made by one of the parties (usually the contractor) seeking to rebalance the contract, whether through financial amendments, term extensions, or a review of obligations. The most common reasons include:

• Significant increase in the cost of inputs, such as steel, cement or fuel;
• Delay in releasing work fronts;
• Flaws or omissions in the executive project;
• Legislative or environmental changes;
• External interference, such as uncompleted expropriations;
• Atypical weather conditions.

The problem is that when this claim is not well-founded, or when there are gaps in communication with the contracting party, the request is denied, ignored, or not even formally reviewed. The most common consequence is an escalation of the dispute, followed by extrajudicial notifications, disallowances, payment withholdings, and, ultimately, legal or arbitration proceedings that compromise the execution of the project and create legal uncertainty for both parties.

Claims management as a tool to avoid legal disputes

For effective claims management, the contract manager must have knowledge of contract administration concepts to map, record, instruct, present, and monitor contractual rebalancing requests, with a focus on avoiding legal disputes and preserving the contractual relationship.

More than a bureaucratic process or legal activity, contract administration is a strategy for protecting the company's interests, maintaining the relationship between the parties, monitoring compliance with contractual obligations based on technical evidence, risk analysis, and negotiation activities. 

When implemented well, it transforms potential disputes into consensual solutions, and this is the major competitive advantage for companies that work with highly complex contracts.

Technical documentation

The first step to efficient management is to build a robust documentation base. Each claim must be supported by concrete evidence: construction reports, histograms, schedules, physical-financial progress curves, photographic records, technical memoranda, productivity analyses, and other documents produced by the contracting parties.

Without this documentation, the claim loses strength and credibility. With solid documentation, the company demonstrates professionalism and transparency, significantly increasing the chances of successful negotiation.

Assertive and timely communication

Many legal disputes can arise due to the way it is presented. Communication must be clear, objective, and within the contractually defined deadlines. Delays in formalization or poorly worded arguments can lead to the loss of rights.

It's important that the request be submitted through official channels, accompanied by a covering letter, executive summary, technical justifications, and a proposed solution. When the contracting party perceives preparation and good faith, they're more likely to be open to dialogue.

Strategic vision on risks and precedents

Claim management goes beyond technical analysis. It requires a strategic understanding of the contract context, the contracting party's track record, the political environment, and applicable case law. In some cases, the claim has good technical merit but low commercial viability. In others, it may be partially accepted through mutual concessions.

A specialized team will be able to assess whether it's worth pursuing negotiations, proposing formal mediation, activating board dispute , or taking the matter to court. This analysis is essential to avoid miscalculated legal disputes, which can last years and result in bilateral losses.

What mistakes make disputes inevitable?

Over the years of working with public and private contracts, we've observed some recurring errors that turn legitimate claims into legal disputes. Here are the main ones:

• Submit claims without documentary evidence;
• Making generic requests without quantifying the impact;
• Wait for the work to be completed to present all accumulated claims;
• Not formally recording events during execution;
• Rely on verbal agreements with representatives of the contracting party;
• Ignoring the deadlines established in the contract for submitting claims.

Avoiding these mistakes is the first step towards more efficient and safe conflict management.

Claims management in practice

Claims management requires technical, contractual, administrative, and negotiation expertise. For simpler projects, part of this process can be handled internally. However, when it comes to infrastructure projects, concessions, PPPs, or public contracts with multiple stakeholders, specialized support is ideal.

A consultancy like Exxata works in an integrated manner with the contractor's team, offering:

• Initial diagnosis of the contract and the main risks of claims;
• Support in formalizing notifications and records during the work;
• Preparation of technical documentation, reports and opinions;
• Definition of the best negotiation strategy for each claim;
• Participation in negotiation and defense meetings with the contractor;
• Support in mediation, dispute boards or legal proceedings, if necessary.

This type of partnership saves time, increases the success rate of claims, and contributes to the professionalization of contract management.