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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?

  1. Claims administration
  2. Contract change control
  3. Conduct Procurements
  4. 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.

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