9 February 2017

Internal Note: PIRS Claim

1.0 INTRODUCTION

1.1 TGE contacted SOBIS as it was looking for a computerised system that would assist project
management in carrying out effective claims management procedures which would ensure the
company maximised possible entitlements for changes occurring on projects. Following various
presentations and discussions TGE decided to purchase the PIRS Claim software from SOBIS on
the understanding that it would be able to:
 Generate automatic Notices of Delay and/or Additional Costs to be claimed.
 Send automatic warning emails to project management that a contractual deadline was
looming with respect to issuing of notices and/or particulars of claim.
 Generate comprehensive Variation Order Requests and/or Claim Requests in TGE format
for direct issue to the Client.

1.2 The software PIRS Claim from the company SOBIS was purchased by TGE on the 8 th July 2016
and was applied on the following projects:
 05444 LNG Terminal Vysotsk and
 05480 Mazidagi Fertilizer complex.

1.3 During the implementation of PIRS Claim, TGE started to improve its entire claim management
process. Several workshops were held to raise the knowledge of the core team members involved in
both abovementioned projects about claims management issues.

1.4 On the 8th February 2017, a performance assessment took place involving the main users of the
software on the abovementioned projects.

2.0 SUMMARY OF PERFORMANCE ASSESSMENT & WHAT PIRS CLAIM HAS ACHIEVED

2.1 The software was successfully used as a central file storage location and all main software users
praised the software as a great tool to improve TGE’s claim documentation.

2.2 The software was successfully used to streamline communication between the project team
members and all main software users praised the improved claim communication within the project
team.

2.3 All main software users praised the improved claim awareness based on the world-wide access to
all information and most recent changes.

2.4 PIRS Claim training and application has greatly helped the TGE teams understand the importance of
capturing all necessary information and documentation to support requests for variations and/or
claims. This has reinforced and put into practice the importance of the causal nexus linking cause
(event) and effect (time & cost) as identified in the CM handbook by the acronym “CEEES”
representing Cause, Effect, Entitlement, Evaluation & Substantiation.

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Internal Note: PIRS Claim

2.5 PIRS Claim has helped the TGE teams become more pro-active in pursuing entitlements as allowed
for by the Contract.

2.6 PIRS Claim has helped the TGE teams become more aware of the importance of robust contract
administration by following procedures and timescales set down in the contract e.g. the giving of
timely notices claim particulars.

3.0 SHORTCOMINGS OF PIRS CLAIM

3.1 PIRS Claim effectively failed to deliver on all three expectations as set out in 1.1 above.

3.2 PIRS is exactly what its full name suggests, namely, a “Project Information Retrieval System” and it
delivers this very well, but at a cost.

3.3 Why PIRS failed to deliver on the 3 No. expectations can perhaps be explained by the fact that the
SOBIS software developers have no practical experience in the field of construction claims. This is
evidenced by the fact that the software fails to recognise the critical importance of issuing timely
contract notices. TGE subsequently drew SOBIS’s attention to this shortcoming and even provided
recommendations which are currently under development by SOBIS programme writers.

3.4 SOBIS also failed to understand that packaging and presentation of claims is not something that can
be churned out automatically from input data into PIRS Claim. The reasons for this are twofold.
Firstly, Contracts often call for specific layout/templates to be used in claims and variation order
procedures. PIRS does not allow for any adjustment to allow compliance with specific Contract
requirements. Secondly, no two claims are the same. Consequently, there will always be necessary
human input to pull everything together (in particular for extension of time claims) under a
comprehensive narrative which will cross-reference to substantiation in Appendices in a logical order
appropriate to the unique claim.

3.5 After several meetings with SOBIS to discuss shortcomings, they were unable to adapt the software
to TGE’s project related user needs for 05444 and 05480.

3.6 As PIRS Claim has not fully matched TGE expectations, all main software users have questioned
the value added/ROI of the high annual costs of the software which are set out in the table below: :

Claim software license 12,000 €

(annual costs)
Claim support 4,532 €
(annual costs)
Claim hosting extended - 50 GB – 50 users 15,576 €
(annual costs)

Total annual costs: 32,108 €

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Internal Note: PIRS Claim

4.0 ALTERNATIVES – INTERNAL TGE SOLUTION

4.1 TGE PIRS Claim users believe that an internal TGE solution is the best way to fulfil TGE’s project
related user needs and that PIRS Claim should be replaced by an internal TGE solution which can
be implemented in a satisfactory interim form (on the R Drive) by the end of the first quarter 2017.

4.2 PIRS, as indicated above, is simply a document retrieval system. TGE can quite easily set up its
own claims management document retrieval system in PIMS and /or SharePoint, at a fraction of the
costs, by creating a dedicated “Claim Management Folder Structure”.

4.3 We can use our experience with PIRS to create a suitable “Claim Management Folder Structure”
and we can also address the PIRS shortcomings.

4.4 TGE can now do this with confidence in the results due no only to the experience gained by working
with PIRS but also due to the fact that during the implementation of PIRS Claim, TGE in parallel
started to improve its entire claim management process. In this regard several training workshops
were held to raise the knowledge of the core team members of projects 05444 and 05480 on how to
ensure “effective claims management”.

4.5 As well as the aforementioned training workshops TGE is nearing completion of the following tools to
further enhance the company’s claims management capabilities:
 “Workflow Procedures Manual for Managing Variation Orders and Claims” [Stored on PIMS]
 “Claims Management Handbook” [Stored on PIMS]

4.6 The Workflow Procedures Manual recognises that effective claims management requires a team
effort. The purpose of this document is to introduce a consistency of approach by a project to
managing variations and claims, This is done by setting out:
 Workflow procedures (in flowchart form) for the key events giving rise to claims.
 Listing key activities to be addressed at each workflow stage.
 Responsibility Matrix (RACI) setting out the team members involved in the various activities
at each workflow stage.

4.7 The Claim Management (CM) Handbook provides TGE project management team with
comprehensive knowledge and guidance to ensure the implementation of effective claims
management to best avoid, mitigate or manage incoming and outgoing claims. The CM Handbook
follows internationally best practice covering the key elements of good claims management, namely:
 Effective communications.
 Recordkeeping (including templates for contemporary record forms included in Appendices)
 Robust contract administration.

4.8 Going forward TGE companywide will use the contemporary record templates as well as register
templates (e.g. Variation, Claims) all as incorporated in the CM Handbook.

4.9 As indicated above, Registers and all contemporary records (using TGE standard templates) will
initially be incorporated as part of a “Claims Management Folder Structure” on the R Drive with a
view to later capturing all Claims folders on either PIMS or SharePoint.

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4.10 Variation/Claim registers will include references to contemporary records relevant to a particular
claim and/or variation with hyperlinks to the relevant “Claims Management Folder Structure”.

4.11 The table below sets out the necessary activities to roll out the “TGE Internal Solution” supported by
the various company tools:

Tasks Responsible Deadline Manhours

1. Completion of Claim Management Templates SV1, BM3, 28 Feb 2017 16 h

SP1, Fd
2. Revise Workflow Procedures for Managing SV1, BM3 10 March 2017* 24 h
Variation & Claim Manual
3. Completion of Claim Management Handbook SV1, BM3 28 Feb 2017 24h

4. Completion of Claim Management Folder Structure SV1, BM3, 10 March 2017 24 h

SP1, Fd
5. Workshop on Workflow Procedures for Managing SV1BM3 28 Feb 2017 16 h
Variation & Claims
6. Workshop introducing CM Handbook BM3 20 March 2017 24 h

Start of the internal TGE Solution: 20. March 2017 ∑ 128 h

*allows for post workshop feedback from TGE personnel and subsequent fine-tuning.

This Document is sole property of TGE Gas Engineering GmbH. It must not be copied or used without written consent of TGE Gas Engineering GmbH

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