A startup in Florida has introduced an AI bot that might save the construction industry millions by reducing contract disputes during project execution. Claims Intelligence, developed by Contract Dispute Analytics, acts like a legal assistant, scanning project communications for words and phrases linked to disputes. The bot identifies references to additional work, unforeseen conditions, and delays, alerting project teams for reconsideration.
Attorney Richard Nasrawy, founder of Contract Dispute Analytics, leverages his 20-year experience in construction contracts to develop this AI bot. He observed that many contractors underestimate the extra work undertaken outside contracts, leading to potential financial losses. The aim is to pre-empt disputes before they escalate, thereby averting severe financial ramifications for contractors.
Contractors often focus on completing work quickly for clients, neglecting to evaluate extra costs. They might unknowingly carry out millions of dollars’ worth of unpaid work.
Nasrawy sees AI as a tool to prevent these issues, reflecting its broader use in contract analysis, notice tracking, and evidence assembly. As per Berkeley Research Group (BRG), document-heavy construction disputes handle thousands of emails and reports. BRG estimates AI can reduce time and costs for document review by 85%, cutting tasks from several weeks to days and significantly lowering costs.
Claims Intelligence stands out as it proactively monitors project communications, unlike other tools requiring manual identification of claims. Nasrawy points to competitors like Document Crunch and Procore but believes Claims Intelligence uniquely spots potential claims early in communications.
The system also supports project teams by linking issues to contract obligations and impacts, not replacing existing management systems. Nasrawy emphasizes its utility for owners, agencies, consultants, and other stakeholders, as early warnings help resolve misunderstandings before they escalate, potentially saving substantial amounts.
HKA’s CRUX Insight Report shows the risks of contract issues. Over 2,200 global projects totaling $2.433 trillion in expenditure faced disputes equal to 33.4% of contract budgets, with time extensions reaching 65.8%. Claims Intelligence could reduce incidents of missed notices, duplicated work, and unresolved misunderstandings.
Nasrawy terms the oversight of contractual significance as “claim blindness.” He believes that understanding the gap between project execution and contract management is crucial. AI tools enhance visibility, potentially avoiding significant financial losses due to unnoticed contractual obligations.
An example highlights a complex roadway project where unresolved claims led to resource wastage. Claims Intelligence aims to identify such issues early, preserving notice periods and resolving disputes before escalation.
David Jewett, a project manager at Masci General Contractors, values the AI’s ability to spot issues promptly. Early identification of potential claims before disputes become costly shows the AI’s practical utility. Jewett tested the platform, noting its role in increasing efficiency and reducing risk.
How It Works
Users start by uploading a project contract into the Contract Dispute Analytics system, which then identifies relevant obligations and notice requirements. The platform analyzes ongoing project communications for issues like extra work, delays, and potential impacts. Upon identifying relevant communication, the system notifies users, aiding in drafting a notice for human review.
Newsweek confirmed the app’s functionality, verifying its ability to scan and flag emails related to costly project issues. Despite automation, the company underscores the necessity of human judgment in interpreting and managing contract issues.
Developed jointly with Second Life Software, the Claims Intelligence bot has four subscription levels, adjusting based on email volume scanned:
- Essential: $49/month, 30,000 tokens.
- Team: $149/month, 120,000 tokens.
- Business: $399/month, 400,000 tokens.
- Enterprise: $999/month, 1.2 million tokens.
Larger token packages cater to organizations dealing with extensive project communications.