In the latest episode of the Contract Heroes Podcast, we’re joined by Jerry Pessah, Senior Director of Contract Management at Fluor Corporation. With over 27 years in the industry, Jerry brings a wealth of experience managing complex projects and mitigating risks through effective claims management. In this conversation, we chat with Jerry about how proactive claims management can nip potential disputes in the bud, reducing the chance of lengthy and costly disputes down the line. If you’re looking to sharpen your claims management skills and learn how to tackle potential risks head-on, this conversation is full of valuable insights you won’t want to miss.
Adapting Contract Management: Jerry’s Experience Across Industries
Jerry’s career began in the mining and metals sector, where he gained valuable experience managing complex contracts in a high-stakes environment. In mining, contracts are often vast and intricate, involving a wide range of stakeholders, from local authorities to global suppliers. Jerry became highly skilled at navigating these complex agreements, structuring deals that protected all parties while allowing for flexibility to adapt to unforeseen changes. His attention to detail and ability to manage risk were critical, and these skills would become the foundation for his success in other industries.
After transitioning to the advanced technology sector, Jerry moved into the world of data centers, where the contract landscape shifted dramatically. Contracts in this field were now shaped by the need to accommodate cutting-edge technology, tight deadlines, and rigorous security requirements. While the stakes remained high, the challenges changed—now Jerry had to manage projects focused on maintaining uptime, addressing compliance issues, and working with highly specialized technical requirements. These contracts often spanned years, requiring meticulous planning and clear communication to ensure success.
He explained how, despite these industries being vastly different, the core principles of effective contract management —communication, understanding terms, and proactive planning—remained the same. Regardless of the field, contract managers must fully understand each clause, anticipate potential risks, and communicate with all stakeholders to keep projects moving forward.
The Art of Claims Management: Preventing and Mitigating Disputes
In our conversation, Jerry dove into the essential role of claims management, a specialization within contract management that focuses on preventing disputes before they arise. He explained that many claims arise from simple misunderstandings or a lack of clarity about contract terms, particularly in complex projects with multiple parties. In large-scale agreements with subcontractors, clients, and suppliers, each party typically has different priorities, which can lead to confusion if not properly managed. Jerry highlighted that one of the most important steps in avoiding claims is ensuring all stakeholders have a clear, shared understanding of the terms and scope laid out in the contract.
To minimize risk, Jerry stressed the importance of ensuring that all parties thoroughly understand every clause in the contract, not just in isolation, but in how it fits into the larger picture. Establishing a culture of communication from the very start of a project can help create this shared understanding and help prevent miscommunications that could result in disputes down the line.
Anticipating potential problems is another integral part of Jerry’s approach to claims management. He shared that successful contract managers don’t simply react to issues after they arise—they actively plan for possible obstacles. By considering risks early in the project, they can implement strategies to reduce or eliminate the impact of unexpected challenges. This kind of foresight allows contract managers to stay ahead of problems and avoid disruptions that could derail the project.
Managing Contracts in a Global Context: Navigating Different Legal Systems
Having managed projects worldwide, Jerry developed a deep understanding of the complexities involved in working with different legal systems. He shared insights into the unique challenges posed by countries like Peru, Spain, and India, where varying legal frameworks and cultural expectations can significantly impact contract management and dispute resolution. In these international settings, each country’s specific legal requirements demand a tailored approach, adding another layer of complexity to large-scale projects that span multiple jurisdictions.
Jerry noted that in India, for example, building strong relationships and understanding local cultural norms are just as important as having a solid contract. In contrast, working in the U.S. or Canada involves a more structured and formal approach, often requiring stricter adherence to legal terms and conditions. Jerry pointed out that successfully navigating these differences requires contract managers to be both flexible and highly knowledgeable about the processes specific to each legal system.
The Role of Technology in Claims Management and Contracting
When asked about how technology can aid in contract management, Jerry emphasized the importance of using tools like AI to streamline and automate processes. For example, during the pre-award phase of a contract, Jerry uses technology to help gather and compare data, such as Request for Proposal (RFP) responses. This helps him make sure that only the most accurate and up-to-date information is considered before agreements are finalized. With this solid foundation of pre-award information, future claims are less likely to arise, as all parties are better aligned from the start.
Jerry explained that AI and automation are especially useful in reducing errors and speeding up workflows. With the right tools, contract managers can access precise data quickly, helping them stay on top of obligations and manage risks effectively. In Jerry’s view, contract management is all about making informed decisions, and the right technology can transform raw data into actionable insights that drive better outcomes.
Despite the growing role of AI, Jerry noted that some aspects of claims management still require human expertise. While AI can be helpful for processing large volumes of data and providing valuable analytics, certain elements—like understanding market conditions or adapting to the culture of a particular project—cannot be fully automated. Human judgment plays a crucial role in interpreting these nuances and making decisions that align with the broader goals of the project.
Practical Advice for Contract Managers: Preventing Claims Before They Happen
As the conversation wrapped up, Jerry shared some practical, actionable advice for contract managers who are looking to avoid costly claims and disputes. These steps focus on proactive strategies that help keep projects on track and prevent misunderstandings that could escalate into costly disputes.
To reduce the risk of claims, Jerry recommends starting with the following steps:
- Thorough Contract Review: Make sure that all terms and conditions are clearly understood and communicated to the team. This includes legal, commercial, and technical aspects, which are often overlooked.
- Proactive Communication: Establish a culture of constant communication with all stakeholders. Aligning expectations from the outset helps prevent misunderstandings and miscommunications down the road.
- Knowledge Transfer: Effective handovers from the pre-award to the post-award phase are crucial. Make sure that all project teams have the knowledge and resources needed to manage the contract successfully.
- Cultural Awareness: Be sensitive to cultural differences when working on international contracts. Tailor your approach to the legal, regulatory, and operational norms specific to each country involved in the project.
- Leverage Technology: Implement technology solutions to automate routine tasks and collect accurate, real-time data. This ensures that your team has the right insights to manage risks and respond to potential challenges quickly.
By adopting these practices, contract managers can stay ahead of potential issues and foster stronger, more efficient partnerships across the entire contract lifecycle.
What’s Next for Claims Management in Contracting
Before wrapping up, Jerry took a moment to look ahead to the future of contract management. He emphasized that proactive planning and early risk identification are necessary for preventing disputes before they escalate. With modern contracts often involving multiple stakeholders and complex terms, having a clear understanding of each clause and open communication across all parties can keep projects on track and avoid costly disruptions.
Looking ahead, Jerry believes the approach to contract management will shift further toward being data-driven and highly collaborative. By leveraging technology and maintaining clear, continuous communication, contract managers will be better equipped to navigate the complexities of large-scale projects and create long-term, sustainable partnerships. And with that, we wrap up another episode of Contract Heroes, brought to you by Koho Consulting.
