Navigating Claims Management in Global Contracts With Jerry Pessah

Made with speech-to-text software, so a few words may be off.

0:00You're listening to the Contract Heroes Podcast, your one-stop shop for all things contract management. And now here are your hosts, Marc and Pepe. Hello everyone, and welcome to another episode of the Contract Heroes live at the World Commerce and Contracting America Summit in Atlanta, Georgia. This time we have our really dear guest. This is the second time we've been doing this with Gerry Pezza. Gerry is the senior director in contract management of Fluor Corporation in Canada. So welcome again to the show, Gerry. Thank you so much, Pepe. Thank you, Marc. It's been a pleasure talking to you. Yeah. Well, I mean, we've been in touch since last time, and you've been doing really cool stuff, actually. So you moved to India for over a year. That's right. One year. And you were working a massive project, so we're really interested to hear a little bit about it. Absolutely interesting. The, the good thing is that you can change.

0:58In my case, I changed from mining and metals to advanced technology life and sciences, and I had the chance to do all the contract management that I've been doing in other industries, but in data centers, especially building data centers for our clients. So that's what I've been doing for the last year. And how was it? Like, any challenges? It was also interesting. Yes, a lot of challenges. There is, uh, interesting approaches. Yeah. You know, uh, but at the end, it's exactly the same. It's contract management, how to provide the best, you know, results to our clients, and how to bring it on time and, you know, under, in budget. Okay. And, well, you're working right now a lot. You're, uh, obviously an expert on claim management. You've been doing a lot of research and work about it, uh, here in the, in the world commerce and contracting, and I'm really interested. What are you doing exactly? Well, claims management is, let's say, a specialization of contracts management, but in reality, it's, you know, how to prevent the claims or potential disagreements, you know, with the third parties. Yeah.

2:04And the way how you normally do it is try to, uh, go through the normal contract management processes. Try to avoid, you know, having problems with your third parties, whether subcontractors or whether your clients or any other parties as well. How can you do that? There's so many ways. First of all, you need to understand your terms and conditions. Yeah. So the first condition is read your final contract documents. Most of the claims problems are that people that are managing their contracts, they really don't read the whole, you know, contract specimen. And the contract specimen contains most, you know, a lot of information. Could be legal terms and conditions with if, whether commercial, whether scope of work, whether, you know, uh, engineering stuff, among others. So the people who are going to manage those, you know, contracts needs to understand everything as a whole. It's not just only separately.

3:00And that's the first thing, you know, that it's important to avoid or prevent claims in the future. And that's challenging, right? Because, I mean, I, I can't imagine the size of those contracts and the multibillion-dollar deals. Like, like, how can you tell everybody, like, to know the specifics on every contract and, and specific in, in those projects? The most important thing from my point of view is to teach, you know, from pre-award to post-award and the handover. So there should be, you know, very good way of communicating from one side to another side, and to transfer this, you know, knowledge that you built in the pre-award, preparing all those packages, and transfer to the people who will manage. That's one thing. The second that I've been talking to many, you know, professionals here, especially in this summit, is, you know, communication with your clients and do as well work- workshops, you know, to be in communication from the very beginning, not just, well, until the very end and encounter these issues at the very end and try to solve them when it's too late.

4:04So try to, you know, define your processes, your procedures, your systems- Right... from the very beginning together and try to, to find the best way, understand, you know, what will be the outcomes and the goals in order to avoid having these potential claims in the future. And we have different layers as well. We have subcontractors. We, we have clients, you know, if we go up to the prime side or we go to the subcontract side. So we have multiple layers. Yeah. And a lot of the projects you've been working on, I mean, they're not all in Canada. You've been all around the world. You've been in Latin America. You've been in Southeast Asia. So do you think that's a challenge specifically because it's, like, completely different legal systems, completely different, you know- Absolutely... uh, tribunals? Like, what are, like, the main ch- challenges that you have seen there? Absolutely. Not only that. You have, you know, different clients. Yeah. Sometimes you need to work using their terms and conditions, their papers. Sometimes you have to use your own terms and conditions. Sometimes, you know, you have to adapt to the culture.

5:03Sometimes you have different dispute resolution processes, you know, in case of you go to different dispute resolutions or, or claims management. So it's about first to identify where are you going. Try to understand, you know, all the culture. Trying to understand what's the environment and the mechanism, how they work in that environment, and try to adapt. That's the most important thing. For example, in, especially in India, I love working with, uh, it's a different, uh, culture that it's very respectful. So we cannot impose a lot of things. We need to work with them in order to work together, and it's a very interesting process. So I love working in that way, you know, trying to, uh, meet the same goals, but working together, which is completely different than if you go to Canada because, or here in the USA. You have your standards. You have to your procedures, and you have to do, you know, what's written, and you have to go through the processes. In different countries, for example, in Peru, it's completely different as well.

6:07There's so many things that you need to adapt. When you go to Spain, I've been in Spain, it's different. When you go to Kuwait, it's different. And as well, negotiations, for example, completely different one way to another to another.... completely different way how to approach, you know, this negotiation matters. You need to be prepared in different ways, and so on and so forth. And, you know, you were saying that when, you know, that handover of information, right? And I wanna take a step back there, 'cause I think that was important. When, when we go from that pre-award to post-award, right, and, and what does that handover of information look like? You know, how, how are they, they passing this along to that other party to make sure that there is a knowledge transfer there and that they are understanding, you know, what those requirements are going to be? Through the process, through the pre-award, you go into, for example, specifications, clarifications, you know, the RFP, the request for proposal, what we call it, request for proposal package, you know. And you go through a lot of, you know, eh, levels of evaluating the data that you have been collecting. Um, even questions and answers and clarifications from one side to another.

7:08These are the parts, especially the clarification process, whether exceptions or you clear, you know, some of the questions, technical questions through the process. You need to incorporate them in basically the contracts that you're gonna do at the end. Mm-hmm. But all this knowledge back and forward with all the bidders through the time is the one that needs to be transferred. Why? Because there may be some gaps. When you prepare the contract, there may be some gaps, but there's some discussion that has been done through the, this technical bid evaluation or- Yeah... technical portion. So this is extremely important. Eh, normally you can do a checklist or normally you can do, you know, some documentation that the pre-award will do with the post-award. And it's everything, talking about the clarifications, talking about the, the letter of recommendations, talking about, you know, all the processes that you've went through through the pre-award and transferring to the post-award, and doing some workshops as well. So that's what's the most important things. And we are already almost, well, actually, over half of the day of the first day of the summit.

8:10Anything that you have heard in any of the sessions that you think is interesting or something that you would think will be, like, very applicable to what are you doing right now? Absolutely. So first of all, AI. It's extremely important. Well, AI is everywhere right now. Of course, AI, AI, AI. But in reality, there are so many common challenges, not just only in my industry, but all industries around, and it's how to do operational excellence, and that's extremely important. How to improve, how to make more, eh, clar- I mean, more specified and standardization of the terms and conditions and processes, and how to transfer the value to, of course, your clients. So but there's a lot of challenges. There's a lot of challenges in the process. How to reduce, for example, eh, the pre-award process. Yeah. How to, you know, optimize those, you know, those times. And there's a lot of things that you can do even using artificial intelligence, but there are some parts that you cannot do, or they are very difficult to predict.

9:12For example, market conditions, or it depends on the project, it depends on the clients as well. But with the AI, you can certainly, you know, can improve processes. Or, for example, do, instead of doing s- e- Excel spreadsheets, you can do, you know, everything automatically, and it can reduce significantly the time. So these are, you know, some things that we are, you know, going through. And there's a lot of the, on the claim management, that's a lot of the, like, post-award, once you sign the contract. If you can have, like, a magic wand on all the processes and everything you have worked with these massive projects, how do you envision a piece of technology that can help you with some of those bottlenecks or some of the issues that you have been facing on your most recent projects? Let me tell you something. There are three parts in claims management. The prevention, the mitigation, and, well, anyways, the, the avoidance.

10:07So first of all, everything that I'm trying to apply right now, what I'm doing, is trying to get the most information that possible in the pre-award to avoid having those issues in the post-award. Okay. So that's not just only experience, but that's as well, you know, technology. So for example, when we send, you know, RFP, a request for proposal, we ask a lot of information back, and we need to use this data to compare in the future. So in the future, when something happen, let's say loss of productivity or- Yeah... something like that, we need to have this data to compare against, and then to evaluate who was responsible for this loss of productivity. So if you don't have the information from the pre-award, you're never gonna get it in the post-award. So there's a lot of things that you can do in order to prevent claims. Now, now talking about not having claims, to me, it's not realistic. Because they may happen in so many ways, but you need to be prepared how to tackle those potential claims in the future.

11:08Yeah, and I, I mean, yeah, so when we talk about those different types of claims and maybe the world of the unknown, right? And I mean, how do you try to prepare yourself for those risks that might be coming, but you're, you're just not aware of them yet? Right. So that's an interesting question. One of the most important things from my experience as well is change management. Change management is one of the most important things that we need to do, one of the most important things that we need to do. If we do a proper change management and on time, we will, you know, eh, prevent having these huge claims at the very end. So it doesn't matter where you are. Try to, on a monthly basis, do, in our cases, reconciliations of everything. Schedule or, for example, I don't know, a reconciliation of cost or things like that. You need to do it on a monthly basis. Therefore, it's easy, you know, to resolve them or potential big dispute or changes in the, at the very end. When you go and wait, this is a, you know, a very difficult practice as well.

12:08Because sometimes, you know, when you are in a project, eh, there's the keep going. You know, no worries, I mean, we're gonna solve it at the very end. But in reality, it's extremely important to tackle all these issues, you know, when they happen. Even though if it's a bad negotiation- But it's ve- it's really better to have a bad negotiation at that time, or certainly, you know, there's some risk, of course. But you need to as- you know, assume this risk of potential overpaying a little bit instead of, you know, paying millions and millions of dollars in potential dispute resolution solutions. So that's a way that I can see, and that's how we can provide additional value to our clients, bringing everything to the pre-award, trying to prevent all these claims, and trying to do contracts in that ways. That's awesome, Jerry. And just to close, tell us a little bit more about your new role. You're more into the management part in Fluor.

13:00You've been working there for a long time, so I'm very curious, actually, just to know what are, what are your future plans there. Thank you so much. I mean, at least in Fluor Canada, you know, Mining Metals in Vancouver, we have great ideas, you know, how to implement, how to improve, how to provide, you know, more quality, you know, services to our client, and how to bring, you know, additional value. You know, that's the most important thing, how to be more competitive, because that's something as well. And there's a lot of plans. I'm, uh, right now the department manager, so in charge more or less 18, you know, contracts professionals. They are located in different projects. Some of them are working with me, some of them in different projects, whether in the USA or whether, you know, in Canada, but in remote assigned for other projects. So I can have the opportunity to help them, you know, transferring this knowledge and as well, you know, career development and all this, uh, the, all this important stuff for the future.

13:56And as well, you know, I'm the project contracts manager for one mining expansion, you know, project. So that's exactly where I have the opportunity to put all the expertise, you know, to, to that project. That's awesome, Jerry. So we really hope that our third episode will be a little bit more about your experience and how you implemented all those types of technology, how you've been growing on your career. Con- congratulations again for all your great job you're doing in Fluor, also in, in the world Contract Heroes because you're a really active member. And thanks a lot again for your time and for sharing your experience. My pleasure. Thank you very much. Thank you, Marc. It's always a pleasure. Always a pleasure, Jerry. Always a pleasure. Thanks for joining us, and thanks everybody for listening to another episode of Contract Heroes. This episode of the Contract Heroes is sponsored by Koho Consulting. Koho helps organizations of all shapes and sizes find, implement, and manage their chosen CLM tool. Whether your project is buy or sell side led, Koho can help you navigate the waters of the CLM space to make sure that you're getting a product that's going to fit like a glove years to come.

15:00If you'd like to learn more about Koho, visit their website at C-O-H-O consulting dot com.