A startup in Florida has introduced an AI bot that might save the construction industry sizable amounts by preventing contract disputes during project development. Claims Intelligence, launched by Contract Dispute Analytics, functions like a legal assistant by examining project communications to identify problem areas. It highlights mentions of extra work, unexpected conditions, and delays to alert the project team about potential issues.
Understanding Claims Intelligence
Founded by attorney Richard Nasrawy, who boasts two decades of experience in construction contracts, Contract Dispute Analytics emphasizes the company’s aim. Nasrawy stated that contractors often overlook extra costs when eager to complete a job. Neglecting to assess additional work might lead to contractors doing significant amounts of unpaid work. In some cases, this leads to bankruptcies due to poor dispute management.
The development of AI tools like Claims Intelligence could notably reduce costs in the industry. As construction projects generate vast amounts of documents, existing products offer a mix of contract analysis and AI-assisted claims management. According to Berkeley Research Group (BRG), AI could slash time and costs, expediting the review process by up to 85%.
“Reviewing 100,000 project emails manually takes several lawyers seven weeks and costs around $216,000. An AI-assisted review cuts this to four days and about $27,000,” notes BRG.
What Sets Claims Intelligence Apart
Nasrawy explains that Claims Intelligence’s proactive approach distinguishes it from other products. It scans project communications to spot potential claims before they evolve into disputes. This feature aids users in aligning emerging issues with contract requirements and project documentation.
Claims Intelligence assists parties beyond contractors, including government agencies and consultants. Early problem detection offers a chance to preserve records and resolve issues, potentially avoiding extensive delays and costs.
Global risk consultancy HKA reports significant stakes involved in construction disputes. Their findings note that, on average, sums in dispute equate to 33.4% of distressed contract budgets, with time extensions averaging 65.8% of initial schedules. Identifying issues early could mitigate these disputes’ financial impact.
Tackling ‘Claim Blindness’
Nasrawy pinpoints ‘claim blindness’—the failure to see an event’s contractual significance—as a significant challenge. He underscores the visions of AI tools in enhancing clarity around unexpected work, its potential costs, and schedule impacts.
Claims Intelligence might prevent the challenges that arise when a routine email gains significance too late. An example involved a roadway project where utility delays affected access, evolving into a claim that burdened the contractor with added costs.
User Experience and Benefits
David Jewett from Masci General Contractors highlights the importance of the AI tool in avoiding costly disputes. With hundreds of emails daily, early signaling of delays or extra work is crucial. Jewett, an independent tester of Claims Intelligence, emphasizes its capacity to immediately flag and act on potential issues.
Operational Insights
Users must first upload project contracts into Contract Dispute Analytics systems, allowing the software to identify essential obligations. The platform regularly scans communications for references to relevant issues, alerting users and assisting with notice preparations before human review. The AI bot underscores that human expertise remains vital for interpreting contract specifics.
Contract Dispute Analytics collaborates with Second Life Software for ongoing development. They offer four subscription tiers reflecting different levels of token usage and email scanning capacities:
- Essential: $49/month for 30,000 tokens
- Team: $149/month for 120,000 tokens
- Business: $399/month for 400,000 tokens
- Enterprise: $999/month for 1.2 million tokens
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