Claims Payment and Funding Mechanism

Payment Mechanisms

Settlement Memorandum (SM)

Generally when a claim is received, it is the Project Manager who negotiates a settlement with the Contractor / Consultant. When they have come an agreemeent, payment is issued via a payment request form.


  • resolution of negotiated claims from contractors/consultant.
  • resolution of claims that arise from the general management of the overall project;
  • pre-arbitration/litigation settlements prior to formal arbitration/litigation;
  • resolution of impact costs or delay costs


PM must:

  • Create a temporary docket and process using the CPMU' - Claims Quality Assurance Checklist
  • refer to Table 1 in document titled 'Claims Processes';

Client Project Funding

Clients are responsible for:

  • costs for correction of errors/omissions, as a consequence of what should have been identified by the client at the requirements definition stage, including additional costs of PSPC and its contracted parties.
  • costs incurred as a result of client modifications to the project, implemented in such a way as to cause a claim, rather than the standard change order process.
  • payment of all other costs which add value to the project, including payment for claims analysis management and defense.