🇺🇸United States

Excessive or Disputed Claims Enabled by Poor Utility Conflict Controls

5 verified sources

Definition

When utility conflicts and related work are not rigorously documented and reviewed, contractors or third‑party utilities may submit inflated time‑and‑materials charges or delay claims that are difficult to verify, creating space for opportunistic over‑billing rather than explicit theft. UCM and structured QA/QC processes, including detailed field documentation and conflict logs, are promoted specifically to control such risks and to support fair, evidence‑based claim resolution.[1][4][5][6][8]

Key Findings

  • Financial Impact: While specific fraud/abuse cases are not itemized in the cited materials, owners routinely face six‑figure claims on large projects related to utility delays and conflict‑driven changes; weak documentation increases the likelihood of paying more than is justified.
  • Frequency: Intermittent but recurring on projects using force‑account or change‑order work for utility conflicts.
  • Root Cause: Lack of detailed conflict logs, inadequate field QA/QC, and absence of standardized protocols for logging and approving conflict‑related work make it hard to distinguish legitimate costs from padded or duplicative charges.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Utility System Construction.

Affected Stakeholders

Owner project managers and resident engineers, Contractor project managers, Utility company field supervisors, Auditors and claims review teams

Deep Analysis (Premium)

Financial Impact

$100,000-$250,000 per project (renewable projects have aggressive schedules; delay claims compound) • $100,000-$250,000 per project (Renewable projects have tight schedules and high penalty clauses; over-accepting claims to meet deadlines) • $100,000–$1,000,000+ per major pipeline project due to inflated utility relocation and demobilization claims

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Current Workarounds

Email back-and-forth with PM, manual spot-checks, delayed payment pending clarification, senior review required for disputes • Email chain analysis, site manager interviews, change-order form completion (spreadsheet), manual cross-reference with project schedule • Email chains, phone logs, handwritten field notes in binders, informal spreadsheets, memory of verbal agreements

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Construction Delays and Change Orders from Poor Utility Conflict Management

Case studies in SHRP2 R15B show projects incurring hundreds of thousands to millions of dollars in additional construction costs from delay claims and change orders tied to late‑identified utility conflicts; across a DOT program this aggregates to multi‑million‑dollar overruns annually.[1][4][3]

Loss of Field and Design Capacity from Manual Utility Conflict Resolution

SHRP2 R15B and DOT implementation reports attribute measurable schedule reductions and fewer coordination cycles to UCM; agencies report saving weeks to months per project, equivalent to tens to hundreds of thousands of dollars of engineering and construction management labor annually across a program.[1][3][4][5][8]

Rework and Field Redesign from Inaccurate Utility Location Data

Case examples in SHRP2 R15B and state UCM guidance describe projects incurring additional relocation construction, redesign effort, and contractor rework costs often in the hundreds of thousands of dollars per major conflict, recurring across large programs to multi‑million‑dollar yearly impacts.[1][3][4][5][8][9]

Regulatory and Safety Exposure from Unmanaged Utility Conflicts

While individual penalty amounts vary by incident and jurisdiction, FHWA/SHRP2 materials stress that avoiding utility disruptions and associated claims is a key economic benefit of UCM; agencies implement UCM specifically to reduce the financial risk of outage‑related claims and safety incidents, which can run from tens of thousands to millions of dollars per serious event.[1][4][8]

Public and Stakeholder Disruption from Late Utility Conflict Resolution

Agencies and utilities incur indirect financial losses through reputational damage, additional public outreach, traffic control extensions, and potential business interruption claims; SHRP2 cites reduced public impact as a primary benefit of UCM, implying that in its absence projects bear recurring costs for prolonged traffic management and stakeholder mitigation, often in the tens to hundreds of thousands of dollars per major project.[1][4][7]

Suboptimal Design and Procurement Decisions from Poor Utility Conflict Visibility

Misjudged relocation scope, underpriced bids, and later change orders tied to unforeseen conflicts can add hundreds of thousands of dollars per project; SHRP2 identifies reduced contractor change orders and improved project development as tangible economic benefits where UCM is implemented, indicating that the baseline (without UCM) embeds recurring decision‑related losses across project portfolios.[1][3][4][5][8]

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