Florida Startup Develops AI Bot to Reduce Construction Dispute Costs

A startup in Florida has created an AI bot named Claims Intelligence, targeting the reduction of contract disputes in the construction industry. Developed by Contract Dispute Analytics, the bot aims to save millions by detecting potential issues early.

Richard Nasrawy, founder of Contract Dispute Analytics and an attorney with 20 years of experience in construction contracts, explained that contractors often overlook additional costs during projects. This oversight can lead to substantial financial losses. Nasrawy emphasized the need for proactive measures to manage these disputes efficiently.

“Contractors often focus on completing projects without assessing extra costs,” Nasrawy said. “This can lead to millions in unaccounted work and even bankruptcies.”

Claims Intelligence acts like a legal assistant, analyzing project communications to identify potential disputes related to additional work, delays, interruptions, and unforeseen conditions. The system alerts project teams to reconsider these issues before they escalate.

Document-Heavy Industry

The construction sector faces increasingly complex disputes with substantial documentation requirements. Berkeley Research Group (BRG) reports that typical cases produce thousands of emails and documents. According to BRG, AI-driven tools could reduce document review time and costs by up to 85%.

For instance, reviewing 100,000 emails manually could take seven weeks and cost $216,000. An AI-assisted review could cut this down to four days and $27,000.

Unique Approach of Claims Intelligence

Nasrawy highlights Claims Intelligence’s proactive monitoring of project communications without needing users to identify claims first. This sets it apart from products like Document Crunch, Procore, and InEight.

Developers have integrated features like automatic folder scanning for continuous analysis of project communications. The platform also helps users align emerging issues with contract requirements and documentation.

Benefits Beyond Contractors

Claims Intelligence isn’t solely for constructors. Owners, agencies, and consultants can also benefit from early identification of potential claim issues, preventing prolonged delays or disputes.

An earlier alert system aids all parties by clarifying instructions and resolving disagreements before they escalate. Global consultancy HKA’s report showed that sums in dispute averaged 33.4% of distressed contract budgets, underscoring the importance of addressing these issues.

Improving Visibility

Nasrawy describes a common problem in the industry as “claim blindness.” This occurs when project personnel fail to recognize the contractual significance of new directives, leading to uncharged extra work and project delays.

He believes AI can bridge the gap between project execution and contract administration, improving overall visibility.

“Extra work can extend projects beyond contracted dates, increasing penalties and additional costs,” Nasrawy said.

Practical Application

A practical example illustrates Claims Intelligence’s potential: a roadway project experienced access issues due to delayed utility relocation. Routine communications failed to recognize this problem timely, leading to extensive dispute and resource allocation.

David Jewett, from Masci General Contractors Inc., reported that Claims Intelligence assists in flagging critical issues early, saving time and resources.

“It helps me act before disputes become costly,” Jewett shared.

Operational Details

Users first upload a project contract to the system, allowing Claims Intelligence to identify relevant obligations. The platform can then analyze communications for potential issues and prompt human review.

Newsweek verified the app’s functionality by scanning emails related to delays and compliance issues. Though AI may flag issues, a human judgment is essential for final decisions.

In partnership with Second Life Software, Claims Intelligence offers four subscription tiers based on volume needs:

• 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.

Subscriptions scale with usage, accommodating organizations with higher communication needs.