Construction Claims Research Papers - Academia.edu (original) (raw)

2016 For companies where its capacity for effective governance has degraded slowly, but consistently over the course of a long chain of rhetorical excesses, guidelines corruptions, sentimental hyperbole and philosophical high-falutin…. They have basically abandoned traditional, well-designed and time-after-time tested project management tools and techniques in favor of distorted methods based on personal beliefs that challenge any existent fraud index to their core and by doing so they are inviting and finding contractual claim disputes on every corner of their business development.

- by
- •
- Project Management, Arbitration, Human Resource Management, Project Risk Management

Essential Information, tools and techniques for the portfolio, program and project managers

- by John Shepherd
- •
- Combined Cycle Power Plants, Construction Claims

Vietnam's construction sector is considered an indispensable industry for the economy. In the meanwhile, variation orders become too common, affect the construction industry and the economy adversely. They result in time delay, cost overrun, quality defects, claim and conflict between project stakeholders. However, no techniques, methods or processes have been developed to prevent the problem. This paper investigates the real cause of variation orders in order to take proactive measures to avoid them and improve overall project performance. The exploratory factor analysis (EFA) method and descriptive statistics were used to indicate that there are 19 factors influencing the VO, divided into 5 groups: management, design, execution, awareness and other. Collecting data through questionnaire survey which is based on the literature reviews.

One of the most common issues most frequently encountered in today's construction industry is the project delay. Contractor's lack of resources, non-availability of materials, changing environmental conditions, poor design and coordination and owner instigated changes are the top reasons for a project delay. Delays are indeed expensive for both the Parties. Construction contracts do specify remedies to the innocent party in case of delays. The owner has the right to claim for liquidated damages should the Contractor is culpable for the delay and the Contractor gets compensation as prolongation costs if the delays are attributable to the owner. Even standard forms of contracts view the delay from the perspective of single party's liability.

- by Venkata Raghavan Ramadurai
- •
- Civil Law, Construction Claims, Delay Analysis

Claims are common in construction industry. Contractor might claim for the delays caused by the Employer, changes to scope of work and even for unforeseen circumstances. On the other hand, the Employer might claim liquidated damages for... more

- by Venkata Raghavan Ramadurai
- •
- Dispute Resolution, Construction Claims, Global Claims

The construction industry in the UAE has been suffering regularly from time and capital losses due to the incurred delays to completion in projects. Faridi and El-Sayegh (2007) identified 44 factors causing delays to the construction projects in the UAE, where several factors are correlated to post-contract design changes. Few authors concentrated on investigating the reasons for those changes and attempted reducing them.
This study aims to determine the factors causing post-contract design changes in the UAE construction industry, reveal the impact of the changes on the projects’ time, cost, and quality, then highlight the knowledge areas requiring more attention from the project management professionals working in the UAE.
The researcher developed a questionnaire that was addressed to 200 construction professionals in the UAE construction industry, from different businesses (clients, developers, project management companies, consultants, contractors, and subcontractors) and held interviews with few of them.
The researcher identified 26 factors causing post-contract design changes and studied the impact of the caused changes on the time, cost and quality in the studied projects, from different perspectives, in different projects’ types and several contracts’ types. It has been identified “changes in the client’s requirements” ranked as the top factor causing design changes with a medium impact on time and cost while “Utility requirements”, “changes requested by other stakeholders” and “changes in Government policies/regulations” ranked second, third and fourth respectively with a similar impact on time and cost. Emerging factors in the UAE construction industry were also identified “Design changes to reduce project duration”, “Design changes due to value engineering”, “Design changes due to budget constraints (omissions due to lack of funds)”, “Design changes due to incompetent contractor’s technical team” and “Design changes due to sustainability requirements (LEED/Estidama)”. The study shows that the design changes caused by the majority of the identified factors are causing minor to medium delays and cost overrun (10% to 20%) and minor decline to the quality. The root causes of the identified factors are studied and recommendations to project management professionals are drafted, to prevent/reduce design changes and/or reduce their impact on the time, cost, and quality.

Internet links to download Project Management and related issues books and publications

- by clara cardenas
- •
- Scheduling, Construction Claims, Delay Analysis, Extension of Time

Purpose of the study: The objective of this research is to develop a framework for managing the claim document. The contractual and management issues will be considered in this framework to enhance the Claims Management System (CMS). The framework includes the mechanism of claim submission based on Fédération Internationale Des Ingénieurs Conseils (FIDIC) 2017 clauses and procedures.
Methodology: Qualitative methodology has been selected for this paper as the topic requires a collection of sensitive information from an experienced professional. The proposed CM framework was developed based on, a study conducted to rank the feature required for CMS. This study has been conducted among 43 experts in Claims Management (CM) field working on contractor firm’s category A. Then, the framework was verified by 7 experts who participate in the first study.
Main Findings: Eleven features were required for CMS that can enhance contractor claim submission. These factors have a different levels of importance. The top three factors are Tracking Claim Status (99.5%), Supporting all types of documents (96.3%), and Centralized Database (93.0%). Based on these features, the proposed framework was developed to improve contractor claim submission.
Applications of this study: Applying the proposed framework will reduce human effort in getting documents related to claims through its systematic recording, transparency, a reminder feature, contractual guide, friendly user, and other features of the system. Moreover, it will provide the contractual support pursuant to FIDIC 2017 clauses.
Novelty/Originality of this study: The framework will improve contractor claim submission and the contractor will be satisfied by claim resolution and engineer determination. Side by side the framework will save about 50% of time consumed (d is missing) by the claims analysts that are usually spent collecting information, screening, and identifying related claim event documents in the project’s documentation.

–The provision of liquidated damages for delay in the completion of a project is common in construction contracts worldwide. The contracting parties are aware of the agreed completion date, which marks the application of the damages and progress is monitored accordingly. However, all too often, due to delays attributable to both the owner and the contractor, the completion date passes, a time extension is not issued and the new completion date is left undetermined. At some point during the works, the owner decides to apply liquidated damages for contractor's failure to complete the works. Aside from the question of concurrency of delay, and its effect on rendering such application of damages unenforceable or subject to apportionment, there is the question of the owner's obligation to forewarn the contractor of the new completion date so that the contractor works to that date and takes the necessary measures to achieving this date (regardless of whether the contractor agrees to such date). This paper tackles this second question from an Egyptian law perspective. Two case studies are examined that illustrate the effect of this prior notification by the owner of the new completion date, or lack thereof, on the contractor's progress. Recommendations are summarized at the conclusion of the paper for construction practitioners.

- by Waleed El Nemr and +1
- •
- Contract Law, Construction Management, Construction Law, Construction Project Management

In traditional claim management system, Extension of Time (EOT) claims often lead to disputes among key construction stakeholders. This necessitates shifting traditional system to a digital environment for efficient processing. This research, therefore, focuses on utilizing Building Information Modeling (BIM) technology for developing a BIM-Based Claims Management System (BIM-CMS) to manage EOT claims. Twenty-nine problematic issues in prevalent EOT claim management process are extracted through an extensive literature review and semi-structured interviews of industry experts. Using Application Programming Interface, a plugin is developed in Autodesk Revit for managing EOT claims. The developed plugin is evaluated by industry's experts, who opined that BIM-CMS can be used to a great extent, as a tool to resolve most of the identified issues. It is also expected to proficiently mitigate potential disputes among contracting parties. The study also highlights barriers to BIM-CMS implementation and proposes corrective measures.

- by Hafiz Zahoor
- •
- API Design, Contractual disputes, Construction Claims, BIM Framework

–It is commonly understood in the construction industry that unit price contracts entitle the contractor to payment for the actual executed quantities. However, a question arises as to whether this statement holds when the contractor fails to undertake his duty to seek clarification for patent omissions in the bill of quantities during the tender stage, which can result in these omissions surfacing as changes during the construction stage with a possibly unanticipated and significant cost overrun borne by the employer. All too often, in this case of clash of principles between the contractor's right under a unit price contract for compensation of actual quantities, including those resulting from patent design omissions, and the principle of not compensating the contractor due to his failure to seek clarification of a patent design omission, there is a heated debate in the industry between employers (including their representatives and project management firms) and the contractors. Contractors argue that the obligation to provide a complete design rests with the employer and the action of not compensating the contractor for actual quantities executed for any cause confuses the delineation between a unit price contract and a lump sum contract. Employers, on the other hand, argue that the contractor gained an unfair advantage by not identifying patent omissions during the tendering stage and consequently submitting a non-responsive and misleading tender price. Although this clash of principles is often encountered in the construction industry worldwide, it is seldom discussed in the literature. This paper sheds light on this topic and elaborates on the two opposing views. Case studies from three major projects in Egypt are discussed to illustrate the complexities of this scenario and how it was handled on each project. The paper concludes with a number of considerations and recommendations to construction practitioners that can contribute to a balanced and fair outcome to the contracting parties.

- by Ahmed Afifi and +1
- •
- Contract Law, Construction Law, Cost Estimation, Cost Engineering
- by Waleed El Nemr
- •
- Construction Law, Construction Claims, Liquidated Damages

The term claim has become of paramount significance in construction projects worldwide. This research is targeted at providing a deeper insight of the status of claims management in general and change order claims in particular with respect to the Egyptian industrial construction sector, as change orders have proven to be the main cause of claims in this sector. A questionnaire focusing on persistent issues noted in construction management literature within the past fifteen years was addressed to a selected sample of Egyptian construction industrial projects. The results furnished by the sampled projects demonstrated clearly that claims management in the Egyptian industrial construction sector has been suffering from a variety of impediments, including lack of proper notification procedures in public contracts and poor documentation management. The results indicated that oral change orders were present in nearly 76% of the sample projects and that half of these oral changes resulted in loss of rights due to improper documentation, which could be attributed to the lack of the contract awareness of the site team and to the “fear of consultant” phenomenon. The main cause of change orders was categorised by approximately 67% of the respondents as the additional scope of work, which was largely attributed to the fast track nature of the industrial sector. The research also identified several factors associated with time and cost increases of the sampled projects, among which were: private ownership and unit rate contracts. Finally, several recommendations for improving claims management are put forward. They included: the formation of a unified form of general contract condition for all the Egyptian industrial sector; the use of information technology systems in lieu of traditional filing procedures and the inclusion of a float‐sharing provision in contracts.

CONSTRUCTION CONTRACT CLAIMS AND METHODS OF AVOIDING CONTRACT LITIGATION THROUGH DISPUTE RESOLUTION ALTERNATIVES.

By JOSEP C. LAVIGNE

A contentious point of discussion between forensic schedule delay analysts and contracts practitioners is the means by which the critical path is determined in a project delay situation after the lapse of the contract completion date. One school of thought is called the negative float theory (the contracts practitioner’s preference), in which the critical path is determined with reference to the contract completion date. Under this theory, any work performed after the contract completion date is considered critical. The second is called the longest path theory, in which the critical path is the longest critical path up to the forecast completion date. Therefore, only the delay to activities on the longest path is considered critical, even if another delay takes place after the contract completion date. The distinction between the two theories is exemplified in a situation in which a change order or an owner-caused delay takes place after the contract completion date when the contractor was already in delay. An examination of the literature and case law demonstrates that the longest path theory has wider application and preference in the United States and abroad. This paper goes against the tide and illustrates, from a contracts practitioner’s standpoint, that there are challenges to the application of the longest path theory. Several contractual and practical (from a contract management perspective) factors are elaborated upon to prove this point, and recommendations are provided in conclusion. The objectives of this paper are (1) to present, from a contract practitioner’s viewpoint (as opposed to the common forensic planner’s viewpoint), critical contractual flaws in the application of liquidated damages using the longest path theory when owner delays are encountered by a contractor after the lapse of the contract completion date; (2) to make recommendations as to how to alleviate these contractual flaws; and (3) to stimulate intellectual discourse and provoke thought on this much-debated topic of changes taking place after the contract completion date and the application of liquidated damages in this situation.

Delay analysis techniques are a frequent topic of discussion in construction law literature. Delay analysis guidelines, such as The Society of Construction Law (SCL)'s Delay and Disruption Protocol, and forensic schedule analysis guidelines, such as AACE International's Recommended Practice 29R-03 Forensic Schedule Analysis ("RP"), were developed in the United Kingdom and United States respectively to provide practitioners across the world with useful tools for implementation. A broad picture outside the United States and the United Kingdom, however, demonstrates that there is seldom any literature or guidelines produced as to how the Middle East and North Africa (MENA) region implements forensic planning methods outlined in the RP and the extent to which these methods are followed in this region. Through the analysis of a select number of projects in the region, which were selected by the authors as a representative sample from numerous other experiences in countries throughout the region, this paper sheds light on the forensic planning methods generally practiced in the region. Of course, the discussion in this paper cannot be generalized to all countries of the MENA region or even to the countries of the selected projects in this paper. The authors also acknowledge that correlations to and deviations from the RP that are reported in this paper may not be necessarily tied to a geographical location, but rather, may reflect preferences by contractors generally, depending on the circumstances of the project. However, it is the authors' intent that this paper serves as a step towards gaining insight on how forensic planning methods are applied internationally and the possible deviations from the RP.

The influence of unforeseen, extreme weather in construction works usually impacts productivity, causes significant project delays and constitutes a frequent source of contractor’s claims. However, construction practitioners cannot count on sound methods for mediating when weather-related claims arise, nor harnessing the influence of weather variability in construction projects. Building on the few most recent quantitative studies identifying those key weather agents and levels of intensity that affect some standard building construction activities, a new stochastic model that processes and replicates the spatio-temporal variability of combined weather variables is proposed. This model can help anticipate weather-related project duration variability; improving construction productivity by selecting the best project start date; and objectively evaluating weather-related claims. A two-building construction case study using different Spanish locations is used to demonstrate the model. The results showed that ignoring the influence of weather can lead to an extension of 5-20% longer project duration compared to planned.

- by Pablo Ballesteros-Pérez and +3
- •
- Civil Engineering, Project Management, Construction Management, Project Risk Management

The relationship between the perceived fairness of administering projects' claims and contractors' reduced potential to disputes is probably missing in published literature in the context of engineering ethics. In the current research, the moderating effect of engineering ethics is explored in relationship between perceived fairness and contractors' reduced potential to dispute. The data are gathered from 90 contract administrators in the construction industry of Pakistan. The results depict that decision outcome fairness, procedural fairness, quality of treatment experienced, and control indicate a significantly positive effect on the contractors' reduced potential to disputes. Additionally, engineering ethics positively moderated the relationship between the quality of treatment experienced and contractors' reduced potential to disputes. These results can guide project management teams to diminish the contractors' perceptions concerning construction claims and disputes.

- by Hafiz Zahoor
- •
- Engineering Ethics, Construction Claims, Claim administration, Perceived fairness
- by Philip Ko
- •
- Project Management, Scheduling, Construction Claims, Delay Analysis

This study endeavors to reveal a lot of insight into the claim management (CM) in the construction industry projects. This paper provides an inclusive overview of the existing literature on construction CM. The objective of this paper is to provide the features and requirements for construction claims management system (CMS) to facilitate contractor claim submission by creating an "as complete as possible" history of a claim from its initiation to the settlement, which is supplemented by the relevant substantiating documents from different involved parties and in line with contract clauses requirements. The qualitative methodology has been selected for this paper as the topic requires a collection of sensitive information from experienced professional. A study conducted from 43 expertise in Malaysia and UAE in CM field working at contractor firm's category A in both of building and infrastructure projects. Feedback of this study confirmed that the most important feature for CMS was Tracking Claim Status 99.5%, the second was Supporting all types of document 96.3%, the third was Categorize Claim Documentation 93.0%, the fourth was Centralized Database 91.4%, and the lowest was Provide Templates for letters and reports 64.3%. Finally, the expert program facilitates dispute resolution by using alternative dispute resolution methods instead of going directly to arbitration or litigation.

Like other developing countries, Vietnam construction industry is very complicated. The inadequacies of design documentation, legal framework, as well as unexpected site conditions most likely happen. Moreover, numerous different parties involved in construction projects can result in a high risk of changes, which if not dealt with quickly, could develop into variation order, can affect the achievement of the project objectives. Therefore, objectives of this study are (a) to investigate the real cause of variation orders in order to take proactive measures, (b) to present some suggestions of practical ways to minimize them and improve overall project performance. Having a better understanding of the nature, causes should lead to improve the reducing strategies and control on variation order

Contingency fund is allowed in the cost estimate to cater for risks which always lead to additional cost. The study used archival data to assess the accuracy of contingency sum and utilization among various types of claims. Data collected were analysed using percentile and Pearson's coefficient of correlation. The study reveals that the current allowance as contingency is 5% of the base line estimates while additional cost is 18% which implies a shortfall of 13%. Furthermore, the study shows that the relationship among contingencies, base line estimates and final cost is statistically significant at 0.01. The study concludes that using percentage in allocating contingency based on subjective approach or at the discretion of the consultants is grossly inadequate. The study recommends that allocation of contingency sum should be based on cost analysis of similar completed projects and that a realistic contingency sum should be about 20% of the base line estimate.

- by Olusola Akinradewo
- •
- Construction Claims

While a wide range of dispute resolution mechanisms exist, practitioners favor legally binding ones such as litigation and arbitration. Since initiating a litigation or arbitration case against a business partner may dissolve the business relationship between them, predicting the arbitrator’s decision becomes valuable to the arbitrating parties. This paper proposes a construction-specific utility framework for the arbitrating party through decision theory, and based on expected utility theory. The proposed framework preserves the industry practicality and most importantly, considers direct short term factors and indirect long-term factors as well. It is suggested that the arbitrating parties’ utility functions could be then used to identify equilibrium points among them when interact via game theory principles, which would serve the purpose of predicting the arbitration outcome.

- by Abdulla Galadari
- •
- Contracts, Decision Making, Contract Law, Decision Making Analysis and Modeling
- by Clara Cardenas
- •
- Project Management, Scheduling, Construction Claims, Delay Analysis

Aseguramiento de Coberturas Excluidas. La solución Española. Como profesionales del conocimiento, nos es inevitable realizar comparaciones cada vez que nos trasladamos, entre nuestro lugar original de ejercicio y el nuevo. Muchas de las instituciones legales con las que trabajamos son evidentemente trasnacionales, y los matices están dados por los detalles de regulación local. La institución del seguro es un claro ejemplo. Este artículo no pretende proponer la implementación de un instituto extranjero (El Consorcio Asegurador), ni criticarlo. Simplemente, por intermedio de este ejemplo, introducir la idea de revisar nuestra propia concepción de ciertos institutos, sea cual sea nuestra área de especialización, que creemos ya fracasados en nuestro país, pero sin embargo parecen funcionar en otros. El seguro puede ser analizado desde tres puntos de vista. Como contrato, como negocio, o como un instituto social. Nos centraremos a los fines de este artículo en los últimos dos. El negocio asegurador gira en torno a maximizar la ganancia fruto de la diferencia entre lo cobrado por las pólizas suscriptas y lo que deba abonarse más tarde en concepto de siniestros, gastos de explotación, y los costos fijos de la operatoria. ii A estos fines podríamos definir al siniestro como el suceso a partir de cuya ocurrencia se materializa el riesgo asumido por el asegurador en el contrato de seguro, desencadenando el nacimiento de obligaciones y derechos recíprocos entre las partes iii. A fin de que estas obligaciones sean exigibles al asegurador habrá que: Primero verificar la Cobertura Temporal; asociando el evento denunciado con la póliza en el marco en el cual se denuncia. Esto implica identificar el riesgo asegurado, y si existe en la compañía un contrato vigente que lo ampare al momento de ocurrencia iv del hecho dañoso. v Segundo, corroborar que el hecho ha sido denunciado en Plazo. vi. Tercero confirmar la Cobertura Financiera, esto es que el asegurado ha cumplido con su obligación de pago de la prima en al plazo convenido vii. Finalmente proceder a la confirmación de la Cobertura técnica viii. Ello consiste en encuadrar el hecho denunciado dentro de las coberturas brindadas por el contrato que vincula a asegurador y asegurado. Aquí será fundamental la evaluación de los hechos narrados, y la claridad del texto de póliza, dado que en caso de duda se estará a la interpretación más beneficiosa para el asegurado ix. Es en este punto donde se procederá al análisis de las exclusiones de cobertura. Sin pretender ingresar en el debate de la naturaleza de las mismas, nos limitaremos a definir como exclusiones a las situaciones vinculadas a la ocurrencia del hecho dañoso causa de la denuncia, sobre las que las partes han acordado expresamente no pactar cobertura. Desde el punto de vista del negocio, es evidente que estas situaciones no deberían de encontrar amparo en el seguro celebrado. Ello desde que el precio de los seguros está dado por el resultante entre la posibilidad de ocurrencia de un evento (P) y la intensidad esperada del mismo (I) x. El precio incorpora aquí toda la información con que las partes cuentan para la fijación de un precio xi. Para la subsistencia de un mercado sano de seguros, los contratos deberían ser respetados. Ello permite a las aseguradoras proyectar sus resultados, poder efectivamente valuar los riesgos que desea asumir, y no desequilibrar el mercado, trasladando los mayores costos de enfrentar riesgos no asumidos al resto del mercado.

- by Federico Ferreyra Marquesto
- •
- Insurance Law, Social Exclusion, Spain, Social Welfare

Many researchers consider disputes as part of the project lifecycle. Although preventative actions exist, it is not utterly possible to avoid them. Once the disputes arise, an appropriate resolution technique should be adopted. Common perception is referring to a resolution method either internally or via a third party; which may also be binding by law. The resolution process requires attention to the disputed claims. Hence, deep investigation of the claims and choosing the appropriate method is crucial for the successful project delivery and reputation of the industry. Preparation of disputed claims and resolution process also faces many debates. Conducting To effective dispute resolution requires attention to proper preparation and presentation of the incurred events. All the required information should be acquired to estimate and present the claim, for a smooth settlement. As an integrated digital model of the project, BIM, stores all the information of the projects in detail. Retrieval of the required information for the disputed issues can easily be obtained from the model. It is also possible to embed the construction schedule, change orders and variations, specifications and financial data such as cash flow along with the multidisciplinary drawings. As this model stores all the information at every particular time and phase, disputes can be concluded quick and accurate. In this research, using a case study and literature review, disputes and resolution processes are deeply studied. A BIM model is created to investigate benefits on overcoming the challenges; during claiming, and resolution of the disputes. It is seen that the claims are prepared faster and more accurate in a visualized environment provided by BIM. Furthermore, substantiating and presenting the disputes for the resolution purpose was incomparable to the traditional methods. The conclusions recommend that; even the project did not adopt a BIM model earlier; it can be created for a smooth process, during claiming and resolution of disputes.

- by S K and +1
- •
- Contracts, Dispute Resolution, Building Information Modeling, Alternative Dispute Resolution (ADR)
- by Piumi Hiranga
- •
- Engineering, Project Management, Scheduling, Construction Claims

Project delay in the construction industry is a universal or large-scale observable fact affecting not only the construction industry but the overall economy of countries too. (Mydin at al. 2014, p. 01) and The declining of economy had shown by the declining the construction activity which had appear a lot of problem in process to finish and then appear the delay in construction project which it scratching of image of our country. (Mohamad 2010, p.01). Based on the analysis the researcher concluded that other than the factor “external and environmental issues” all other factors having a significant relationship with delay in completion of construction projects.

Project execution is often delayed by extreme and unforeseen weather conditions. This is because extreme weather usually causes work disruption, waste of resources, significant project delays and, eventually, financial losses for both the contractor and the project owner. Construction contracts generally include weather-related clauses addressing when, and to what extent, the responsibilities and consequences of adverse weather are to be shared or compensated. However, setting clear and objective limits for abnormal weather is problematic, starting with the lack of agreement about which weather conditions can be considered as "normal" or "average”. Research on the influence of weather on construction productivity is scarce and underdeveloped. Therefore, practitioners cannot count on sound methods to mediate in and evaluate weather-related contract disputes. In these situations, claims are likely to arise and escalate. A stochastic model for objectively evaluating the weather influence during the execution stage is proposed. This model allows actual weather to be compared to historical data in a way that provides an objective assessment of the extent to which the adverse weather was (or not) exceptional. A case study of a fictional project is used to show its implementation. This is the first tool of its kind to address this concern with a straightforward, holistic and quantitative approach.

- by Pablo Ballesteros-Pérez and +1
- •
- Project Management, Construction Management, Construction Project Management, Weather Risks

The role of life-tasks in the design of the future, their place among the rational and irrational, cognitive and emotional forms of self-prediction was defined. It is established that the tasks of life synthesize temporal and semantic perspectives, explicating the life claims of the individual. It has been found that tasks are a kind of personal chronotope, combining psychological time-space and promoting self-realization.

- by Ahmad Alozn
- •
- Arbitration, Arbitration Law, Construction, Alternative Dispute Resolution