Forecasting the outcomes of construction contract disputes using machine learning techniques

Abstract

Purpose

This study aims to develop a predictive model using machine learning techniques to forecast construction dispute outcomes, thereby minimizing economic and social losses and promoting amicable settlements between parties.

Design/methodology/approach

This study develops a novel conceptual model incorporating project characteristics, root causes, and underlying causes to predict construction dispute outcomes. Utilizing a dataset of arbitration cases in Türkiye, the model was tested using five machine learning algorithms namely Logistic Regression, Support Vector Machines, Decision Trees, K-Nearest Neighbors, and Random Forest in a Python environment. The performance of each algorithm was evaluated to identify the most accurate predictive model.

Findings

The analysis revealed that the Support Vector Machine algorithm achieved the highest prediction accuracy at 71.65%. Twelve significant variables were identified for the best model namely, work type, root causes, delays from a contractor, extension of time, different site conditions, poorly written contracts, unit price determination, penalties, price adjustment, acceptances, delay of schedule, and extra payment claims. The study’s results surpass some existing models in the literature, highlighting the model’s robustness and practical applicability in forecasting construction dispute outcomes.

Originality/value

This study is unique in its consideration of various contract, dispute, and project attributes to predict construction dispute outcomes using machine learning techniques. It uses a fact-based dataset of arbitration cases from Türkiye, providing a robust and practical predictive model applicable across different regions and project types. It advances the literature by comparing multiple machine learning algorithms to achieve the highest prediction accuracy and offering a comprehensive tool for proactive dispute management.

Citation

Un, B., Erdis, E., Aydınlı, S., Genc, O. and Alboga, O. (2024), "Forecasting the outcomes of construction contract disputes using machine learning techniques", Engineering, Construction and Architectural Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/ECAM-05-2023-0510