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Open Access
Article
Publication date: 4 August 2022

Christopher Amoah and Hlatshwayo Nkosazana

Contract risk management has become a critical mission, as contract issues may lead to a loss of vast amounts of money to parties involved or cause project failure. This study…

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Abstract

Purpose

Contract risk management has become a critical mission, as contract issues may lead to a loss of vast amounts of money to parties involved or cause project failure. This study sought to identify effective management strategies to mitigate construction contract issues that might emerge during construction.

Design/methodology/approach

A quantitative research approach was adopted for the study. Structured questionnaires made up of close-ended questions were distributed to construction professionals in South Africa via the SurveyMonkey platform. The data were then analysed using descriptive statistics.

Findings

The findings indicate that the critical sources of contract-related disputes are ambiguous definitions of the contract parties' scope of their rights and obligations, lack of precise arrangements regarding the calculation of contractual penalties for failure to meet the deadline, lack of detailed specification of the works and specific milestones, lack of provisions regulating changes to the project documentation during the construction stage, an excessive amount of contractual penalties on contractor's side and lack of provisions regarding the rules of performing additional and replacement works and their settlement. However, for these disputes to be effectively managed, strategies such as reduction uncertainties in project's phases, setting up contingency plans, construction guarantee, extension of time claims, payment guarantee, retention and escalation clause should be implemented by the parties involved.

Research limitations/implications

Even though the empirical study focused on construction professionals in South Africa, the findings could be applied to other countries outside of South Africa.

Practical implications

To effectively manage and prevent contract disputes from averting project failures and losses to parties involved in the contract, construction professionals need to be aware of strategies that must be implemented before and during the project execution. If well implemented, these strategies will help a construction project be successful and experience fewer contractual disputes.

Originality/value

The study has identified the knowledge gap concerning suitable contract risk management strategies available for implementation to effectively prevent any contract parties from losing money, time and project failure.

Details

International Journal of Building Pathology and Adaptation, vol. 41 no. 6
Type: Research Article
ISSN: 2398-4708

Keywords

Article
Publication date: 16 September 2022

Ali Mohammad Mirzaee, Towhid Pourrostam, Javad Majrouhi Sardroud, M. Reza Hosseini, Payam Rahnamayiezekavat and David Edwards

Public–private partnerships (PPPs) are notoriously prone to disputes among stakeholders, some of which may unduly jeopardize contract performance. Contract disputes arising in…

Abstract

Purpose

Public–private partnerships (PPPs) are notoriously prone to disputes among stakeholders, some of which may unduly jeopardize contract performance. Contract disputes arising in Iran are often due to inefficiency of PPP concession agreements and practice. This study presents a causal-predictive model of the root causes and preventive measures for inter-organization disputes to enhance the likelihood of achieving desirable performance in PPP projects.

Design/methodology/approach

A theoretical “causal-predictive” model was developed with fourteen hypotheses based on extant literature and contractual agency theory, which resulted in the creation of a pool of 110 published items. Data were obtained from a questionnaire survey with 75 valid responses, completed by 4 stratified groups of Iranian PPP experts. Partial least square structural equation modeling (PLS-SEM) was used for validating the proposed model via a case study.

Findings

Results reveal that the main three factors of PPP desirable performance are as follows: on-time project completion, high quality of activities/products and services for public satisfaction. Further, the most influential factors of the lifecycle problems, construction stage, and preferred risk allocation included risk misallocation, improper payment mechanism and failure to facilitate a timely approval process.

Originality/value

For researchers, the findings contribute to the theory of contractual agency; specifically, how different influences among the model's elements lead to better PPP performance. In practical terms, proposed outcome-based strategies will inform PPP stakeholders to avoid dispute occurrence and thus improve the time, quality and services of projects.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 6 September 2022

Namal Thilakarathne, Akila Pramodh Rathnasinghe, Udayangani Kulatunga, Niraj Thurairajah and Lichini Weerasinghe

Most developing countries, such as Sri Lanka (SL), are now looking for the support of foreign construction companies for large-scale infrastructure projects in return for…

Abstract

Purpose

Most developing countries, such as Sri Lanka (SL), are now looking for the support of foreign construction companies for large-scale infrastructure projects in return for expertise and resources. Thus, foreign companies may enter into agreements with local contractors through joint ventures (JVs). However, the priorities of construction project stakeholders may differ, which may ultimately end up in conflicts. Therefore, this research aims to investigate the most suitable conflict management strategies for international construction JVs (ICJVs) considering the SL context.

Design/methodology/approach

The mixed method was used for the research choice by selecting a questionnaire survey and expert interviews. Completed questionnaires (n = 78) were analysed using statistical techniques. The expert interviews with six industry practitioners were piloted to increase the validity and credibility of survey findings through a triangulation process where the collected data was analysed through content analysis.

Findings

The findings confirm that JV parties should first seek collaborative solutions in a conflict and seek legal redress only when those efforts are unsuccessful. Collaborating and compromising were recommended as the most appropriate tactics if an informal approach to conflict management was chosen. Alternative dispute resolution and litigation were identified as formal conflict management strategies.

Originality/value

This study, to the best of the authors’ knowledge, will be the first of its kind in SL, which will lead to a better understanding of conflict management in IJCVs and will encourage other researchers to extend this study through further work.

Details

Journal of Financial Management of Property and Construction , vol. 28 no. 3
Type: Research Article
ISSN: 1366-4387

Keywords

Article
Publication date: 18 September 2023

Mohammad Mayouf and Ciaran Gilligan

In construction projects, underpayments can be recognised as one of the significant drawbacks that impact the success of a project. Research into underpayments is considered…

Abstract

Purpose

In construction projects, underpayments can be recognised as one of the significant drawbacks that impact the success of a project. Research into underpayments is considered ambiguous and provides a limited reflection of the issue, which makes it complicated to trace how it originates in the first place. This study aims to examine the causes that lead to underpayments and develop a holistic synthesis of underpayments for subcontractors in the lifecycle of a construction project.

Design/methodology/approach

An open-ended and closed-ended questionnaire was used to collect the data using purposeful sampling with 28 construction stakeholders who ranged from main contractors, subcontractors and others (Small medium enterprises SMEs, Consultancies, Clients etc.). Data collected was analysed to trace drivers and the impact of underpayment and suggested mitigation strategies to be identified whilst viewing the perspectives of a main contractor and subcontractor.

Findings

The findings show that the most prominent driver for underpayments is variation disputes followed by cash flow. The research also suggests mitigation strategies such as collaborative working, more robust budget control and early identification of risks as potential remedies to overcome the underpayment issue. The research concludes with a framework that elicits the complexity underlying underpayments for subcontractors in construction projects.

Originality/value

The research evolves the understanding that underpayment is a complex phenomenon, relying heavily on the data/information exchange mechanism between the main contractor and subcontractors. This research provokes the need to understand underpayment further so it can be mitigated.

Details

Journal of Financial Management of Property and Construction , vol. 29 no. 1
Type: Research Article
ISSN: 1366-4387

Keywords

Content available
Article
Publication date: 28 November 2023

Amir Faraji, Shima Homayoon Arya, Elnaz Ghasemi, Maria Rashidi, Srinath Perera, Vivian Tam and Payam Rahnamayiezekavat

In the construction industry, various parties are involved in a project. Consequently, claims and disputes are inevitable in this industry. This paper aims to develop Integrated…

Abstract

Purpose

In the construction industry, various parties are involved in a project. Consequently, claims and disputes are inevitable in this industry. This paper aims to develop Integrated project delivery (IPD) practices including early involvement of stakeholders and multiparty contracts which its combination with advanced technologies such as blockchain can lead to better dispute management and improve the whole construction process.

Design/methodology/approach

Based on literature review, the alternative dispute resolution (ADR) for IPD contacts were identified, and three formats of IPD contracts were selected, and the dispute resolution process of them has been analyzed. Then, based on blockchain review, a conceptual blockchain-based dispute management (BDM) model was generated for ADR in IPD. Model validation was done by an interview. Experts were asked to compare the BDM model with the traditional system regarding the ADR duration.

Findings

Analyses of the collected data from the experts demonstrated that the BDM model has better function in terms of time and cost for ADR process when the project is facing serious and considerable number of disputes. The relation between blockchain technology (BCT) and building information modeling (BIM) has been examined through a framework, and the ability of the proposed model for administrating dispute resolution process has been verified using four different scenarios of construction claims that show the system can run successfully.

Originality

The current study proposes a truthful model, reliable framework to address the problem of project dispute management in IPD contracts. The system combines the ability to being unchangeable and the reliability characteristics of BCT with informative and automation aspects of BIM together to improve dispute resolution issue in the IPD system.

Article
Publication date: 19 February 2024

Murali Jagannathan, Vijayeta Malla, Venkata Santosh Kumar Delhi and Venkatesan Renganaidu

The dispute resolution process in the construction industry is known for delays in settlement, with some cases even escalating to complex arbitration and litigation. To avoid…

Abstract

Purpose

The dispute resolution process in the construction industry is known for delays in settlement, with some cases even escalating to complex arbitration and litigation. To avoid conflicts turning into disputes, the parties need to be proactive in identifying and resolving conflicts in their nascent stages. It is here that innovative lean construction practices can potentially act as a game-changer to avoid disputes, and this study aims to attempt to understand this phenomenon empirically.

Design/methodology/approach

A questionnaire-based empirical study, followed by semi-structured interviews, is conducted to understand the relevance of key tenets of lean principles in dispute avoidance.

Findings

Although stakeholders agree on the usefulness and practicality of lean principles in dispute avoidance, the extent of agreement is lesser when it comes to its implementation practicality. Moreover, there is a demographic influence observed on lean tenets such as “open communication”, “stakeholder collaboration” and “constraint identification”.

Practical implications

The results point towards an approach that combines contractual mandate, training and awareness creation to iron out the differences in the usefulness and practicality of lean approaches to avoid disputes.

Originality/value

Lean implementation is widely discussed in many construction contexts, such as sustainability, productivity improvement and planning. However, a discussion on lean philosophy’s role in dispute avoidance is muted. Therefore, this study assumes significance.

Details

Construction Innovation , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1471-4175

Keywords

Article
Publication date: 21 November 2022

Babar Ali, Ajibade A. Aibinu and Vidal Paton-Cole

Delay and disruption claims involve a complex process that often result in disputes, unnecessary expenses and time loss on construction projects. This study aims to review and…

Abstract

Purpose

Delay and disruption claims involve a complex process that often result in disputes, unnecessary expenses and time loss on construction projects. This study aims to review and synthesize the contributions of previous research undertaken in this area and propose future directions for improving the process of delay and disruption claims.

Design/methodology/approach

This study adopted a holistic systematic review of literature following Preferred Reporting Items for Systematic Reviews and Meta-Analysis guidelines. A total of 230 articles were shortlisted related to delay and disruption claims in construction using Scopus and Web of Science databases.

Findings

Six research themes were identified and critically reviewed including delay analysis, disruption analysis, claim management, contract administration, dispute resolution and delay and disruption information and records. The systematic review showed that there is a dearth of research on managing the wide-ranging information required for delay and disruption claims, ensuring the transparency and uniformity in delay and disruption claims’ information and adopting an end-user’s centred research approach for resolving the problems in the process of delay and disruption claims.

Practical implications

Complexities in delay and disruption claims are real-world problems faced by industry practitioners. The findings will help the research community and industry practitioners to prioritize their energies toward information management of delay and disruption claims.

Originality/value

This study contributes to the body of knowledge in delay and disruption claims by identifying the need for conducting more research on its information requirements and management. Subsequently, it provides an insight on the use of modern technologies such as drones, building information modeling, radio frequency identifiers, blockchain, Bigdata and machine learning, as tools for more structured and efficient attainment of required information in a transparent and consistent manner. It also recommends greater use of design science research approach for delay and disruption claims. This will help to ensure delay and disruption claims are the least complex and less dispute-prone process.

Details

Construction Innovation , vol. 24 no. 3
Type: Research Article
ISSN: 1471-4175

Keywords

Article
Publication date: 6 September 2022

Murat Cevikbas, Ozan Okudan and Zeynep Işık

The purpose of this paper is to propose a disruption claim management (DCM) life cycle and a risk management framework to provide comprehensive guidance to construction…

Abstract

Purpose

The purpose of this paper is to propose a disruption claim management (DCM) life cycle and a risk management framework to provide comprehensive guidance to construction practitioners for facilitating effective and efficient DCM.

Design/methodology/approach

DCM life cycle was initially developed through a focus group discussion (FGD) with the participation of the construction practitioners who have diverse experiences about DCM. The life cycle is comprised of 6 phases and also includes proper reactions of the owners and contractors. Then, 42 risk factors that can impact the deliverables of DCM were identified through a literature review and an additional FGD session. This was then followed by a Fuzzy Analytical Hierarchy Process (FAHP) which was performed to evaluate the importance of each risk factor in terms of the factor's impact on the success of DCM. Additionally, consistency analysis was performed to further maximize the reliability of the results.

Findings

Findings revealed that a proactive and systematic approach should be adopted and DCM practices should be initiated before any disruption event is triggered. Accordingly, the proposed framework recommends DCM practices to be initiated early in the contract development phase since compensation for the disruption might be recovered only to the extent that the contract permits. The contract-related risks were given top priority by the experts so that the results of the fuzzy AHP analysis also verified the significance of the contract development phase. Besides contract-related risks, risks related to insufficient site observation, ignorance of the project team, cognitive bias and conflict of interest were determined as the most significant DCM risks, needing an urgent and sophisticated risk response plan. Lastly, results suggested that “Site observation and record-keeping” is the most formidable phase since the phase's implementation on a continuous basis could create unforeseen organizational challenges such as mismanagement of project records, especially in the dynamic and turbulent environment of the construction projects.

Originality/value

Disruption – which is caused mostly by change – is inevitable in construction projects due to their sophisticated nature. DCM, therefore, becomes crucial to compensate losses of contractors and eliminate or diminish the prolonged dispute resolution process. Existing studies, however, do not provide a comprehensive theoretical basis for the DCM life cycle and DCM life cycle's potential risks so that DCM life cycle's promising benefits can hardly be materialized. Thus, developing a DCM life cycle and associating DCM life cycle with risk management, this study is highly believed to make a promising theoretical contribution to the DCM domain since this is one of the earliest attempts in the literature. Additionally, this research provides construction practitioners with an insight into the effective implementation of DCM practices in construction projects.

Details

Engineering, Construction and Architectural Management, vol. 31 no. 1
Type: Research Article
ISSN: 0969-9988

Keywords

Article
Publication date: 14 August 2023

Murali Jagannathan and Venkata Santosh Kumar Delhi

Judiciary plays a pivotal role in the overall development of a nation's economy and its involvement assures process transparency and impartiality. However, litigation is often…

Abstract

Purpose

Judiciary plays a pivotal role in the overall development of a nation's economy and its involvement assures process transparency and impartiality. However, litigation is often expensive, uncertain and prone to delays. Notwithstanding such inherent challenges associated with litigation, it is observed that parties in construction disputes do resort to litigation. This study attempts to understand the potential paths triggering litigation of contractual disputes in construction. While extant researchers have identified focus areas or factors influencing litigation, the underlying paths connecting these focus areas, leading parties to litigation, is explored in this study.

Design/methodology/approach

Considering the framework of Rachlinski's “framing theory of litigation” and the mixed-methods approach (qualitative and quantitative approaches), this study proposes and validates a model that identifies the paths to litigation of contractual disputes in construction.

Findings

The results of in-depth interviews, followed by validation through structural equation modelling (SEM), reveal four critical paths, namely positional focus (PF) – contract and dispute characteristics (CDC) – decision to litigate (DTL), milieu influence (MI) – CDC – DTL, MI-PF-DTL and CDC-DTL.

Practical implications

The identified paths highlight the areas policymakers can consider while developing policy interventions to mitigate litigation.

Originality/value

Researchers have identified factors causing litigation in construction. However, attempts to examine the existence of multi-factor “paths” on the decision to litigate (DTL) have hitherto received a muted response, so this study focuses on identifying the project-level path(s) leading to the litigation of contractual disputes in construction.

Details

Built Environment Project and Asset Management, vol. 13 no. 6
Type: Research Article
ISSN: 2044-124X

Keywords

Article
Publication date: 26 May 2023

Andrew Owsiak, Paul F. Diehl and Gary Goertz

The purpuse of this study is to answer the following two questions. Do conflict management efforts mitigate the recurrence and severity of civil conflict? If so, how? Do some…

Abstract

Purpose

The purpuse of this study is to answer the following two questions. Do conflict management efforts mitigate the recurrence and severity of civil conflict? If so, how? Do some conflict management strategies fare better than others in these tasks? This study theorizes about the connection between the costliness of a conflict management strategy – with respect to both the disputants and third parties – and civil conflict outcomes. This theory produces two contradictory predictions: that more costly strategies either increase or decrease violence. This study not only adjudicates between these two possibilities but also incorporates the role of timing. The early use of more costly strategies, for example, may encourage disputants to reduce violence in civil conflicts.

Design/methodology/approach

To evaluate the predications that the authors derive from their theoretical argument, the authors quantitatively analyze the effect of conflict management strategies’ relative cost on various measures of civil conflict recurrence and severity. The authors first identify the set of international–civil militarized conflicts (I-CMCs) during the period 1946–2010. I-CMCs contain two dimensions – interstate and intrastate – making them the most complex and dangerous form of militarized conflict. To each I-CMC, the authors then link all third-party attempts to manage the I-CMC’s civil conflict dimension. Finally, after developing quantitative indicators, a series of regression equations explore the relationships of primary interest.

Findings

Two main findings emerge. First, when third parties use a relatively more costly conflict management strategy to manage a civil conflict (e.g. a peace operation or military intervention, as opposed to mediation), the severity of the conflict increases, while conflict recurrence rates remain unchanged. Second, this study uncovers a trade-off. The early use of a relatively more costly management strategy lowers a civil conflict’s severity in the short-term. It also, however, increases the likelihood – and speed with which – civil conflict recurs. The timing of certain conflict management strategies matters.

Originality/value

Scholars typically isolate conflict management strategies in number (i.e. consider efforts as independent of one another, even those within the same conflict) and kind (i.e. examine mediation but not peace operations). This study, in contrast, includes the following: the full menu of conflict management strategies available to third parties – negotiation, mediation, adjudication/arbitration, peace operations, sanctions and military intervention – over a lengthy time period (1946–2010); theorizes about the relative merits of these strategies; and considers the timing of certain conflict management efforts. In so doing, it highlights a policy trade-off and proposes promising areas for future research.

Details

International Journal of Conflict Management, vol. 35 no. 1
Type: Research Article
ISSN: 1044-4068

Keywords

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