What Do You Think Causes Construction Claims And Disputes? Think Again.04 October 2016
A prerequisite to recognizing and remedying problems on the construction project is understanding their causes. The National Cooperative Highway Research Program has identifed practices and characteristics of contractors and owners that are associated with the high incidence of claims, including the following:
- Inadequate investigation before bidding.
- Unbalanced bidding.
- Bidding below costs and over-optimism.
- Poor planning and use of wrong equipment.
- Failure to follow authorized procedures.
- Changes in plans and specifications during construction.
- Inadequate bid information.
- Inadequate time for bid preparation.
- Excessively narrow interpretation of plans and specifications.
- Restrictive specifications.
- Contract requirements for socioeconomic objectives.
Causes Associated with the Contract Documents
- Exculpatory clauses.
- Mandatory advance notice of claims.
- Finality of field engineer’s decisions.
- Changed Conditions clauses.
- Lack of periodic review of documents.
Causes Associated with Contract Awards
- Diversity of state contract award rules.
- Treatment of bid mistakes.
Causes Associated with Contract Administration
- Coordination of owner responsibilities.
- Interpretation of owner policy and practices.
- Attitude and style of contract administrators.
- Documentation of contract performance in field records.
- Owner program factors.
Causes Associated with Claim Settlement Procedures and Practices
- Encouragement of project-level settlements.
- Delegation of settlement authority to field supervisors.
- Effectiveness of field/headquarters consultation.
Review this list and think again. What other causes of disputes can you identify?
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