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Operational framework to settle contractual claims in construction projects
Author(s)
Saad, Awad Saad Abdulla
Date Issued
2017
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
Delays are frequent and recurring in construction projects, mostly in developing
countries. Several factors pertaining to modes of operation in the local construction
industry contribute to construction delays. Contractual claims are integral and an
important feature of construction project's life. Often times, delay-related contractual
claims in construction projects is a controversial issue that often leads to disputes
and conflicts between contractual parties due to its ambiguity and complexity.
Literature have shown over the last decade a range of problems that have
consistently resulted in construction delay and significant costs to all contractual
parties due to contractual claims in almost all types of construction projects.
Therefore, to achieve more time efficiency on construction projects, comprehensive
studies on common problems resulting in routine delays due to contractual claims is
essential. Such studies need to pinpoint the most relevant causes of delay that have
to be monitored carefully in order to avoid the construction delays. Thus, this study
adopted a quantitative research method. Closed ended and open ended questions
were designed in the quantitative instrument for the quantitative survey. Descriptive
and Principal Component Analysis was employed for data analysis to develop an
operational framework for evaluating delay related claims in the South African
construction industry. Findings from the analysis of data revealed several factors
through which, when appropriately evaluated will reduce the incidence of contractual
claim to minimum if not completely eliminated in construction project.
The study has found that delay-related claims are increasingly emerging and have
become the most common and costly problem in construction projects which not only
deny the client timely access to the completed facility but disrupt the overall
performance of the building project. This study also concludes that the contractual
claims that often lead to dispute during execution of building projects are; Change
order claim, Variation order claim, Cost and expense claims and Dayworks claim.
Therefore, evaluation of these claims must be given careful assessment during the
construction phase of a building project to forestall its attendant consequence on
project performance. Inconsistencies in the operational dealings with contractual
claims in the South African construction industry showed that; release of payment
emanating from claims, quality of management and design coordination, nonavailability
of specified materials and change in micro economic policy are the most
significant in evaluation factors which must be considered in evaluation of accurate
and undisputed contractual claims. This study also affirmed that the three principal
components that lead to claim and dispute when combined explained 49% of the
total variance. Also, it was concluded that arbitration is most appropriate for dispute
due to; shortage of materials, claims in fluctuation of the materials price, physical
environmental consideration, and conflict of interest among the project team.
Litigation is most appropriate to resolve dispute due to access to the construction
site. While mediation is most suitable for dispute due to; inability of the client to
understand design, the choice of the procurement process, delay in release of
payment emanating from claims, lack of prompt delivery of materials by the
suppliers, interference with utility lines and extreme weather condition. Lastly,
Negotiation is most suitable for dispute arisen from constructability of the design and
non-availability of specified materials.
countries. Several factors pertaining to modes of operation in the local construction
industry contribute to construction delays. Contractual claims are integral and an
important feature of construction project's life. Often times, delay-related contractual
claims in construction projects is a controversial issue that often leads to disputes
and conflicts between contractual parties due to its ambiguity and complexity.
Literature have shown over the last decade a range of problems that have
consistently resulted in construction delay and significant costs to all contractual
parties due to contractual claims in almost all types of construction projects.
Therefore, to achieve more time efficiency on construction projects, comprehensive
studies on common problems resulting in routine delays due to contractual claims is
essential. Such studies need to pinpoint the most relevant causes of delay that have
to be monitored carefully in order to avoid the construction delays. Thus, this study
adopted a quantitative research method. Closed ended and open ended questions
were designed in the quantitative instrument for the quantitative survey. Descriptive
and Principal Component Analysis was employed for data analysis to develop an
operational framework for evaluating delay related claims in the South African
construction industry. Findings from the analysis of data revealed several factors
through which, when appropriately evaluated will reduce the incidence of contractual
claim to minimum if not completely eliminated in construction project.
The study has found that delay-related claims are increasingly emerging and have
become the most common and costly problem in construction projects which not only
deny the client timely access to the completed facility but disrupt the overall
performance of the building project. This study also concludes that the contractual
claims that often lead to dispute during execution of building projects are; Change
order claim, Variation order claim, Cost and expense claims and Dayworks claim.
Therefore, evaluation of these claims must be given careful assessment during the
construction phase of a building project to forestall its attendant consequence on
project performance. Inconsistencies in the operational dealings with contractual
claims in the South African construction industry showed that; release of payment
emanating from claims, quality of management and design coordination, nonavailability
of specified materials and change in micro economic policy are the most
significant in evaluation factors which must be considered in evaluation of accurate
and undisputed contractual claims. This study also affirmed that the three principal
components that lead to claim and dispute when combined explained 49% of the
total variance. Also, it was concluded that arbitration is most appropriate for dispute
due to; shortage of materials, claims in fluctuation of the materials price, physical
environmental consideration, and conflict of interest among the project team.
Litigation is most appropriate to resolve dispute due to access to the construction
site. While mediation is most suitable for dispute due to; inability of the client to
understand design, the choice of the procurement process, delay in release of
payment emanating from claims, lack of prompt delivery of materials by the
suppliers, interference with utility lines and extreme weather condition. Lastly,
Negotiation is most suitable for dispute arisen from constructability of the design and
non-availability of specified materials.
Additional information
Thesis (MTech (Construction Management))--Cape Peninsula University of Technology, 2017.
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