Minimizing disputes in construction industry : analysis of procurement arrangement

Abstract

The goal of every construction project stakeholder is the completion of a project that meets the objective of time, cost and function. However the construction process is often fraught with disputes. Because of differences in perception and frequently of conflicting goals among partners to a project, conflicts in the construction project environment are inevitable. However, conflicts can quickly turn into disputes if not properly managed. These unresolved disputes can lead to programme delay, increased tension, and can damage long term business relationships. According to the theory, dispute occurrence is differing within different procurement arrangements. However, there is no empirical study carried out based on disputes within different procurement arrangement in Sri Lankan context. Therefore this research has carried out to provide suggestions to minimize disputes in different procurement arrangements. Multiple case studies has been carried out by using four construction projects; two projects on traditional procurement method and two on design and build procurement method. During data collection semi structured interviews were conducted with professionals involved in four projects. Analysis of cases indicates that, among the two procurement methods most of the disputes were raised due to deficient management, supervision and coordination effort of the Client, variations initiated by the owner, poor communication among project team, poor interpersonal skills, Lack of team spirit and lack of design management. There were no any significant difference between causes of disputes among projects procured under design & build procurement arrangement and traditional procurement arrangement. Therefore the research indicates that rather than expecting less disputes considering the project procurement method effort should be taken to avoid disputes by putting proper structure to handle the disputes within the project. Finally suggestions were made to minimize the disputes in construction projects which were procured under traditional and Design & Build procurement methods