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Best practice for Dispute Avoidance

17 replies [Last post]
Sat, 2005-04-16 18:56
Andrew Flowerdew
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What do you all believe to be best ways of avoiding disputes in the first place?

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Wed, 2005-04-20 07:21
#1
Andrew Flowerdew
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Gerry,

I agree attitude is 90% of the problem - I have read the publication you state which is full of good ideas, unfortunately either others don’t agree with it’s content or the part of the industries culture is unwilling to change. maybe unwilling is the wrong word, unable may more appropriate.
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Wed, 2005-04-20 04:28
#2
Gerry McCaffrey
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Not wishing to stifle debate - but a thorough review of the persistent and recurring problems within the construction industry are eloquently narrated - and sound solutions postulated in the landmark publicattions

(a) Constructing the Team
(b) Rethinking Construction
(c) Accelerating Change

In short the solutions are Trust and Culture.
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Tue, 2005-04-19 19:04
#3
Andrew Flowerdew
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All,

A few aspects, certainly in the UK, which do cause disputes are:

"what an experienced contractor ought to have resaonably foreseen or included for"

"consultants who think contractors are designers and therefore should know what they were thinking at the time of tender on every detailed aspect of the project" - what was obvious to them was not always obvious to an estimator who has non or little technical design experience

"consultants who are trying to cover thier rear ends due to a potentially embarrissing mistake on their part"

"contractors who are not making the money they thought they would putting in stupid claims"

I could go on but the thread is dispute avoidance, so is partnering the way forward or is there a better way?

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Tue, 2005-04-19 09:41
#4
Philip Jonker
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Hi Jaco,

Another point is contingincies,in any project there is ussually an allowance made for contingincies, this is to cover the extras. This is also the reaoson contracts are normally remeasurable, in the event that the scope changes more than an established percentage, normally 12.5 to 15%.

Any contractor or party that do not make sure that these measures are in place, are risking claims/disputes, that could have been resolved in terms of the contract, without the expensive litigation that often occurs.

Regards


Philip
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Tue, 2005-04-19 05:28
#5
Andrew Flowerdew
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Jaco,

I think you have raised an interesting point although given the nature of construction projects it is probably impossible to cover and price eventuality at the start.

Maybe if each parties risks were better defined in the contract at the beginning, ie this happens - that party pays, then some of the disputes would be avoided.
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Tue, 2005-04-19 05:11
#6
Jaco Stadler
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Hi Jagadish

I still think the problems is not with scope of work or additional requirements. The Problem is with Dispute. No Owner or contractor will argue (Dispute) about something which is clear in the contract. If the contract say you must be paid x amount and if you do this you will be paid y amount this will stop all desputes.
Two way’s of solving this.

1) The Contract must be very specific. (BOQ / Dayworks Cost Plus etc.)
2) The contractor must price for the additional scope. (Turnkey type contract) increased risk.

Well I prefer detailed contracts.


Cheers
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Tue, 2005-04-19 04:52
#7
Jagadish E M
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thanks for the book and the author’s name.

but, still do you think if every thing goes as per the book and programme then would there be any dispute at all !

well our industry still in most of the places is unorganied unlike manufacturing and there is no hard and fast rules to do things and in construction project, ACTIVITES are not repetitive in nature and hence here and there project requires some minor adjustments(in work !). and when these adjustments bite contractor’s profit in ways of time/cost , there starts dispute.

well anyways thanks for sharing your thoughts.

regards
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Tue, 2005-04-19 04:50
#8
Jagadish E M
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thanks for the book and the author’s name.

but, still do you think if every thing goes as per the book and programme then would there be any dispute at all !

well our industry still in most of the places is unorganied unlike manufacturing and there is no hard and fast rules to do things and in construction project things are not repetitive in nature and hence here and there project requires some minor adjustments(in work !). and when these adjustments bite contractor’s profit in ways of time/cost , there starts dispute.

well anyways thanks for sharing your thoughts.

regards
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Tue, 2005-04-19 04:30
#9
Philip Jonker
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The author is Eliyahu M. Goldratt, and he also has written about the theory of constraints.

Have a look at his website.

Regards
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Tue, 2005-04-19 04:25
#10
Philip Jonker
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I disagree, most of the projects in other industries, are fast track, as the bulk is product development. The reason, the disputes never hit the courts, is that most of the work is carried out in-house, except where parts have to be outsourced.

Maybe there is a couple of IT or Manufacturing Project planners around, who can enlighten us.

There is a book, "Critical Chain", I unfortunately do not have the author’s name with me, but he is an American Professor. The book is quite interesting in it’s approach to planning, specifically in avoiding delays by being pro-active, and removing float from schedules. Although the case studies he uses, is mostly related to the industries I mentioned.

Regards

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Tue, 2005-04-19 02:53
#11
Jagadish E M
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ANDREW


THIS IS B’COS CLIENT / CONSULTANT NOBODY IS ABLE TO FREEZE THE PROJECT REQUIREMENTS AT THE BEGINING. AND DUE TO FREQUENT CHANGE IN SPECIFICATIONS & REQUIREMENTS OF THE PROJECT AS IT STARTS TAKING UP SOME SHAPE, CONTRACTOR , IN MOST OF THE CASES MADE TO COMPROMISE ON HIS SHARE EITHER ON TIME / COST AND AS MR.SHAHZAD RIGHTLY SAID EVERYONE IS THEIR IN THE BUSSINESS TO MAKE MORE MONEY, THIS VERY INTENTION OF THE CONTRACTOR IS BEATN UP HERE AND HENCE DISPUTE ARISES MORE OFTEN IN CONSTRUCTION INDUSTRY.

ON THE CONTARARY IN OTHER INDUSTRIES THE PROJECT STARTS ONLY AFTER THEY FREEZE THE PROJECT REQUIREMENTS.

FURTHER YOU FIND MORE PLANNERS / CONTRACT ENGINEERS IN CONSTRUCTION RATHER THAN OTHER INDUSTRIES !!!!!!!!!

THANKX


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Mon, 2005-04-18 10:43
#12
Andrew Flowerdew
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Shahzad -

But can’t that be said about anyone in any business? So why do we in construction end up in disputes so often - or is it just that due to the often large sums of money involved the disputes end up in the high courts and therefore attract more attention.

Maybe all industries have a similar amount of payment disputes. They just get settled in the small claims courts or similar and therefore go largely unnoticed.
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Mon, 2005-04-18 04:23
#13
Shahzad Munawar
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Hi Andrew:

This act can not be performed by the Contractors because each Contractor wants to earn more as he anticipated in his TENDER.

This is the fact.
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Sun, 2005-04-17 18:35
#14
Andrew Flowerdew
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I agree with whats being said to date and the general concepts are similar so if we all know what to do - why can’t this industry get it’s act together?
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Sun, 2005-04-17 13:41
#15
Jaco Stadler
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Being Honest.

To stop disputes the best way is for all to stop being dishonest. With other words contractors to stop and trying to make crazy claims and owners to stop having crazy arguments.

In order to achive this we need contracts that is very clear on all the work. (Scope & extra’s). I believe a contract with a BOQ helps because at the end all we need to do is to count the beans. The contract must also be clear on completion and LD.

Cheers


(I also agree with up to date agreement of extra’s)

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Sun, 2005-04-17 13:34
#16
Philip Jonker
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Hi Andrew,

That is a loaded question, but a valig one. The answer is that all parties should be committtrd to the project.
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Sun, 2005-04-17 11:23
#17
Shahzad Munawar
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To resolve the disputed items at the time of their inseption with the Engineer/Employer and include these items in interim certificates in first place desite the disputes deffer till completion
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