Construction Project Contract Disputes

Disputes and claims are common in many construction projects. Usually,

common sense and sound planning and management prevail in such disputes. Clear
identification of requirements, team formation, good communication channels,
good bidding practices, and complete construction documents all work to minimize
misunderstandings and avoid disagreements.

Resolving the Problem

When a facility manager is in the midst of completing a project, there is

usually no time to discover who is at fault. On big-ticket problems, such as roof
failure, it is usually possible to take immediate stopgap action to prevent further
deterioration and to take the time to determine fault. For other problems, however,
the facility manager makes a decision and determines cause and fault at a later
time.

Laying blame is less important than resolving the problem. An effective facility
manager can often settle most problems through dialogue with each of the parties.
Once the situation is resolved, the facility manager can attempt to determine
clearly where the problem originated.

Contracts often provide that the GC and subcontractors continue working on a

project even while a dispute is in progress. In some cases, particularly if delays are
not part of the problem, this may be workable. If a dispute must be resolved before
work can continue, the facility manager and end user must understand that the
more they stall, the more they compromise their own position. They stand to lose a
great deal more than the GC if work is delayed, because move-in will be delayed.

When a situation can’t be resolved through conversations with each party, a facility
manager may have to resort to formal negotiations, arbitration, or (as a last resort)
legal actions.

Formal negotiations. Formal negotiations are when parties formally sit down to

discuss their various viewpoints. For example, if light fixtures need to be relocated,
the architect’s view may be that the contractor placed the mechanical equipment
incorrectly. The contractor, conversely, may have discovered something in the
building that didn’t allow the specified placement of the mechanical equipment.
Project engineers may have determined that the equipment could have been placed
where originally planned, but perhaps the mechanical subcontractor installed
equipment that was different from the originally specified size.
Arbitration. Formal arbitration is the next step in resolving disputes. Many
contracts contain a clause such as, “Any disputes will be settled under the rules for
arbitration in effect in [the state in which the project or organization is located] at
the time of construction commencement.”

This clause indicates that all parties agree that claims and disputes will be settled
through binding arbitration and that no lawsuits will be filed. Many organizations
are opting for this approach in order to prevent expensive and time-consuming
litigation. Lawsuits regarding buildings and construction can last years. This is
especially true in situations where it is difficult to establish where the fault lies.

Litigation. When all other remedies have been exhausted, a dispute may go into
litigation. The clear, precise, and consistent documentation that has been kept
throughout the project is critical to litigation issues. Many cases that could have
been won in court have been dropped because project notes, meeting minutes, and
telephone logs were not maintained and could not be reconstructed with enough
reliability to hold up under cross-examination.

In many cases, it may be beneficial to call in an outside expert with no prior

knowledge of the project to assist with the determination of cause and effect.
Individuals who are particularly good at this can often easily identify causes—they
are not caught up in the politics and pressure of the situation and can be objective
in their evaluation.

In more complex situations, pursuing legal action can become extremely

expensive. In many cases, legal costs outweigh the costs of simply fixing the
problem.

The Description of a Construction Dispute

A construction dispute can be the outcome of various factors. Delays

in the project, failure of compliance with the pre-set project standards and
exceeding cost can be some very good reasons for a project dispute to
arise. The lack of precision in the contract description can be the source of
this problem.

When a disagreement like the ones above appears, this has a serious impact on the
whole life-cycle of a project. For the project to be able to proceed, every single
dispute has to be resolved. Otherwise, there’s a danger that every process and task
around the project will freeze. An “on-hold” situation can lead a project to start
bleeding money due to the serious delays. In order to solve these disputes, it’s
imperative that you first detect the causes behind them. Only then, you can proceed
with finding a solid solution that can save your project.Reasons Behind a
Construction Dispute   

The

following are some of the most common issues that may pop up during a
construction project:

Contract Disputes

The reasons for a contract dispute may vary each time. Disputes
over insurance agreements can be, for example, one of those reasons. One of the
project parties may feel that it’s entitled to some compensation while the insurance
company, or whoever is responsible for that may have a different opinion. Another
example of contract dispute could be a disagreement that emerges regarding the
scope of work of each party. In simple words, the one side may think that some of
the assigned tasks aren’t part of its responsibilities and start demanding a higher
payment for completing them.

It’s clear that both situations above are eventually coming down to one thing. Lack
of precision when putting together the contract. That’s why, it’s truly vital to pay
extra attention to define the obligations and the rights of anyone involved in the
project. A well-written contract can save you and your project from a lot of fuss.
High Conflict People

A construction project team normally is consisted of a vast amount of people with

different mentalities and ways of reacting under pressure. In the long run, this can
be a problem in cases where people of high temper or simply people who have a
totally different vision for the outcome of the project start putting obstacles in the
project’s life cycle. For that reason, chemistry is key when putting together a
construction project team. A precise description of each individual’s rights and
responsibilities on the contract is the best way to deal with such people.

Unforeseen Reasons

A construction project can sometimes be full of surprises. Severe accidents

or extreme weather conditions are unpredictable factors that may impede the proper
progress of a project. To prevent such construction disputes, it’s important to have
analyzed all the potential risk factors in advance.

Strike Action

This factor could be part of the prior category. But the main difference in this case
is that it’s something that could easily be prevented if there are no problems with
late payments or unsafe site conditions. In a nutshell, the more professional you are
during the conduction of the project the smaller the danger for such kind of actions.

Construction Dispute Resolution

Analyzing the reasons behind a construction dispute is one thing. But being able to
resolve them is another. Here are some of the ways in which parties involved in a
construction project choose to solve their disputes:

Putting together a Dispute Resolution Board

A straightforward way of resolving a dispute is the establishment of a dispute

resolution board. The board normally consists of three members. The disputing
parties are appointing the first two (every side chooses one) and are people with
high technical knowledge. In that way, they will be able to offer responses in
complicated technical issues. The two board members in an effort to achieve the
higher level of objectivity possible, they choose the third board member which is
most of the times the supervisor of the whole process.

Hiring a Mediator

The choice of a mediator can also be a common practice when trying to

resolve a construction dispute. As a rule, a mediator is a neutral person who is
assigned to offer some suggestions and potential solutions to an arising dispute
after having come in contact with both parties. The judgments made by a mediator
aren’t binding. A mediator can be a valuable addition to any construction project
even when no dispute is in progress. In that way, s/he can constantly monitor the
progress of the project and provide valuable feedback in order to make sure that
everything goes as planned.

Construction Arbitration

Construction arbitration is another method of dispute resolution. In recent

years, it tends to be considered as part of the mediation progress that we already
described. The main difference, in this case, is that the arbitrator has the power to
come up with a solution that has legal binding power.

Judicial Appraisal

A judicial appraisal is also a smart way in which you can find a solution to a
potential dispute. It could be described as a trial stimulation. In this case, a judge is
asked to make an estimation of the outcome of the trial if the dispute reaches to the
court. His/her judgment is the outcome of the details that the parties in dispute
have presented.

How to Prevent a Construction Dispute

Prevention is always better than cure. Before you start working on a new
construction project, you want to be certain that you have taken all the necessary
measures in order to minimize the emergence of any project disputes. Below we
offer some advice which can help you save a lot of time and money by avoiding
unnecessary conflicts:

Elaborate a Detailed Construction Project Plan

A detailed plan is the core of your project. Make sure that you start your
effort by analyzing every detail of the project and by elaborating a risk
management plan. This will offer you the ability to predict any mistakes along the
way and to define your project’s’ needs. The latter would be of tremendous
importance when you try to put your team together. The better the team you build
the fewer chances for a dispute to arise.

Use Construction Software

Construction software can offer significant help in preventing disputes

between project parties. A top-performing construction software allows you to keep
track of every single detail around your project. In that sense, everything is
recorded. A dispute can easily be resolved given the fact that all the data of the
project are available. Moreover, this clear way of keeping a detailed record of the
project’s progress allows for the prediction and prevention of any potential
conflicts.

Keep a Site Diary

A solid construction software can be your eyes and ears in a project.

However, you always want to be sure that you keep a personal record of what takes
place on the site. By keeping a site diary, you can be confident that all the
important issues around a project are addressed and that mistakes are detected on
time. For that reason, try to record everything you see and ideally keep a photo
archive, as well.

Hold Meetings With The Other Parties Regularly

 Establishing good communication with the other project parties is crucial. In
that manner, you have the opportunity to discuss any potential disagreements
before they get too serious. On top of that, by meeting regularly with the other
project members you minimize the possibility of mistakes and maximize the
project management efficiency.

Conclusion

Designing and eventually conducting a construction project is tough.

Preventing or resolving construction disputes is even more challenging. It’s
understandable, then, that there’s a strong need for an exhaustively elaborated plan
in order for your project to be successful. A plan that will be a valuable tool in
your effort to predict and manage risk and conflicts around a project.

What is field reporting?

Reporting from the field isn’t normally a one-man job. Typically, almost

everyone on the ground is part of the reporting process. It can’t be different if we
take into account that all tasks and activities on the site are closely connected to
each other. The slightest delay in one task can have a serious impact on the budget
and the time frame of the entire project.

Without a doubt, field reporting is one of the main pillars for the success of every
project in construction. Through this process, the people on site have full visibility
and a good understanding of what needs to be done.
Nevertheless, the way progress is documented plays a substantial role. Traditional
reporting requires a lot of time and resources on a day-to-day basis. It’s a serious
administrative load which can hinder productivity.

Furthermore, the way these reports are shared with the rest of the team is also
essential. The use of Excel and Word was a good option around ten years ago but
today in most cases it can generate major problems.

The reason is that everyone is working on an isolated way and as a result, the
different stakeholders of the projects are unable to remain on top of the field
reporting process. This can create costly misunderstandings and project delays.
This is where the importance of dashboards that can be updated in real time
becomes apparent. In a nutshell, dashboards give management an overview to
monitor progress and efficiency of the project managers and subcontractors on site.

What is a construction report?

There are many different types of construction reports which cover a wide
spectrum of activities and tasks both on the site and the office.  Some of the most
common construction report categories could be summarised to the following:

Trend reports

They offer the latest status on different building construction types and
analyse if their importance in the market is going up or decreasing.

For example, a report on the latest trends in office buildings can offer useful
information with regard to what facilities and comforts should an office provide to
the people working in it. Like that, newly built structures can meet the actual needs
of those who will eventually make use of them.

Materials reports

Construction companies rely on material reports in an effort to stay up-to-

date with the latest changes and boost productivity and building quality.

To acquire such reports, contractors might purchase or enroll in

organisations/services which create such market reports coupled with the benefits
of each new material.

Cost reports

Cost reports are substantial for every construction project. They are always
used during the bid stage of a project in order to offer an accurate cost estimation
concerning the workforce and the materials that will be used.
What is a construction progress report?

One of the most popular construction reports is the construction progress

report, also known as daily report, and it is critical for the success of every project.

How do you
prepare a field
report in
construction?

Here are the 10 things that must be included on every daily report:

1. Date: The date that the information pertains to, which should also be the
date that the report is written and submitted.
2. Weather conditions: The weather conditions for that day, as it will show
why certain tasks weren’t completed or why everyone left the job site early
or arrived late.
3. site, which may have affected how much work got done on that day.
4. Overview of resources: The resources that were available and unavailable
on that day. This list may include employees, equipment, and materials.
5. Type and status for the job performed on the field: The work that was
performed and the status for each job.
6. List of disruptions/delays: A list of any disruptions or delays that occurred
on that day.
7. Inventory checklist: The inventory checklist that will show what is in stock
and what may be arriving later than planned.
8. Upcoming risks: The potential risks for future delays, so that everyone can
work to avoid these problems.
 9. Safety and environment-related issues: Any incidents that occurred,
whether safety-related or environment related. The employees’ name, as
well as specific details and photos, should also be included.
10.Additional notes and comments: There may be days when additional notes
or comments may be necessary, and they should be included at the end if
they do not fit in any of the other categories.

Why construction reports are important?

Daily reports can also be useful at the end of the project if the owner has an
issue and wants to go to court over something that was or wasn’t done. These notes
can prove that everything was done as it should be, leaving no unanswered
questions.
Clear accountability through audit trail reports

Getting a fully transparent view of accountability across your project at any

time is of paramount importance. For data-driven reporting, you need a digital tool
that is able to automatically store all data and the latest changes on them.

In addition, it should be easy for project managers to retrieve all these valuable
pieces of information when that’s necessary.

Here is an example of how an audit trail could look like:

Weather information

Automatic daily logs and site diary

The ability to record automatically all crucial project information can help
project managers to maintain their daily logs and site diary up-to-date while getting
rid of paperwork.

Custom reporting

Projects differ from one to the other and by extension, the reporting process
differs, too. Therefore, being able to fully customise your reports and build them
according to your project needs is powerful.
Types of Construction Skills

Specific construction skills include bricklaying, carpentry, pouring cement, putting

up drywall, and installing specific types of equipment. Be sure to tell your
prospective employer the tasks that you have experience performing and the
amount of experience, even if it is not directly relevant to the job for which you are
applying. Employers typically appreciate versatile workers who can take on
additional tasks as needed. Construction tasks may include:

 Masonry
 Carpentry
 Painting
  Drywall
 Electrical
 Plumbing
 Framing
 Building site supervision
 Pipe fitting
 Surveying
 Maintenance
 Power tools

Physical Skills
Construction work generally involves:

 Physical endurance
 Compliance
 Personal protective equipment (PPE)
 Heavy lifting
 Dexterity
 Heavy equipment operation

Office Skills
 Microsoft office
 Phone etiquette
 Oral communication
 Written communication
 Information management
 Basic math
 Punch lists
 Scheduling
  Customer service

Management Skills

Obviously, not all construction workers need management or leadership skills,

but having them certainly gives you more advancement options in your career.
Managing work sites, developing estimates and negotiating prices, performing
quality control, and reaching out to prospective clients are all important skills for
construction workers. Management skills typically include:

 Project management
 Leadership
 Managing a team
 Teamwork
 Safety
 Directing
 Supervision

Design and Planning

 Interpreting blueprints
 Construction reports
 Estimating
 Identifying the building process
 Identifying material costs
 Understanding the design

Codes and Regulations

 Environmental awareness
 Adherence to safety measure
 Problem sensitivity
 Discernment
 Labor relations
 Negotiation