By Uwe Putlitz
All construction projects are always ‘unique’. This is part one of a two-part series.
Yan Krukau | Pexels
A similar project may have been executed many times before, usually on a different site, by the same or another group of people to common specified standards of quality and performance, but achieving results significantly different to those in previous projects – possibly resulting in delays and disagreements about the final quality achieved and/or at an actual cost higher than the initial offer.
‘Forewarned is forearmed’ is the strap line of the annual HKS Crux Insight Survey Report of ‘common’ project disputes or failures internationally, according to which between 15 and 35% of projects, depending on their complexity, result in claims due to:
- Delayed access to site (sometimes due to late statutory and other approvals)
- Late scope changes
- Late issue of design information, errors in or incomplete design information
- Poor contract administration and construction management
- Poor interpretation of contractual issues, often resulting in cashflow and payment issues
- Poor subcontractor or supplier management
- Poor workmanship and latent defects
- Unforeseen site
Can we ‘fix’ the process?
Yes, for example, by using prefabricated building systems that resemble industrial production lines. The system can be tweaked to eliminate repeat faults and defects, but this can only apply to a small sector of the construction industry, or …
By dealing with any disagreement promptly before it develops into a dispute. Such events will typically demand attention before routine tasks, resulting in emotional stress to all those involved and possibly delaying execution of the works invariably attracting
irrecoverable costs – which may be minimised, or …
As soon as practical in the project life cycle, create a ‘conflict avoidance triage team’ comprising the employer, the ‘end user’ (if possible), the architect or engineer and the construction project manager and – appointed for this task only – an independent senior industry practitioner as facilitator to optimally guide the conflict/dispute avoidance or dispute resolution process, if applicable.
In the UK, a ‘Conflict Avoidance Toolkit’ has been published under the auspices of nine principal consultant and national employer organisations a decade or so ago, to proactively guide the project implementation process by anticipating events that may lead to failures or disputes by ‘stopping the smoking embers of a dispute by bringing them to the attention of people who can do something about it’.
Early intervention is about ‘snuffing out the smoking embers before they ignite into a fire’. This can be achieved by:
- Pre-contract preparation
- Dispute avoidance – early warning
- Early intervention
- Amicable resolution
- Dispute resolution
The three-step model:
Step 1: Define the problem. This involves acknowledging the conflict, establishing common ground or goals (such as ‘we both want what is best for the organisation’) and separating the problem from the people’.
Step 2: Explore and evaluate alternatives – this is a ‘diverge’ phase where many alternatives are explored and discussed.
Step 3: Select the best alternative – this is the ‘converge’ step, where we agree on the best way forward.
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Pre-contract preparation
PROCUREMENT
1.2) Determine the appropriate method and time required to acquire consulting services:
- At project inception, certain employers appoint only essential core consultants to limit expenditure before a project has formally been given the go-ahead. This may result in avoidable rework later to accommodate specialised skills, typically those of the acoustics and/or landscaping consultant that may significantly influence the final design solution – most of whom are happy to give such input on the condition that they will be appointed when the project is formally ‘given the go-ahead’.
- Certain employers dictate the professional fee they are prepared to pay – typically resulting in proportionally reduced services with a consequent increase in ‘requests for information’ from contractors which may result in delays and/or errors on site, entitling the contractor to a revision of the date for practical completion and/or an adjustment of the contract value.
1.2) Determine the appropriate method and time to acquire construction services:
- By negotiation dealing with preferred competent service providers but not necessarily at the best value for money depending on market conditions
- By invitation based on an advanced design solution to involve contractors with particular skills, a product licence or specialised construction equipment for a hybrid design and build solution
- Appointment by invitation implies that the contractor has the ability to execute the project to the specified quality within the time period allowed from previous experiences – at a fair price, but not necessarily at the most competitive price
- By open tender implies that any contractor with a specified CIDB grading can submit an offer – requiring careful analysis and background checking of all submissions, discardingnon-complying tenders to compile a short list of, say, 3-5contractors for final consideration. By taking the average of the three to five tender lowest prices received, the contractor whose offer is closest to the median is likely to have realistically priced the all aspects of the works without strategic omissions or an opportunistic profit.
1.3) Establish and confirm site conditions:
- Discrepancies between actual site conditions and survey and/or historical or as-built records and new construction information
- Undocumented below ground services not shown in any servitudes or as-built records
- Unexpected founding conditions not identified in the geotechnical survey
- During excavations, discovery of historical relics
- Obstructive neighbouring owners
1.4) Construction information:
- All contract documents should be clear and well drafted to suit the application
- Scope creep is the silent killer of delivery – within budget, on time, to the specified quality
- Clarity prevents conflict
- Unilateral changes instigated by the employer to SfCC, or by the contractor to standard-form subcontracts, which, in addition to altering the balance of the respective rights and obligations of the parties, may affect the works insurance and the consultants’ professional indemnity insurance cover.
| Uwe Putlitz is a registered professional Architect and Construction Project Manager, a Fellow of the Royal Institute of Chartered Surveyors (RICS) and is a visiting lecturer at the School of Construction Economics and Management at the University
of the Witwatersrand. Having recently retired as the Chief Executive Officer of the Joint Building Contracts Committee (JBCC) he specialises in the avoidance of construction disputes by way of lectures, technical articles dealing with aspects of contract administration for various industry publications arising from the use of Standard- form Contracts including the Federation Internationale des Ingenieurs-Conseils (FIDIC), the General Conditions of Contract (GCC), the JBCC or the New Engineering Contract (NEC) to find an acceptable settlement without resorting to legal processes, where possible. More info: info@buildstrat.co.za |
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