Disputes in Construction Industry: Owners and Contractors’ Views on Causes and Remedies

Ali A. Shash 1  and Salah I. Habash 2
  • 1 Construction Engineering & Management Department, King Fhad University of Petroleum & Minerals, Box 1627, Dhahran 31261, Saudi Arabia
  • 2 Construction Engineering & Management Department, King Fhad University of Petroleum & Minerals

Abstract

The construction industry is prone to conflicts and disputes due to complexity, competitive environment, and complicated project documents. In this complex environment, members from various professions, each has their goals and desires to secure the most of his own benefits, work together to build a structure. The objectives of this study were to investigate the frequency, causes, and remedies of disputes in the Central Province of Saudi Arabia. The required data were collected, through a questionnaire survey, from 130 contractors and 54 owners located in the Central Province. This study reveals that disputes in the Saudi construction industry are inevitable with a frequency of occurrence exceeds two disputes per month. Project documents, owners, and contractors to some extent are the sources for such disputes. Project documents are poorly prepared with inaccurate specifications, ambiguity in contract wording, contradictions between project documents, unrealistic project duration, the inaccurate bell of quantities (BOQ), and weakness in contract language. Owners cause great disputes through sizable variation orders exceeding allowable limits, changing item descriptions and quantities in BOQ, interfering in the execution of the contract, and delaying responses to requested information/approvals. Contractors cause disputes through poor contract administration. Contractors follow a combined strategy (mitigating disputes and holding only the disputed work area only) and owners either mitigate disputes or hold disputed scopes. Government owners mostly mitigating disputes and, conversely, private owners hold the disputed scope and continue with the rest of the project. This study is believed to contribute to the current body of knowledge in disputes and contractors and owners by providing effective mitigation techniques that will assist them in minimizing the negative impacts of disputes.

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