A new report issued by an internationally known consulting firm says that construction project work changes remain the primary driver of legal disputes.
According to Crux Insight, published by the firm HKA, which has offices in New York, what are commonly known as “scope of work changes” currently account for nearly $47 billion in industry costs internationally.
While noting that other matters such as incorrect or incomplete designs, as well as deficient workmanship and poor subcontractor management, are also leading reasons for disagreements, scope of work changes for the second year in a row continued as the number one subject area of disputes.
And those disputes most often end up end up in court, says the report, with mediation, arbitration, and negotiation employed less frequently.
The growing incidence of scope of work changes, notes the publication Construction Dive, “shows the importance of preconstruction planning, and accurately capturing a project’s comprehensive footprint.”
Equally important: clearly spelling out the “role, responsibilities and risks on the job, right out of the gate,” for all participating parties.
After closely examining more than 1,100 construction projects internationally, the Crux Insight report notes that the change in scope disputes are most often “closely linked with design failures.”
“A notable development in the latest analysis is how these design-centric problems—incorrect, incomplete and late design information—have risen up the ranking,” the report continues.
The trend is additionally fueled by “fast-track construction,” says the report, which is shortening the design phase, with the pace of building for contractors often outweighing the “capability to control and manage.”
On the up side, observes the report: there has been a marked decline in disputes centering on “failures in the management of administration of contracts,” as well as clashes over contract interpretations.
By Garry Boulard
