In an article published by Risk Management on October 1, Greg Seador discusses how to avoid costly construction project disputes. “To minimize unexpected costs and delays and avoid disputes wherever possible, project participants should create a plan before the project,” he states.
He stresses for all project participants to set reasonable goals and expectations. Disputes commonly arise when the budget of either the owner or contractor is unrealistic, as well as if schedules are overly aggressive and unachievable.
Seador also cautions to anticipate the unexpected. “Regardless of advanced preparation and planning, unexpected events such as design errors or scope changes almost always arise during construction projects,” he explains. “However, having early-warning systems in place can help avoid or minimize the risk. A risk management program designed to promote early detection and resolution of potential problems on the job goes a long way to prevent a full-fledged dispute from developing. The program should include a formal strategy and procedures for resolving issues that may arise during construction before they become formal disputes.”
Additionally, it is imperative that project participants maintain open lines of communication with each other and address issues that arise during construction as they happen. “Be open-minded and prepared to compromise, and keep in mind that not all problems during construction are worth fighting over,” Seador shares. “When project team members are more interested in being ‘right’ than achieving solutions, disputes inevitably develop.”
For the full article, click here.