Investigation on Particular Contractual Issues in Construction

Construction companies have to challenge difficulties in undertaking private or public projects in domestic and international venues. This study focused on contractual issues encountered by Turkish companies as a case study. The main aim of the research was to investigate particular difficulties encountered by Turkish companies and remedies to overcome or prevent the adverse effects. This research focused on the problem areas, their causes, and executed contracts. In order to meet these aims, research methods included literature survey, analysis of courts of cessation decisions, interviews with 37 contractual staff in 30 companies which are members of Turkish Contractors’ Association, and analysis of 41 contracts to understand their types and conditions. Throughout this investigation, the findings revealed classification of contractual issues as finance, time, compliance, technical documentation, and clauses related difficulties. Practitioners can benefit from this paper by obtaining information through experiences of other companies. By reading this paper the readers can better prepare themselves to avoid and cope with claims and issues. Furthermore, companies intending to establish joint venture or consortium with Turkish construction companies will be able to foresee and prevent/overcome possible difficulties.     

Measurements of elastic neutron scattering from sup12C and 32S at 30.3 and 40.3 MeV: Limits on charge symmetry breaking in the nuclear mean field

[Or Equal” product specifications are the subject of this paper. A series of legal decisions are comprehensively reviewed to paint an operational framework for using “brand name or equal” specifications. Important issues include: Concept of eqtiality; bidding equals; salient features; commercial availability; interchangeability and compatibility; effect of contracting officer's approval; and substitutes of superior quality. By understanding the specific points captured in this article, designers and contractors can write and interpret product specifications and hence reduce their chances of being involved in serious construction contract disputes.     

International Treatise on Construction Specification Problems from a Legal Perspective

Given the limitations of construction drawings, clear specifications are important in conveying technical requirements of the owners to the constructors. However, apart from the contextual differences across the world, specifications share one common characteristic, i.e., they are not always prepared with due care and understanding of the problems that will arise from their misuse or nonuse. Disputes have arisen from defective specifications, material substitutions, noncompliance, different interpretations, enforcement slack, etc. Expensive litigation has been used to resolve these problems, which could well be avoided with proper drafting and appropriate use of specifications. This paper identifies and outlines common deficiencies and traces the efforts put into the improvement of specification writing, through a selection of legal cases in various jurisdictions with commentaries.     

Not Finding Anything Different and Not Reviewing All Documents Defeats DSC Claim

Differing site condition (DSC) claims are common in construction and can be very disruptive and expensive. The 1999 case of Fru-Con Constr. Corp. v. United States (Fru-Con Constr. Corp. v. United States) affords the opportunity to explore some of the issues that can mean the difference between prevailing and not prevailing on a DSC claim.     

Catastrophic Transitions of Construction Contracting Behavior

The ways to manage a construction project very much depend on the attitude of the people involved. Collectively this is identified as construction contracting behavior (CCB). The CCB of the construction industry is adversarial as pinpointed in many industry-wide reviews. A more cooperative project delivery approach has therefore been advocated. In fact, drive for efficiency provides the incentive for cooperation. Nevertheless, members of a project team, in representing their respective organizations, are often in conflict. The dichotomous pair of cooperation and aggression forces therefore coexist. It is not uncommon to note that CCB turns aggressive as the construction activities of a project intensify. This change is often sudden and thus matches well with the phenomenon of hysteresis described by the catastrophe theory (CT). It is hypothesized that the dynamics of CCB can be modeled by CT. The three-variable CT models include CCB (as dependent variable), cooperation forces (as normal factor) and aggression forces (as splitting factor). With data collected from a survey fitted by the Cuspfit program, it was found that trust intensity is an effective normal factor. Contract incompleteness and competitive inertia are splitting factors that trigger aggression.     

Contractors’ Claims Insurance: A Risk Retention Approach

The negative effects of claims and disputes have serious negative impacts on contracting parties, their projects, the construction industry as a whole, and consequently on the nation’s economy. This paper explores a method for mitigating the negative effects associated with contractors’ claims and disputes using a risk retention approach. This method can help contractors in getting early relief from the financial and economic burdens of construction claims. To meet the goals and objectives of this study, the writers have: (1) investigated the feasibility of pricing insurance premiums using the options pricing theory; (2) explored the applicability of modeling the options pricing theory using Monte Carlo simulation; (3) set up the principles required for optimal design of a risk retention group for construction claims; and (4) tested the possible impact of the newly developed risk retention group using historic data of 10,193 construction projects spanning over 12 different California districts. Pursuant to this study, it was verified that construction claims satisfy the required principles for insurance. Also, based on the used testing framework, the developed risk retention group for construction claims has been proved a success from the insured and insurer sides. It is the writers’ hope that this study will lay the basis for a leading risk management technique that could be extended over the nation for the benefit of relieving the negative consequences associated with lengthy claims and disputes resolution in the construction industry.     

Incorporating Contractual Incentives to Facilitate Relational Contracting

Construction projects are undertaken by many parties, all with their own goals and motivations which may not always be aligned. Furthermore, they are governed by contracts, which do not necessarily produce win-win outcomes. The aims of this study are (1) to compare the views of contractors, clients, and consultants on factors facilitating and deterring relational contracting (RC); and (2) to investigate the use of contractual incentives to increase the effectiveness of RC. Structured questionnaires were sent by post to randomly selected construction industry players in Singapore to find out factors that enable RC and the barriers that impede the formation of RC. The results show that RC can be facilitated by having top management support, alignment of project objectives, relationship building, and most importantly, appropriate contractual incentives. In most instances, contractors gave a lower level of importance to many of the factors than clients and consultants. It is concluded that more contractual incentives should be provided in contracts in order to evoke the desired relational approaches.     

Amplitudes of the two-nucleon interaction at 579 MeV

There has been increasing emphasis in recent years on construction contract claims and disputes. This paper examines the frequency of occurrence of 427 separate construction claims which were experienced on 22 federally funded and administered construction projects. The data examined include various claim types, the frequency of their occurrence and the average cost of these claims. Also, various factors thought to influence the frequency of claims occurrence were investigated. This study indicates that the largest proportion of change orders and modifications originate with the owner of the project or with those responsible to the owner.     

Analysis of Adverse Weather for Excusable Delays

Severe weather conditions can be disruptive to construction. Contractors typically obtain time extensions for weather days beyond normal conditions. However, contracting parties often dispute the extent of weather-related time extensions. Typical industry contracts may overlook many important points that can provide an acceptable resolution. This paper classifies seven factors causing discrepancies in analysis of adverse weather for time extensions; namely, the definition of normal weather, weather thresholds, type of work, lingering days, criteria for lost days, lost days equivalent due to lost productivity, and work days lost versus calendar days lost. An analysis of an actual weather-caused delay claim illustrates the impacts of those factors on the outcomes of the analysis. A contract should define anticipated weather delay days and their lingering days and provide threshold values for weather parameters to differentiate between predictable and unpredictable severe weather. The contract should clearly define how a time extension is granted in calendar days as a result of work days lost, and also address how a time extension is granted due to inefficiency caused by unusually severe weather. Future research may provide an appropriate mechanism for analyzing equivalent lost days to account for lost productivity.     

How Relational are Construction Contracts?

For many years, the construction industry has relied on formal contracts to define and enforce the obligations and rights of contracting parties. Legal scholars have suggested that, based on their transaction characteristics, there are three different forms of contracts: classical, neoclassical, and relational. Of these, which form is more appropriate for use in construction projects? With increasing awareness of the importance of teamwork in construction, there is clear evidence of a rising trend in adopting a partnering approach to construction project delivery. For projects that seek to achieve a partnering relationship, relational contracts that value relationships, trust, and communication appear to be the appropriate form of contract. This paper discusses the application of relational contracts in construction by examining the fundamental question “How relational are construction contracts?” The degree of relationalism is assessed using a relational index comprising eight factors: cooperation, organizational culture, risk, trust, good faith, flexibility, the use of alternative dispute resolution, and contract duration. It was found that in the traditional design–bid–build form of delivery, the main contract and domestic subcontract forms are more relational than those of the nominated subcontract and the direct labor contract. The study was conducted in Hong Kong.     

Avoiding and Mitigating Delay and Disruption Claims Conflict: Role of Precontract Negotiation

Delay and disruption claims often generate conflict and contract dispute in the delivery of building and civil engineering projects. If construction delay claims conflict can be avoided or mitigated, there could be substantial financial savings on projects. This study explores the effect of precontract negotiation as a means of avoiding or mitigating delay and disruption claims conflict. The data collection instrument was a structured questionnaire administered face to face on 41 contractors’ personnel on 41 completed projects in Singapore. The data were analyzed using structural modeling with partial least squares estimation approach. The results indicate that when the contractors received an unfavorable outcome from the contract administrator’s decision on their claims for delay, the intensity of conflict was lower when there was precontract negotiation and precontract agreement regarding the rules for quantifying and assessing the impact of anticipated delays than when there was none. It was also discovered that the higher the level of precontract negotiation and precontract agreement on the rules for quantifying and assessing delays, the higher the contractors perceived the quality of the decision-making process for delay claims during the construction phase. Further, the higher the contractors perceived the quality of the decision-making process for delay claims, the lower the intensity of conflict. At the time of entering into contracts, owners and their project management team need to pay more attention to precontract negotiation and agreement with their contractor to clarify and agree on the rules for quantifying and assessing the impact of anticipated delay and disruption. Aspects that require precontract negotiation, agreement, and clarification include: the rules of evidence for claims, the record requirements for claims and the procedure for keeping the records, form of construction program including the software for the preparation of the program and the procedure updating the program, the methodology for analyzing delay claims, formula for quantifying unabsorbed head office overhead component of prolongation cost, the method for quantifying disruption cost, the handling of concurrent delays, profit—whether claimable and the rate of profit to be paid, acceleration—circumstances under which it will be compensated and basis of compensation, and the question of who owns the float. These are, typically, not adequately covered by most standard forms of contracts. The agreements on these matters may be incorporated as part of partnering agreement or as a supplement to the contract agreement. Precontract negotiation, clarity, and agreements could produce instrumental and noninstrumental (social psychological) effects, which could facilitate delay and disruption claims assessment and their resolution. It could mitigate conflict even when the outcomes are unfavorable to a party.     

Integrating Green Specifications in Construction and Overcoming Barriers in Their Use

The use of green specifications as a contractual tool to promote sustainable development should be adopted in the construction industry. The definition and characteristics of green specifications are presented in conjunction with the results of a cross-sectional survey on the possible barriers to their implementation. Generally, construction stakeholders agree that environmental considerations should be included in construction specifications but their underlying motive may be simply for satisfying mandatory requirements. Among the potential barriers identified, the additional cost associated with green requirements is perceived to be the most dominant barrier, followed by possible delay and a limited pool of competent suppliers. Although the crucial barriers based on overall responses were identified, different groups of stakeholders have shown their concerns on particular barriers. Hence, their concerns should be addressed with due regard to these differences during implementation of green specifications. Based on the results of this study, a database and a new market mechanism for green specifications are recommended for adoption by the construction industry.     

Whole Life Performance Assessment: Critical Success Factors

Whole life costing (WLC) has become the best practice in construction procurement and it is likely to be a major issue in predicting whole life costs of a construction project accurately. However, different expectations from different organizations throughout a project’s life and the lack of data, monitoring targets, and long-term interest for many key players are obstacles to be overcome if WLC is to be implemented. A questionnaire survey was undertaken to investigate a set of ten common factors and 188 individual factors. These were grouped into eight critical categories (project scope, time, cost, quality, contract/administration, human resource, risk, and health and safety) by project phase, as perceived by the clients, contractors and subcontractors in order to identify critical success factors for whole life performance assessment (WLPA). Using a relative importance index, the top ten critical factors for each category, from the perspective of project participants, were analyzed and ranked. Their agreement on those categories and factors were analyzed using Spearman’s rank correlation. All participants identify “Type of Project” as the most common critical factor in the eight categories for WLPA. Using the relative index ranking technique and weighted average methods, it was found that the most critical individual factors in each category were: “clarity of contract” (scope); “fixed construction period” (time); “precise project budget estimate” (cost); “material quality” (quality); “mutual/trusting relationships” (contract/administration); “leadership/team management” (human resource); and “management of work safety on site” (health and safety). There was relatively a high agreement on these categories among all participants. Obviously, with 80 critical factors of WLPA, there is a stronger positive relationship between client and contactor rather than contractor and subcontractor, client and subcontractor. Putting these critical factors into a criteria matrix can facilitate an initial framework of WLPA in order to aid decision making in the public sector in South Korea for evaluation/selection process of a construction project at the bid stage.     

Analytical Model for Analyzing Construction Claims and Opportunistic Bidding

Construction claims are considered by many project participants to be one of the most disruptive and unpleasant events of a project. Construction claims occur for various reasons. There is a need to understand the dynamic nature between construction claims and opportunistic bidding. An analytical model, the Claims Decision Model (CDM), based on “game theory,” was developed to study opportunistic bidding and construction claims. This model explains (1) how people behave during a potential or existing claiming situation, (2) how different claiming situations are related to opportunistic bidding behavior, and (3) what situations encourage or discourage opportunistic behavior. The results of this pilot study indicate that the equilibrium solution of a construction claim is to negotiate and settle, which concurs with most of the claim cases in the industry. The possible range of a negotiation settlement is obtained in this paper. The model provides the rationale for recent innovations to manage disputes. The model can also help project owners identify the possibility of opportunistic bidding, and can assist the project participants in analyzing construction claims.     

Longitudinal Study of Innovative Contracting Practices in State Departments of Transportation

Gathering content expertise both from published sources and from recognized highway construction professionals, a questionnaire was created to determine the use of 16 innovative contracting practices in the highway construction industry. The major practices include: build-own-operate-transfer, contractor prequalification, design/build, dispute resolution, guarantee/warranty, partnering, value engineering, among others. Using the questionnaire, a 10-year longitudinal study gathered information from U.S. Departments of Transportation in 1996, and then again in 2007. Statistical analysis of the 43 state responses found that 10 of these practices have seen significant increase, but the perceived benefits have increased very little, and one practice has seen a significant decrease in perceived benefit.     

Web-Based Construction Project Specification System

Due to discrepancies and multiple ownerships of construction specifications in Korea, writing a project specification is very challenging. This paper presents a framework and architecture of a Web-based construction specification system (aka SPEC WRITER). Its database includes 15 standard specifications, 13 specialty specifications, national design guidelines, technical standards, standard drawings, over 45,000 construction materials, and more than 600 lists of manufacturers. This system is linked to national construction laws, regulations, and decrees through the internet. A functional framework and system architecture is proposed and construction information breakdown structure is used to reorganize the specifications and construction materials because of different numbering systems and formats. SPEC WRITER enables specification writers to write or edit a project specification in accordance with the national guideline and allows them to find all the related sections using a few keywords. Specification writers can also review, edit, and generate complex specifications with minimum efforts by using premade templates. This paper also presents a method to update and validate the SPEC WRITER through the internet.     

Consultants’ Perceptions on Construction Delay Analysis Methodologies

Resolving the delay claims that usually trail delayed completion of construction projects is beset with immense difficulties that often lead to disputes between the parties involved. The research reported in this paper is a part of a wider study aimed at developing a framework for reducing the attendant disputes and aiding cost-efficient dispute resolution. The focus of the part reported here is owner consultants’ perceptions on existing methodologies for analyzing project delay. Based on a survey of U.K. construction consulting organizations, the study examined, among others, the awareness and use of these methodologies, their perceived reliability, expert involvement, and obstacles to their use. The main study findings are: (i) delay analysis is a multidisciplinary task, with the project quantity surveyor often playing the leading role on the owner’s side; (ii) the simpler methodologies are used more often than the complex ones although the former are known to be less reliable than the latter; and (iii) the principal obstacles to the use of the sophisticated methodologies are: lack of adequate project information, the use of programmes not in CPM network form, and poorly updated programmes. It is thus argued that improvement in current programming and record-keeping practices will promote the use of the more reliable methodologies which, in turn, will facilitate smoother resolution of delay claims.     

Mechanic’s Liens on Private Projects in Hawaii

Mechanic’s and materialman’s liens are an important alternative remedy for tradesmen who have not been paid for improvements made under a contract. These statutes allow the unpaid tradesman to place a lien on the improved property and then foreclose and force the sale of the property to satisfy the lien. While the procedures are technical and vary from state to state, general concepts are commonly shared. This article examines Hawaii’s mechanic’s lien statutes and case law and describes the basic procedures and requirements of the remedy for nonpayment on contracted work. Because a lien jeopardizes an owner’s interest in his real property, courts require strict compliance with procedural safeguards including notice and a right to a hearing to contest the lien before the property can be foreclosed. Owners can avoid the danger of liens by requiring payment bonds, by ensuring that subcontractors and suppliers are promptly paid, and by overseeing the project with care. The issues surrounding timely filing are emphasized.     

Downside Risks in Construction Projects Developed by the Civil Service: The Case of Spain

The purpose of the work summarized here was to improve the efficiency of the construction project management processes performed by the Spanish civil service, identifying and analyzing the main risks in these kinds of projects, and also establishing potential risk responses. The scope of this effort included a list of 96 risk events, categorized and prioritized first by impact, then by frequency. The most relevant ones are related to issues such as an inadequate prequalification system, insufficient training of public servants, or political considerations prevailing over real needs, among others. A total of 117 potential risk responses were identified, categorized, and prioritized by potential efficiency and difficulty of implementation. Each risk event was associated to a set of potential responses. The paper includes the top 15 risk events with its main potential responses, including qualitative assessments. A survey was carried out among Spanish public servants working in construction projects, to validate risk identification and to obtain a qualitative assessment. Moreover, a Delphi analysis was developed to validate the risk response identification and obtain a qualitative assessment. One of the conclusions is that small and medium-sized Spanish civil service agencies should work toward increasing their maturity in managing projects and, mainly, project risks.