Avoiding Claims & Disputes: It’s the People

Large construction projects are risky, and when they end with claims or disputes, the blame is usually placed on unfair contracts, planning or estimating errors, design deficiencies, unforeseeable delays, poor productivity, or other process or technical factors. These are simply indications of the real root cause: the project management capability of the companies working together on the project.

It is normal for issues to arise during a project. It is how these issues are managed that determines what becomes a claim or a dispute. Disputes often result from inexperienced or misguided teams that lack the knowledge or discipline to follow project management practices. The challenge grows when inevitable scope, resource, cost or schedule changes occur during project execution. For example, an owner fails to provide its deliverables on time to the contractor; the contractor then fails to appropriately track progress and cannot substantiate the impact. A dispute arises, which diverts more resources
away from project execution.

Contracts are typically written by attorneys, and they form the basis of the relationship between project parties; however, contracts must be put into practice by project management who administers and controls the work. The potential for disputes is ever present, and it is the project management team that determines what is managed successfully and what becomes a dispute.

One thing is clear: Ineffective project management has been and continues to be the primary cause of project disputes. The best contracts, work processes or management systems all fail without effective project management.