Analyzing the Nature of Contractor Claims and Strategies for their Effective Management: A case of BuildServe in Botswana

Abstract

Though contractor claims are inevitable, the frequency of their occurrence and their impact on project cost, time or both, can be minimized with effective management by a client during the pre-contact and post-contract phases. The article discusses findings of a study that investigated the nature of claims and the level of effectiveness in managing them by an organisation code named, BuildServe. The latter manages building construction projects for the government of Botswana. A total of 32 projects, implemented in a five-year period (2015-19), were selected and yielded 79 construction claims for the study. A mixed-method approach was employed to analyze and understand their nature. Apart from project document review, experiences of project managers were solicited through interviews, a Delphi technique and a focus group discussion. Results indicated that a majority (61%) of the claims related to requests for extension of time with additional cost while the rest were purely requesting for extension of time (31%) or cost (8%). Furthermore, results indicated that on average the completion period was twice the contracted duration of which the awarded extension of time contributed half (49.8%) of the project delays, the other half is due to rejected (21.3%) and non-claimed delays (28.9%). In addition, majority (56%) of the claims were due to client breaches of contractual clauses while others were due to common law (19%) and quantum meruit (9%) breaches. Client breaches related to various delays (48%) and changes (22%) to project work. The results indicated that BuildServe needed to improve its claim management regime, an aspect confirmed by the by project managers’ self-assessment who noted that first, there is a lack of institutionalization of project evaluation to harness lesson learned from past project implementation experiences. Second, there was also a need for restraint by the client especially in reducing project changes and delays on decisions or actions that affect project work. It is hoped that improving these areas will reduce avoidable claims and hopefully curtail project time and cost overruns.