Claims management in the Egyptian industrial construction sector

Abstract

PurposeThis research aims to provide a better insight into the status of claims management in general, and change order claims in particular, from the contractor's perspective with respect to the Egyptian industrial construction sector, as they proved to be the main cause of claims in this sector.Design/methodology/approachA questionnaire survey discussing the most persistent issues of claims management in general, and change order claims in particular, was conducted on a selected sample of construction industrial companies.FindingsThe results demonstrated that claims management in the Egyptian industrial sector has been suffering from a variety of obstacles, including lack of proper notification procedures in public contracts and poor documentation management. Change orders had been actually lost due to poor documentation. Oral change orders were present in approximately 76 percent of the projects; half of which resulted in loss of rights due to improper documentation, which was largely attributed to the lack of contract awareness of the site team, and to the “fear of consultant phenomenon”.Practical implicationsThe paper presents several recommendations for improving claims management including: the formation of a standard form of contract general conditions for the Egyptian industrial sector, and applying a methodological approach for change orders quantification.Originality/valueThe increasing number of international companies contemplating construction projects in Egypt, and the significant problems with regards to claims propagation and management, addressed the need to conduct such a study, which targets one of the most challenging areas in the Egyptian construction industry.