Risk analysis and prevention system to minimize claim and dispute on construction projects

Abstract

Claims and disputes between the owners and contractors may always occur on construction projects. Thus, sensitivity to the fundamental factors in identifying claims becomes important besides the undoubtedly-effective and proper skills in project management. This research aims to study the causal factors which potentially high in term of its level of risk that leads to the project claims, in order to set a comprehensive risk-based approach that is applicable for an effective claim management system. Six layers of data collection were passed-through. The identified factors examined with such analysis of homogeneity, validity and reliability tests offered in SPSS. In this regard, the risk factors that considered the causes of the claims were set as independent variables, while dispute was designated as dependent variables. The findings were then re-analyzed based on its risk-levels and its causes, thus preventive actions could be measures. As the result, a set of dominant risks and its plausible responses identified. This research finding suggests a preventing system which consists of five guidelines that should be applied in construction projects to minimize the occurrence of claims and disputes; risk management planning; competent project team; detailed and accurate specification and quality; documentation system and record keeping; and precautionary measures during the construction period.