Risk of Contractors’ Claims On the Example of Road Works

Abstract

The aim of the study is to analyse claims filed by building contractors during the project implementation. The work is divided into two parts. In the first part problems associated with the management of claims in the construction process were discussed. Bearing in mind that claims may result in prolongation of the investment or exceeding planned budget, possibilities of applying information included in documents connected with claims procedure to risk management was analysed in the second part of the study. The basis of the analysis is a review of 226 documents. They originate from 8 construction sites completed in the last 5 years in southwestern Poland. In each case, these were linear road projects, executed by different contractors, according to conditions in the contract set out in the “Yellow Book” FIDIC. In the study, other documents relating events that according to contractors entitled them to claim were also analysed. They included among others: project documentation, terms of reference, construction log, reports and correspondence under the contract. The events constituting the reason for contractors` claims were classified according to their sources. 8 areas of potential threats were distinguished. They were presented in the form of a block diagram. Most events initiating the claims were reported in the following group - adverse actions of third parties, while the fewest were recorded in the group – the lack of access to the construction site. Based on calculated similarity indicators it was found that considered construction sites were diversified in terms of the number of the events occurrence that generated the claim and their sources. In recent years, many road projects are completed behind the schedule and their initially planned budgets are significantly exceeded. Conducted research indicated that data derived from the analysis of documents connected with claims can be applied to identify and classify both cost and schedule risk factors. Obtained data can also be useful at the stage of risk control because early diagnosis of threats in relation to technical and organizational aspects is necessary to take effective action.