Abstract
Conflicts within the Norwegian construction industry have reached unacceptable levels. The grievance of these disputes, whether it is the number of conflicts or the expense involved in these conflicts, is under discussion. This article examines the reasons for these conflicts in a comprehensive and inclusive manner. Twenty-five respondents with expertise and understanding of most conflicts in the Norwegian construction industry were interviewed. Results from a questionnaire sent to 1799 contractors have also been included in this study. Sixteen reasons for disputes were identified out of which four comprised the root causes. Tender specification and contract understanding came in first followed by “final settlement-payment related”, corroborating previous findings. The third and fourth root causes of conflicts were “low priced contracts” and “changes in projects” respectively. Our findings point to design deficiencies and defective contract plans as significant causes of conflicts, confirming the view of construction experts. The third root cause of conflicts might explicate some aspects of the first and second major causes of disputes. It is also important to mention that though this is the general view, one can also see how every group involved in this study interpret major causes of conflicts. Our findings also point to “communication between clients and contractor”, “carried out quantities” and “client restriction to time extension” as among the chief causes of conflicts, confirming the view of construction experts. Client understanding of contractors’ anxiety and quest for sound contracting process are aspects that Norwegian clients are currently engaging in, for the sake of conflict reduction and prevention in future construction projects.
Highlights
Disputes between contractors and clients in the construction sector are global problems that need to be addressed
The rising conflict levels within the Norwegian construction industry were highlighted by the Norwegian Public Roads Administration (NPRA) in 2014 and is reflected in Figure 1 clearly showing an upward shift in the level of disputes between the investigated time frames of 2008–2012 and 2013–2017, reaching unacceptable levels since 2013 (Hegerberg, 2016)
Among the root causes of conflicts identified in the present study, “tender specification and contract understanding” ranked first. This indicated that specifications with loopholes have been exploited by contractors to benefit unequally from the contract and was deemed the most significant cause of conflict identified in this study
Summary
Disputes between contractors and clients in the construction sector are global problems that need to be addressed. The most recent publicly available report on global construction disputes pegged the value of disputes globally at US$ 43.4 million in 2017, a significant increase from US$ 32.5 million in 2016, with the average length of disputes spanning 14.8 months in 2017, an increase from 13.9 months in 2016 (ARCADIS, 2018). Though the value of global disputes has marginally reduced, the durations have markedly increased creating multiple effects for both parties and are likely to have a negative impact on the construction industry. The rising conflict levels within the Norwegian construction industry were highlighted by the Norwegian Public Roads Administration (NPRA) in 2014 and is reflected in Figure 1 clearly showing an upward shift in the level of disputes between the investigated time frames of 2008–2012 and 2013–2017, reaching unacceptable levels since 2013 (Hegerberg, 2016)
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