Abstract
The extent to which disputes affect the construction industry has been well-documented. There are a plethora of anecdotal stories, and even some data that explain how unresolved conflict can impact project cost, schedule, and quality. In response, many systems and procedures have been developed to address disputes and their resolution within the construction industry. However, no data exist that quantitatively compare these various alternatives and the real costs of resolving a dispute using methods other than litigation. This paper presents a framework for identifying and capturing the transactional costs incurred to resolve disputes throughout the full spectrum of resolution options. Transactional cost data from 46 recently completed construction projects, totaling over $2 billion of total installed costs, confirm that these sums can account for a large portion of the settlement/award amount, the original claim amount, and even the total contract value when using some dispute resolution methods. Furthermore, using dispute trend and cost data, a comprehensive dispute management system based upon the concepts of risk management is proposed, highlighting the overriding objective of promoting dispute avoidance/resolution in the most cost-efficient manner possible.
| Original language | English (US) |
|---|---|
| Article number | 004603QPI |
| Pages (from-to) | 264-271 |
| Number of pages | 8 |
| Journal | Journal of Professional Issues in Engineering Education and Practice |
| Volume | 132 |
| Issue number | 3 |
| DOIs | |
| State | Published - Jul 2006 |
| Externally published | Yes |
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Keywords
- Conflict
- Construction industry
- Cost control
- Dispute resolution
- Litigation
- Risk management
ASJC Scopus subject areas
- Engineering (miscellaneous)
Cite this
Quantification of costs for dispute resolution procedures in the construction industry. / Gebken, Richard J.; Gibson, Edd.
In: Journal of Professional Issues in Engineering Education and Practice, Vol. 132, No. 3, 004603QPI, 07.2006, p. 264-271.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Quantification of costs for dispute resolution procedures in the construction industry
AU - Gebken, Richard J.
AU - Gibson, Edd
PY - 2006/7
Y1 - 2006/7
N2 - The extent to which disputes affect the construction industry has been well-documented. There are a plethora of anecdotal stories, and even some data that explain how unresolved conflict can impact project cost, schedule, and quality. In response, many systems and procedures have been developed to address disputes and their resolution within the construction industry. However, no data exist that quantitatively compare these various alternatives and the real costs of resolving a dispute using methods other than litigation. This paper presents a framework for identifying and capturing the transactional costs incurred to resolve disputes throughout the full spectrum of resolution options. Transactional cost data from 46 recently completed construction projects, totaling over $2 billion of total installed costs, confirm that these sums can account for a large portion of the settlement/award amount, the original claim amount, and even the total contract value when using some dispute resolution methods. Furthermore, using dispute trend and cost data, a comprehensive dispute management system based upon the concepts of risk management is proposed, highlighting the overriding objective of promoting dispute avoidance/resolution in the most cost-efficient manner possible.
AB - The extent to which disputes affect the construction industry has been well-documented. There are a plethora of anecdotal stories, and even some data that explain how unresolved conflict can impact project cost, schedule, and quality. In response, many systems and procedures have been developed to address disputes and their resolution within the construction industry. However, no data exist that quantitatively compare these various alternatives and the real costs of resolving a dispute using methods other than litigation. This paper presents a framework for identifying and capturing the transactional costs incurred to resolve disputes throughout the full spectrum of resolution options. Transactional cost data from 46 recently completed construction projects, totaling over $2 billion of total installed costs, confirm that these sums can account for a large portion of the settlement/award amount, the original claim amount, and even the total contract value when using some dispute resolution methods. Furthermore, using dispute trend and cost data, a comprehensive dispute management system based upon the concepts of risk management is proposed, highlighting the overriding objective of promoting dispute avoidance/resolution in the most cost-efficient manner possible.
KW - Conflict
KW - Construction industry
KW - Cost control
KW - Dispute resolution
KW - Litigation
KW - Risk management
UR - http://www.scopus.com/inward/record.url?scp=33745309887&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=33745309887&partnerID=8YFLogxK
U2 - 10.1061/(ASCE)1052-3928(2006)132:3(264)
DO - 10.1061/(ASCE)1052-3928(2006)132:3(264)
M3 - Article
AN - SCOPUS:33745309887
VL - 132
SP - 264
EP - 271
JO - Journal of Professional Issues in Engineering Education and Practice
JF - Journal of Professional Issues in Engineering Education and Practice
SN - 1052-3928
IS - 3
M1 - 004603QPI
ER -