Assessing the Delay, Cost, and Quality Risks of Claims on Construction Contract Performance

Abstract

Conflicts are frequent within the complex professional environment of the construction industry. If claims cannot be overcome amicably, they result in disputes that lead to litigation. Identification of the causes of these claims and their impact on the duration, cost, and quality of the final project is expected to facilitate the prevention of unsuccessful performance of construction contracts. The novelty of this study is that after codifying the most common causes of construction contract claims derived from the extant literature, they are further investigated in terms of their probability of occurrence and the perceived impact they have on the project completion time, its total cost, and quality. Based on calculated relative importance indices from expert opinion, this paper proposes probability and severity of impact values for 39 common causes of claims in the construction industry. These can be applied to calculate their risk values for stakeholders in public construction contracts to plan mitigation measures for contractual claims. The findings show that the top five highest risk causes of contractual claims in the Greek construction industry are changes in quantities, work, or scope, design quality deficiencies or errors, payment delays, delays in work progress, and the financial failure of the contractor.

Keywords

• claim management
• causes of claims
• construction industry
• contract management
• relative importance index
• risk management