Quantification and analysis of construction claims

With the construction market being increasingly competitive, contractors have increasingly submitted optimistic bids; as a result, many projects experience delays and cost overruns. This often leads to claims and disputes. Quantifying and resolving construction claims, consequently, has become an inevitable routine for both the contractor and owner staff. Winning a claim depends on the ability to prove: legal responsibility, project delay, and claim amount. Lack of knowledge and tools to quantify these three claim elements is a major problem for the construction industry. This study proposes a reliable and accurate method to quantify and analyse construction claims. The relative frequency of the leading claim causes is estimated at: defective contract documents (27%), differing site conditions (15%), work changes (15%), and weather (3%). Through a comprehensive literature review and analysis of 100 court cases, factors affecting legal responsibility for these claim causes are identified. A decision support tool that uses a set of decision rules is developed to assess legal responsibility for a claim event. Existing methods to calculate and apportion responsibility for project delays are evaluated and found inadequate. Accordingly, two new reliable and accurate delay analysis methods are developed (Modified But-For and Daily Windows Analysis method). With regard to cost consequences, claim amount is calculated based on: contract terms, breach of contract, tort liability, and qualitative considerations. Based on the developed methods, an integrated computer program is developed to assess legal responsibility, calculate and apportion project delay, and maximise claim amount.