Assessment of causes and settlement mechanisms of construction disputes in public work contracts: An Ethiopian perspective

Abstract

Construction contracts are susceptible to disputes as they regulate very complex multi-party relationships. Previous studies not only fail to aptly outline the distinction between "conflict"and "dispute", but also fail to adequately study the causes of construction disputes in-light of project delivery systems. The present research aims at assessing the causes and settlement mechanisms of construction disputes in Design-Bid-Build (DBB) and Design-Build (DB) delivery systems with a view to add evidence to the existing knowledge. Accordingly, four most relevant causes of construction disputes identified from previous works of literature were incorporated in a questionnaire survey to determine their frequency of occurrence in the two delivery systems. The Relative Important Index (RII) of the four direct causes of construction disputes computed by SPSS software revealed that, in DBB contracts, the frequency of occurrence of disputable claims (unsettled claims for money/extension of time) has RII = 0.794969/0.777358, project delay has RII = 0.708176, and poor quality of work has RII = 0.469182. In DB contracts, the frequency of occurrence of disputable claims has RII = 0.533333/0.515723, project delay has RII = 0.495597, and poor quality of work has RII = 0.465409. The RII values proved that, DBB projects are significantly prone to disputes than DB projects. Furthermore, qualitative data obtained from road and building project reports exposed that DBB projects are exceedingly prone to disputes because they are frequently vulnerable to an increase in the volume of work due to frequent change orders and design deficiencies. The research further found out that, despite a clear proscription in the laws of the land, there is a routine out of court settlement of public construction disputes in Ethiopia.