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By Duane Craig
March 20, 2017
You want me to do what?
I don’t have to––I’m the owner (or GC) and it’s my way or the highway.
Those attitudes, still popular with many construction project participants today, reflect more than just a resistance to change, and dogged effort to maintain the status quo––they are the stimulus for disputes.
When the master builders faded away, and construction became a commodity delivered by multiple parties, each bent on preserving their own self interests––collaborating was something to avoid. Fortunately, there is now widespread acknowledgement within construction circles that something does need to change, and it starts by encouraging more collaboration among project participants.
The well-publicized 2016 Dodge Smart Market Report, co-sponsored by Procore, tabulated responses from over 500 construction pros from every sector with the following results:
The idea that construction projects function poorly when run like a factory from the 1800s is not new. But what is new, is the positive correlation between collaboration and administering construction contracts.
When Arcadis, a design and consultancy firm, analyzed the data collected from the construction disputes they worked on in 2015, they found that “failure to properly administer the contract” was the number one cause of construction disputes across the globe. Not surprisingly, collaboration is necessary if you want to avoid disputes while enforcing contract provisions.
Here are just a few of the activities where collaboration is needed when administering a construction contract:
When in-house, contract administration relies on a range of collaborative efforts among departments. But, when managing the contract with other project participants, the collaborative effort reaches new heights of complexity.
If you are a trade contractor, you have a 60% chance of involvement in a dispute in any five-year span, according to the Dodge report. That goes up to 83% for general contractors. If you could cut those odds in half, you could free up money and resources for growth and security. For each dollar you don’t have to spend dealing with disputes, you’ve got another dollar for something more positive.
When you can handle more risk, you become more competitive. That’s because owners are transferring more and more risk to contractors, and they are increasingly looking for opportunities to consolidate risk with single entities. When your firm can realistically handle more project risk, it becomes more attractive to owners.
One of the main ways to reduce disputes is to manage risk. When better collaboration makes your firm better at managing risk, you not only reduce the incidence of disputes, but you also set up your firm to participate in projects with collaborative delivery methods. More than half of project owners want delivery methods that encourage team integration. And, the increased transparency that comes with more collaborative delivery methods is also sought by owners.
Stay alert for opportunities to get on projects that emphasize collaboration. Projects using integrated project delivery, building information modeling, and other delivery methods that spark team effort are places to learn and grow. Say “yes” when someone suggests you try a new tech tool for improving collaboration with them and invite others to try the ones you use.
Better collaboration is a good way to immediately see improvement in project outcomes as well as lowering risk and reducing disputes. And because change is happening all the time, better collaboration brings everyone’s creative energy to the task of dealing with it.
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