Secrets to Slaying the Dispute Dragon

Pam Scholefield
Aug 19
3 min read

According to the 15^th Annual Construction Disputes Report (the “Report”) published by Arcadis, “speed, agility, and adapting to change” are the secrets to managing the reality that disputes are constant in this industry. But what does that mean?

“Speed” can be achieved by using a proactive approach to “to identify potential issues early and address them before they escalate into full-blown conflicts.” The first step here is to thoroughly study the plans, specifications, preliminary project schedule, and site conditions to increase your awareness of where potential problems may arise. This should be done pre-bid to the extent possible, and addressed in pre-bid RFIs.

“Agility” is conduct designed to “prevent disputes from arising in the first place”, such as using “open communication and a willingness to quickly resolve unforeseen circumstances.” Being a good team player means you don’t throw your hand up when there’s a problem, you offer solutions.

“Adapting” is a skill that involves embracing “innovation to mitigate risks and address disputes effectively”, which can include the use of AI to “forecast potential project disruptions, enabling stakeholders to take preemptive actions.”

So, what types of disputes are most common so that you can be on the lookout for them? The Report shows that tied for first place are “errors and/or omissions in the contract documents” and “Owner/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations.”

While contractors and subcontractors cannot generally ensure that the plans and specs are accurate for the intended results of the project, nor should they be expected to (except for design-build project deliveries), a lot can be done to avoid misunderstanding contractual obligations.

Specifically, the Report points to “misaligned expectations, unclear scope requirements, and lapses in adherence to agreed-upon timelines and standards are frequent triggers for conflict.” This is caused by “a lack of contract knowledge among both owners and contractors” which “often amplifies these issues, creating a cycle of misinterpretation and dispute.”

What’s the best line of defense to avoid this #1 cause of expensive construction disputes?

1. Make Sure Your Scope of Work is Clear. This starts at the time of bid. If you’re a prime contractor on a public or federal project, leave yourself ample time to review the plans and specs carefully and use the pre-bid RFI process to get clarification when needed. A subcontractor’s proposal should clearly state the plan sheets and spec sections they are bidding. A sub’s proposal should also include clarifications and exclusions so that the prime contractor is on notice of exactly what scope you are offering for the price you are offering. Then make absolutely sure that your subcontract includes the scope you presented in your proposal, including the references to the plans and specs for your work and your clarifications and exclusions.

2. Review the Project Start and End Dates. This is critical in today’s market. Before you submit your proposal, get confirmation that long lead time items can be acquired in time to meet that schedule. Sub’s should clearly state the lead times of materials and equipment that will be needed for their scope.

3. Learn the Changes and Dispute Resolution Process. You can never study these procedures too much! This is the absolute key to resolving questions and disputes quickly: from the RFI process, to the notice requirements, to the claims procedure. Exercising your rights ensures that the change order or other dispute moves forward efficiently without having to wait until the end of the project!

If you or your team struggle with any of these must-do’s for managing disputes, or maybe you need to brush-up on these skills, OnSite Pro Development can help! We offer targeted and exciting workshops to give you and your team the confidence needed to boldly navigate the more challenging aspects of contracting and slay that DISPUTE DRAGON! Check out our most popular workshop at: https://www.onsite-pro-development.com/popular-workshops.