Billy Morrissey BE LLM Dip Adj CEng MIEI FCIArb MDBF MMII Chartered Engineer ,Conciliator, Adjudicator, Arbitrator Engineers Ireland / CIArb / DBF /CIF / TII / IFA / Dispute Panel Member Chair CIArb (Ireland) Group: Project Dispute Avoidance Tel. 087 2890792 www.projectadr.com
Construction Proje jects often Fail il to hit it all ll Targets ( Time , Cost & Quality) It is not realistic to expect construction operations to run perfectly • There are no known perfect designs • Or forces of nature that work in a perfect predictable way • Or known perfect engineers , architects or surveyors?
Quoted at Construction Summit on Wednesday 2 May 2018 Maurice Buckley, Chairman of the Office of Public Works, said: There was too much of a "disputes and claims" culture which was delaying projects. And also… "Everywhere in Government people are very worried as to what impact it (the €116bn NDP spend) will have"
Construction dis isputes cost money and a lo lot more besid ides! • Direct costs include: legal and expert services can be substantial and often dwarf the initial claim itself • Indirect costs include: adverse performance, reduced morale, erosion of confidence and trust in working relationships, delays to the project, negative reputational impact, emotional impact on people involved and the loss of people to the industry because of wasted effort, disillusionment and frustration and lost opportunities for future work due to the destruction of business relationships
Abil ility to In Infl fluence Performance on a Project
Main Causes of f Contractual Dis isputes • Failure to properly administer the contract • Poorly drafted or incomplete and unsubstantiated claims • Errors and / or omissions in the contract documents • Incomplete design information or employer requirements (design & build) • Employer / contractor / subcontractor failing to understand and / or comply with contractual obligations • Unforeseen or differing ground conditions • Action /inaction of 3 rd parties and utility diversion issues
Latent Path thogens lurking in the system
Recent changes adding to chaos in Ir Ireland Current Issues: • Tightening of cashflow / under-funding for Contractors • Very low profit margins for Irish Contractors • Increased business and environmental regulation New Acts /Legislation and Changes: • Construction Contracts Act 2013 / Payments & Adjudication • Mediation Act 2017 • Ammendment to Building Regulations ( BCAR System ) • Digital Construction / BIM PWC Contract Suite Updates and Review Underway: • Project Boards and Standing Conciliator Role • Bill of Quantities Back means Methods of Measurement Back
The underlyin ing polic licy obje jective should be: • Developing realistic plans and schedules, maintaining their accuracy, and dealing with delays and other ‘claims’ contemporaneously • Ensuring that the contract contains a process to resolve issues at project level • Ensuring process and procedural fairness always • If necessary, escalate the conflict or issue to a more senior level • Employing every endeavour to resolve issues by negotiation while they are fresh • Using skilled facilitators , standing conciliators and dispute boards to assist in resolving issues, and • if formal dispute resolution is inevitable, selecting the most appropriate method to achieve an early, and non-project disruptive solution
Tie iers of Dis ispute Resolution • Negotiator • Mediator • Conciliator ( plus Standing Conciliator ) • Arbitrator • Litigation and Court Global movement in progressive dispute avoidance, e. g.: DABs and DAABS in FIDIC contracts
Public lic Works Contracts
Some Important Points to Check • Is there actually a Dispute • Is there a contract and when was it formed ( written or oral) ? • Who actually are the Parties to the Contract? • Who are the Notice Parties? • Importance of Notices , Time Bars, Conditions Precedent
Four Corners of a Claim • Cause • Effect • Entitlement • Substantiation
Project Delivery & Risk Management • Soft Risks: (People) (Behavioural , Contractual, Operational Problems) • Hard Risks: (Technical)
Traditional Project Balancing Act ‘ The Iron Triangle ’
Project Management is a People Business • Projects get done through people . • We need people on our teams to do what they say they are going to do, and we need to help them do that • That’s why stakeholder engagement is such an important skill.
If you’re not building rela latio ionship ips with your project stakehold lders? Then this will sound familiar: • You can’t get time with your stakeholders • You’re stressed out by having to deal with conflicting priorities • Your projects take longer because no one will commit to anything • You get blindsided by people saying they should have been involved • And in the end stakeholders are not happy with the results.
Proje ject Leadership a Big Is Issue In Inability to make Decisions ! ‘’The very essence of leadership is that you have a vision. You can’t blow an uncertain trumpet’’ …………. Theodore Hesburgh
IT’S ALL ABOUT RELATIONSHIPS POTENTIAL FOR DI DISPUTES CAN BE ADDRESSED EARLY • HUMAN DYNAMICS : NEED A PEOPLE - CENTRED APPROACH • FOCUS ON HUMAN FACTORS AS MUCH AS SCHEDULES AND DELIVERIES • ISSUES & TYPES OF DISPUTES RARELY CHANGE IN PROJECTS; PEOPLE DO • RESOLVE ISSUES WHILE FRESH IN THE CURRENCY OF THE PROJECT
NEED AN INS INSIGHT IN INTO EMERGING PROJE JECT CT RISK ISKS & ISS ISSUES MAKE CE CERTAIN PROJE JECT CT WIL ILL FUNCT CTION ? WHO HO IS IS IN IN CH CHARGE? • USE A PEOPLE- CENTRED APPROACH • COLLABORATIVE TOOLS AND CONTRACTS • AVOID POORLY COORDINATED DESIGNS • PROACTIVE STAKEHOLDER ENGAGEMENT • AVOID ONE SIDED CONTRACTS • RISK IDENTIFICATION & HORIZON SCANNING • GOOD SCHEDULE = EMPLOYERS BEST FRIEND • GOOD DOCUMENTS • AVOID ‘PENNY PINCHING’ UP FRONT
Some In Insights • Often lack of coordination by Design Team of Tender Documentation • Usually no meaningful contractor engagement / involvement at pre-tender stage • No Constructability Assessment either pre or post tender, in most cases • Rare to have Independent Risk Assessment or ‘Commercial’ Review pre -tender • 100% design complete expected from Consultants …… not happening + unknowns? • Design Team fees and tenders not adequate for task … ‘penny pinching’ • Rarely a provision for ‘Project Management ‘ or project team approach • Never: ‘Conflict Audits’, Stakeholder Consultation and Engagement Plans • Rush to Tender … . Optics! ... Inadequate site and ground investigations • Inadequate bid times and low opportunistic bids / over- optimism • Poor interpersonal skills and relationship management on site • Access Problems, issues with stakeholders, unknown conditions causing change in scope
More In Insights • Weak Assessment / lack of training /experience , time for Assessors; eg schedules? • Utility relocation Issues / Actions and Inactions of Third Parties • Tender Assessment often only a paper checking ‘Beauty Contest’ • Race to the Bottom / ‘ contractor’s head in the sand at tender stage ’/ opportunism risk • Need for appreciation of importance of cashflow and ‘ margin ’ for Contractors by Client • ‘ Pathogens in System’: e.g. Copy & Paste problems and others • Conflicting Contract Documents : eg: BoQ /Drawings/Works Requirements/ specifications • No incentives for contractors /design teams in current system • Inadequate resources for risk /commercial management and ‘ real time ’ dispute avoidance • Behind other countries on Collaborative Contracting , Early Contractor Involvement and BIM • Who’s in Charge ……. Lack of or clear decision making
Thank You For Listening ‘A Bad Beginning makes a Bad Ending’ …. Euripid ipides es 484 BC - 406 BC Billy Morrissey www.projectadr.com Tel: 087 2890792
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