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July 2016
Industry Buzz
J
BCC, a non-profit company
representing building own-
ers, developers, professional
consultants, general and specialist
contractors, publishes, updates and
promotes standardisation and good
practice in the built environment.
Putlitz says dispute and conflict
on building sites are nothing newbut
tend to increase during difficult trad-
ing conditions, when all the parties
involved are seeking to contain costs
and survive building slumps. The fact
that newand relatively unestablished
sub-contractors are now increasingly
present onbuilding sites canalso lead
tomisunderstandings. He says that in
some cases, the new companies feel
intimidated and this is a recipe for
conflict, which needs to be nipped
in the bud.
“The best way to address a conflict
is at the outset through negotiation
between the participants. Conflict
can be destructive leading various
parties involved in a building project
to develop negative feelings toward
each other, and spend energy on
conflict that could be better applied
to completing a project on time. It
can also deepen differences, and
lead groups into hostile positions.
Yet most cases of conflict that the
JBCC encounters could have been
prevented by timeous preventative
action,” says Putlitz.
Some important guidelines to help
reduce often expensive and time con-
suming claims in building disputes:
•
Planning
: A pro-active project
manager should anticipate and
avoid potential problems rather
than rectify problems that have
already occurred;
•
Recognition
: Recognising a poten-
tial dispute timeously may enable
a contractor or employer to time-
ously take action to limit or avoid
a claim or litigation;
•
Communication
: Parties to an
agreement and their agents must
communicate freely, speedily
and be able to refer to others for
a prompt decision. Employers
should recognise that their rep-
resentatives may be reluctant to
acknowledge a problemto conceal
delays and/or additional costs. The
contractor’s staff may similarly
want toconceal apossibleproblem
from their superiors. Both situa-
tions will lead to confrontation,
especially when the employer is
presented with an unexpected
claim near the end of the project.
•
Defining the consequences
: The
partiesmust deal with a (potential)
problem as soon as it arises and
reach consensus on the possible
impact, extent, cost and plausible
solutions;
•
Notification
: If the contractor
identifies a problemhe/she should
immediately notify the employer
or the employer’s representative.
Failure to do so, by either party,
could result in a claim and/or liti-
gation. Each party must provide
factual evidence to substantiate
its position. A late or ill-prepared
claim places both parties in a dif-
ficult position by limiting possible
options and/or resolutions;
•
Documentation
: Themaintenance
of current and accurate project
records is critical throughout a
project, particularly if a disagree-
ment or a dispute should arise.
Records should clearly show a
logical cause-and-effect relation-
ship between any unanticipated
events and its consequences to
demonstrate the full effect of the
events that occurred;
•
Contract Documents
: The contract
documents must be fair to both
parties and specific to the project.
Each party to an agreement must
be provided with a copy of the
contract documents. One-sided
contracts promote disputes that
often end in litigation;
•
Contract Instructions
: The princi-
pal agentmust administer the issue
of contract instructions promptly
in accordance with the provisions
of the agreement, clearly defining
the scope of employer-authorised
additional work or omissions and
the allocation of costs;
•
Impact of delays
and time and
money claims
: The contractor
must promptly assess the direct
and indirect implications of a
delay/disruption to the project
completion dates and possible
resultant cost implications. The
contractor must also confirm that
resources to undertake additional
work are available without disrup-
tion to the regular scope of work.
The employer must recognise the
contractor’s right to compensation
and fair profit on any additional
work;
•
Solution
: The parties must co-
operate to determine the most
cost-effective method to deal with
a particular problem, possibly by
alternative solutions for which
neither party should assume total
responsibility.
“Consensus and teamwork remain
integral parts of the process to en-
sure that project risks remain fairly
allocated to both parties,” concludes
Putlitz. For further information about
JBCC go to
www.jbcc.co.za■
Conflict
resolution
on site
The earlier a dispute, or potential
dispute, in a building contract is
dealt with the better the chances
of an equitable and prompt
solution, says Uwe Putlitz, CEO
of the Joint Building Contracts
Committee (JBCC).