Design problems have overtaken change in project scope as the primary cause of claims and disputes in the construction industry in the U.S. Projects have also become more prone to deficiencies in workmanship and unforeseen physical conditions, according to the report, which primarily examines pre-pandemic data. Other top drivers of conflict include poor management of third parties and inadequate contract management, which may be contributing to the design issues.
The toll of disputes on the industry is staggering. The value of claims on the 1,100-plus projects studied worldwide from 2018-2020 worked out to $48.6 billion (excluding legal and related fees) and the extensions of time claimed would accumulate to 593 years.
Here were the top causes of claims and disputes in the U.S. and the Americas more broadly from data on 410 projects collected in 2020:
