Management of dispute related to contractor's liability under differing site conditions in design and build projects

Abstract

The Design and Build Procurement method is one of the most frequently used procurement methods in the present construction industry. It releases Employers from the design responsibilities and transfers design and construction responsibilities to the Contractor. Further, Differing Site Conditions are one of the unforeseen, unpredictable risks construction projects face, and it acquires considerable additional time and cost to complete the project. Hence Contractors are keen on claiming the Differing Site Conditions situation, one of the highly disputed claim types in the Design and Build projects. Thus this research aims to manage the contractual disputes related to the Contractor’s Liability under Differing Site Conditions in Design and Build Projects. Initially, a comprehensive literature survey was conducted, followed by selection of three case studies. Document review and expert interviews helped gather information about the Design and Build Projects in Sri Lanka. The research findings revealed that Contractors’ Differing Site Conditions liabilities towards the D&B projects and types of Differing Site Conditions disputes from the literature review were validated via interviews. In addition, the interviews disclosed the new Differing Site Conditions liabilities of the Design and Build Contractor and Differing Site Conditions disputes. The research disclosed the D&B Contractor’s non-perform DSC liabilities and reasons for the non-performance. The study outcome reveals that validation of Employerprovided data and not conducting a proper site investigation before bid submission are some

DSC liabilities non-performed by the D&B Contractors. The research further identified that

the main reasons for this non-performance are the negligence and unawareness of the DSC

liabilities

by D&B Contractors and the cost and time limit to include a detailed site investigation during the bidding period. The literature revealed the contractual and technical parameters to manage each type of Differing Site Conditions dispute, and the interviews introduced new parameters to manage the Differing Site Conditions disputes. The interview results revealed that establishing the DSC parameters, DSC evaluation techniques, and identifying DSC risk responsibilities in the Contract are primary contractual parameters. Doing a detailed site investigation and obtaining technical experts’ knowledge to identify and analyse the potential DSC risks are a few technical parameters to manage the DSC risk as of the interview response. Managing the Differing Site Conditions disputes in the construction project is a win-win situation for both the Employer and the Contractor. This research can be a benchmark for further study in Differing Site Conditions disputes.