Factors influencing claims management practices in the Nigerian Construction Industry

Abstract

The management of construction claims is a vexing problem for stakeholders in the construction industry. Despite research efforts, there remains no agreement over how much should be paid to the contractor when a claim is established. The problem is further complicated by the client’s desire to complete the project at the minimum possible cost while the contractor intends to maximise profit at the project’s conclusion. There is, however, a consensus that the best approach to managing construction claims involves adopting claims management processes. The purpose of this study is to identify and categorise positive and negative factors. A survey approach was used in gathering information and 197 valid responses were collected through structured questionnaires administered to industry practitioners. Data collected were analysed using mean item score and factor analysis. The result shows that 42 factors with a mean score above 2.00 contribute positively while 2 factors with a mean score of less than 2.00 contribute negatively to construction claims management. The result of factor analysis identifies six groups of positive factors influencing which are the drivers that contribute meaningfully to successful construction claims management. These groups were planning control and organisation factors; quality and schedule factors; procurement and environmental factors; contractor’s motivational factors, contractor’s management capabilities factors; and cost and time management factors. It also identifies four groups of negative factors that must be mitigated before claims could be settled amicably, namely: societal; contractor’s liability; lowest bid; and people. It implies that the identification and application of these positive factors influencing construction claims will strengthen the relationship between clients and contractors and subsequently improve construction claims management. The study recommends that the negative factor should be mitigated to achieve robust construction claims management practices.