Scholarly article on topic 'Micro and macro level of dispute causes in residential building projects: Studies of Saudi Arabia'

Micro and macro level of dispute causes in residential building projects: Studies of Saudi Arabia Academic research paper on "Civil engineering"

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Abstract of research paper on Civil engineering, author of scientific article — Ibrahim Mahamid

Abstract The objective of this research is to identify the common direct and indirect (micro and macro level) dispute causes in residential building projects in Saudi Arabia. The questionnaire method was used in this research. Randomly distributed questionnaire technique was applied to 120 contractors to evaluate the severity of the identified 29 direct dispute causes and 32 indirect dispute causes. The analysis of the identified causes indicates that the top five severe direct dispute causes are: delay in progress payment by owner, unrealistic contract duration, change orders, poor quality of completed works, and labor inefficiencies respectively. While the top five severe indirect dispute causes are: inadequate contractor’s experience, lack of communication between construction parties, ineffective planning and scheduling of project by contractor, cash problems during construction, and poor estimation practices.

Academic research paper on topic "Micro and macro level of dispute causes in residential building projects: Studies of Saudi Arabia"

Journal of King Saud University - Engineering Sciences (2014) xxx, xxx-xxx

King Saud University Journal of King Saud University - Engineering Sciences

www.ksu.edu.sa www.sciencedirect.com

ORIGINAL ARTICLE

Micro and macro level of dispute causes

in residential building projects: Studies of Saudi Arabia

Ibrahim Mahamid *

Civil Engineering Department, Hail University, Hail, Saudi Arabia Received 22 October 2013; accepted 4 March 2014

KEYWORDS

Dispute;

Residential buildings; Disagreement; Construction; Severity

Abstract The objective of this research is to identify the common direct and indirect (micro and macro level) dispute causes in residential building projects in Saudi Arabia. The questionnaire method was used in this research. Randomly distributed questionnaire technique was applied to 120 contractors to evaluate the severity of the identified 29 direct dispute causes and 32 indirect dispute causes. The analysis of the identified causes indicates that the top five severe direct dispute causes are: delay in progress payment by owner, unrealistic contract duration, change orders, poor quality of completed works, and labor inefficiencies respectively. While the top five severe indirect dispute causes are: inadequate contractor's experience, lack of communication between construction parties, ineffective planning and scheduling of project by contractor, cash problems during construction, and poor estimation practices.

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1. Introduction

The construction industry has perhaps the unenviable reputation of being highly adversarial, and as a result of this, is paradoxically a leader in both dispute occurrences and dispute resolution systems (Keil, 1999). In the construction industry, disputes can be damaging and expensive, but can also seem inevitable. There is no universal definition of dispute. However for the purpose of this research, the dispute is defined as a problem or disagreement between the parties that cannot be resolved by on-site project managers. Disputes in construction may be

caused by one or a combination of several reasons. It may start with a simple reason and lead to a substantial set of interrelated complex disputes in contract agreement. Dispute may lead to adversarial relation between the involved parties in construction projects (i.e. general contractors, subcontractors, suppliers, lenders, developers, design professionals and owners).

In Saudi Arabia, the construction industry is one of the main economic keys. However, it suffers some major problems that affect its role in building up the national economy. Assaf et al. (1995) found and reported that the contract disagreement was one of the main delay causes in large building projects in Saudi Arabia. Based on their research, great attention should be paid to disputes between construction parties that lead to negative effects on the project success. Therefore, this research is important. It is considered as the first step in appraising disputes and improving methods for dispute resolution and prevention. Thus, this research aims at identifying the common macro and micro level of dispute causes in residential building projects in Saudi Arabia. The questionnaire method was used

* Tel.: +966 536659056.

E-mail addresses: imahamid@ymail.com, i.mahamid@uoh.edu.sa Peer review under responsibility of King Saud University.

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in this research. Randomly distributed questionnaire technique was applied to 120 main contractors to evaluate the severity of the identified 29 direct (micro level) dispute causes and 32 indirect (macro level) dispute causes. It is hoped that the findings of this research will lead efforts to minimize disputes among construction parties in Saudi Arabia and other developing and developed countries.

2. Literature review

Construction industry is a leader in dispute occurrences. However, very limited researches were conducted to study dispute issues in construction projects. Semple et al. (1994) studied disputes on 24 construction projects in Canada. They concluded six common categories of dispute: premium time, equipment costs, financing costs, loss of revenue, loss of productivity, and site overhead. Colin et al., 1996 conducted a study on 438 dispute events on 21 projects in the UK. They concluded that disputes between construction parties were mainly related to six areas: payment and budget, performance, delay and time, negligence, quality, and administration.

Ayudhya (2011) conducted a study in Honk Kong to identify and appraise the dispute problems in residential building projects. The severity of the 43 identified dispute factors were evaluated by 175 consisting of owners, consultants and main contractors. The results of the survey indicated that construction projects faced moderately severe dispute level between owners and main contractors. The delay in progress payment by owner factor was the highest individual severity index followed by unforeseen problem underground, unrealistic contract durations, inaccurate bill of quantities and inappropriate type of foundation. Waldron (2006) studied disputes in Australian construction and infrastructure projects. He concluded 10 key issues in disputes, they are: variations to scope, contract interpretation, EOT claims, site conditions, late or incomplete information, NA/ or did not know, obtaining approvals, site access, quality of design, and availability of resources. Mezher and Tawil (1998) and Groton (1997) indicated that the most typical dispute causes in construction projects include: unrealistic contract duration and cost, differing site conditions, change orders, delays, impact and ripple effects of delays, evaluation of the quality and quantity of work, owner furnished items, difference in the interpretation of plans and specifications, unfulfilled duties, acceleration, inefficiency and disruption. Rhys (1994) conducted a general survey of construction industry and lawyers to study the disputes in construction industry. He found 10 factors in the development of disputes: poor management, adversarial culture, poor communications, inadequate design, economic environment, unrealistic tendering, influence of lawyers, unrealistic client expectations, inadequate contract drafting, and poor workmanship. Yiu and Cheung (2004) identified 33 dispute sources through the literature and grouped them under two categories: construction related (24 items) and human behavior related (9 items). They conducted a questionnaire survey to rank the identified sources according to their importance. They concluded that the significant sources are: parties expectations and inter parties' problems (human behavior related), and variation and delay in work progress (construction related). Heath et al. (1994) conducted a survey of 28 quantity surveyors and five case studies in the UK to study disputes and claims in construction pro-

jects. They concluded seven main types of disputes: contract terms, payments, variations, extensions of time, nomination, renomination, and availability of information.

Many articles examined the relation between construction disputes and main problems in construction projects such as: delay, claims, failure, productivity, rework and cost overrun. They concluded a high correlation between them (Ahmed et al., 2003; Sambasivan and Soon, 2007; Aibinu and Jagboro, 2002; Kaliba et al., 2009; Nega, 2008). Therefore, it is important to review the factors leading to such problems in construction projects to have a detailed and deep view about the direct and indirect dispute causes in construction industry.

In Saudi Arabia, a number of studies have been conducted to investigate main problems of construction projects such as: delay, claims, failure, productivity, rework and cost overrun. Assaf and Al-Hejji (2006) conducted a survey on time performance of different types of construction projects in Saudi Arabia to determine the causes of delay in large construction projects. Surveys concluded that 70% of projects experienced time overrun and found that 45 out of 76 projects considered were delayed. They found that the average time overrun was between 10% and 30%. 73 causes of delay were identified during the research. They concluded that only one cause of delay is common between all parties, which is ''change orders by owner during construction''. They found that many causes are common between two parties, such as delay in progress payments, ineffective planning and scheduling by contractor, poor site management and supervision by contractor, shortage of labors and difficulties in financing by contractor.

Al-Khalil and Al-Ghafly, 1999 conducted a research to investigate three components of delay in the construction of water and sewage works in Saudi Arabia. The components are (1) the frequency of delayed projects, (2) the extent of delay, and (3) the responsibility for delay. The results of the survey showed that a high proportion of projects were subject to delay, especially in medium- and large size projects. The frequency of delayed projects seems to be associated with the contractor classification grade, but not with the region where the project is constructed. It was also found that the extent of delay was severe. They found that the project owners and consultants assigned the major responsibility for delay to the contractors while contractors believed that the owner is mostly responsible.

Assaf et al. (1995) studied the causes of delay in large building construction projects in Saudi Arabia. They outlined 56 main causes of delay. The most important causes of delay included approval of shop drawings, delays in payments to contractors and the resulting cash-flow problems during construction, design changes, conflicts in work schedules of subcontractors, slow decision making and executive bureaucracy in the owners' organizations, design errors, labor shortage and inadequate labor skills. Al-Ghafly (1995) discussed the delay in public water and sewage projects in Saudi Arabia. Sixty causes were identified and classified. He concluded the following: the delay occurred frequently in medium and large size projects, and are considered severe in small projects. There are many important causes of delay related to owner involvement, contractor performance, and the early planning and design of the project. Important causes are financial problems, changes in the design and scope, delay in making decisions and approvals by owner, difficulties in obtaining work (commencement) permit, and coordination and communica-

Table 1 Severity index and ranking of micro level of dispute causes in residential building projects.

Direct dispute cause (micro level) S.I. Rank

Delay in progress payment by owner 86.60 1

Unrealistic contract duration 84.18 2

Change orders 82.03 3

Poor quality of completed works 80.18 4

Labor inefficiencies 78.53 5

Unforeseen problems 77.57 6

Main contractor financial problems 75.33 7

Inflation 75.03 8

Inaccurate bill of quantities 74.87 9

Fluctuation in material's cost and labor during construction 72.95 10

Difference in the interpretation of plans and specifications 71.99 11

Poor site management by contractor 69.68 12

Differing site conditions 66.22 13

Slow in making decision from owner 63.33 14

Evaluation of the quality and quantity of completed works 61.41 15

Approval delay by owner/consultant 60.41 16

Inability of main contractor to sublet the contract during bidding 58.72 17

Accuracy of project cost estimate 57.57 18

Insufficient specifications of materials 56.60 19

Violating condition of the contract 56.10 20

Exchange rate 55.45 21

Mistakes in design 54.72 22

Poorly written contract 53.36 23

Insufficient working drawing details 53.01 24

Qualifications of subcontractors 52.76 25

Shop drawing approval 51.16 26

Adverse weather conditions 48.91 27

Lack of skill labor 46.18 28

Inspection delay by consultant 44.64 29

tion problems. Al-Kharashi and Skitmore (2009) conducted a study to investigate causes of delays in Saudi Arabian public sector construction projects. The survey covers a sample of 86 clients, contractors and consultants working in the Saudi construction industry. They found that the top affecting causes are: shortage of construction materials, shortage of manpower, low skill levels, delay in progress of payment by the clients, contractor inexperience, consultants' experience, delay in review of the design documents, and unrealistic timeframe.

Shash and Abdul-Hadi (1992) have identified the factors affecting the accuracy of cost estimation in construction projects in Saudi Arabia. These were classified as financial issues, bidding process, project characteristics and the estimating process itself. Al-khaldi (1990) concluded that the top five factors affecting construction cost in Saudi Arabia from contractors' view are previous experience in contracts, payments, availability of management finance and plans, type and size of contract and its content, and project location. On the other hand the top five factors from consultants' view are previous experience of contract, type and size of contract and its content, payments, project location, and contract period. Al-Juwairah (1997) conducted a study to identify the most severe factors affecting construction cost in Saudi Arabia. 42 factors were considered in the study. He concluded that the most severe factors affecting construction cost from the contractors' perspective are: cost materials, incorrect planning, contract management, wrong estimation method, and previous experience in contract.

Bader and Assaf (2004) discussed the main causes of failure in the construction industry in Saudi Arabia. A survey of 68 contractors from the entire Kingdom was undertaken. The sur-

vey included 34 different causes of failure and their degree of importance. They concluded that lack of experience in the line of the work, neglect, poor estimation practices, bad decisions in regulating company's policy, and national slump in the economy are the most severe factors. Zaneldin (2006) conducted a study to investigate the types, causes, and frequency of construction claims in the emirates of Dubai and Abu Dhabi in UAE using a data from 124 claims for a variety of projects in the two emirates. The results indicated that the most frequent causes of claims are: change or variation orders, delay caused by owner, oral change orders by owner, delay in payments by owner, and low price of contract due to high competition.

The above examples demonstrate that there is a plethora of factors with the potential to affect the disputes between construction parties. As such, this paper builds upon the vast amount of published studies in order to identify a comprehensive list of macro and micro level of dispute causes in residential building projects in Saudi Arabia. Following this, the paper reports on the findings of a survey targeting contractors, in an attempt to shed some light on how they perceive the relative severity of these causes. Finally, the paper formulates a number of recommendations in order to minimize disputes between owners and contractors in residential building projects.

3. Research method

Potentially relevant studies were retrieved from literature collections of published, peer-reviewed research articles and reports. Through these collections, dispute causes in residential building projects were defined. 29 direct dispute causes and

Table 2 Severity index and ranking of macro level of dispute causes in residential building projects.

Indirect dispute cause (macro level of causes) S.I. Rank

Inadequate contractor's experience 88.43 1

Lack of communication between construction parties 86.67 2

Ineffective planning and scheduling of project by contractor 85.19 3

Cash problems during construction 84.89 4

Poor estimation practices 84.15 5

Used unbalance contract in Saudi Government projects 83.43 6

Incorrect planning 82.74 7

Poor Saudi litigation system to settle the delay claim (Arbitration) 82.13 8

Poor contractor classification/qualification system used by the Saudi Government 81.08 9

Unclear vision of owner to start with projects 80.81 10

Unfamiliarity with local laws of related governmental agencies 78.17 11

Waiting for sample materials' approval 78.12 12

Changes in material prices 76.86 13

Difficulties in obtaining work permits from the authorities concerned 76.56 14

Delay in resolving contractual issues 75.13 15

Poor financial control on site 72.33 16

Management - labor relationship 69.73 17

Poor qualification of supervision staff of the consultant engineer 68.92 18

Low skills of manpower 64.35 19

Owner involvement in construction phase 62.61 20

Shortage of equipments required 60.84 21

Using the lower bid system 58.56 22

Subcontractor problems with the contractor 53.47 23

Low margin profit due to competition 52.88 24

Slow response to the contractor inquiries in the job site by the consultant engineer 51.61 25

Excessive bureaucracy in project-owner organization 49.54 26

Recruitment from one country 48.19 27

The relationships between different subcontractors' schedules in the execution of the project 44.76 28

Shortage of construction materials 41.90 29

Construction industry regulation in Saudi Arabia 41.10 30

Employee benefits and compensations 38.89 31

Delay in materials delivery 36.78 32

32 indirect dispute causes are considered in this study. A questionnaire survey was decided to be used for data collection. A sample of 150 contractors were randomly selected to fill out the questionnaire.

4. Pilot study

A pilot study was conducted to verify the questionnaires and to ensure that the information returned from the contractors would be appropriate to the objectives of this study. This is done by sending the draft questionnaire with a covering letter to five experts in building construction to evaluate the content validity of the questionnaire and to add more causes if needed. After receiving the answers from the selected experts, the questionnaire was slightly modified based on their feedback.

5. Questionnaire design

The questionnaire was divided into three main parts. Part I is related to general information for the company. The contractors were requested to answer questions pertaining to their experience in residential building projects. Part II includes the list of the identified direct dispute causes in residential building projects. Part III includes the list of the identified indirect dispute causes in residential building projects. In part II

and part III, the respondents were required to rank the identified causes based on their severity using a 5-point scale as follows: very high, high, moderate, low, and very low (on 5 to 1 point scale).

6. Data analysis

The suggested dispute causes are ranked by the measurement of the severity index. The following formula is used to rank them based on the severity level as identified by the participants.

Severity Index (%) = ^ a (n/N)* 100/ 5 (1)

where a is the constant expressing weighting given to each response (ranges from 1 for very low up to 5 for very high), n is the frequency of the responses, and N is the total number of responses.

7. Statistical analysis

Some statistical techniques are used to interpret the dispersion, compactness, and the degree of homogeneity of the responses for the influence of the identified dispute causes as assessed by the contractors. These techniques include computation of the weighted mean, standard deviation (Sn), and coefficient of variation (C.V.).

Table 3 Statistical analyses of contractors' responses for micro level of dispute causes in residential building projects.

Direct dispute cause Mean Sn C.V.

Delay in progress payment by owner 4.33 0.09 2.15

Unrealistic contract duration 4.21 0.42 10.06

Change orders 4.10 0.34 8.29

Poor quality of completed works 4.01 0.21 5.32

Labor inefficiencies 3.93 0.26 6.71

Unforeseen problems 3.88 0.40 10.40

Main contractor financial problems 3.77 0.46 12.30

Inflation 3.75 0.33 8.88

Inaccurate bill of quantities 3.74 0.41 11.04

Fluctuation in material's cost and labor during construction 3.65 0.46 12.70

Difference in the interpretation of plans and specifications 3.60 0.57 15.93

Poor site management by contractor 3.48 0.56 16.17

Differing site conditions 3.31 0.54 16.41

Slow in making decision from owner 3.17 0.42 13.37

Evaluation of the quality and quantity of completed works 3.07 0.63 20.62

Approval delay by owner/consultant 3.02 0.36 12.03

Inability of main contractor to sublet the contract during bidding 2.94 0.58 19.87

Accuracy of project cost estimate 2.88 0.49 17.14

Insufficient specifications of materials 2.83 0.42 14.96

Violating condition of the contract 2.81 0.46 16.52

Exchange rate 2.77 0.28 10.22

Mistakes in design 2.74 0.57 20.95

Poorly written contract 2.67 0.46 17.37

Insufficient working drawing details 2.65 0.38 14.46

Qualifications of subcontractors 2.64 0.53 20.22

Shop drawing approval 2.56 0.46 18.11

Adverse weather conditions 2.45 0.50 20.58

Lack of skill labor 2.31 0.39 17.03

Inspection delay by consultant 2.23 0.54 24.19

8. Results and discussion

8.1. Participants

The questionnaire was sent out to a total of 150 contractors in the Northern part of Saudi Arabia asking their perception in ranking the identified dispute causes in terms of severity using an ordinal scale. A total of 120 contractors filled the questionnaire. The response rate by contractors is 80% which is a good rate. This result was achieved by continuous and close contact with contractors. The participating contractors have an average of more than 10 years of experience in residential building projects.

8.2. Ranking of direct dispute causes (micro level of causes)

In this study, 29 direct dispute causes in residential building projects were identified and ranked by the measurement of severity index according to Eq. (1). Table 1 shows the severity index value and ranking of the identified causes.

Results show the following: (1) there are 4 causes with severity index higher than 80, (2) there are 12 causes with severity index between 60 and 80, and (3) the minimum severity index is 44.64. These results indicate that the identified causes are highly relevant to the dispute problems over the building residential projects in Saudi Arabia.

Table 1 shows that the top five severe direct dispute causes are:

(1) Delay in progress payment by owner: progress payment delay is probably the most common source of construction disputes. Failure to provide steady monthly progress payment by owner to main contractor will cause agreed project objectives less carry output. The interviewees indicated that the progress payment delay is a frequent dispute cause in construction projects in Saudi Arabia. They indicated that the owners had often benefited from the interest earned from delayed payments to main contractors. In general, the progress payments are usually transferred to main contractor's designated bank account within 14 days after all requested documents have been approved by authorized person. Nonetheless, it might take longer than agreed. To prevent this dispute cause, owners should pay progress payment on time and contractors should manage their financial resources and plan cash flow by utilizing progress payment. This result is supported by Ayudhya (2011) and Heath et al. (1994).

(2) Unrealistic contract duration: one of the most damaging things for construction projects is when there is a significant delay on the project. This can damage the owner, because it potentially threatens the owner's anticipated revenue from the project, the owner's standing with its lender, and increased interest expense. For general contractors and subcontractors, delays can pose unanticipated time sensitive expenses, such as increased material and equipment costs, increased jobsite overhead expenses, and increased home office overhead

Table 4 Statistical analyses of contractors' responses for macro level of dispute causes in residential building projects.

Indirect dispute cause Mean Sn C.V.

Inadequate contractor's experience 4.42 0.42 9.50

Lack of communication and cooperation between construction parties 4.33 0.42 9.69

Ineffective planning and scheduling of project by contractor 4.26 0.37 8.69

Incorrect planning 4.24 0.43 10.13

Cash problems during construction 4.21 0.41 9.74

Used unbalance contract in Saudi Government projects 4.17 0.44 10.55

Poor estimation practices 4.14 0.44 10.64

Poor Saudi litigation system to settle the delay claim (Arbitration) 4.11 0.45 10.96

Poor contractor classification/qualification system used by the Saudi Government 4.05 0.28 6.91

Unclear vision of owner to start with projects 4.04 0.50 12.37

Unfamiliarity with local laws of related governmental agencies 3.91 0.34 8.70

Waiting for sample materials approval 3.91 0.38 9.73

Changes in material prices 3.84 0.25 6.51

Difficulties in obtaining work permits from the authorities concerned 3.83 0.33 8.62

Delay in resolving contractual issues 3.76 0.38 10.12

Poor financial control on site 3.62 0.49 13.55

Management - labor relationship 3.49 0.48 13.77

Poor qualification of supervision staff of the consultant engineer 3.45 0.46 13.35

Low skills of manpower 3.22 0.54 16.78

Owner involvement in construction phase 3.13 0.39 12.46

Shortage of equipments required 3.04 0.38 12.49

Using the lower bid system 2.93 0.52 17.76

Subcontractor problems with the contractor 2.67 0.61 22.82

Low margin profit due to competition 2.64 0.54 20.42

Slow response to the contractor inquiries in the job site by the consultant engineer 2.58 0.58 22.48

Excessive bureaucracy in project-owner organization 2.48 0.40 16.15

Recruitment from one country 2.41 0.69 28.64

The relationships between different subcontractors' schedules in the execution of the project 2.24 0.58 25.92

Shortage of construction materials 2.10 0.50 23.87

Construction industry regulation in Saudi Arabia 2.06 0.65 31.63

Employee benefits and compensations 1.94 0.58 29.83

Delay in materials delivery 1.84 0.62 33.71

1.00 0.90

0.70 0.60

Sn 0.50 0.40

0.30 0.20

y ♦ % ♦ ♦ ♦

2.00 3.00

0.60 0.50

0.40 0.30

0.20 0.10

2.00 3.00

Figure 1 Direct cause mean versus standard deviation.

Figure 2 Indirect cause mean versus standard deviation.

expenses. Therefore sufficient time and effort should be spent at the preconstruction phase for feasibility studies, design and site survey and exploration in order to have better duration estimate. This result is in line with Ayud-hya (2011), Mezher and Tawil (1998), and Groton (1997).

(3) Change orders: change orders in Saudi construction projects can be caused by many events, including, insufficient working drawing details, scope changes, mistakes in design, lack of owner experience, inaccurate bill of quantities and unrealistic contract durations. Change orders have negative effects on project success. For

example it affects durations during the execution of the project which lead to dispute between owner and main contractor. Therefore, construction parties should conduct a detailed and comprehensive site investigation at the design phase in order to avoid variations and late changes during the construction phase. This result is supported by Mezher and Tawil (1998), and Groton (1997).

(4) Poor quality of completed works: a frequent source of disputes on construction projects concerns the quality of labor or materials furnished to the project by a contractor, subcontractor, or supplier. The issue is often

C.V (%)

100 90 80 70 60 50 40 30 20 10 0

2.00 3.00

Figure 3 Direct cause mean versus coefficient of variation.

C.V (%)

100 90 80 70 60 50 40 30 20 10 0

2.00 3.00

Figure 4 Indirect cause mean versus coefficient of variation.

whether various standards of quality were met, including, (I) standards specified in the design documents, (II) industry standards, and (III) performance standards. The interviewees indicated defects in the used quality control system which should be improved, according to them, either by improving the prequalifica-tion system of main contractor during the bidding phase or by review and inspection system during the construction phase. This result is in line with Rhys (1994).

(5) Labor inefficiencies: contractors and subcontractors can experience lost productivity due to labor inefficiencies. The interviewees indicated that the lost productivity in construction projects in Saudi Arabia can be caused by many events and job site conditions, but often, unanticipated labor inefficiencies are the product of delays and resulting acceleration of the work. This dispute cause was not concluded by any of the investigated studies as a critical one.

8.3. Ranking of indirect dispute causes (Macro level of causes)

In this study, 32 indirect dispute causes in residential building projects were identified and ranked by the measurement of severity index according to Eq. (1). The identified 32 causes are relevant to problems in construction projects that lead to dispute between construction parties. These problems include: delay, cost overrun, labor productivity, rework, failure, and claims. Table 2 shows the severity index value and ranking

of the identified causes. Results show the following: (1) there are 10 causes with severity index higher than 80, (2) there are 11 causes with severity index between 60 and 80, and (3) the minimum severity index is 36.78. These results indicate that the identified causes are highly relevant to construction problems that lead to dispute between construction parties.

Contractors' input indicates that ''inadequate contractor's experience'' is the top indirect cause that may lead to dispute between construction parties with a severity value of 88.43. This result is justified, as the lack of contractor's experience may lead to project failure or severe cost overrun and delay problems that negatively affect the relation between the contractor and project owner. This result is in line with Al-khar-ashi and Skitmore (2009) and Bader and Assaf (2004). ''Lack of communication between construction parties'' was ranked in position 2 with a severity index value of 86.67. Contractors indicated that proper communication channels between the various construction parties should be established during the early project stage. Any problem with communication between construction parties may lead to severe misunderstanding and therefore, delay in decision making, frequent design changes, and rework. This result is supported by Al-Ghafly (1995) who confirmed that lack of communication between construction parties is a top delay factor in Saudi construction projects.

''Ineffective planning and scheduling of project by contractor'' was ranked in position 3 with a severity index value of 85.19. This result is justified, as poor project planning and scheduling by contractor may lead to poor site management, poor control, cost overrun, and delay which may lead to dispute between the project participants. This result is in line with Assaf and Al-Hejji (2006) who confirmed that ineffective planning and scheduling of project by contractor is a top delay factor in Saudi construction projects. ''Cash problems during construction'' was ranked in the 4th position with a severity index value of 84.19. Availability of cash flow is very important for a contractor to run the business. Construction works involve high amounts of money and most of the contractors find it very difficult to bear the heavy daily construction expenses when the payments are delayed. This result is supported by many of the investigated studies (Assaf and Al-Hejji (2006), Assaf et al. (1995), Al-Ghafly (1995)). ''Poor estimation practices'' were ranked in the 5th position with a severity index value of 84.15. Construction clients require early and accurate cost advice prior to site acquisition and commitment to build in order to enable them to take a right decision regarding the feasibility of proposed project. Consequently, inaccurate cost estimate will be misleading and may negatively affect the owner's ability to pay progress payments to the contractor which will lead to deputation between them. This result is in line with Shash and Abdul-Hadi (1992) and Al-Juwairah (1997) who confirmed that poor cost estimate is a major contributor to cost overrun in Saudi construction projects.

8.4. Statistical analysis

Tables 3 and 4 present the statistical analyses for the severity responses of direct and indirect dispute causes as assessed by contractors. The tables contain the computation of the weighted mean, standard deviation, and coefficient of variation. They are used to interpret the dispersion, compactness, and the degree of homogeneity of the collected data.

Table 3 shows that the standard deviation and coefficient of variation of direct dispute causes have reasonable values (i.e. the maximum standard deviation is 0.63 and the maximum coefficient of variation is 24.19%). Table 4 also shows reasonable values for standard deviation and coefficient of variation of indirect dispute causes (i.e. the maximum standard deviation is 0.69 and the maximum coefficient of variation is 33.71%.

Illustrations in Figs. 1-4 show the following: (1) visually, Figs. 1 and 2 indicate good data consistency and high agreement between contractors on the severity of the identified direct and indirect dispute causes, (2) Figs. 3 and 4 show that the values of variation coefficients for both direct and indirect dispute causes are reasonable, 3) Figs. 2 and 4 indicate that the coefficient of variation decreases as the weighted cause mean increases, meaning that the participants highly agreed on the impact of the top direct and indirect dispute causes.

9. Conclusion

The construction industry is one of the main sectors that provide important ingredients for the development of national economy. However, it is a leader in dispute occurrences. Disputes can be damaging and expensive, thus it should be studied more to be minimized or prevented. This study aims at identifying direct and indirect dispute causes in residential building projects in Saudi Arabia from contractors' viewpoint. To do so, 120 contractors completed a structured questionnaire survey. 29 direct dispute causes and 32 indirect dispute causes were identified through the literature review and interviews with local construction experts. The contractors were asked to rank the identified dispute causes according to their level of severity. The analysis of the identified causes indicated that the top five severe direct causes are: delay in progress payment by owner, unrealistic contract duration, change orders, poor quality of completed works, and labor inefficiencies respectively. While the top five indirect causes are: inadequate contractor's experience, lack of communication between construction parties, ineffective planning and scheduling of project by contractor, cash problems during construction, and poor estimation practices.

The statistical analysis of the gathered data shows the following: (1) there are 4 direct causes and 10 indirect causes with severity index higher than 80, (2) there are 12 direct causes and 11 indirect causes with severity index between 60 and 80, (3) the minimum severity index is 44.64 and 37.78 for direct causes and indirect causes, respectively, (4) the results of standard deviation and coefficient of variation show reasonable values and good data compactness and consistency, (5) the results of standard deviation and coefficient of variation show high agreement between contractors on the impact of the top dispute causes. These results indicate that the identified causes are highly relevant to dispute problems over the residential building projects in Saudi Arabia.

Based on the study results, the following points are suggested to minimize dispute between owners and contractors in construction projects: (1) owners are recommended to check for resources and capabilities of the bidder before bid awarding, (2) owners are recommended to allow sufficient time for proper planning, design, information documentation, cost estimating, scheduling and tendering. This helps to avoid later er-

rors and omissions, (3) owners are recommended to pay progress payment to contractors on time because it affects the contractors' ability to finance the work, (4) owners and consultants are recommended to conduct a detailed and comprehensive site investigation at the design phase to avoid variations and late changes during the construction phase, (5) contractors are recommended to manage their financial resources and plan cash flow by utilizing progress payment, (6) contractors are recommended to assign a larger percentage of skilled labors and to motivate them to improve productivity, (7) there is a need to review cost estimation practice in terms of education and training required for those who are responsible for estimating function to do their job properly, (8) project participants (owner, supplier, consultant, and designer) are recommended to have more communication and coordination during all project stages.

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