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Class Summary

Class Summary. The Construction Industry. Conflict in the Construction Industry Is Inherent of the Characteristics of the Industry. Project Uncertainties and Sub-optimal Contractual Relationships Are a Major Source of Conflict (LNGT Project)

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Class Summary

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  1. Class Summary

  2. The Construction Industry • Conflict in the Construction Industry Is Inherent of the Characteristics of the Industry. • Project Uncertainties and Sub-optimal Contractual Relationships Are a Major Source of Conflict (LNGT Project) • Legal Costs of Dispute Resolution Constitute a Burden for the Industry. • Dispute Avoidance and Resolution Techniques Should Be Implemented to Resolve Conflicts With Time and Cost Savings.

  3. Evolution Of DART LITIGATION BINDING LITIGATION NONBINDING BINDING ARBITRATION STANDING NEUTRAL Negotiations NEGOTIATION DETERMINATION BY DESIGN PROFESSIONAL PARTNERING PREVENTION Conflict Management Plan

  4. Evolution Of DART • The Traditional Two-step Resolution Ladder Stems From Ancestral Dispute Resolution Forms. • The Traditional Model Did Not Allow an Efficient Dispute Resolution in Complex Projects. • New Strategies Are Adopted for a Spectrum of Conflicts (Conflict Continuum). • The DRL Is Adopted to Prevent and Resolve Disputes.(Chek Lap Kok Airport)

  5. Stage 1: Prevention LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  6. Stage 1: Prevention • Conflict Prevention : More Effective, Less Expensive and Less Time Consuming Than Conflict Resolution (Office Building Project And the Illustration of Preventive Measures) • Different Prevention Techniques But Many Common Denominators • Importance of the Recognition of a Potential Threat and the Commitment to Avoid it

  7. Partnering LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  8. Partnering • Partnering, a Complete System of Operation, not a DRL Stage • Advantages: (Museum Project and Success Keys ) • Less Exposure to Liability Through Open Communication • Early Identification and Resolution of the Problems • Risk Sharing • Increased Productivity • Better Quality Through the Empowerment of Workers • Better Cash Flow and Reduced Costs • Commitment of all participants • Synergy and Objectives Alignment • Win/win Philosophy • Problems Associated with Partnering • Demand on Everyone Committed to the Partnering Process • Difficulty with Taking the Risk of Trusting Others • Tendency to Believe in the Win/lose Approach

  9. Stage 2: Negotiation LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  10. Stage 2: Negotiation • Negotiation as the First Stage after the Occurrence of a Dispute • Participants with High Degree of Control Over the Possible Outcomes • Possible Involvement of a Third Party Facilitator • Interests Based rather than Positions Based Negotiations • Attempt to Reach a Non-zero Sum solution with a Win-win Outcome (Highway Interchange Project) • Different Negotiation Styles: Avoiding, Competing, Accommodating, Compromising, Collaborating • Three Techniques in the Negotiation Process : Step, Structured and Facilitated Negotiations

  11. Stage 3: Standing Neutral LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION

  12. Stage 3: Standing Neutral • Common Denominators of Techniques Used in the Standing Neutral Stage(Ex:State-of-the-art Land Level Transfer Facility in the Northeastern United States) • Third Party Involvement • Unbiased Decisions • Knowledgeable Expert • Cost,Time and Resources Savings • Variations • Number of Agents Involved • Relationship of the Agents with the Project • Stage of Involvement

  13. Stage 4: Non-Binding Dispute Resolution LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  14. Stage 4:Non-Binding Dispute Resolution Mediation Conciliation Advisory Arbitration Fact-Based Mediation Minitrial Jury Trial and Rent-a-Judge Flexibility:decreases along the continuum, less chances for win-win solutions Formality:increases as the techniques required more predefined steps Third Party Role: moves from a facilitator of communications to a judge or jury with only advisory opinion Costs:expenses should be expected to increase as the procedures become more complex • Ex: Condo Project Peña-Mora,et.al,1997

  15. Stage 5: Binding Dispute Resolution LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  16. Stage 5: Binding Dispute Resolution • Ex: Reservoir Project • Common Characteristics Between Arbitration and Litigation • High Costs • Time Consumption • Strains in the Relationship Among Parties • Increased Formality • Decrease in Control by the Parties and in Flexibility of Outcome • Adversarial Stance • Win/Lose Outcome • Valuable Trait • Reliance on Knowledgeable Third Party Neutral • Other Binding Procedures as Modification of Arbitration • Mediation-Arbitration and Shadow Mediation : Increasing Mediation During Binding Procedures • Adjudicator and Baseball Arbitration: Rapid Closure of Dispute, Less Communication , win/lose outcome

  17. Stage 6: Court Alternatives and Litigation LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  18. Stage 6: Court Alternatives and Litigation • Litigation, the Final Stage in the DRL • Importance of Solid Discovery of the Situation and Effective Presentation (Ex: Hospital Heating Plant Project) • Procedures to Overcome the Challenges of Litigation by “Forced” Communication • Court Appointed Experts • Judge Pro-Tem • Trial by Reference

  19. Conflict Management Plan LITIGATION BINDING NONBINDING STANDING NEUTRAL NEGOTIATION PARTNERING PREVENTION Conflict Management Plan

  20. Conflict Management Plan • Conflict Management Plan (Ex: Brock’s and Kelly’s Plans) • Vital Step in Construction Projects • Often Overlooked • Conceived in the Planning Phase and Reviewed Throughout Project Life Cycle • Identifying Conflicts and Analyzing Their Impacts • Prioritizing Conflicts • Application of Dispute Avoidance Techniques • Design of a Resolution Procedure • Allocation of Risks Between Participants

  21. Case Study: Tren Urbano • Partnering and the Success of Innovative Delivery Methods in a Global Market • Importance of Partnering in Multi-Cultural, Multi-Phase Projects • Partnering Embodied in Initial Meetings, Quality Summit, Follow-Up Meetings • Conclusions and Recommendations • Contract Language Regarding Conflict Resolution Is Not the Source of Problems • Inter-phase Conflicts Require Additional efforts

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