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Comprehensive Conflict Management Plan for Construction Projects

Learn how to assess and manage conflicts in construction projects to ensure smooth operations and cost-effectiveness. Identify possible conflicts, prioritize management strategies, and implement dispute resolution plans efficiently.

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Comprehensive Conflict Management Plan for Construction Projects

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  1. Conflict Management Plan

  2. Definitions • WHAT • Assessing Susceptibility of Each Project to Conflicts and Gravity of the Conflicts • Developing Cost Effective Ways for Conflict Avoidance and Dispute Control • Presenting Complete, Unbiased and Unanimous Plans • WHO • Owner, Owner’s Representatives, Designers, Lawyers, Contractors • WHY • Responsibility Allocation and Reduction of Court Proceedings • HOW • Identify the Potential Sources of Conflict • Analyze the Severity and the Impacts of Conflicts • Match the Conflict with a Corresponding DART • Draft Plan, Review and Revise it Continuously

  3. Case Study : Brock’s Plans • Real Estate Development (Family Business): Mainly Department and Retail Stores Projects (US$1 to US$10 Million) • No Previous Experience in Hotel Development Business • US$20,000 Million Hotel Development Project • Funding Provided by Developer and Banks • Excellent Reputation and Willingness of Banks to Finance • Negotiated Cost Basis , Plus Fee Equal to 3.5% of Total Construction Costs • Completion of 90% of Design at Contract Award

  4. Case Study : Kelly’s Plans • Senior Procurement Officer for the State Aviation Administration • US$1.5 Billion Fast-Tracked Capital Improvement Program : 19 Contracts (US$20 Million - US$ 400 Million) • Interdependent Schedules and Overlapping of Design and Construction Phases • Fixed Price, Design-Bid-Build Projects, Operation and Maintenance

  5. Important Issues • How Should Kelly and Brock Go About Planning to Identify, Avoid, Monitor and Control Any Potential Conflict? • How Should Brock’s Approach Differ From Kelly’s Approach? • Could These Both Use the Same Methodology? • Are There Restrictions on What Dart Each of Them Could Use?

  6. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  7. Conflict Management Process • Objective • Look at Each Project Individually • Assess How Much Conflict You Will Encounter • Assess How Severe Is the Conflict • Present Cost Effective Ways to Avoid Conflicts • Mitigate Impact of Conflict • Resolve Disputes

  8. Common Steps Conflict Identification ConflictAnalysis Design and Implement Conflict Management Monitor and Review Plan Peña-Mora,et.al,2002

  9. Conflict Space • The Conflict Management Plan Should be Able to Handle at the Same Time • The Cumulative Effect of Conflicts Throughout the Project Life Cycle • The Different Conflicts at Different Stages of the Dispute Resolution Ladder at a Specific Time

  10. Conflict Space Degree of Conflict litigation Dispute Resolution Ladder arbitration mediation Standing neutral negotiation Cumulative Effect of Conflict Project Life Cycle Project Life Cycle Peña-Mora,et.al,2002

  11. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  12. Identifying Possible Conflicts • Review of the Common Sources of Conflict Peña-Mora,et.al,2002

  13. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  14. Effect of Delivery System on Identifying Conflicts • Identify the Potential Conflicts that Need to be Avoided • Select a Delivery System that Minimizes Such Conflicts

  15. Example: Selection of a Delivery System • Stephenson (1996) • Establish a Detailed List of Potential Conflicts Based on Historical Data or Personal Experience • Identify the Relationships Between the Participants (For Ex, Owner-CM, Owner-Designer) • For Each Delivery System, Match the Potential Conflict with the Concerned Relationships and Give it a Specific Number of Points • Add up the Total Number of Points for Each Delivery System and Choose the Best Approach

  16. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  17. Analyzing Identified Conflicts • Probability of Occurrence of Conflicts • Impact of Potential Conflicts on Project

  18. Examples • Probability of Occurrence of Conflicts • Assume that the Identified Sources of Conflict Are Misunderstandings, Unrealistic Expectations and Poor Communication, Compare the Two Cases: • Case 1 : Owner and Contractor With Previous Experience Together, in the Same Geographic Region • Case 2 : Owner Venturing into a Neighboring Country and Working with an Unfamiliar Contractor • Impact of Potential Conflicts on Project • Two Similar Projects With Introduction of Design Change Halfway Through Construction • Project 1 : Design-Bid-Build Approach • Project 2 : Design-Build Approach

  19. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  20. Probability of Occurrence • Organizational Issues • Uncertainty

  21. Organizational Issues • Structure Conflict: Example: Contract Terms • Case 1 : Fair and Reasonable Allocation of RiskLow Probability • Case 2: Unfair, Unreasonable Allocation of Risk  High Probability • Process Conflict: Example: Performance and Quality • Case 1: Cost-Plus, Quality Driven Projects, Inspection StaffLow Probability • Case 2:Competitive Bids Award to Lowest Bidder, Bad Reputation High Probability • People Conflict: Example: Management • Case 1 : Long Distinguish Solid ManagersLow Probability • Case 2 : Inexperienced Participants  High Probability

  22. Uncertainty • External Uncertainty : Example: Political Risks • Case 1 : Stable, Well Developed Governments Low Probability • Case 2 : Afghanistan During the Soviet Invasion Throughout the 1980’s  High Probability • Internal Uncertainty : Example : Unforeseen Site Conditions • Case 1 : Open, Above Ground Projects with Adequate InvestigationLow Probability • Case 2 : Lack of Subsurface Investigation for All Participants  High Probability

  23. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  24. Impact of Conflict • Quantification Tools • Historical Data • Experience and Knowledge • Example • Weather: Low Impact in Construction ‘ Friendly’ Environment and High Impact in Areas Prone to Natural Disasters

  25. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  26. Combined Conflict Exposure • Step 1 : Calculate Conflict Exposure=P(C)x L(C) Where: • P(C) Is the Probability of Occurrence • L(C) Is the Impact of Occurrence • Step 2: Group Conflicts Into Priority Levels: • Group A : 10-20% of the Top Conflicts Accounting for Roughly 60% or More of the Total Potential Impact • Group B : Conflicts not in A or B • Group C : Large % of the Bottom Conflicts Accounting for 10% or Less of the Total Potential Impact

  27. Example: $200 M Project Risk Exposure: P(c) x L(c) Large Problem P(c)=0.10 L(C)=$25 M 2.5 M Project (no mitigation strategy) Medium Problem P(c)=0.20 L(C)=$5 M 1 M 10.5 M Small Problem P(c)=0.70 L(C)=$1 M 0.7 M

  28. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  29. Designing the Management Plan • Prioritize The Sources Of Conflict. • Implement Dart To Avoid/prevent Conflict Using Techniques In Stage 1 And Partnering. • Implement Dart To Resolve Conflict, Using Techniques In Stages 2 Through 5. • Identify Each Participant’s Role. • Perform A Cost/benefit Analysis Of The Conflict Management Plan. • Develop A Contingency Plan. • Review With All Participants And Update As Necessary.

  30. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  31. Prioritizing and DART Implementation

  32. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  33. Identification: Who Is Responsible? • Agreement on Allocating the Responsibility for Conflicts • Through Contract Clauses • In Conflict Management Plan • Eliminating Confusion Between Clauses and Management Plan

  34. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  35. Cost/Benefit Issues Risk Exposure P(c) x L(c) P(c) = 0.10 Large Problem L(c) = $ 25 M 0.1 x 25 = 2.5 M + 2.5 + 1 + 7 = 10.5 M P(c) = 0.20 Medium Problem L(c) = $ 5 M Yes 0.2 x 5 = 1 M P(c) = 0.70 Small Problem L(c) = $ 1M 0.7 x 1 = 7 M Partnering P(c) = 0.40 Large Problem L(c) = $ 25 M 0.4 x 25 = 10 M + 10 + 2.5 + 1 = 13.5 M P(c) = 0.50 Medium Problem L(c) = $ 5 M No 0.5 x 5 = 2.5 M P(c) = 0.20 Minor Problems L(c) = $ 1 M 0.1 x 1 = 1 M

  36. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  37. Contingency Plan • List of Options of Both Parties • Strengths and Weaknesses of Conflict Management Plan • Identification of Areas Where No Conflict Mitigation Plan is Implemented • Backup in Case of the Unpredictable (Mainly Litigation) : “What If?” Process

  38. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  39. Computer Applications Peña-Mora,et.al,2002

  40. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  41. Importance of Review • Importance of Review and Acceptance of the Plan by All the Parties • Objective of Review at Various Stages of Project Life Cycle : Inform All the Parties and Make Them Partners in the Process

  42. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  43. Conflict Resolution Indexes Peña-Mora et al., 2001

  44. Review Process Peña-Mora et al., 2001

  45. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  46. Kelly’s Plan

  47. Brock’s Plan

  48. Summary • Conflict Management Plan • 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

  49. References • [Pena-Mora et al., 2001] : Pena-Mora, Feniosky and Tamaki, Tadatsugu (2001). Effect of Delivery Systems on Collaborative Negotiations for Large-Scale Infrastructure. ASCE Journal of Management in Engineering, Vol. 17 (2), April 2001. • [Peña-Mora et al, 2002] : Peña-Mora, F., Sosa, C., and McCone, S. Introduction to Construction Dispute Resolution. Prentice Hall, New Jersey, 2002 • [Stephenson, 1996] : Stephenson, R. (1996). Project Partnering for the Design and Construction Industry. Wiley. New York. 1996. Pfleeger, Shari Lawrence. Software engineering: Theory and Practice. Upper Saddle River, NJ. Prentice Hall. 2001. Jalote, P. An integrated approach to software engineering. New York. Springer. 1997.  Braude, Eric J. Software engineering: An object-oriented perspective. New York. Wiley. 2001.

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