Resolving Payment Issues, Difference Between Public and Private Projects
Date Posted: May 27, 2021
Posted In: Ideas,
From Construction Dive: Disagreements can arise on any size project and over a wide variety of issues. Consultancy firm HKA found in a 2020 report that scope changes drove the majority of construction disputes worldwide, followed by design errors; incomplete design; substandard management of subcontractors and suppliers; unforeseen physical conditions; issuing design information late; deficient workmanship; differences in contract interpretation; and late approvals.
Of the $1.8 trillion of projects that HKA examined, construction disputes cost almost $50 billion and extended job schedules by 71%.
So, it’s safe to say that many private-sector contractors have already dealt with the type of issues that can end up in disputes. However, with a potential federal infrastructure plan in the works, valued at almost $2 trillion, those contractors that specialize in private work could be considering a leap into the public sector as they look for more certainty after a year when the COVID-19 pandemic cast doubt on the viability of some projects and stalled others.
Hand in hand with the new opportunities in the public sector, though, come different rules and processes around some of the areas of disagreement a contractor could encounter and top among these is the issue of payments.