This paper highlights the ways in which to handle conflict between contractors and clients. In this sample, the contractor was tasked with the construction of a building. However, during the commissioning process of the building, an inspection report by a building inspector and engineer revealed that there were minor defects in the HVAC system. Therefore, as the agent representing my client, I am tasked with dealing with both the client and the contractor so as to come up with an amicable solution with regards to the problem at hand.
The commissioning process was done by a professional building inspector and engineer as stipulated by the contract between the civil engineer and the representatives of the client. The contractor was to deliver the building as fully operational. The same company was to be paid a lump sum that would cater for all costs. This would include the hiring of another electrical firm to handle all electrical installations. The HVAC system was part of the electrical system. However, the main contractor wanted to be paid an extra sum to repair the HVAC system but the client refused to do so stating that those were not the terms of agreement as stipulated by their contract. Therefore, I acted as the mediator in this case. “The primary benefit of mediation is risk and cost control. Because the parties arrive at the solution, the disputants maintain control of the entire process.” (Kelsey 2010: 1).
The client was informed of the HVAC defects and the position of the main contractor. The client declined to add any more funds towards the project. The client claimed that the relevant clause with regards to the conflict mentioned was clearly stipulated in the contract. The client further claimed that the contractor had accepted all the terms of the contract without any question. This was also the case as all the other bidders of the contractor. The client therefore felt that the contractor was going against the terms of agreement. It was assumed that the bid would take care of any contingency with relation to extra costs that the contractor would have to incur.
The contractor was informed of the position that the client had taken with regards to the defects in the HVAC system. The contractor accepted that they had failed to raise this matter during the bid clarification meetings. This is because such implications had not been noticed. However, they claimed that the defect was not caused by them and that they had done their civil work perfectly. They claimed that the additional costs should not be levied on them but on the electrical firm that had installed the HVAC system.
On further scrutiny of the contract agreement, it was found out that the contractor had a weak case to prove. This is because the client made an agreement with the civil company and not the electrical firm. Therefore any dispute was to be handled between the electrical firm and the civil firm. Since the commissioning was underway, the client was not to suffer the consequences of this conflict. An amicable solution was devised and the HVAC system was to be repaired and the conflict issues be sorted out later. This meant that the final payment of the contractor was not changed and that the issuance of the final certificate was done in time.
The closing stage of projects involves a “formal acceptance of the project and the ending thereof.” (Harrison, 2004: 34). Documenting the lessons learnt and file archiving are some of the administrative activities involved.
The closing phase involves:
An example relevant to this case is given by a case study by Whitticks (2005) titled ‘Direct and Consequential Costs’. In the final phase, the following statement resolves the dispute between the contractor and the client “Such penalty for delay shall be recoverable from Contractor by any means available to Company under the terms of this Contract or at law.” (Whitticks, 2005: 230)
“Every party mentioned in a construction contract is responsible to follow the terms agreed to in the contract” (Rothstein 2013: 1). Before accepting terms of any contact, thorough scrutiny should be done and any ambiguous statement is brought forward for clarification. This will take care of any possible scenario that may occur during the project implementation. “Honesty and candor between the owner and the contractor is necessary for progressive construction management.” (Levin, 1998: 7).