Classification and resolution procedure for disputes in public construction projects

Abstract

Construction sector, which is associated with approximately two hundred sub-sectors in terms of employment area, plays the role of locomotive sector in economic development of countries. This feature of the sector affects economy directly and indirectly. Despite this positive contribution of the sector, disputes are inevitable between parties –administration and contractor– in a bid, contract and implementation processes, which are parameters of the construction process. Formal judicial process applied for the purpose of resolving disputes encountered in construction projects that the public assumes the role of employer, takes a long time. Therefore, while contractor is exposed to financial losses, administration cannot conclude public investment. In the study; disputes in public construction projects are classified, and proposals preventing disputes are presented. In this scope, firstly, 174 of 10591 disputes submitted to Court of Cassation, and 84 of 102 disputes submitted to Directorate of High Technics Board are selected regarding public construction projects. In the second stage, parameters causing disputes are classified under six main items. Thirdly, reasons of the disputes for each classification are detailed, and then proposals are presented for prevention of the disputes based on FIDIC (International Federation of Consulting Engineers) contract forms. Finally, a resolution procedure is developed for the processes including bid, contract and implementation phases based on FIDIC. By the presented proposals for GCCW (General conditions of construction works) official resolution paths can be reduced to a minimum, and the processes result positively for administration and contractors. It is concluded that the developed procedure is suitable as a practical tool for resolution process of the disputes in the public construction projects.