Dispute risk management in the procurement systems used in high-rise building projects

Abstract

Dispute risk is inherent in high-rise building projects because of project complexity and uniqueness. The type of dispute risk management required depends on the procurement method used. No previous study has focused on any specific type of project, such as high-rise building projects, although a need exists to manage dispute risks in procurement systems used in high-rise building projects. Thus, this study aimed to explore the systematic dispute risk management in traditional method with measure and pay (M&P), traditional method with lump sum (LS), and design and build (D&B) with LS procurement systems used in high-rise building projects. Delphi technique comprising three rounds of a questionnaire survey was used to collect the empirical data. By analysing the collected data, dispute risk factors were identified; the severity of the risk factors was assessed; the identified risk factors were allocated among the client, consultant, and contractor; and the appropriate risk response strategies were identified in respect of the procurement systems.  ‘Lack of skilled labour’ and ‘inability to complete work on time’ were the two most significant risk factors of all three procurement systems. In risk allocation, the risk should be allocated to the party that can best tolerate and manage the risk. Risk response strategies were found to be common in all three procurement systems. Dispute risks can be avoided at the commencement of the project itself by accommodating standard conditions of the contract together with an appropriate (this can be innovative) procurement system.