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Dispute Mitigation Due to Un-Mature Change Management

in Construction Projects in Gulf Area

 

FEATURED PAPER

by Essam Mohamed Lotfi, PMP, CCP

Abu Dhabi, UAE

 



1.  Abstract

“Is Change Fact – of – Life”

Despite construction industry in GCC area is growing rapidly, there are apparent severe failures to meet the project objectives it was undertaken for, in terms scope, time and cost. However; change is Fact – of – Life unfortunately buyers and sellers usually fail to mitigate the risk of changes effectively due less maturity level of change management. The paper intends to expose the root cause of change in construction industry to enable buyers and sellers to eliminate the probability and impact of the change. It is inevitable to charter the scope baseline with necessary acceptance criteria and to develop a proper change management plan as early as possible to mitigate the root cause of prospective disputes due to change.

Keywords: Construction, GCC, maturity, change management, dispute

2. Objectives

Objectives of this research are to identify the relationship between the root cause of change in construction and maturity level of the organization in dealing with the change, to control all the implication on the whole project baselines in terms of scope, time & cost. The research will test:

  1. Organization understanding level of change management and change control.
  2. How organization’s maturity level influences the change management?
  3. What are the precautions or provisions that seller and buyer should include to control the change management plans?
  4. The pre-actions that could be undertaken by buyer and seller to mitigate the disputes due to changes.

3. Literature Review

In construction projects change is the significant cause of delays and dispute between buyer and seller. Despite both parties trying to stick with the contract obligations, disputes due to change arise and take place. Most of previous researches focused on description of the change types and how to mitigate the risks of the cost overrun and time claims due to incurred changes. However; the root cause of changes and the level of understanding of the value of change management are not to the level where each party seller and buyer could control and manage the changes and their impacts to achieve the project objectives smoothly and successfully.

Based on project life cycle approach either adaptive, predictive or incremental (1) PMBoK it is apparent that since project is progressing the impact of any change will drastically impact the project, hence there should be an escalation provision during the time of chartering the project during the development of project management plan and risk management plan as well that regularize any cost and time impact of prospective change. However; this is a practical approach neither seller nor buyer have the maturity level that enable them to eliminate the root cause of the change or mitigate the risk of potential changes by having extended collaboration sessions or workshops for collecting requirements as much as possible and developing a clear project scope statement with all necessary acceptance criteria as early as possible during initiation and planning phases of the project. Since change is fact of life (3) so failure to provide escalation provisions during project chartering and project management plan development will obviously impact the project and increased the possibility of disputes between seller and buyer.

In addition there will be inevitable changes due to seller’s failure to get project’s deliverables signed-off by the buyer or end-user due to seller’s lack of understanding the end-user requirements (4) or the difference between As-built and As-designed as the seller should take all necessary corrective actions or defect repair through change request and this will requires the seller to evaluate all the impacts due to his failure and consequently the result of this change request will be revising either scope, cost or schedule baselines.

At this point the low level of seller’s and buyer’s maturity will disrupt both parties towards achievement of project objectives and their organizations goal as well and the absence of agreed upon amount thresholds and tolerances should be re-evaluated, despite it is obviously known that every organization has it’s enterprise environmental factors.

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About the Author


Essam Mohamed Lotfi

Abu Dhabi, UAE

 




Essam Lotfi
, PMP, CCP is ELV Projects Manager, BSc. in Electrical Engineering, Power Distribution through Zagazig University, Egypt since 2001. He has pursued and achieved his certificates in Project Management (PMP®) from PMI-USA since 2013, and certificate in Cost Management (CCP®) from AACE International since june-2014. Essam has 15 years extensive hands on experience in various aspects of projects and project management within maintenance, power distribution networks, monitoring and supervision, and construction projects as well.

He has volunteered at PMI-Global Congress EMEA-2014 – Dubai during 5th to 8th May 2014. He has made technical presentations at PMI-AGC 15th International conference –Bahrain 19th to 21st January 2015; the 54th AACEi-SF Bay Annual Western Winter Workshop, Lake Tahoe, Nevada, USA; and the 55th AACEi-SF Bay Annual Western Winter Workshop, Indian Wells, CA, USA. He has authored and co-authored papers previously published in the PM World Journal and now contained in the PM World Library at https://pmworldlibrary.net/authors/essam-lotffy/

An independent project management, cost engineering and cost control consultant and instructor, Mr. Lotfi can be contacted at [email protected]