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Is change in Construction contracts a risk?

Analysis of causes and impacts

 

STUDENT PAPER

By Sirine Ben Jebara

SKEMA Business School

Paris, France

 



ABSTRACT

Changes in construction projects are very common and usually generate cost and time overruns. The purpose of management of change is to reduce the bad impacts of changes that are necessary to the project and not to eliminate them. Changes should be well-managed through a formalized change management process and if not, it will generate serious impacts on the schedule and the productivity of a project.

At this time, there is an insufficiency of standards for the methods used in project change management and the cause Is that the changes are sometimes not well-managed. Some projects are adaptable to changes since the contractors succeed in managing and predicting the change but there are some cases that they fail in saving the project from these different changes. To explain this, we used the Compensatory Model of Additive Weighting Technique to help us analyze different situations and different impacts of change within a construction projects.

Keywords: Change, Management, Impacts, Causes, Contractors, Construction projects, Risk, Organizational changes, Project changes.

INTRODUCTION

A construction project goes through several stages from planning, cost estimation, ordering, contracting, designing and engineering to the construction of the building and the delivery of the final project. In construction processes, decisions are taken based on the professionals’ personal experience and incomplete information that possibly lead to rework and change. Construction rework is generally related to the destruction of what has been already built, and this usually has a higher influence on the performance of the construction than the change option.

Managing the change is considered as an essential part of project management and it turns out to be very important to the success and the achievement of construction projects since project changes are unavoidable at all stages.

There are many sources for change which are inevitable but these changes generally refers to design or change orders, they have been called the biggest cause of disputes between the clients and the contractors and it can also be the cause of continuous delays in project schedule, requiring extra materials, added time, labor and cost to an already complex project. Changes should be managed to reduce the bad impacts and to maintain quality at its best level.

Change Management arises in construction at two levels which are project and organizational level. Managing how to introduce the change in an organization effectively and efficiently is the main purpose at the organizational level. On the other hand, the focus on trying to handle the changes that occur in the project due to external and internal reasons is the main aim at the project level.

Changes in construction projects can be the cause of many problems such as delays, claims and disputes and in some cases, it can be the cause of the end of a project if they are not resolved following a change management process.

To summarize, what this research has been designed to address are the following questions:

  • What are the main causes of change in construction contracts?
  • What are the impacts?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper: Ben Jebara, S. (2018). Is change in Construction contracts a risk? Analysis of causes and impacts, PM World Journal, Vol. VII, Issue XI – November.  Available online at https://pmworldjournal.net/wp-content/uploads/2018/11/pmwj76-Nov2018-Ben-Jebara-is-change-in-construction-contracts-a-risk.pdf

 



About the Author


Sirine Ben Jebara

Paris, France

 

 

Sirine Ben Jebara is an MSc student in SKEMA Business School, major in Project and Programme Management & Business Development (PPMBD). She graduated from HEC Carthage in Tunisia and held a Bachelor’s high-quality diploma in Finance. She has attended three internships in general in different types of company. She also has the knowledge background about international Marketing. She performed humanitarian work during her university years. She lives in Paris, France now and can be contacted at [email protected].