Reducing Construction Costs

This report examines the significant issue of disputes in the construction industry, highlighting effective resolution techniques and providing guidance for project owners to enhance project success and minimize costs.

Reducing Construction Costs examines the significant challenges posed by disputes within the construction industry, as identified by the National Academy of Construction (NAC). In 2002, the NAC recognized that disputes not only lead to inefficiencies but also incur substantial costs, hindering overall industry progress. Their assessment revealed that while effective tools and techniques for dispute prevention and resolution exist, they are not being utilized to their full potential.

In response to this issue, the NAC collaborated with the Center for Construction Industry Studies at the University of Texas and the Alfred P. Sloan Foundation in 2003 to conduct empirical research aimed at understanding the transaction costs associated with various dispute resolution methods. This initiative laid the groundwork for a broader discussion on the economic implications of disputes in construction. By 2004, the NAC partnered with the Federal Facilities Council to host a forum focused on best practices in dispute resolution, highlighting the importance of collaboration between government and industry stakeholders.

The report details various successful applications of dispute resolution techniques in notable projects and emphasizes the role of project owners in influencing the effectiveness of these practices. It outlines actionable steps that owners can take to enhance project outcomes, ultimately advocating for a shift towards more proactive dispute management strategies. By addressing the root causes of disputes and promoting the adoption of effective resolution tools, Reducing Construction Costs aims to foster a more efficient and cost-effective construction industry.