RC108 SeptOct2023 - Magazine - Page 30
has a historically high number of large infrastructure
projects underway.
Works in urban areas must navigate buried utility services, which are often poorly mapped or even unrecorded.
Projects in remote areas—such as pipelines and transmission lines—penetrate mountainous areas or other terrains
where geological data is scant.
This causal factor peaked in the power and utilities
sector, triggering claims and disputes on 52.9 per cent of
Canadian projects. Almost a quarter of buildings (24.1 per
cent)—exceeding transportation projects (21.4 per cent)—
had claims and disputes arising from unforeseen physical
conditions.
Workmanship deficiencies
In 2022, CRUX also detailed the prominence of claims over
workmanship deficiencies in the Americas (and Europe).
Our sectoral analysis indicates defects are more common
on building projects than on civil engineering projects.
This is true for both the U.S. and Canada, but a slightly
higher proportion of our buildings (27.6 per cent) and
power and utilities projects (17.6 per cent), are affected.
New transportation infrastructure is more negatively
impacted in the US (22.7 per cent) than in Canada (14.3 per
cent) by workmanship deficiencies.
Project labour agreements, phase planning in collaboration with specialist trades, and increased investment in
skills training can pre-empt some of these problems. One
in 10 Canadian building projects had claims or disputes attributed to skills shortages and/or unskilled workers (10.3
vs. 7.7 per cent in the U.S.).
TABLE B
Percentage of projects affected by main causes of claims or disputes
Change in scope
Design was incorrect
Physical conditions were unforeseen
Access to site/workplace was restricted and/or late
Design was incomplete
Design information was issued late
Workmanship deficiencies
Bias and/or failure to cooperate
Contract management and/or administration failure
Weather conditions were exceptionally adverse
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RENEW CANADA – SEPTEMBER/OCTOBER 2023
Risk mitigation
Although focus on project disputes has most often
occurred historically at project completion, more contractors and contracting authorities are seeking expert support earlier in the project life cycle. Settling claims during
a project not only avoids protracted litigation afterward
but also defuses tensions before they escalate, avoiding
souring relations and potentially spawning additional
delays and disputes.
A further step—advancing risk identification to the
pre-construction phase—would be even better for the
industry and all stakeholders. It would enable action
to pre-empt or mitigate problems—from corner cutting in design to cursory site investigation. Moreover,
identifying risks prior to the start of construction would
be conducive to a culture that
fosters market engagement, early
contractor involvement, and
Canada
U.S.
collaborative procurement and
partnering.
34.6%
27.0%
The CRUX data has helped
30.9%
20.0%
HKA identify these issues as they
29.6%
18.5%
uniquely apply to the Canadian
construction market. Canada’s
29.6%
13.3%
infrastructure market continues
24.7%
19.8%
to be robust, and addressing
22.2%
18.5%
these issues proactively helps
reduce the risks they pose to the
19.8%
21.8%
projects. Our common goal must
18.5%
4.5%
be to achieve more successful
17.3%
15.5%
project outcomes across Canada
and reduce the toll of lost money
17.3%
14.3%
and time.
RENEWCANADA.NET
WINDSOR-DETROIT BRIDGE AUTHORITY
Steering major
infrastructure projects—
such as the Gordie
Howe International
Bridge—to achieve
successful outcomes
involves navigating
multiple risks.
Differentiating factors
Several causation factors are unique to Canada’s top 10
ranking.
Late or restricted access to the site or workplace contributed to more than twice as many claims and disputes
in Canada as in the US (29.6 vs. 13.3 per cent). Power and
utilities projects (41.2 per cent) faced the worst disruption, followed by transportation infrastructure (32.1 per
cent) and buildings (17.2 per cent).
Delays in securing environmental permits and land
possessions are among the likely causes of claims or
disputes, as the data does not show any spike associated
with the pandemic.
Two other differentiating factors— ‘cultural or personality clashes’ and ‘bias or failure to cooperate’—arose
on more projects than expected (16.0 and 18.5 per cent
respectively). Our country’s construction and engineering market is open, and public-private partnership (P3)
projects have attracted many contractors and investors
from overseas. HKA has been helpful in assisting those
contractors in understanding and adapting to the project
requirements that are unique to Canada. In one instance,
a contractor well versed in constructing plants in Europe
recently sought advice on procuring locally experienced
contractors for its project. Such foresight reflects a positive trend toward earlier risk mitigation on large infrastructure projects.
