Building a Management System to Control the Construction Claims in Iraq

The paper deals with claims in construction projects in Iraq and studies their types, causes, impacts, resolution methods and then proposes a management system to control the impacts of claims. Two parts have been done to achieve the research objective (theoretical part and practical part). The findings showed that the main types of the claims are extra work claims, different site condition claims, delay claims and the main causes of the claims are variation of the orders, design errors and omission, delay in payments by owner, variation in quantities and scheduling errors. The claims have bad impacts on the cost by increasing (10% to 25%) and also on the duration of the project by increasing from (25% to 50%).The negotiation is the main method which is used to resolve the claims in the construction project in Iraq. Finally, the proposed claims management system is developed to control the causes of the claims during the preconstruction phase and construction phase.


Introduction
Today, projects of construction are the subject of more claims than in any other time. The high competition has forced contractors to bid projects with minimum profits in order to stay in business. In addition to their multiparty nature the projects are becoming more complex and risky.
Claims commonly arise between the parties to construction contracts (owner, consultant, and contractor). Claims in construction project are considered by participants of the project to be one of the most unmanageable and unpleasant events of a project (Ho and Liu 2004). This can be caused a many problems such as; delays, changes, unforeseen circumstances, insufficient information, and conflicts. Claims might be made for loss and expense, extension of time, liquidated damages and so on. The contract should set out what can constitute a claim and how it should be dealt with. There may also be claims associated with the appointment of consultants. The main objectives of this study is to identify the characteristics of claims building projects in Iraq including ; types , causes, impacts and Proposing an efficient system for managing claims in building projects in Iraq.

Overview of Construction Claims
Many researchers had taken place on claims in the construction project and the following are the main researches: Ala'a S. Shdiefat (2013) study claims causes that related to (owners , engineers , contractors and other ) and also determine the impacts of claims in projects in, the research findings showed that the main causes were the changes related to owner, while the delay by the contractor was the second cause, the claims impacts on the cost by increasing 10% to 25% of total cost , and on time by increasing 25% to 50%.
According to Zaneldin (2006) the construction industry in the United Arab Emirates is considered the largest single industry, yet, it is also very complex and the most fragmented industry as it involves multidisciplinary participants.
In this multidisciplinary environment, claims appear to hinder the completion of construction and cause delays in delivering projects. This research presents the results of a study of the types, causes, and frequency of construction claims in the emirates of Dubai and Abu Dhabi in UAE using a data from 124 claims for a variety of projects in the two emirates. The data were analyzed and the results of this analysis along with recommendations on how to reduce/prevent claims in construction are then presented.
Al-Momani (2000), This study is to investigate causes of delays on 130 projects in Jordan and to aid the mangers of construction projects in establishing adequate evaluation of the contract award by using quantitative data. The Results of this indicated main causes of delay in construction of public projects relate to planners, client changes, climate, site conditions, late conveyances, financial conditions and increment in amount. The presence of these factors has an effect on the completion at the time specified. Findings suggested that special attention to factors identified can help industry practitioners by minimize the risk of contract disputes.
Frank DK. (2010) study the causes of delay in construction projects in Ghana and identify the important according to the project participants. Thirty-two possible causes of delay were identified. The list of delay causes was subjected to a questionnaire survey for the identification of the most important causes of delay. The results of the study show that the respondents agree that financial group factors ranked highest. The budgetary gathering variables were deferral in respecting installment testaments, trouble in getting to credit and change in costs. Materials bunch components are second trailed by planning and controlling elements. Wilkinson, (2001. This research about project management companies in New Zealand. The major issues confronted were relationship-based. The examination in this paper found that venture administration organizations need to conquer issues in their associations with different experts on the venture group and with the customer. This study discusses the problems by using data collected from a survey to project management companies in the New Zealand construction industry and examined how project management companies saw their role, their experiences of managing construction projects and suggestions for improving relationships This examination recommends that the issues confronted by organizations in New Zealand are probably going to be worldwide and accordingly any arrangement proposed can be connected to different nations.

Methodology of Work and Data Collection
This part of the study narrates the manner in which the research objective of the study would be illustrated. This section discusses the data collection process, the sampling technique deployed and the data analysis technique to be used in the following steps. Data collection generally involves two methods primary data collection and secondary data collection. Primary data collection refers to the information which is gathered from the owner's documents. Secondary data refers to information that is collected from the respondents; in this case the respondents are project managers of construction projects. The respondents would be given research questionaries' to fill and this data would be utilized for the purpose of data analysis. Data collected, reported and discussed. The questionnaire survey was carried out, the results that have been obtained from processing of questionnaires using statistical package for social sciences SPSS.Finally proposed a management system to control causes and impacts of claims.

Analysis of Existing Claims in Construction Projects in Iraq
A real data has been collected from existed projects to determine the types, causes, impacts of claims. Claims information have been collected includes: project duration, project budget, causes of claims, resolution method for claims and their impacts on the projects time and cost as follows:

Project A
The total budget of the project is 15,000,000,000 ID with 2 years original duration.

Project B
The total budget of the project is 5,000,000,000 ID with 8 months original duration.

Project C
The total budget of the project is 44,000,000,000 ID with 4 years original duration.

Project D
The total budget of the project is 14,746,450,000 ID with 450 days original duration. Table (4.4) shows the causes of claims which happened in this project and their impacts on project cost and time.

Project E
The total budget of the project is 19,300,000,000 ID with 660 days original duration. Table (4.5) shows the causes of claims which happened in this project and their impacts on project cost and time.

Analysis of the Causes of Claims for the Studied Projects
The analysis of the five selected project data showed that the highest frequent repetition of claim causes, as presented in Table, (4.6) is (variation orders and design errors and omission).  Table below shows the resolution methods for the five projects. The table shows that the owner and the contractor resolved their claims through the negotiation process which is the main method of resolution.

Statistical Analysis and Discussion of Tabulated Answers
The questionnaire was formulated based on the literature review, the questionnaire was sent to a selected number of project parties (owner, contractors, and consultant), and after the questionnaire responses were collected the next step was analyzing the tabulated answers statistically. Weighted arithmetic mean and standard deviations were calculated and used to evaluate the responses:  The characteristics of sample have been identified from the responses of the participants as follows; 1-The academic qualification of participants as (45) of respondents holding BSc degree , (20) holding MSc degree and (6) holding Ph. D. degree.

The Reliability's Analysis of Claims
The Cronbach's Alpha is utilized to appraise the robustness of any research instrument. Any value above 0.70 is reliable especially for exploratory study (Nunnally, 1978), Table (5.1) shows the value of reliability for each causes which considered to be high and appropriate for the study purpose.

Data Analysis for Causes of Claims
Tables  to (5)(6) shows the ranking of the causes of claims which is related by the (owner, consultant, contractor).

Data Analysis for Impacts of Claims
Tables (5.7, 5.8) and Figure (5.1, 5.2) show the effects of claims that caused the project cost and time to increase.

Proposed of Claim Management System for Construction Projects
Management system of claims is proposed to have efficient procedures for minimizing the claims impact (cost and time), the proposed management system has been divided into two stages (preconstruction phase and construction phase) which are shows in figure (6.1) and (6.2).

Management System during the Preconstruction Phase
This phase will be achieved by the following steps: 1. Owner must select a qualified consultant (the consultant choosing should not depend on lower price. 2. Consultant must review the contract documents in related to specifications, drawings, designs; bill of quantity .the aim of this revision is to identify any ambiguities in contract documents. 3. Consultant should meet the owner for reviewing his needs and orientations. 4. Consultant has to prepare full documents for changes (addition and omissions). Moreover he has to provide final set of modified contract documents to come out with final impacts of changes on project completion cost and duration. 5. Owner has to give his approval for the new cost and duration. 6. The Qualified Based Selection QBS should be a basic procedure in selecting the qualified contractor, both of performance and price should be the base of selecting the contractors.

Management System During The Construction Phase
This phase will be achieved by the following steps: 1. Consultant has to establish a documentation center. The documentation center is keeping all transaction and correspondence between the project parties. 2. The contractor has to assign a project manager; the project manager responsibility is to assign a construction manager CM, the CM responsible for mange, claims, variation orders, and any technique issues related to works. 3. The contractor should then notify both of the owner and the consultant about the causes of any claims, if the contractor fails to notify the owner and the consultant, he will then lose his right for any compensation. 4. The construction manager shall prepare all the documents of claim.

5.
Contractor has to update the information about the claim through his project manager and CM. 6. Engineers have to analysis documents of claims with contractors of the project and CM. 7. If the contractor accepted the decision of the engineer, a copy should sent to the owner to paid and if not the claim then goes through any method of resolution.

Conclusions
The main types of claims in construction projects in Iraq are (extra work claims, different site condition claims, delay claims, Changes claims, and Damages claims) , and this types of claims caused by many causes which are the main five causes of claims in construction project in Iraq are (Variation orders, design errors and omission, delay in payments by owner, variation in quantities, scheduling errors). The main method which are used to resolving claims in construction project in Iraq is the negotiation method. There is an impact of claims on the project cost between (10%-25%) and on the project time between (25%-50%) and a claim management system should proposed to have efficient procedures for minimizing the claims impact (cost and time) during (preconstruction phase and construction phase) to reduce the claims in construction project in Iraq.