Nature and Influence of Contractual Claims on the Performance of Construction Projects : Evaluation for Sustainable Property Development in Nigeria

Abstract

This study evaluates the nature and influence of contractual claims on the performance of traditional construction projects in Nigeria. The objectives are to evaluate frequency of occurrence, magnitude, as well as influence of factors on claims, influence of claims on cost, time and quality and importance of claims’ mitigation strategies. The study purposively sampled 72 contractors, 66 professionals and 45 clients using a questionnaire. Data was analyzed by using Likert scale, severity index, Mann-Whitney U and Kruskal-Wallis tests. The results show that extra-work, change orders and delay/extension claims are most frequent. Average estimated claim values vary between 6.9% and 30.7% of bid price. Stakeholders have similar view of frequency of occurrence and magnitude of claims (p-values = 0.826 and 0.972 > 0.05). There is a difference in the effect of factors between owners’ and contractors’ claims (p-value=0.001<0.05), while the influence of contractual claims does not vary among cost, time and quality (p-value=0.691>0.05). The study recommends that stakeholders should avoid claims, by placing priority on the factors with high significance. Stakeholders should adopt the identified mitigation strategies, with emphasis on holding periodic progress reviews and inspections, as well as reading and understanding the contract documents.