The Contribution of Contract Administrators Towards Prevention of Escalation of Contractors’ Claims Into Disputes.

Abstract

Standard forms of contracts provide mechanisms of resolving claims through determination by Contract Administrators. Failure to resolve claims at the Contract Administration level leads to a declaration of disputes. Despite the existence of such contractual provisions, there has been a sustained increase of disputes arising from unresolved contractor’s claims which are subsequently escalated to adjudication, arbitration or even litigation. After a review of literature, the research identified impartiality, procedural fairness, trustworthiness and accuracy of determination as the main factors that influence satisfaction with Contract Administrators’ determinations on contractor’s claims. The aim of this research study was to evaluate the performance of Contract Administrators towards prevention of escalation of contractors’ claims into disputes in terms of whether they maintain impartiality, procedural fairness, trustworthiness and accuracy during the evaluation of claims. Impartiality, procedural fairness, trustworthiness was rated by 5-Pont Likert Scale whereas accuracy was measured by comparing Contract Administrators’ determination with arbitration or adjudication awards on the same claims. The target population was contractors. Purposeful sampling was done on a sample size of 51 contractors and responses were collected through questionnaires. 38(75%) contractors returned their filled questionnaires. The data was analyzed through Microsoft Excel and SPSS to give out descriptive statistics in terms of means and standard deviation. The results showed that contractors were overly neutral with an average mean of 3.13 and 3.01on their assessment of Contract Administrators’ manifestation of impartiality and observance of procedural fairness respectively when evaluating contractors’ claims. However, on the question of whether Contract Administrators demonstrate trustworthiness, the results posted a mean score of 2.9 indicating disagreement with the statement. On Contract Administrators’ determination of contractors’ claims in comparison with adjudication decisions or arbitration awards, in 52 (73%) of the claims, the findings in adjudication or arbitration were different and favorable to the contractors compared to the findings made by the Contract Administrators. In 57(77%) claims, the amount awarded by arbitration was significantly higher than the amount determined by the Contract Administrators whereas, in

26(37%) of claims, the findings in arbitration were the same but the amount awarded were significantly higher than what was initially recommended by the Contract Administrators. The study concluded that the performance of Contract Administrators in the prevention of declaration and escalation of disputes arising from disputed contractors’ claim is not satisfactory. The rate at which contractors win arbitration cases is a sign that Contract Administrators do not give fair determination during the evaluation of contractors’ claims and is serving as the reason for contractors to escalate more claims into disputes and arbitration. The study recommends training of Contract administrators on how to practice impartiality, procedural fairness, trustworthiness, and accuracy during the evaluation of contractors’ claims. Finally, the research recommends further study on what could be the possible reasons for the differences in findings and determinations made by Contract Administrators when compared to adjudication or arbitration awards.