INVESTIGATING THE IMPACT OF CONTRACT RISK AND DISPUTE MANAGEMENT ON PROJECT PERFORMANCE IN HAWASSA PUBLIC BUILDING CONSTRUCTION

Abstract

The construction industry faces various uncertainties and risks that can lead to disputes and affect project performance. Effective contract risk and dispute management practices are crucial for achieving project objectives. However, in the Ethiopian context, there is a research gap in understanding the impact of contract risk and dispute management practices on performance efficiency and effectiveness in public building construction projects. Identify potential risk factors that affect project performance in terms of time, costs, and quality. Additionally, it aimed to examine the current practices of dispute management in Hawassa public building construction projects and the challenges faced in resolving contract-related disputes. Finally, the study aimed to develop recommendations. The study employ a mixed-methods research approach, including a comprehensive review of relevant literature, analysis of contract documents and provisions, interviews with key stakeholders, and data collection from public building construction projects in Hawassa city. A sample of public building construction projects in Hawassa city was selected purposively for the study. The findings was analyzed quantitatively and qualitatively to provide a comprehensive understanding of the impact of contract risk and dispute management on project performance. The findings of the study indicated that the adequacy of provisions in the special conditions of contract for addressing risk and dispute resolution proactive measures suboptimal. Only 38% of respondents rated the adequacy of these provisions as "good" suggesting the need for improvement. Additionally, the study identified several potential risk factors that impact project performance in Hawassa, including delays in material delivery (27%), poor project management practices (18%), and inadequate coordination among stakeholders (15%). In terms of dispute management, the study revealed that the current practices faced challenges, with 65% of respondents experiencing difficulties in resolving contract-related disputes. The major challenges identified included lack of impartiality in the contract forms and delays in dispute resolution processes. Based on the findings, it is recommended to improve clause clarity by providing a glossary and clear definitions in contract forms. Addressing the issue of impartiality in PPA contract forms is crucial for ensuring fair dispute resolution. Enhancing cost estimation and control measures is necessary to manage cost adjustments effectively. A comprehensive review of the amount set as liquidated damages should be conducted to ensure its reasonableness.