into the project contracts) will establish a framework up front for
how the parties will manage conflict and disputes as the project is
designed, permitted, and built. Infrastructure projects often use
mediation, advisory opinions, and dispute review boards as their
primary methods. (See box on this page.)
As an example, one recent large infrastructure project successfully
used advisory opinions to resolve disputes. The owner had entered
into a single construction contract with one contractor for the
entire project, so their relationship will last for several years.
During the first phase site work, a dispute arose over piling and
foundations based on subsurface conditions. The parties came
up with the following process to obtain a non-binding advisory
opinion quickly on both claims:
• The neutral would be a mutually agreeable single arbitrator
with at least 10 years in the industry.
• Within 30 days the parties would exchange all materials to
be relied on in the hearings. Two weeks later, position papers
would be submitted.
• The hearing would have strict time limits with a 30 minute
opening statement and a 4 hour presentation of positions.
Only the neutral would ask questions.
• The neutral would deliver a decision within 10 days of the
close of the hearings in a written opinion no more than three
( 3) pages in length.
• Either party would have the right to object to the decision
within 30 days. If there were no objections, the decision would
become final and binding. If a party objected the decision
would remain non-binding and proceed to arbitration, but
the objecting party objecting would pay the entire cost of the
In this case, neither party objected to the decision within 30 days.
Thus the matter was completely resolved before the project was
even 30% complete. The entire process was completed within 90
days from start to finish. The cost of the advisory opinion process
was probably less than 20% of what a binding arbitration process
would have cost and only slightly more than the cost of mediation.
Methods in Infrastructure Projects
Mediation. Mediation is not new to the construction industry, and
is becoming more widely used on projects. Many of the standard
industry form agreements now require that the parties agree to start
with mediation before they undertake the next step, whether that
step be binding arbitration or litigation. As with other collaborative
processes, mediation is well suited for multi-party agreements. The
mediator’s main role is to actively assist the parties in achieving
their interests and fostering settlements that work. The mediator
serves to schedule and “coach” negotiations, acts as a catalyst for
open dialogue, helps develop proposals between the parties, and
serves as an assessor – not a judge – of the positions taken by the
parties during the course of the negotiations. On construction
projects, the mediator often is a construction industry professional
who can communicate and understand the project parties’ issues
Advisory Opinions. The use of a non-binding advisory opinion
from an expert third party neutral can be a cost-effective, real-
time method to resolve disputes. It has some advantages over both
mediation (which often is not an evaluative process) and binding
arbitration (which often is very expensive and time-consuming).
The advisory opinion can give the parties a neutral benchmark
to settle the dispute, before large amounts of time, money and
damage to on-going working relationships are incurred.
Dispute Review Boards. Dispute Review Boards (DRBs) consist
of a standing panel, typically with a member chosen by each party
and the remaining member chosen by the other panel members.
DRBs can be a powerful tool in promoting collaborative dispute
avoidance and dispute resolution. DRBs that are appointed at
the beginning of a project and in place through the life cycle of
the project can help avoid or defuse disputes by regular meetings
with the parties that promote open communication about issues,
challenges or potential disputes.
DRBs can also provide “advisory recommendations” that are
informal evaluations of disputes before they become formal
claims—the parties can take the DRB’s feedback into consideration
in their negotiations. In more formal claim situations, the DRB’s
detailed evaluation of the parties’ positions and recommended
outcome can be a powerful tool in promoting collaborative
dispute resolution. DRBs are particularly helpful in complex
engineering, construction and manufacturing projects where its
opinions can be advisory, non-binding and made in real time
during project execution. The DRB can also be structured to
address the internal relationships of the parties that make up
the development team, and the same or a differently constituted
DRB panel can address the relationships between the project
team and its consultants and designers.
The most valuable contribution of the DRB is in dispute
avoidance by providing a forum for the parties to jointly find ways
to minimize the impacts of unforeseen events. Recommending
resolution of disputes is another important function of the DRB,
but ultimately the project parties still control the outcome since
the recommendations are non-binding.
What’s Innovative in Project
Lifecycle Collaborative Processes?
As noted above, many of these conflict management and dispute
resolution techniques are not new and are well accepted. However,
as dispute systems designers we often design processes in silos, in
the sense that we have a process for each phase of the project, but
each is developed only for that phase. So, for example, a consensus
building process may address issues in the planning phase, but
then the process is “completed” and the design and permitting
phase may have another process put in place, and so on and on.
What happens is that each project phase is treated as its own stand-alone segment with a defined set of players and issues, and there is
little or no continuity between and among phases.
What is different about our approach is that we look for a common
thread of collaborative behaviors and goals and then design a system
that is continuous, but evolving, as each phase unfolds with
different sets of issues, players and challenges. The way to do this
is to use specific tools to design a holistic conflict management
and dispute resolution approach that recognizes and reflects the
commonalities and differences each project phase presents.
First, we refer to the “collaboration imperatives” which, because of
changes in the industry, require collaborative behavior. Examples
of this are alternative project delivery approaches (with more
complexity and shared risk/reward) and Building Information
Modeling which by its nature (computer-aided design using a shared
model) requires parties to work together to make BIM work.