A systemic approach for construction contract claims settlement in the Kingdom of Saudi Arabia

The Kingdom of Saudi Arabia (KSA) construction sector is an important part of the country’s Vision 2030 programme that is focused upon increasing non-oil economic growth. The structure of the KSA construction sector is different to many countries because of the reliance upon foreign workers and international companies to deliver projects. Culture also plays an important role, together with the use of Sharia law for dispute settlement. The KSA government is a key client of the sector commissioning projects to develop and improve housing, infrastructure, and social projects. Construction claims are endemic on KSA public sector projects. Cases of disputes, conflicts, and claims are on the rise over the past two decades which impact the time, cost, and quality of the work. In the worst-case scenario, they may even result in project abandonment. Making claims and resolving disputes takes a long time, costs money and resources, and can affect the professional relationship of the parties involved. The costs of disputes and contractual claims is rising and becoming more difficult. The claims settlement procedure is a complex process of interdependent and interrelated activities, which takes time and can delay the project. This research considers the efficiency of claim settlement procedures in KSA construction projects with the aim of developing a code of best practice. To develop the code, data and information was collected through mixed methods, including qualitative and quantitative methods. Interviews were conducted with 15 professionals involved in KSA construction projects. A survey questionnaire was designed and distributed to the professionals to collect quantitative data to frame measures for the code of best practice. The primary causes of claims have been identified. The most important feature is the lack of design development at the tender stage, with projects being started on site with incomplete and inaccurate information, which ultimately leads to claims. Contingency allowances are included in tenders for risks that are poorly specified. The two most critical areas in the pre-construction phase are the design process and the contract awarding procedure. There are five contributions. Firstly, the research explored the underlying causes of disputes and claims through qualitative and quantitative data raised from interviews and survey questionnaires from 15 respondents