Characteristics and causal factors of claims in michigan highway construction projects

The US highway system is the largest road network system in the world. MDOT administers about 9,722 route-miles, (28,000 lane-miles) of roadway networks in Michigan. Every year, hundreds of projects worth millions of dollars are let by the State Transportation Agency (STA). Majority of these projects are successfully completed within the original scope of work, budget, schedule, and without litigation. However; some projects end up in litigation and disputes costing tax payers a great amount of money and the STA a great amount of resources. The number and cost of these construction claims has been substantially increasing in recent years. Research on this topic has been limited to-date. Therefore, a research on this subject is needed to investigate all of the factors affecting highway construction claims to improve efficiency and effectiveness of highway project delivery. The data available at the STA provide a rich source of information that can be utilized to study the characteristics and causal factors of claims in highway construction projects at the STA. However, until this point, these separate data sets were not integrated and much of it was not utilized for this type of research or analytical purposes. A research of all of the projects that experienced claims was initiated that was followed by research and collection of all of the projects that were categorized as successful projects at the STA. All of the projects were organized and analyzed using logistic regression modeling. LIMDEP software was utilized to determine the factors that are more likely to affect the filling of construction claims and their likely payouts. The results were tabulated for all of the significant factors based on the values of their Estimated Coefficient, Standard Error, T-Statistic, P-Value, and Logit Relative Elasticity Calculations. The analysis showed that certain projects factors are more likely to affect the filling of a claim, and that certain factors are more likely to affect the payout on the claims. The results also indicated that certain project factors do not seem to have any significant affect on the likelihood of filing of a claim or the payouts of these claims. This research is the first of its kind as it categorizes the projects specific factors according to their likely affect on the filing of construction claims and the payout of these filed claims based on Michigan data. This methodology can be tested and applied in other state transportation agencies to mitigate the risks of construction claims on highway transportation projects