Research Into The Quantification Of Transactional Costs In Construction Project Disputes

With the complex constructions and fussy contract documents, the constructionprojects have grown more and more complex, which results in complex conflicts anddisputes. The dispute itself is a non-value behavior, but solving dispute takes lots ofcost, even has some potentially profound effects. This article analyses the cost causingby solving dispute quantitative and proposes a method to forecast transactional cost,which is helpful to identify and analyze the possible transactional cost, chooseappropriate solving strategies, avoid escalating dispute and reduce the dispute cost fordispute participants,Based on the proposed factors of research achievements and the factors got frominterviews with experts, this article builds the factor system of construction disputetransactional cost and divides it into two parts, explicit transactional cost and hiddentransactional cost. For the not easily identifiable factors of hidden transactional cost,the importance level of the loss it caused is analyzed quantificationally withquestionnaire survey. And the result shows that the greatest loss, which contractorbelieves is caused by losing opportunities for future cooperation, while ownerbelieves it is caused by the delays. Next, the degree of importance of hidden costfactors is further analyzed with the principal component-factor analysis method. Andthe weights of hidden cost factors calculated by its two algorithms are slightlydifferent. So, considering both of the results, this article finds the top five factorswhich effect hidden cost most, and they are other cooperation, future cooperation,contractors’ bidding competitiveness loss, the loss because of the delay of fundrecovery and the loss of quality.Based on the identified factor system of project dispute transactional cost, thisarticle further proposes a method of quantitative prediction for project disputetransactional cost. And21cases of project dispute are collected to predict itstransactional cost by means of a combination of structured interview andquestionnaire survey, which helps dispute parties to get reasonably predictabletransactional cost of solving project dispute, set reserve price objectively andreasonably and avoid escalating dispute. In addition, aiming at the delays, which owner concerns most, this article makes afurther discussion on how to decrease transactions costs and resolve disputes friendlyin the case of progress and quality performance on the basis of own researchachievements. When the dispute occurs, if contractor ensures the progress and qualityand tries to void delay, the hidden cost of delays and loss of quality will effectivelyreduce. And the owner will accept the contractor’s effort and make concessions forhis own benefit, which is also beneficial to contractor.