REDUCING CONSTRUCTION COSTS: USES OF BEST DISPUTE RESOLUTION PRACTICES BY PROJECT OWNERS

PROCEEDINGS REPORT

FEDERAL FACILITIES COUNCIL TECHNICAL REPORT No. 149

THE NATIONAL ACADEMIES PRESS

Washington, D.C.
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Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report REDUCING CONSTRUCTION COSTS: USES OF BEST DISPUTE RESOLUTION PRACTICES BY PROJECT OWNERS PROCEEDINGS REPORT FEDERAL FACILITIES COUNCIL TECHNICAL REPORT No. 149 THE NATIONAL ACADEMIES PRESS Washington, D.C. www.nap.edu

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Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report NOTICE The Federal Facilities Council (FFC) is a continuing activity of the Board on Infrastructure and the Constructed Environment of the National Research Council (NRC). The purpose of the FFC is to promote continuing cooperation among the sponsoring Federal agencies and between the agencies and other elements of the building community in order to advance building science and technology— particularly with regard to the design, construction, acquisition, evaluation, and operation of Federal facilities. The sponsor agencies are the: Architect of the Capitol Department of Agriculture, Agricultural Research Service Department of Commerce, Office of Real Estate Department of Defense, Defense Facilities Directorate Department of Energy, National Nuclear Security Administration Department of Energy, Office of Engineering and Construction Management Department of Energy, Office of Science Department of Health and Human Services, Indian Health Service Department of Health and Human Services, National Institutes of Health Department of Homeland Security Department of Homeland Security, U.S. Coast Guard Department of State, Bureau of Overseas Buildings Operations Department of the Air Force, Air National Guard Department of the Air Force, Office of the Civil Engineer Department of the Army, Army Corps of Engineers Department of the Army, Assistant Chief of Staff for Installation Management Department of the Interior, Office of Managing Risk and Public Safety Department of the Navy, Naval Facilities Engineering Command Department of Veterans Affairs, Office of Facilities Management Environmental Protection Agency General Services Administration, Public Buildings Service National Aeronautics and Space Administration, Facilities Engineering and Real Property Division National Institute of Standards and Technology, Building and Fire Research Laboratory Smithsonian Institution, Facilities Engineering and Operations U.S. Postal Service, Engineering Division As part of its activities, the FFC periodically publishes reports that have been prepared by committees of government employees. Because these committees are not appointed by the NRC, they do not make recommendations, and their reports are considered FFC publications rather than NRC publications. For additional information on the FFC program and its reports, visit the Web site at www.nationalacademies.org/ffc; write to Director, Federal Facilities Council, 500 Fifth Street, N.W., Room 967, Washington, DC 20001; or call 202-334-3374. Printed in the United States of America 2007

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Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report Acknowledgments The Federal Facilities Council thanks the forum participants for giving generously of their time and for sharing their expertise, views, and opinions through briefings and discussions. Mr. James Groton, Mr. James Slaughter, and RADM Jack Buffington of the National Academy of Construction deserve special recognition for their efforts in planning, organizing, and bringing the forum and this report to fruition.

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Reducing Construction Costs: Uses of Best Dispute Resolution Practices by Project Owners: Proceedings Report Contents 1   OVERVIEW   1 2   CHANGING THE ADVERSARIAL CULTURE OF THE CONSTRUCTION INDUSTRY   7 3   BRIEF REVIEW OF TYPICAL DISPUTE PREVENTION AND RESOLUTION BEST PRACTICES   13 4   USE OF BEST PRACTICES IN CONSTRUCTION   19 5   WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY SUCCESSFUL USES OF DISPUTE RESOLUTION BEST PRACTICES   21 6   EMPLOYING STANDING DISPUTE RESOLUTION PANELS WITH THE BRIDGING METHOD OF DESIGN AND CONSTRUCTION PROCUREMENT   25 7   RISK ALLOCATION: THE PENTAGON RENOVATION PROJECT   31 8   METHODS FOR REDUCING CLAIMS   37 9   EXPLORING WAYS TO ENCOURAGE AND IMPLEMENT GREATER USES OF DISPUTE RESOLUTION BEST PRACTICES   43 10   GETTING BEYOND PROCESS TO THE ROOTS OF LITIGATION: CHANGING THE LITIGIOUS CULTURE IN AN ORGANIZATION AND ITS IMPACT ON THE CONSTRUCTION INDUSTRY   49     APPENDIXES          A  Agenda   55      B  Speaker Biographies   57

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