Construction contract is a contractor agreement for work. The nature of this agreement is more complicated than legal issues of Civil law, such as regular bargain, lease and loan agreements, particularly due to the long duration and immense risks involved in a construction project. Issues related to public works are further complicated by the uneven bargaining power between the government and the contractor, as well as the various policy burdens born by government officials, as the project owner.
Construction contract disputes not only arise from contract terms, document interpretation and related legal definition, but also derive from disparity of engineering practice and intrinsic background knowledge of construction practitioners. Furthermore, a construction project often develops interfaces with other projects undertaken by legally irrelevant parties. This creates yet more dispute prone opportunities.
Design errors, changes in specification, conflicts between pipeline design and interfaces, geological problems and inconsistencies between bid documents altogether bother construction contractors extendedly. These factors result in design changes, cost overrun, construction duration extension and other consequential loss and injuries, such as quality defects or site accidents.
The imperative issue is that the public owner work with the contractor in order to encounter and resolve the complexities, as discussed above. And whenever there are legal damages done to the contractor, the legal standing of the contractor shall be fully. In the realm of public works, this would include most importantly the owner’s inactiveness, during the course of contract performance.
Construction contract disputes most frequently attributed to public owners include delays in offering construction site, delivering material, confusing illustration of engineering drawing, mishandling of waste soil, inadequate auditing of work, and delay progress payments. Such disputes can only be efficiently settled by mediation or arbitration. However, court lawsuits are still the more prevalent, due to the same loath attitude uphold by the public owner. This further generates resents and increase financial burdens on the part of the contractor.
A non-profitable construction industry contributes to a dysfunction economy. This in turn degenerates state of public works, in terms of quality and time. Vast opportunity costs and social costs are lost, and the political atmosphere only calls for harsher treatment to the entirety of the construction industry.
Inactive public owners hardly regard this as a fault on their part. The construction industry remains a convenient scapegoat. Despising the construction industry as a cheat commercial player, irrational gambler, or even law-breaking cheater is publically and commonly acceptable. National policies for penalizing construction industry as a whole or individual contractor are abundant.
The aim of this work is to identify the facts and causes of the myriad ineffective aspects in the public work domain, particularly related to the attitudes of public owners. This work expects to advocate feasible concepts and actions, in order to condense consensuses within the industry and the public. Most hopefully, by putting these concepts and actions into reality, the state of public works in Taiwan will look for a brighter future.