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Conflict Management Plan

Conflict Management Plan. Definitions. WHAT Assessing Susceptibility of Each Project to Conflicts and Gravity of the Conflicts Developing Cost Effective Ways for Conflict Avoidance and Dispute Control Presenting Complete, Unbiased and Unanimous Plans WHO

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Conflict Management Plan

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  1. Conflict Management Plan

  2. Definitions • WHAT • Assessing Susceptibility of Each Project to Conflicts and Gravity of the Conflicts • Developing Cost Effective Ways for Conflict Avoidance and Dispute Control • Presenting Complete, Unbiased and Unanimous Plans • WHO • Owner, Owner’s Representatives, Designers, Lawyers, Contractors • WHY • Responsibility Allocation and Reduction of Court Proceedings • HOW • Identify the Potential Sources of Conflict • Analyze the Severity and the Impacts of Conflicts • Match the Conflict with a Corresponding DART • Draft Plan, Review and Revise it Continuously

  3. Case Study : Brock’s Plans • Real Estate Development (Family Business): Mainly Department and Retail Stores Projects (US$1 to US$10 Million) • No Previous Experience in Hotel Development Business • US$20,000 Million Hotel Development Project • Funding Provided by Developer and Banks • Excellent Reputation and Willingness of Banks to Finance • Negotiated Cost Basis , Plus Fee Equal to 3.5% of Total Construction Costs • Completion of 90% of Design at Contract Award

  4. Case Study : Kelly’s Plans • Senior Procurement Officer for the State Aviation Administration • US$1.5 Billion Fast-Tracked Capital Improvement Program : 19 Contracts (US$20 Million - US$ 400 Million) • Interdependent Schedules and Overlapping of Design and Construction Phases • Fixed Price, Design-Bid-Build Projects, Operation and Maintenance

  5. Important Issues • How Should Kelly and Brock Go About Planning to Identify, Avoid, Monitor and Control Any Potential Conflict? • How Should Brock’s Approach Differ From Kelly’s Approach? • Could These Both Use the Same Methodology? • Are There Restrictions on What Dart Each of Them Could Use?

  6. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  7. Conflict Management Process • Objective • Look at Each Project Individually • Assess How Much Conflict You Will Encounter • Assess How Severe Is the Conflict • Present Cost Effective Ways to Avoid Conflicts • Mitigate Impact of Conflict • Resolve Disputes

  8. Common Steps Conflict Identification ConflictAnalysis Design and Implement Conflict Management Monitor and Review Plan Peña-Mora,et.al,2002

  9. Conflict Space • The Conflict Management Plan Should be Able to Handle at the Same Time • The Cumulative Effect of Conflicts Throughout the Project Life Cycle • The Different Conflicts at Different Stages of the Dispute Resolution Ladder at a Specific Time

  10. Conflict Space Degree of Conflict litigation Dispute Resolution Ladder arbitration mediation Standing neutral negotiation Cumulative Effect of Conflict Project Life Cycle Project Life Cycle Peña-Mora,et.al,2002

  11. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  12. Identifying Possible Conflicts • Review of the Common Sources of Conflict Peña-Mora,et.al,2002

  13. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  14. Effect of Delivery System on Identifying Conflicts • Identify the Potential Conflicts that Need to be Avoided • Select a Delivery System that Minimizes Such Conflicts

  15. Example: Selection of a Delivery System • Stephenson (1996) • Establish a Detailed List of Potential Conflicts Based on Historical Data or Personal Experience • Identify the Relationships Between the Participants (For Ex, Owner-CM, Owner-Designer) • For Each Delivery System, Match the Potential Conflict with the Concerned Relationships and Give it a Specific Number of Points • Add up the Total Number of Points for Each Delivery System and Choose the Best Approach

  16. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  17. Analyzing Identified Conflicts • Probability of Occurrence of Conflicts • Impact of Potential Conflicts on Project

  18. Examples • Probability of Occurrence of Conflicts • Assume that the Identified Sources of Conflict Are Misunderstandings, Unrealistic Expectations and Poor Communication, Compare the Two Cases: • Case 1 : Owner and Contractor With Previous Experience Together, in the Same Geographic Region • Case 2 : Owner Venturing into a Neighboring Country and Working with an Unfamiliar Contractor • Impact of Potential Conflicts on Project • Two Similar Projects With Introduction of Design Change Halfway Through Construction • Project 1 : Design-Bid-Build Approach • Project 2 : Design-Build Approach

  19. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  20. Probability of Occurrence • Organizational Issues • Uncertainty

  21. Organizational Issues • Structure Conflict: Example: Contract Terms • Case 1 : Fair and Reasonable Allocation of RiskLow Probability • Case 2: Unfair, Unreasonable Allocation of Risk  High Probability • Process Conflict: Example: Performance and Quality • Case 1: Cost-Plus, Quality Driven Projects, Inspection StaffLow Probability • Case 2:Competitive Bids Award to Lowest Bidder, Bad Reputation High Probability • People Conflict: Example: Management • Case 1 : Long Distinguish Solid ManagersLow Probability • Case 2 : Inexperienced Participants  High Probability

  22. Uncertainty • External Uncertainty : Example: Political Risks • Case 1 : Stable, Well Developed Governments Low Probability • Case 2 : Afghanistan During the Soviet Invasion Throughout the 1980’s  High Probability • Internal Uncertainty : Example : Unforeseen Site Conditions • Case 1 : Open, Above Ground Projects with Adequate InvestigationLow Probability • Case 2 : Lack of Subsurface Investigation for All Participants  High Probability

  23. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  24. Impact of Conflict • Quantification Tools • Historical Data • Experience and Knowledge • Example • Weather: Low Impact in Construction ‘ Friendly’ Environment and High Impact in Areas Prone to Natural Disasters

  25. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  26. Combined Conflict Exposure • Step 1 : Calculate Conflict Exposure=P(C)x L(C) Where: • P(C) Is the Probability of Occurrence • L(C) Is the Impact of Occurrence • Step 2: Group Conflicts Into Priority Levels: • Group A : 10-20% of the Top Conflicts Accounting for Roughly 60% or More of the Total Potential Impact • Group B : Conflicts not in A or B • Group C : Large % of the Bottom Conflicts Accounting for 10% or Less of the Total Potential Impact

  27. Example: $200 M Project Risk Exposure: P(c) x L(c) Large Problem P(c)=0.10 L(C)=$25 M 2.5 M Project (no mitigation strategy) Medium Problem P(c)=0.20 L(C)=$5 M 1 M 10.5 M Small Problem P(c)=0.70 L(C)=$1 M 0.7 M

  28. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  29. Designing the Management Plan • Prioritize The Sources Of Conflict. • Implement Dart To Avoid/prevent Conflict Using Techniques In Stage 1 And Partnering. • Implement Dart To Resolve Conflict, Using Techniques In Stages 2 Through 5. • Identify Each Participant’s Role. • Perform A Cost/benefit Analysis Of The Conflict Management Plan. • Develop A Contingency Plan. • Review With All Participants And Update As Necessary.

  30. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  31. Prioritizing and DART Implementation

  32. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  33. Identification: Who Is Responsible? • Agreement on Allocating the Responsibility for Conflicts • Through Contract Clauses • In Conflict Management Plan • Eliminating Confusion Between Clauses and Management Plan

  34. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  35. Cost/Benefit Issues Risk Exposure P(c) x L(c) P(c) = 0.10 Large Problem L(c) = $ 25 M 0.1 x 25 = 2.5 M + 2.5 + 1 + 7 = 10.5 M P(c) = 0.20 Medium Problem L(c) = $ 5 M Yes 0.2 x 5 = 1 M P(c) = 0.70 Small Problem L(c) = $ 1M 0.7 x 1 = 7 M Partnering P(c) = 0.40 Large Problem L(c) = $ 25 M 0.4 x 25 = 10 M + 10 + 2.5 + 1 = 13.5 M P(c) = 0.50 Medium Problem L(c) = $ 5 M No 0.5 x 5 = 2.5 M P(c) = 0.20 Minor Problems L(c) = $ 1 M 0.1 x 1 = 1 M

  36. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  37. Contingency Plan • List of Options of Both Parties • Strengths and Weaknesses of Conflict Management Plan • Identification of Areas Where No Conflict Mitigation Plan is Implemented • Backup in Case of the Unpredictable (Mainly Litigation) : “What If?” Process

  38. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  39. Computer Applications Peña-Mora,et.al,2002

  40. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  41. Importance of Review • Importance of Review and Acceptance of the Plan by All the Parties • Objective of Review at Various Stages of Project Life Cycle : Inform All the Parties and Make Them Partners in the Process

  42. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  43. Conflict Resolution Indexes Peña-Mora et al., 2001

  44. Review Process Peña-Mora et al., 2001

  45. Outline • Conflict Management Process • Identifying Possible Conflicts • Effect of Delivery System on Identifying Conflicts • Analyzing Identified Conflicts • Probability of Occurrence • Impact of Conflict • Combined Conflict Exposure • Designing the Management Plan • Prioritizing and DART Implementation • Identification : Who Is Responsible? • Cost/Benefit Issues • Contingency Plan • Computer Applications • Importance of Review • Conflict Resolution Indexes

  46. Kelly’s Plan

  47. Brock’s Plan

  48. Summary • Conflict Management Plan • Vital Step in Construction Projects • Often Overlooked • Conceived in the Planning Phase and Reviewed Throughout Project Life Cycle • Identifying Conflicts and Analyzing Their Impacts • Prioritizing Conflicts • Application of Dispute Avoidance Techniques • Design of a Resolution Procedure • Allocation of Risks Between Participants

  49. References • [Pena-Mora et al., 2001] : Pena-Mora, Feniosky and Tamaki, Tadatsugu (2001). Effect of Delivery Systems on Collaborative Negotiations for Large-Scale Infrastructure. ASCE Journal of Management in Engineering, Vol. 17 (2), April 2001. • [Peña-Mora et al, 2002] : Peña-Mora, F., Sosa, C., and McCone, S. Introduction to Construction Dispute Resolution. Prentice Hall, New Jersey, 2002 • [Stephenson, 1996] : Stephenson, R. (1996). Project Partnering for the Design and Construction Industry. Wiley. New York. 1996. Pfleeger, Shari Lawrence. Software engineering: Theory and Practice. Upper Saddle River, NJ. Prentice Hall. 2001. Jalote, P. An integrated approach to software engineering. New York. Springer. 1997.  Braude, Eric J. Software engineering: An object-oriented perspective. New York. Wiley. 2001.

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