How Can Businesses Avoid Litigation During Construction?
The construction industry is prevalent with contractor-bullying project teams, so much so that only few make it through to a successful project. Tunde Ojo-Aromokudu says that: “These days where consultants are required to price keenly for work to get it, results in reduced service to the extent that unsuspecting clients do not get the desired quality in many cases. Whilst in some, where it is demanded, it leads to disputes or even litigation that could have been avoided from the onset.” In this scenario, contractors who get scanty information have to be creative to maneuver through the project, otherwise, the project is terminated. In this article, Tunde reveals more to where businesses and contractors go wrong, which often leads to litigation and disputes.
What changes had a significant impact for major cities and corporations?
Use of technology has placed major impact, from planning and execution to completion. Technology has improved the pace of real estate development just as much as everything else, as you are able to plan multiple projects to successful completion without colocation of team members. I believe that with better access to finance, comes more hurdles for corporations in property investment. The government’s investment in basic infrastructure development too, has been the backbone to these changes.
Where do these companies often go wrong when it comes to construction, especially in regard to working in Johannesburg?
Corporates often believe that price is the major determinant for creating value from professionals. Most companies do not know that the lowest price does not often equate to a good bargain, as a number of clients opt for open competitive tendering in their source selection for their projects. This approach creates room for opportunists who might not make the right fit, but try to do so either way. A point to note is that most companies are not aware of contractor-bullying that is prevalent in the industry as consultants fail to plan well, thereby passing the buck to the contractor.
What are common cases you are called for?
Client-contractor disputes, where the contractor’s claim delays are due to client’s agents not performing their responsibilities. This is often a case where consultants fail to supply buildable information to contractor in good time, thereby leading to loss of time to the contractor or client. There are also cases where contractor delays completion due to scope creep.
In what way is your expertise valuable for solving such cases?
As an architect/project manager with almost 30 years post-qualification experience, cases are viewed from an angle of a professional with varied experience in both Nigeria and South Africa. The application of knowledge of various forms of contract used in projects has helped me in evaluating issues on various contentious issues. Forms of contract, for instance in South Africa, are mainly FIDIC, NEC, GCC & JBCC forms. These are basically the same with variations between them. In many cases, involved parties never accept any wrong-doing until some education takes place in the form of mediation or arbitration. You need a clever system of enquiry to surface certain assumptions at play leading to the disputes in the first place.
What could companies/business people do in order to avoid legal action?
Companies should have an idea and a plan of what they desire to achieve, even this is at a high-level. Engage responsible agents early enough to interrogate the company requirements, identify risks and advise promptly. Companies, through the appointed agent, should determine a clear brief at the onset and ensure a common understanding of that brief is noted and documented with their attendant challenges. They should also ensure processes and documentation are quality-assured and controlled. They should also identify expectations for all key stakeholders and set goals where necessary whilst ensuring the communication regime is clear to all and demand that it is strictly adhered to. Moreover, companies should always be on the lookout for risks inherent in the process and promptly explore options to mitigate them. Despite all these, legal action might still be inevitable, where one party exploits a weakness in the other party’s system.
Could you suggest any legislative changes you would make in order to improve your role as an architect?
Architecture is a science and an art. Hence, you really cannot put a value to the outcome of that service. Therefore, where architects’ fees are regulated, they should not be subject to negotiations because negotiating fees often compromises service, sometimes to the point where the gain in fee-reduction is lost in the final outcome due to poor delivery of that product. This poor delivery might not even be obvious until later in the product’s life cycle. If fees are legislated they should not be subject to negotiation. This also means that architects need to compulsorily procure indemnity insurance to be eligible to render services to the public.
In what way are you hoping to witness cities in Africa develop in regard to their architecture and landscape? Evolution of smart cities that are driven by technological innovation but equally vibrant and beautiful. I am hoping for cities that are compact with less dependence on fossil fuels underpinned by legislation. There should be cities with higher rebates and recognition for buildings with greening principles. I am also hoping for cities with landscape that creates opportunity for less maintenance costs.
What has been the biggest challenges during your big projects, such as Defunct Durban International Airport Upgrade? How did you overcome these challenges?
The biggest would be managing a contractor who declared bankruptcy mid-way through project. As part of the team advising the client, ACSA, – early interventions were made and this became the saving grace before the contractor could declare bankruptcy. The client promptly terminated the contract to avoid the embarrassment of the damage of this bankruptcy declaration.
Tunde Ojo-Aromokudu is registered as an architect in both Nigeria and South-Africa but also registered as a construction project manager in South Africa and a project management professional with the PMI. Prosite Plan is a practice of architects and project managers operating in both aforementioned countries. Tunde is the CEO of Prosite Plan based in South Africa operating from their Johannesburg offices.
PROSITE PLAN is a professional built environment practice focusing on Architecture and Project Management. We pride ourselves in developing fruitful relationships with our clients through our reputation for sensitive, appropriate and tasteful architectural solutions. PROSITE PLAN is a registered architectural practice founded in the year 1994 and registered in South Africa. Since its inception, it has grown to become a major player in the South African economy in the field of residential, commercial and industrial design and construction. PROSITE PLAN has a team of architects, project managers and other professionals creating pleasing results to meet client requirements – we have offices in South Africa and in Lagos, Nigeria.
Tunde Ojo-Aromokudu
Managing Director
