Is there less construction risk on one side of the US-Canada border than on the other?
Within the recently published CRUX report—HKA’s annual risk analysis in different parts of the world—there is a section comparing what’s happening in the US and Canada. Around the world, scope changes, design deficiencies and contractual differences are often the main causes of disputes, HKA reports.
HKA’s All Americas analysis covered 581 projects in 19 countries, most in North America, with an average cost of $693 million. Disputed costs, writes HKA, tended to reach almost a third of this average value, while additional time sought by contractors extended schedules by more than half their expected duration.
It turns out that the Canadian projects suffered more design problems, HKA reports. About 42 percent of the projects reviewed had what HKA calls a “design-focused failure,” which could be incomplete, incorrect, or late release of design information.
By comparison, only about 36% of US projects according to HKA’s analysis had this same type of problem.
Among transportation projects that had design problems, the divergence between the US and Canada widened beyond 10 percent, HKA wrote.
Late or restricted access to the site
In the case of late or restricted access to sites, an independent source of claims and disputes tracked by HKA, they were “almost twice as common north of the border,” the report said. Canadian project disputes had site access issues in 24.5% of those studied, while US project issues only had site access issues in 12.8%.
Disputed costs are typically lower in Canada and the additional time to complete projects is less than in the US, HKA wrote.
“Cultural differences may be at play, along with a more contractor-driven environment in the US and a less litigious one in Canada,” the report notes. “Adjudication has become a legal remedy in several provinces, and there is also a greater tendency to resolve promptly.”
