Explaining Cooperative Behavior in Building and Civil Engineering Projects’ Claims Process: Interactive Effects of Outcome Favorability and Procedural Fairness

Abstract

Cooperation is fundamental to successful procurement and delivery of building and civil engineering projects. This study explores the role of perceived fairness as a motivator of cooperative behavior in the process for administering project claims. The objective is to investigate how a contractor’s perceptions about fairness of the procedure for administering project claims would interact with the outcome received from the claims to influence the contractor’s cooperative behavior in terms of conflict intensity and potential to dispute. The data collection instrument was a structured questionnaire. Face-to-face interviews were conducted with 41 contractors’ personnel regarding their experience with claims on 41 completed projects in Singapore. The data were analyzed using the structural modeling approach. The results indicate that on projects where contractors did not receive a favorable outcome from claims, there was lower intensity of conflict and lower potential to dispute when contractors perceived that the procedure for administering the claims was fair than when the procedure was perceived to be unfair. The findings suggest that, in construction, cooperative behavior is a combined function of the outcome and procedure leading to that outcome. It also suggests that enhancing cooperative behavior goes beyond formal contract provisions but rather how the contract is administered in practice. It is recommended that employers’ project management team whose actions of rejecting invalid claims may be misinterpreted and disputed pay greater attention to how decisions on claims are reached. A fair procedure could cushion the effect of an unfavorable decision and thereby reduce a contractor’s uncooperative attitude.