Identifying significant compensation events and the assessment of these events under public procurement authority’s conditions of contract for medium contracts in Ghana

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The main aim of this study is identify significant Compensation events and assessment of these events under Public Procurement Authority’s (PPA) Conditions of Contract in relation to time, cost and profit. Quantitative research approach was adopted and purposive sampling was used to determine the respondents. Twenty five (25) identified compensation events were significantly tested and were ranked in order of importance using the Relative Importance Index under cost, time and profit respectively. Under cost category, variations, late response to claims and cost overruns were identified as the most significant by consultants, clients and contractors respectively. For time category, inexperience, poor communication and clients with no technical background were identified to be the most significant. Finally, late response to claim, insufficient time for claims to be notified and changes and modification in design were seen to be the most significant factors which affected the contractor’s profit. Using factor analysis, it was determined that the variables had common underlying factors. The significant factors determined after reduction were four under Profit, namely: Delays from Consultants, Extra Cost, Increase or Decrease in Project Duration and Programme of Works. Under time, the factors were Works Interruptions, Inconsistent Instructions and Late Implementation. Cost also had three main factors namely: Cost Benefit to Stakeholders, Additional works and technical errors. It was revealed that compensation events tend to increase project cost and also drag the project. In view of this, the origination of compensation events must be thoroughly assessed and best solutions to these events must be implemented for a successful project.
A thesis submitted to the Department of Building Technology, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Master of Science in Construction Management, 2014