p–ISSN: 2723 - 6609 e-ISSN: 2745-5254
Vol. 5, No. 4 April 2024 http://jist.publikasiindonesia.id/
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1856
Identify the cause of claims on construction contracts in the
West Papua Provincial Government Area
Adonia Pasinggi
1*
, Manlian Ronald A. Simanjuntak
2
Universitas Tarumanagara Jakarta, Indonesia
1
, Universitas Pelita Harapan Jakarta,
Indonesia
2
Email: [email protected]
1*
2
*Correspondence
ABSTRACT
Keywords:
Construction claims,
construction contracts,
and causative factors of
claims.
Along with the development of the construction service
industry today, which is increasingly complex, construction
service actors must carry out better project management so
that the planned design can be realised properly. Before
carrying out a construction project, the parties will agree on
a legal basis in the form of a letter of agreement or a contract.
In the execution of construction contracts, sometimes there
are differences in interpretation and other things that can
cause claims or claims. The formulation of the problem in
this study is what are the potential risk factors of claims on
construction contracts, what are the variables of potential
claim risk on construction contracts, what are the variables
of claims-forming models, what are the causes of risks in
model-forming variables and what are the improvement
recommendations produced in this study. The data collection
method for this questionnaire was obtained by distributing
the questionnaire three times. The results to be achieved in
this study are to be able to determine the potential risks of
what factors and variables can cause construction claims
(first questionnaire), find out the variables of the claim-
forming model (second questionnaire), and find out the
causes of risk in the model-forming variables (third
questionnaire). By knowing the level of influence of factors
and variables, conclusions can be drawn about what needs
to be anticipated in construction claims. Thus, appropriate
recommendations are given to the West Papua Provincial
Government to regulate the articles in the contract in more
detail to minimise the potential for construction claims.
Introduction
The construction industry in Indonesia today has developed very rapidly (Arsana,
2016). The complexity of construction work requires Service Providers to master
technology to assist Service Providers in carrying out construction work (Syahputri,
2022).
Identify the cause of claims on construction contracts in the West Papua Provincial Government
Area
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1857
Figure 1 GDP Distribution Based on Prices Effective Quarter III of 2021 (Source: Central
Statistics Agency)
Infrastructure development in Indonesia is one factor that is increasing the
construction sector's role in the Indonesian economy. This can be seen from the large
percentage of the construction sector to the Gross Domestic Product (GDP) of 10.39% in
the third quarter of 2021 (Construction in 2021 Figures, https://www.bps.go.id.
Before the construction process begins, Service Users and Service Providers will
agree in a letter of agreement or contract (Ibrahim, Octora, & Sirait, 2016). In a
construction project, a contract is a document that must be complied with and executed
jointly between parties who have agreed to be bound by each other (Ariani, Roza, & Ayu,
2022). Contract documents that are not by the conditions in the field can cause disputes
and interpretation conflicts. If there is a delay in completion time, differences in
specifications, and changes in design from those agreed in the construction project
contract with implementation in the field, it could become a claim. The involvement of
various parties certainly represents different interests, causing various kinds of conflicts
that can affect the continuity of the project, so the project may deviate in terms of
budgeted costs, planned time, and quality (Armanita, 2018).
The issue of construction claims is well-known and is a common problem in
executing construction work. Claims in the construction industry are issues that can refer
to requests for increased costs and time and trigger disputes (Ariani, 2019). The request
for additional time to implement construction projects affects the project's performance
and the use of the construction project implementation budget (ALIVIA, 2024). Building
owners, especially the government, feel allergic to the term claim while contractors feel
reluctant to file claims for fear of being recorded as fussy or demanding contractors.
Service providers who often submit claims are usually not given recommendations or
included in the next tender opportunity (Noviani, Amin, & Hardjomuljadi, 2022).
Some construction service companies look for opportunities to win tenders no
longer in efficiency but from accuracy when seeing large claim opportunities at tender
time (Harto et al., 2023). The Employer needs to analyse the claims submitted by the
Service Provider by considering the alignment of the clauses in the contract, the
responsible party, the project situation, imperfections of specifications, and
19%
14%
13%
10%
10%
34%
Industri
Pengolahan/Manufacturing
Pertanian, Kehutanan dan
Perikanan
Perdagangan Besar dan
Eceran (Reparasi Mobil dan
Sepeda Motor)
Konstruksi
Pertambangan dan Penggalian
Adonia Pasinggi, Manlian Ronald A. Simanjuntak
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1858
misinterpretation of the contract. However, few service users also want an addition or
change in the scope of work that can cause claims to occur. These parties have different
interests and goals, leading to conflicts or disputes during project planning and
implementation (Arief & Hardjomuljadi, 2020).
According to Suntana S. Djatnika, in his article downloaded from the
https://sibima.pu.go.id website wrote that based on empirical facts from the Supreme
Court for case decisions that have permanent legal force from the total number of civil
cases as many as 16,287 (sixteen thousand two hundred and eighty-seven) decisions, as
many as 3,710 (three thousand seven hundred and ten) decisions or 22.78% (twenty-two
point seventy-eight per cent) are about cases in the construction sector, A total of 2,080
(two thousand eighty) rulings or 12.77% (twelve point seventy-seven per cent) are
regarding legal dispute cases in the agreement. The same is true in the settlement of legal
dispute cases carried out through arbitration proceedings. From the empirical facts of all
cases submitted to the Indonesian National Arbitration Board (BANI) in the framework
of Arbitration and Alternative Dispute Resolution (APS) from 2014 to 2016, disputes in
the construction sector showed the highest percentage compared to other sectors.
Thus, we need to know the claim itself, such as where the possibility of a claim
comes from, what elements can give rise to a claim, categories of claims (types of claims)
and others, to mitigate these claims early. By knowing the causes of a claim, construction
service actors are expected to be able to place the claim problem reasonably and
proportionately. Therefore, it is necessary to study the factors that cause the construction
claim model and methods of resolving construction claim disputes that are acceptable to
all parties, both Service Users and Service Providers, so that the implementation of
construction service work can run well without violating the rights and obligations of
each party. With this research, it is hoped that the problem of construction claims in the
future will no longer cause significant disputes or arguments so that construction service
actors can treat claims fairly and resolve them professionally so that the principle of
justice and equality can be realised.
Research Methods
Research Process
This research process will start by identifying the problem in this research so that
researchers can raise the topic. The sources of the factors causing the construction claim
in question come from books, expert opinions, journals/previous research relevant to this
research, sources related to this research, and other literature related to the factors causing
construction claims.
In identifying these problems, what factors can give rise to construction claims?
From the factors that have been established, the next step is to analyse these factors. After
searching the literature and analysing the factors of construction claims related to this
research, the next step is to look for data to be processed, such as the example of claims
on construction contracts in the West Papua Provincial Government area.
From the factors that have been determined, the next step is to discuss the data so
that later, it will be processed using qualitative description methods and quantitative
description. After getting the results of the discussion of this study, the researcher will
provide recommendations for improvement of each problem that has been prepared and
then make conclusions and suggestions.
Research Variables
Identify the cause of claims on construction contracts in the West Papua Provincial Government
Area
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1859
Table 1
Variability of research
No.
Construction claim
factors
Variable
Code
A.
Factors Derived from Service Users
1.
Incomplete/imperfect
tender information
a) Imperfect design information
X1
b) Imperfect detail engineering
design (DED)
X3
2.
Inconsistency and
incompleteness of contract
documents
a) Unclear specification provisions
X5
b) Field conditions are different from
the conditions stated in the
contract.
X6
3.
Changes to linkup jobs
a) Initial design changes
X7
b) Drawing is impossible to
implement
X8
4.
Late payment of job
performance by service
users
a) Quite a complicated payment
system
X14
b) Inconsistency between contract
specifications and field-installed
materials
X18
5.
Delay in delivery of the job
site
a) Delays in land permits
X21
b) Delays in land acquisition
X22
c) Field conditions that are difficult to
reach due to natural factors
X23
d) Licensing with other agencies that
have not been completed
X24
e) There is still unfinished work by
the previous contractor
X25
B.
Factors derived from Planning Consultants
1.
Imperfect design
information
a) Inadequate human resources of
planning consultants
X27
b) Lack of coordination among
internal planning consultants
X28
2.
Design changes
a) Errors from the initial design
X29
C.
Factors derived from Supervisory Consultants
1.
Late approval of the
process of carrying out
work
a) Heavy equipment submitted by
contractors is not suitable and may
endanger other work
X34
2.
Late material inspection
a) There has been no submission of
material approval by the contractor
X35
b) Scheduled material arrival
X36
3.
Work delay/termination
a) Contractor errors in the preparation
of work time plans
X37
b) Contractors are late in submitting
laboratory test results
X39
D.
Factors derived from Construction Service Providers
1.
Defective work/poor
quality of work
a) Higher than normal rainfall/days of
heavy rain
X41
2.
a) Erratic weather conditions
X45
Adonia Pasinggi, Manlian Ronald A. Simanjuntak
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1860
No.
Construction claim
factors
Variable
Code
Delay in completion of
work
b) Difficulty in finding local
materials
X47
c) Material damage at the time of
delivery
X48
d) The amount of material produced
is not to the needs of the field
X49
e) The longness of the minerals in the
soil
X51
E.
Factors of External Origin
1.
The condition of the
community around the
project
a) Social disturbances around the job
site
X58
F.
Construction claims can affect the performance of project execution
time and changes in total contract value.
Y
Data Engineering and Analysis
The research data will be analysed through statistical test tools using SPSS 26.0
software with testing as described below:
a. Validity and Reliability Test
This validity and reliability test is used to determine the consistency or stability of
an answer. A valid instrument means that the instrument can be used to measure what
should be measured, and an instrument is said to be reliable if the instrument is used to
measure the same object and will produce the same data.
b. Multicollinearity Test
According to Frisch, a regression model is said to be exposed to the problem of
multicollinearity when there is a perfect or near-perfect linear relationship between some
or all of its independent variables. As a result, the model will need help seeing the
influence of independent variables on dependent variables. If there is a strong correlation
among fellow independent variables, then the consequences are:
1. Coefficient - the regression coefficient becomes inestimable.
2. The standard error value of each regression coefficient becomes infinite.
Thus, it means that the greater the correlation between independent variables, the
greater the error rate of the regression coefficient, which results in a greater standard error.
The method used to detect the presence or absence of multicollinearity is to use Variance
Inflation Factors (VIF).
c. Regression
Simple regression analysis is used to predict or test the effect of one independent
variable on the dependent variable. If the score of the independent variable is known, the
score of the dependent variable can be predicted in magnitude. A good regression model
is that there are no symptoms of multicollinearity.
Identify the cause of claims on construction contracts in the West Papua Provincial Government
Area
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1861
Results and Discussion
Data validity and reliability testing is performed with the SPSS 26 tool. The validity
and reliability test results can be seen in the table below.
Table 2
Validity Test Results
Variable
r
calculate
r table
Information
X1
.672
0.312
Valid
X3
.724
0.312
Valid
X5
0.606
0.312
Valid
X6
0.652
0.312
Valid
X7
0.511
0.312
Valid
X8
0.508
0.312
Valid
X14
0.469
0.312
Valid
X18
0.612
0.312
Valid
X21
0.601
0.312
Valid
X22
0.659
0.312
Valid
X23
0.710
0.312
Valid
X24
0.542
0.312
Valid
X25
0.795
0.312
Valid
X27
0.795
0.312
Valid
X28
0.763
0.312
Valid
X29
0.677
0.312
Valid
X34
0.561
0.312
Valid
X35
0.552
0.312
Valid
X36
0.792
0.312
Valid
X37
0.781
0.312
Valid
X39
0.765
0.312
Valid
X41
0.667
**
0.312
Valid
X45
0.612
0.312
Valid
X47
0.613
0.312
Valid
X48
0.677
0.312
Valid
X49
0.597
0.312
Valid
X51
0.558
0.312
Valid
X58
0.537
0.312
Valid
Adonia Pasinggi, Manlian Ronald A. Simanjuntak
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1862
Based on Table 2, the results of the validity test show that there are no invalid
questionnaire items. This means that all questionnaire items can be further analysed.
Based on the reliability test results, the value of Cronbach's Alpha is 0.947, so the
instrument in this study is reliable. The results of the reliability test can be seen in the
table below.
Table 3
Reliability Test Results
Reliability Statistics
Cronbach's Alpha
N of Items
0.947
28
From the results of the Multicollinearity test for variables that do not occur,
multicollinearity is variable X3, X6, X21, X22, X23, X25, X27, X28, X29, X34, X36,
X37, X45 and X48.
Table 4
Multicollinearity Test Results
Model
Collinearity Statistics
Tolerance
BRIGHT
X3
0.173
5.780
X6
0.260
3.850
X21
0.320
3.128
X22
0.234
4.281
X23
0.259
3.861
X25
0.213
4.702
X27
0.121
8.258
X28
0.180
5.566
X29
0.433
2.310
X34
0.341
2.931
X36
0.198
5.057
X37
0.330
3.031
X45
0.445
2.248
X48
0.292
3.423
From the regression test results, an R2 value of 0.803 was obtained, which means
that variable X, which is the variable that causes construction claims, affects variable Y,
namely the performance of project implementation time, and changes in the total contract
value simultaneously by 80.3%. With details of the effect of effective donation as follows:
a. Imperfect detail engineering design (DED) at 2.81%
b. Field conditions are different from the conditions stated in the contract by 2.64%
c. Delay in land licensing by 4.04%
d. Delay in land acquisition by 24.91%
Identify the cause of claims on construction contracts in the West Papua Provincial Government
Area
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1863
e. Field conditions that are difficult to reach due to natural factors of 32.12%
f. There is still unfinished work by the previous contractor at -23.68%
g. Inadequate human resources of planning consultants by 14.05%
h. Lack of coordination among internal planning consultants by -12.76%
i. Error from the initial design of 10.33%
j. Heavy equipment submitted by contractors is not suitable and can endanger other work
by 16.47%
k. Unscheduled material arrivals amounted to 0.88%
l. Contractor error in making work time plan 8.28%
m. Erratic weather conditions 0.60%
n. Material damage at the time of delivery -0.37%
Table 5
Regression Test Results
Regression Test Results
Model
R
R
Square
Adjusted
R Square
Std.
Error of
the
Estimate
1
.896a
0.803
0.711
0.25323
The improvement recommendations in this study are as follows:
1. Service Users and Planning Consultants must coordinate well and maximise the design
process at the Detail engineering design (DED) stage to reduce errors during the
construction process.
2. In making a letter of agreement, it must be ensured that the location of the work is by
the location written in the letter of agreement (contract).
3. Before construction work begins at kick-off, the Service User must ensure all permits
are completed not to hamper ongoing construction work.
4. Before construction, Service Users must ensure that field conditions ensure no land
disputes or unresolved land acquisitions.
5. With conditions in some locations that are difficult to reach due to natural factors,
Service Users and Service Providers must make good plans, such as making alternative
roads to the work site so that at the time of carrying out construction work, it does not
damage other people's land and the location to be carried out construction work can be
done properly.
6. In some construction projects, unfinished work from the previous contractor is still
obtained, and the Service User must coordinate with the old contractor to accelerate
the completion of the work. The new contractor must coordinate with the old
contractor so that the new contractor can carry out the work and not interfere with the
activities of the old contractor.
7. Planning consultants must have human resources who have and are certified to plan
well to avoid technical errors during construction.
Adonia Pasinggi, Manlian Ronald A. Simanjuntak
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1864
8. Team leaders in the organisational structure of planning consultants must be able to
coordinate well with all personnel involved in the design process to understand the
design process clearly.
9. Planning consultants must understand very well what the outputs/outputs of the
planning consultant's design are. The planning consultant must conduct a thorough
evaluation before sending all planning technical documents to the Service User so that
there will be no significant errors in the design results later.
10. Before carrying out the construction work process, the contractor must fully
understand what will be done and what heavy equipment is needed in the work
process so that the work can run well.
11. Contractors and supervisory consultants must periodically monitor all work and
materials to be used during the implementation so that delays in the arrival of
materials cause no delays in work.
12. When submitting the work time plan (S curve), the contractor must ensure from all
aspects that what will be done is by the proposed S curve so that the construction
work process is by the planned schedule. The supervisory consultant must also
evaluate the S curve proposed by the contractor so that the proposed S curve can be
carried out according to the work's implementation time.
13. The implementing contractor must have a good plan so that when uncertain weather
conditions occur during the work process, they do not hamper the progress of the
work.
14. The contractor must escort the process of shipping goods to the work site so that the
materials brought do not cause damage upon arrival.
Conclusion
Based on the results of the research that has been done, conclusions can be drawn
as follows:
a. Factors causing construction claims can come from service users, service providers,
and external factors.
b. Of the factors analysed, 14 (fourteen) factors can cause construction claims based on
respondents' questionnaires. In this case, construction service actors are contractors
and experts by conducting regression tests.
c. The construction work contract must stipulate each construction work stage.
d. All activities must be well documented so that if a claim occurs, it can be resolved
professionally and there is no construction dispute
Identify the cause of claims on construction contracts in the West Papua Provincial Government
Area
Indonesian Journal of Social Technology, Vol. 5, No. 4, April, 2024 1865
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