Written by Sue Dyer, Founder, IPI     

Real Story: The owner says to his GC, “We need to resolve these issues. We’ve been unable to over the past several months, and now the dispute plays out everyday on the project”.  

Every construction project leader faces a harsh reality in 2025: claims are increasing both in frequency and dollar value. Despite innovative delivery methods designed to boost collaboration and reduce disputes, the construction industry continues to grapple with conflicts that can derail project momentum and damage critical working relationships. What should be collaborative problem-solving often becomes adversarial positioning that benefits no one. 

Facilitated Dispute Resolution (FDR) offers a powerful alternative that's transforming how the construction industry handles disputes. Used successfully on billions of dollars of construction projects across diverse sectors, from transportation and utilities to commercial and institutional work, this process has proven its effectiveness with facility owners nationwide who now routinely include FDR provisions in their contracts. 

The Problem: When Issues Fester During Construction 

The construction industry has long struggled with a fundamental challenge: how to resolve disputes while projects are still active. Traditional approaches often let issues simmer unresolved, creating mounting tension that can derail project momentum. By the time formal dispute resolution kicks in, problems have often escalated beyond simple disagreements into entrenched positions that damage working relationships. 

When disputes remain unresolved during active construction, the consequences multiply rapidly. Project teams spend valuable time documenting positions rather than focusing on completion. Decision-making slows as parties second-guess every choice through the lens of pending disputes. Trust erodes between team members who need to collaborate daily. Most critically, unresolved issues create uncertainty that can impact project schedules, budgets, and quality. 

A Different Approach: Teams Resolving Their Own Disputes 

Unlike dispute review boards (DRBs) or arbitration, FDR doesn't hand decision-making authority to outside parties. Instead, it creates a structured environment where the actual project stakeholders, those who lived through the issues, can work together to find solutions. This approach produces more durable agreements because the people who must live with the results are the ones crafting them. 

The process maintains collaborative relationships while providing the framework needed to tackle complex disputes. Because project teams retain control over outcomes, they can craft solutions that work for everyone involved. Most importantly, the team collectively understands what constitutes a "fair" resolution given the specific circumstances and project realities they've experienced together. 

FDR functions as an extension of the issue resolution ladder established during project partnering sessions. When disputes escalate to the highest levels, the senior executive for owners or the principal for contractors, FDR provides these decision makers with a neutral forum for working through difficult issues based on facts and merit rather than adversarial positioning. 

The FDR Process: Structure That Works 

At its core, FDR brings all stakeholders together with a trained, neutral facilitator in an informal setting. Each side presents their story, supporting facts, and documentation. The facilitator helps break complex issues into manageable sub-issues, allowing parties to resolve disputes piece by piece rather than getting overwhelmed by the entire scope of disagreement. 

The process works because it creates specific roles for each participant. Presenters, typically field team members from both sides, prepare and present the facts for each issue. They know the project best and can tell the real story of what happened. Experts provide technical analysis when needed. Decision Influencers offer oversight perspective without making final calls. Most importantly, Decision Makers, those with actual authority to commit their organizations, focus on understanding issues and crafting fair resolutions. 

Preparation proves critical to success. Each issue requires identification of the core problem, chronological development of events from all perspectives, relevant specifications and documentation, and clear explanation of how work was actually performed. Presentations should match the quality and completeness of formal dispute proceedings, complete with visual aids, highlighted documents, and supporting exhibits. 

Real-World Application: What to Expect 

FDR sessions typically run full days, though complex issues may require multiple sessions. The first meeting often focuses on discovering what the real disagreements are, something that's not always obvious when disputes have festered for months or years. Facilitators assign "homework" between sessions, allowing teams to gather additional information or perform specific analyses. 

A typical session follows a structured flow. After introductions and ground rules, each side presents their perspective on the first issue. Questions and clarifications follow. Decision makers may call individual caucuses to discuss their positions privately, then reconvene in joint sessions to work toward resolution. The process continues until agreement is reached or impasse declared. 

The informal setting proves crucial. Unlike formal hearings or litigation, FDR sessions encourage open dialogue. Decision makers can ask direct questions of field personnel who witnessed events firsthand. Technical experts can explain complex issues without formal rules of evidence getting in the way. Most importantly, parties can explore creative solutions that might not be available in more rigid dispute resolution forums. 

Strategic Implementation: Real-Time Resolution During Construction 

Today's most successful FDR applications occur during active construction rather than at project closeout. Smart project teams don't wait for issues to accumulate, they address brewing disputes immediately when they arise. At major milestones or when specific problems emerge, teams can quickly convene FDR sessions to resolve issues while everyone is still engaged on the project. 

This real-time approach offers tremendous advantages. Facts remain fresh in everyone's memory since events just occurred. Key personnel are still on-site and available to explain what happened. Project momentum continues because disputes don't fester and spread to other work activities. Most importantly, teams can implement solutions immediately, often preventing smaller issues from escalating into major problems. 

Consider a typical scenario: three months into a major infrastructure project, unexpected subsurface conditions create disagreement about changed work scope and compensation. Under traditional approaches, this issue might simmer while work continues, creating ongoing tension and uncertainty. With FDR, the team can convene a session within days, present the facts while they're fresh, and reach resolution that allows work to proceed smoothly. 

Of course, FDR can still prove valuable during project closeout when multiple unresolved issues remain. However, its greatest power lies in preventing that accumulation of disputes in the first place. 

Building Better Relationships 

Perhaps FDR's greatest benefit isn't just faster resolution, it's preserving working relationships. Traditional dispute resolution often creates winners and losers, burning bridges between parties who may need to collaborate again. FDR's collaborative approach allows all parties to save face while finding solutions that work for everyone. 

The process also provides valuable education for less experienced field personnel. Junior engineers and project managers get to see how seasoned decision makers work through complex issues. They learn what documentation matters, how to present technical information clearly, and how to separate personalities from problems. 

Making FDR Work: Critical Success Factors 

Success with FDR requires commitment from the top. Decision makers must actually participate, not delegate authority to subordinates. The neutral facilitator must be truly skilled in dispute resolution, this isn't a partnering session or team-building exercise. Preparation must be thorough and professional, with each side ready to support their positions with solid documentation and clear reasoning. 

Cost sharing between parties, typically split equally as part of the partnering process, ensures both sides have skin in the game. More importantly, it reinforces the collaborative nature of the process rather than making it feel like one party is imposing dispute resolution on the other. 

The Path Forward 

Twenty-five years after its development, FDR remains a powerful but underutilized tool in the construction industry's dispute resolution toolkit. Its success depends not on complex legal procedures or outside experts, but on bringing the right people together in the right environment with proper facilitation. 

For owners, including FDR provisions in project specifications signals commitment to collaborative problem-solving during construction. It demonstrates understanding that disputes are often inevitable in complex projects but that immediate, collaborative resolution is possible. For contractors, FDR offers the opportunity to present their case directly to decision makers without layers of bureaucracy, getting issues resolved quickly so work can proceed efficiently. 

For project leaders tired of disputes that disrupt construction progress, FDR offers a proven alternative that resolves issues in real-time. For owners seeking to improve project outcomes while maintaining positive contractor relationships, FDR deserves serious consideration in project specifications. For an industry that's built on collaboration and problem-solving, FDR provides a way to resolve disputes during construction that honors those values while keeping projects moving forward.