It’s industry knowledge that construction delays are an endemic problem. In fact, the sheer number of moving parts, and variables inside and outside of a contractor’s control, make delays almost inevitable for many projects.
The statistics make for grim reading. According to a KPMG report, only 25% of construction projects are completed within 10% of their original deadlines. And the bigger the project, the more likely it is to run into significant delays. Large projects generally take 20% longer than expected to finish, while an eye-watering 98% of ‘mega projects’ become delayed or over budget, according to McKinsey Global Institute.
Source: McKinsey & Company, The construction productivity imperative report, 2015
Construction project delays are seen as simply a fact of life for many in the industry. But why exactly are they so common, how can they be mitigated, and how can contractors truly get a project back on track after it has suffered a delay?
Causes of delay in construction project completion
Construction project delays are an inherent issue precisely because of the fact there is no one specific danger for general contractors or owners to guard against. Put simply: there are a lot of things that can (and do) go wrong, making it near impossible to prepare for them all.
Added to this, the fact that every project is unique means that strategies that have worked well in the past are not guaranteed to work again. A general contractor can take lessons from previous projects - but nothing can really prepare them for the ‘one-off’ circumstances they will encounter.
Here are 8 reasons why construction delays occur:
- Project complexity
- Cost overruns
- Labor concerns
- Changes in project scope
- Changes and updates in the design
- Subcontractor relationships
- Sign-off
- Acts of God
1. Project complexity
Complexity in large-scale construction projects or mega construction projects like dams, power plants, nuclear plants, airports, highways, tunnels, skyscrapers, oil and gas extraction projects, pipeline projects, etc., can lead to increased costs and delays due to factors such as resource price changes and availability, supply chain issues like procurement and shipping, stakeholder diversity, and the need for extensive planning and experienced management.
2. Cost overruns
Miscalculating spend, most importantly at the start of a project but also once it is underway, often proves catastrophic when it comes to meeting a project deadline. When funds begin to run low because of poor budgeting, the pace of work often needs to be reduced or the project suspended entirely until new funds can be secured.
3. Labor concerns
Poor scheduling of the crew at your disposal can seriously hamper progress. Overstaffing can soon cause budgets to run out of control leading to the associated issues we’ve touched on, while understaffing means the project will slip behind schedule and prove demoralizing to staff. Even if staffing levels are right for the job, it’s easy to allocate crew inefficiently.
In some cases, contractors will struggle with labor shortages or recruiting the right amount of talent for the job at hand - issues some in the industry are overcoming through the use of technology.
4. Changes in project scope
In construction projects, inadequate initial scope definition can cause cost overruns and delays. Changes in scope, stemming from factors like unforeseen risks or client requests, necessitate adjustments in deliverables, budget, and team. Effective scope change management involves recognizing its inevitability, proactively engaging stakeholders, and clearly communicating changes to minimize disputes. Early identification of key success factors and performance indicators is essential for project alignment.
5. Changes and updates in the project design
Design errors or variations in construction projects can lead to delays and cost overruns due to the need for later-stage corrections and the impact on project planning and execution. This necessitates the need for accurate planning, stakeholder communication, and thorough reviews for project success.
6. Subcontractor relationships
This gets to the heart of the jeopardy of large construction projects. Even if scheduling and budgeting has been carried out perfectly, and the relationship between contractor and owner is strong, reliance on a host of subcontractors leaves projects vulnerable at every turn. Keeping every subcontractor on-schedule is a major challenge of communication and management where one break in the chain can lead to a series of project delays.
7. Sign-off
Open communication between contractors and owners is of vital importance throughout the process to ensure everyone is on the same page - and the pace of approval can make or break a project.
8. Acts of God
Construction projects are long-term undertakings, and as such it’s very likely that they fall victim to random and unpredictable factors. Most common of these are extreme weather conditions and natural disasters, which can obviously stifle or even destroy the pace of progress. Increasingly, contractors are creating deadlines that account for periods of bad weather - in order to safeguard themselves against paying liquidated damages.
Recovering from project delays
While it may not be possible to prevent delays in construction projects, contractors and owners have much more power when it comes to correcting the stricken project.
Traditionally, the road to project recovery comprises a few crucial steps - all of which need to be completed as quickly as possible. Firstly, an honest assessment of the state of the project needs to be carried out; one that identifies where it went wrong, why and what needs to be done to correct it. Then, a new construction schedule needs to be built - one that takes lessons from potential issues up until that point, whether it was unrealistically forecasted productivity rates or suboptimal crew sequencing. It’s likely that timelines, budgets and even project scope will have to be changed during this process. Up until the advent of AI and parametric project planning and scheduling, this process was extremely tedious and all-consuming.
Fortunately, today’s technology can be a boon to contractors working on large and complex projects. When it comes to project recovery, our AI-powered construction platform can simulate millions of permutations with regards to the project’s tasks and resources in order to find the optimum recovery schedule, based on the contractor’s goals. Quantifying the overall cost and time impact of each scenario is now done in minutes instead of hours or days. When it comes to de-risking large scale construction projects (especially infrastructure megaprojects), this technology is really a huge step forward for the industry.
The ALICE platform is the world’s first and only construction optioneering software that helps contractors to keep their projects on track and recover the ones that are in trouble. It truly is a lifeline for delayed projects - creating schedules from all available data that take the guesswork out of recovery, helping you avoid liquidated damages and protect your margins, which is key to any project's success.
To learn more about how ALICE can help with construction project recovery, contact our experts.