delays on large construction projects

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Delays on L arge C onstr uction P r ojectsby A. Sullivan and F. C. HarrisUniversity of Technology, Loughborough, UKReceived February 1985Revised M ay 1985

The main research effort into the UnitedKingdom's construction industry'sperfor-mance is undertaken by the National Economic Development Office (NEDO). Inrespectof large projects, NEDO haveconcentrated uponthe performance of thepro-cess industriesandhavelooked at the problems facing mechanical plant contractors.Thisarticle is primarilyconcernedwithperformance on largecontemporary con-structionprojects and the problems experiencedbycivil engineering contractorsdur-ing construction.Most of the information wasbased on a seriesof interviews with major construc-tion industryclients, contractorsand consultants alongwith information derived fromquestionnaires. Theconclusions recommend the need for more team buildingand agreater integration of skil ls particularly at theearly stagesof planning a projectanddeveloping its design.IntroductionOver recent years large construction projects have become more complex as newtechnologies have demanded concentration of resources into single facilities, for example, power stations, petrochemical plants, container ports, airports, etc. A strikingfeature of many such projects has been the noticeable occurrence of cost and timeover-runs, excessive in a number of cases. This article addresses these problems, andreports on a study undertaken by the authors[l] to try to isolate and identify causesof the inefficiency. The emphasis is directed towards the problems experienced bycontractors.M ethodologyExamples of "large" projects initiated by major construction industry clients are shownin Table I. Information was elicited by means of interviews and questionnaires. Thedistribution of questionnaires returned is shown in Table I I .Respondents were asked to indicate their estimates of the frequency of occurrence(i.e., the proportion of projects experiencing) of each of the problems listed; thesehaving been formulated after extensive interviews involving discussions on a wide rangeof problem areas (Figure 1).


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Reliability of InformationThe reliability of information was clearly dependent upon the quality of experienceof the persons providing information and the manner of interpretation of questionsasked.Table I. Contemporary Large Projects

Sector

Energy and processengineering

Civil engineering

Buildings

Nature of work

Oil industry: Fabrication contracts: Hook-up E lectricity generating power stations: 2 x 660 MW util ising A tomicGas Cooled Reactors (A GRs) Chemical plant Gas liquefaction storage and supply A irport terminals Docks expansion New construction Renovation

Typical value of (UK )contemporary projects3-32 million70 million

1,750 million30-75 million12-80 million200 million(two ongoing projects)70 million8-60 million25 million

Overseas: 100 million plus generally.Table I I . Distribution of Questionnaires Returned

Type of organisationT op 20 civil contractorsPl ant contractors (Turnkey)ClientsConsultantsOverall

Questionnaires sent20

19

1040

Questionnaires returned1213420

Response60%

100%331/3%

40%50%

All questionnaires were sent to top management personnel. In a number of cases,information was provided by contractors' chairmen and consultants' senior partners.The source of information from clients was sometimes unclear.The questionnaire itself had some fairly obvious limitations. For example, no account was taken of different types of work, locations or contract strategies. A moreelaborate form would probably not have attracted such a wide response from therelatively small number of organisations who are actually involved with contemporarylarge projects.


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L arge Construction Projects 27

Figure 1. Information Sheet A Typical Single ResponseTypical P roblems Leading to Unanticipated Delays

1. Waiting for information from the client or his representative.2. Design complexity.3. Materials procurement or delivery delays.4. Shortage of appropriate (a) labour or tradesmen.

(b) foreman or supervisors.(c) senior staff.

5. Bad weather.6. Subcontractors default (a) Mechanical and Electrical,

(b) Civil.7. Ground problems.8. P hysical obstructions (e.g., unexpected presence of services)9. Industrial disputes/strikes.

10. S tatutory undertaker's default.11 . Variation orders.12. P lant shortage or procurement problems.13. Breakdowns.14. J oint venture co-ordination problems.15. Mechanical and Electrical plant procurement ordelivery delays.16. S ignificant contractual disputes.

Frequency of occurrenceon large constructionprojects%UK Overseas

90152010

55

4015

58060152090

5102100

301525

510105

101010

5-

2075

5105150

Results of the SurveyUK ProjectsThe major factors leading to unanticipated delays and extra costs on large UK projects (Table I I I) were late receipt of information, variations, M and E (Mechanicaland Electrical) construction and procurement delays, ground problems and badweather. Surprisingly, however, differences of opinion among clients, consultants andcontractors on the frequency of factors were generally fairly slight. In particular, therewas general agreement on the frequency of occurrence of ground problems. This wasalso the case with M and E plant procurement when all parties were involved in thisaspect the consultant in the pre-construction programme, the contractor from tenderstage onwards, with the clients tending to get involved with the other parties on suchcrucial aspects during construction indeed the client may be responsible for procurement. (In this regard, it is not to be assumed that a traditional contractual arrangement necessarily exists in each case).There appeared to be general agreement between contractors and consultants aboutbad weather delays.


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Table I I I . Major Factors Leading to Unanticipated Delays on L arge UK ProjectsContrast between the Views of Civil Contractors, Consultants and Clients

Waiting for information from the clientV ariation ordersGround problemsBad weatherDesign complexityM and E subcontractorsObstructionsM and E plant procurementM aterials procurementStatutory undertakersIndustrial relationsCivil subcontractorsClaimsL abour/ tradesman shortagesConstruction plant shortagesBreakdownsSenior staff shortagesForemen shortagesJ oint venture co-ordination problems

Contractors% of projects514921191917141413977655542.50.3

Consultants% of projects291722185

2212158

20599941

41

Clients% of projects9

15179768

174123

45

The variability of viewson waiting for information was not surprising since the contractor has to wait for both the consultant and the client, but the consultant onlyfor the client. Moreover, the contractor is at the sharp end and is often the first toexperience the effects of those factors responsible for delays followed by theconsultants,and then the client. For example, the client's degree of awareness of the priority ofproviding timely information depends to some extent upon feedback and the sort ofrelationships enjoyed with advisers. A similar argument could be applied to thedif-ferences in opinion in connection with variations and design complexity.Overseas ProjectsThe most frequently occurring delays on overseas projects are given in Table IV. Aswith UK work, waiting for information, variation, and M and E problems were commonly cited by all parties, together with materials procurement difficulties. On thislatter point factors such as lack of processing expertise, difficulties in the supply ofraw materials, and customs/import problems at points of entry into the country weretypical causes. L ong lead times were also needed for competitive shipments of one-off items.


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Table IV. Most Frequently Occurring Factors which Lead to UnanticipatedDelays on L arge Overseas Projects

Plant contractor*Materials procurementWaiting for informationVariationsConstruction plantshortagesM and E plantprocurementDesign complexityLabourer/tradesmenshortagesBad weatherPhysical obstructionsForemen shortagesCivil subcontractorsStatutory undertakersJoint venturesSenior staff shortagesM and E subcontractorsBreakdownsClaimsGround problemsIndustrial relations

Civils contractorVariationsMaterials procurementWaiting for informationM and E plantprocurementLabourer/tradesmenshortagesM and E subcontractorsDesign complexityConstruction plantshortagesClaimsForemen shortagesGround problemsPhysical obstructionsStatutory undertakersSenior staff shortagesBreakdownsCivil subcontractorsBad groundIndustrial relationsJoint ventures

ClientsM and E plantprocurementConstruction plantshortagesWaiting for informationM and E subcontractorsGround problemsMaterials procurementVariationsForemen shortages

ConsultantsWaiting for informationMaterials procurementSenior staff shortagesDesign complexityForemen shortagesM and E subcontractorsVariationsJoint venturesM and E plantprocurementConstruction plantshortagesBreakdownsCivil subcontractorsPhysical obstructionsLabourer/tradesmenshortagesGround problemsClaimsBad weatherStatutory undertakers

*Note: based on one response.A high frequency of (local contractors) senior staff foremen and labour shortagesare also evident. Contractors and clients emphasised the shortage of contractors'general plant. A lso from the authors' personal experiences cash flow problems arecommon, often aggravated by unrealistic bid prices, unbalanced tenders, lack of accounting for inflation, insufficient attention to the setting up of adequate management organisation and controls by the contractor and, occasionally, unrealistic consultant's specifications. Evidently, more care is needed prior to contract award andselection.The main differences between contracts undertaken overseas and in the UK in termsof factors causing delay as given by contractors are summarised in Table V.These are more readily appreciated when viewed diagramatically as in Figures 2and 3where it is clear that a disturbing proportion of largeprojects are liable to unanticipated delays from a relatively small number of causes.


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Table V. Average Frequency of Occurrence of M ajor Factors Leading toUnanticipated Delays on Large UK and Overseas ContractsA. UKDescriptionWaiting for informationV ariation ordersGround problemsBad weatherDesign complexityM and E subcontractorsObstructionsM and E plant procurementM aterials procurementStatutory undertakersIndustrial relationsCivil subcontractorsClaimsL abourers/tradesmen shortagesConstruction plant shortagesBreakdownsSenior staff shortagesForemen shortagesJ oint venture co-ordination problf

Frequency ofoccurrence%51492119191714141397765554

2.5:ms 0.3

B. OverseasDescriptionV ariation ordersM aterials procurementWaiting for informationM and E plant procurementL abourers/ tradesmen shortagesM and E subcontractorsDesign complexityConstruction plant shortagesClaimsForemen shortagesGround problemsObstructionsStatutory undertakersSenior staff shortagesBreakdownsCivil subcontractorsBad weatherIndustrial relations

Frequency ofoccurrence%4035322617171412111099988644

J oint venture co-ordination problems 4

RecommendationsA number of recommendations are implicit. For example, procurement problems maysuggest that supply contracts should have been placed earlier or perhaps construction was commenced too soon, or the "best" supplier was not chosen, or the specification was inappropriate, or perhaps a product should not have been specified at alland an alternative found.The construction industry has always suffered from fragmentation owing to the temporary nature of project execution and the various technical, financial and managerialspecialisms that are incorporated into a project. Management's task is to mitigate theeffects of fragmentation and specialisms by adopting a project strategy which will combine the skills of individuals and groups from contributing organisations so as to havethe best balance of resources available at the right time. The trend of major clientstowards executive project management is a positive step in the right direction and isto be encouraged. It is essential that major clients should develop a strong management


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team since, with large projects involving many contractual agreements, only the clientcan view the project in its entirety and from the client's point of view.There isa need for more team building and a greater integration of skills particularlyat the early stages of planning a project and developing its design. During this timemost of the decisions are made which will directly affect the final cost of the projectand its viability so that operational experience, fabrication, construction and transportation logistics need to be integrated together with a thorough knowledge of themanufacture and supply market. A "construction logistics and cost engineering"department could be set up which, under the auspices of a project manager, wouldadvise designers on economic forms of construction and, as a result of building up


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communications with suppliers and manufacturers, could advise on the most economicusage of materials. Duties would also include reviewing programmes and performingdesign audits.Future ResearchMore work could usefully be undertaken in the following areas:

(1) Team Building: The relationship between the project team and functionaldepartments should be examined to find ways of forming more effective project teams.(2) Integration of Parties' Contributions: Channels of communication could bereviewed to see what improvements can be made to the integration of parties'contributions.(3) UnrecoverableCosts: Following on from the identification of factors causingunanticipated delays and additional costs, a survey could be undertaken to attempt to determine the extent to which such factors lead to unrecoverable costsby contractors.

Bibliography1. Sullivan, A., "Organisation and Control of LargeConstruction Projects", MScProject Report, Department of Civil Engineering, Loughborough University of Technology, 1984.2. "Contract Strategy: A Pilot Study", NEDO, 1983.3. "Guidelines for the Management of M ajor Projects in the Process Industries", NEDO, 1982.4. "Engineering Construction Performance", NEDO, 1970.5. "Large Construction Sites", NEDO, 1976.6. "M arket Briefs", (Series of 12), NEDO, 1981.7. "The Public Client and the Construction Industry", NEDO, 1976.8. Harris, F. and McCaffer, R., Modern ConstructionManagement, second edition, Granada/Collins, 1983.

delays on large construction projects

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