Department of Civil Engineering Project 2-Part A CIVIL 0005 Literature Review Analysis of Delays in Construction Name: Mohammed Zainab ID: 14F13037 1.0 Introduction The construction industry has become the most researched engineering sector, but it is not without problems the major on being the overrun of cost and time. The overruns in each construction project and the magnitudes inclusive of the cost and delay overruns are dynamic with every type of project. Therefore, it is essential there be a clear definition of the events that actually lead to the cost and time overruns so that it is possible to minimize and mitigate the increasing. This part of the paper is going to conduct an in-depth literature review on the main issue concerning costs and time overruns and any other information that relates to the issues. 2.0 Building Projects The building projects involving construction are categorized depending on the scale of the building projects and therefore are in three forms: High rise, Medium Scale, and small scale building projects. The high rise are those buildings that have above or equal to 10 stories. They are mainly purposed for use as office and apartment complexes. They are owned by the government or private companies. Most of them are construction projects initiated by the private companies. They involve high investment costs and thus are only constructed by ICTAD grades M2 or M1 companies. Consultancy is done by private enterprises in the business, and the projects are mostly done in the urban settings ( Ibironke, et al., 2013). The medium scales have 2-10 stories and are also used for apartments, shopping, and office complexes. Their ownership is mainly by the government, private companies, or individuals. They are also consulted by the services of private companies. They can be undertaken by up to ICTAD grade M3 due to the relatively high costs involved. The small scale mainly is made up of house projects. They are carried out by the individuals and meant for housing purposes. They are either 1-2 stories. The consultants are only involved to the stage of preparing projects designs. 3.0 Definition of Cost and Time Overruns 3.1 Time Overruns It is defined as an extension of time exceeding that which was planned for completion dates as traceable back to the contractors. Delay have negative impacts on the business which retards its progress and lead to the postponing of activities of the project; there are also those that cause incidents such as resource unavailability, weather delays, and the delays in design among others. Generally, the delays are as a result of activities of the project which have both internal and external cause and the relationship effects (Abd El- Razek, et al., 2008). It has also been defined as the difference that is between the anticipated time of completion and the actual time of project completion. It is measured in terms of days. The delays in projects are those that result in the delay of the date of completion. Therefore, we can define the time overruns as the time which is increased for the completion of the project and after the date that was planned for as a result of external and internal factors surrounding the project. 3.2 Cost Overruns It is defined in terms of the excess amount above the actual cost of the budget. It is also known as cost escalation, budget overrun, or cost increase. It can also be defined as the change in the dividend of the amount of the contract and the original amount that was awarded to the contract. The computation can be done in percentages for the ease of making comparisons. Cost Overrun Amount = Final Contract Amount − Original Contract Original Contract Amount The overruns in cost can also be defined as the difference in the cost estimates that were estimated and the actual costs of the construction project when the work is completed in a construction project of the commercial sector (Abdul-Rahman, et al., 2006). 4.0 Types of Delays Delays in construction projects have been researched by many studies and thus are divided as concurrent, excusable, critical, and compensable delays. These types of delays have external and internal impacts on the process of the project. The delays can result from internal causes which come from the project designers, owners, consultants, and the contractors. They can also be caused by external factors which normally come from outside the project of construction and includes such factors as the government, utility companies, suppliers, nature, labor unions, subcontractors, among others (Assaf & Sadiq, 2006). The figure below shows the relationship of the different delay categories. Figure 1. Sequential Relationship of Delays 4.1 Excusable Delays The excusable delays are those events that are unpredictable and out of the control of individuals. They can be categorized further into either non-compensable or compensable. When considering the delay as compensable, the contractor is entitled to extra time in the project completion and financial compensation added to the one already in place. Under certain situations where the excusable delays are considered as non-compensable, the contractor will be entitled to extra time but no additional money for the extra work that is to be completed (Ibrahim, et al., 2012). Also, referred to as force majeure, or the acts of God, the excusable delays are referred to by this names as they are not the fault or responsibility of any project players. Most of the contracts in place give the contractor the allowance of creating additional time for the excusable delays but not extra financials. When the owner issues the contracts, they specifically address the potential delays that can be classified as compensable and make adjustments that are equitable. The most common clauses of adjustment in those contracts issued by the owner in response to the delays are suspension, site conditions that are differing, and the changes. The changes in the contracts issued by the project owner have provisions of the order that the equitable adjustments should be conducted (Ahmed, et al., 2002). 4.2 Concurrent Delays In the case where only one factor delays the construction project, it is much easier to compute both the financials and the time which results from the single factors. More complicated and typical situations are the ones where more than a single factor causes the project delay and in subsequent time overlaps or similar time. Such types of delays are referred to as concurrent delays. The concurrent delays can occur when both the contractor and the project owner are the causes of the delay. Generally, when inextricably intertwined, neither the players especially the contractor is held responsible; these include being forced to accelerates, or being held liable for the liquidated damages, he is also not liable for recovering the damages of the delay from the project owner (Braimah, 2008). Before the analysis of the CPM schedule was developed, there lacked a reliable method for differentiating the impacts of the delays caused by the contractor from those that were created by the owner. With the rise of computerized techniques that are sophisticated, it has become possible to differentiate the impacts of concurrent delays caused by the owner from those caused by the contractor. When analyzing the claim in the event of delays, it is done on a comparison basis of the CPM schedule that was approved by the contractor to the CPM schedule as-built and it should be performed for apportioning proper responsibility of the delay that occurred. This is because a shift in the critical path may take place during the progress of the job, it is thus updated gradually as required by the terms of the contract and from the inputs of the contractors. 4.3 Compensable Delays The compensable delays generally occur as a result of the activities of the owner or the agents of the contract. The most prevalent form of the delay is the specifications and drawings being inadequate, however, they can also result from the failure of response from the owner in timely fashions when requested for shop drawings or information, changing the design or the materials, and disrupting or changing the work sequence. The contractor is thus entitled to both additional time and money as a result of the compensable delay from the owner. Adding to the stated possible causes of delays, there are also other ways in which the compensable delays can be caused. The compensable delays from such causes are excusable delays, interruptions, suspension of all or part of the work resulting from an act or failure on the part of the owner through the breaching of the obligations which imply or are stated in the contract. In the event that the delay is compensable, then the contractor has entitlement not only in the time extension but also equitable adjustments for any cost increase which are caused by the occurrence of the delay. There is yet another type of delay termed as the pacing delay; it is the deceleration in the works of the project caused by one of the parties to the contract. This is due to the delay in the project’s end date which is caused by other parties of the contract. The objective is always to have a steady progress of the project schedule that has been revised (Bubshait & Cunningham, 2004). 4.4 Critical Delays These are claims in the delay that affect the time, progress, and compensation. The nocritical delays have no effect on the date of completion of the project. They influence the activities that are succeeding but not on the critical path. It can really cause a setback in the activities if there is no float in the schedule 5.0 Causes of Costs and Time Overrun 5.1 Causes of Delay in Time The delays in time can be categorized into three: • Those that neither of the contract parties has control over; • Those which the owner or the project agents has control over; • Those which the contractor and the subcontractors have control over; The factors that predominantly influence the overrun in time are the changes in the design, reduced productivity of the labor, shortages in resources, and no planning adequately for the project. The tables below show the variables resulting from the cost controls and delays Table 1. Variables that influence time and cost control The construction projects as stated before are as a result of two major causes: 1. External cause; 2. And, internal cause The internal causes of overruns include those that arise from the four parties that are involved in the project (Chang, 2002). The parties include the project owner, contractors, consultants, and the designers. The other delays in the project that are not caused by the four parties are termed as being caused by external causes for instance, from the materials suppliers, weather, and the government. Researchers have frequently categorized the factors in four categories, these are: 5.1.1 Responsibility of the Contractor These are factors that come from the responsibility of the contractors. They include mistakes in construction and work that is defective, on-site materials shortage, poor labor skills and experience as well as site labor shortage. Other factors include low labor productivity, problems with financials; problems when coordinating with others and lack of competencies by the subcontractor. Lack of site staff from the contractor, poor management of the site, and the on-site shortage of tools and equipment also happen to be responsibilities of the contractor (Li, et al., 2000). 5.1.2 Responsibility of the consultant These are the factors that are related to the project responsibility of the consultant. They include site staff absence from the consultant, lack of experience by the consultant, lack of experiences from the site staff from the contractor’s side i.e. the supervisory and managerial personnel. Other factors include the slow and delayed decision making from the supervision, having documents that are incomplete, and the slowness in issuing instructions. 5.1.3 Responsibility of the Owner These are factors relating to the responsibility of the owner in the construction project. They include lack of knowledge in the working, slow in the decision-making process and lack of coordination with other parties in the contract. Other factors include modification of the contract such as replacing or adding new activities to the project and changing the specifications; and problems in financials such as delaying the payments, difficulties in financials, and the problems in the economy. 5.1.4 External factors These include such factors such as: the market lacking materials; lack of tools and equipment in the market; poor conditions of the weather, poor conditions on the site such as the location and ground; poor conditions of the economy such as rate of inflation, currency; changes in the regulations and laws; delays in transportation; and external work from the public agencies such as the utilities, public services, and the roads (Abd El- Razek, et al., 2008). Classification of factors which cause the overrun of the eight groups are the consultant, material, contractor, labor, owner, contract, external factors, and the relationship of the contractual. Table below illustrated the factors which cause overrun at the time. Table 2. Factors that cause Effects Leading to the Overruns in Time An examination of delays in construction in the economy that is growing fast which was a comparison between Thailand and other economies; the study showed that the delays that in the construction projects of the 12 high rise buildings in Bangkok, it was found that problems with the supply of resources were the most acute causes of the delays in the boom of the industry. Projects incurred delays due to the inadequacy of materials to be particular cement which were very short in supply, the overstretching of the technical personnel by giving them so much duties exceeding their career entry level (Abdul-Rahman, et al., 2006). The solution to the problems incurred can only be found by the strategies from the collaboration between the national agency and the participants in the industry. A study assessing the frequency of project delays especially in the sewage and water projects, the extents of the delays and the parties that are responsible for the delay. It was also found that most of the projects that experience delays are the large and medium size projects. The consultant and owners always assign most responsibilities of the delay to the contractor but the contractor blames it on the owner. It was found that on average the contractor was given most of the responsibilities; however, considering the responsibilities from the side of the contractor it was found that they can be transferred to the owner (Ahmed, et al., 2002). The owner thus has the prime responsibility for the delays. It can however be argued that a contractor is not be held responsible explicitly due to the high rate of approval for the requests of the contractor for extension of time. It was also found that the excusable compensable is the most common type of delay that occurs at a rating of 48%, the non-excusable follows at 44% and the excusable, and noncompensable delays are 8% (Assaf & Sadiq, 2006). In approximately all the cases it was found that when the responsibility is given to the contractor or the consultant, it is referred to as a delay that is excusable compensable, but when the responsibility falls on the government, it is termed as excusable compensable. The consultant plays a very significant role in delays that are related to the design since they are the ones who are in charge of the design process in collaboration with the project owner. On the other hand, in code-related activities, the delays are related to the government (Braimah, 2008). The contractor of the project is responsible for delay in the activities that relate to construction projects. The delays that result from the economic or financial reasons as well as from the administrative or management have a common position of significance or a key detail of delay such as the delayed payments. The categories mentioned above have the same impact that is negative depending on the time of the project completion similar to other factors such as the construction, design, and code of the related issues ( Ibironke, et al., 2013). Most authors recommend that the permit approval process for buildings should be streamlined as efficiently as possible and any changes in the regulations and laws also be kept in mind and the possible negative impacts it can cause to the cost and time of the construction project. The issues related to design such as changes in the drawings, faulty and incomplete specifications and the changes in the order have effects that are very damaging to the times of project completion and usually lead to escalations in the cost (Ibrahim, et al., 2012). The issues mention above are subject to control in case proper management of the design process and the decision making being timely. It is also well known that the decisions are taken at the early life of the project usually have the weightiest effect on the objectives of the project in delivering safe, quality of the project within the budget and time allocated. Another study examining the factors that result in the delay in the construction projects done in Malaysia showed the result from the analysis being a total of 31 variables that were evaluated and categorized into four. The categories were based on the responsibility and thus the major factors that are causing project delays in the construction projects arise from the side of the contractor, the factors second in line are those from the consultant, third is from the owner’s side and finally from the external factors (Braimah, 2008). The main conclusion of the study is that the financial factors have the most influence in causing delays for the construction projects in Malaysia. The problems occurring from coordination are given the second degree of causing the delays. A further assessment of the factors causing delay of the projects in the construction industry in Malaysia based on the categories of the consultant, contractor, external factors, and the owners show that the side of the contractor and problem with financials are seen to be major factors causing delays in the construction projects. Factors such as the poor management of the site which also result into mistakes in construction, delay in materials delivery to the site, and problems with coordination were shown to be subsequent causes of delay in construction projects in the country (Chang, 2002). The studies also identify with the side of the owner as being the main causative factor of delays in the construction industries, and this is mainly due to the financial problems. The side of the consultant causes delays due to lacking in efficient supervision, slowness in the issuing of instructions and lack of expertise from the consultant. 6.0 Identifying the Factors That Affect Delays in Cost Past research has attempted to explain the reasons behind the disparity between the final account and the tender sum ( Ibironke, et al., 2013). This section is going to look into the identification of the factors that have an influence on the cost delays. Four factors have so far been identified from previous research material and mainly are changes in design, inadequacy in planning, weather conditions being unpredictable, and the changes in the cost of materials for building thus causing a change in the bill of quantities. The factors mentioned above are augmented with others that have been gleaned from the reports of final accounts. The comparison was made with factors from other research findings in existence and thus coming up with a final result of 18 factors. These factors can be divided into two groups each having the seven factors that are critical and nine factors which are commonly subject to ignorance but are perceived to have equal importance in the matters of discussion (Li, et al., 2000). 6.1 Critical Factors • The design being incomplete during tendering. • Owner request of additional work. • Owner changing their brief. • Lack of planning or monitoring of the cost during the stages of pre-contract and postcontract. • The site and soil conditions being poor. • Adjusting the provisional sums and the prime costs. • Provisional work being re-measured. • Site location logistics. • Cost reports lacking at the construction stage. 6.2 Other Commonly Ignored Factors • Delayed giving of information to the contractor when the construction is progressing as a result of delays. • Design stage technical omissions. • Claims that are contractual such as additional time along with claims of the cost. • Standard drawing improvements during the stage of construction. • The supervision being indecisive when dealing with the queries of the contractor during delays. • Additional works and costing variations delays. • Errors and exclusions in the bill of quantities. • Abnormal item rates ignorance when doing the tender evaluation, specifically items that have provisional quantities. • Contractors tendering maneuvers, for instance, the rates front-loading. The cost delays prime variables have been commonly associated with material costs inflation, project complexity, weather conditions being unpredictable and inaccurate estimates of the materials (Abdul-Rahman, et al., 2006). The cost delays prime variables have also been associated with lack of geographical experience from the contractor, lack of contractor experience in the type of project undertaken and lack of familiarity with the regulations of the region where the project is being undertaken (Abdul-Rahman, et al., 2006). A study of the factors that influence the delay in costs in the projects of the public sector showed that the cost escalations is attributable to the fact that the estimates that are original were undertaken when the prices were different from the current ones and also due to the delays that enhance the inflation effect and the direct cost escalation that results from the scope and errors (Bubshait & Cunningham, 2004). Taking certain assumptions basing on the pace of the project expenditure in 133 projects, only about 25% of the cost is subject to change from inflation (Bubshait & Cunningham, 2004). The remaining percentage is explained with basis on the inefficiencies, delays, statutory levies changes, changes in the scope, exchange rates variations and the effect resulting when these factors are combined with inflation. Another study mentions ten factors which have effects on the cost overruns for the construction projects. These factors can be categorized as inadequately preparing for the project, implementation and planning, and construction delays; they are the major causes given top ranking in the study. The second factor is the supply of equipment and raw materials by the contractors (Chang, 2002). The third factor is the change in the project scope. The fourth factor is the constraint in the resources: foreign exchange, funds, power; and the auxiliaries associated with the project that are not ready. The decision-making delays by the government, the failure of specific coordination between bodies is the fifth. The sixth factor is the inappropriate and wrong site choice. The seventh factor was the incompetence of the technicalities and the organization structure being poor. The eighth factor is the unrest of labor. The ninth factor that resulted to cost overruns are the natural calamities such as war. The tenth and last factor is the technical consultants lacking the required expertise, the foreign collaboration being inadequate in the agreements, technology monopoly. Another study examining the causes of the factors the affect the cost delays in the construction projects that are high-rise in Indonesia found that the cost overruns are frequent in the country and are predominated by the factors such as the increase in the cost of material due to fluctuating rates of inflation, inaccurate estimates of materials, and the complexity of the project (Ibrahim, et al., 2012). 7.0 Building Projects Time Variance Time variance (TV) is defined as the time between the time that is scheduled for the contract and the time of completion when undertaking the activities of the building project. 7.1 Major Causes Contributing to the Time Variance The results from the time overrun in construction projects in the public sector affect all other parties involved in the project with such factors as the additional costs. Various methods can be undertaken when mitigating these problems for countries that are developed through previous studies, the limitation of applying the methods arouses concerns that they are probably the causes of the time variance not being adequately addressed. The primary causes of the overrun in time are: 7.1.1 Causes related to policy The local authorities mainly endorse the projects of the public sector. The implementation of such projects, therefore, must, therefore, abide by the governmental policies. Also, the government policies must incorporate the interest with multiple dimensions mainly the interests of the public. The interests are dynamic, multiple and complicated and thus their satisfaction leads to an unavoidable change in the policy (Braimah, 2008). 7.1.2 Causes related to the owner The projects of the public sector involve many changes which induce delays when implementing the project. The owner of the public sector is usually inactive when pushing the progress of the project as compared to the owner of the private sector (Ijaola & Iyagba, 2012). The owners lack skills involved in construction control programming. Bureaucracy is present in all the procedure undertaken in the public project thus causing further delays (Kim, et al., 2005). 7.1.3 Causes related to design In the event of the design data being insufficient or incorrect it leads to major delays in the project. The problem arises due to poor briefing by the owner, allowing insufficient design time, poor skills on the side of the architect and the request for changes in the design by the owner during the construction process (Ahmed, et al., 2002). 7.1.4 Causes from the contractor The main causes are disputes with the suppliers of materials and subcontractors that may lead to major delays. Other factors are insufficient financials by the contractor, mistakes in the decision-making process and inability in performing managerial functions. The contractor may sometimes agree to unrealistic contract details just to win the contract (Odeh & Battaineh, 2002). 7.1.5 Causes related to the consultant The consultant can affect the project progress by the different monitoring measures which include the issuing of certificated, and satisfaction endorsement for given activities. These are common in China. 8.0 Oman Case One study that was done in the assessment of the delays that occur in Oman and the causes concluded the findings below (Al-Momani, 2000). The study compared the delay time percentages during the 2007 to 2010 period. The table below shows the major reasons for delay in Oman for the period divided in two study stages (Alia, et al., 2014). Table 3. Reasons for delay between 2007 and 2008 Table 4. Reasons for delay between 2009 and 2010 • The construction projects in Oman in between the years 2007 and 2009 found that the delay in time was over 40% of that which was planned which is very high. • The maximum delays occurring between 2007 and 2009 were about 3005 thus indicating the significance of studies related to the efficiency and planning of the construction projects that are specialized. • The studies of the various projects that experienced delays came out to be those as the responsibility of the owner. References Abd El- Razek, M. E., Bassioni, H. A. & Mobarak, A. M., 2008. Causes of Delay in Building Construction Projects in Egypt. Journal of Construction Engineering and Management, 134(II), pp. 831-841. Abdul-Rahman, H. et al., 2006. Delay Mitigation in the Malaysian Construction Industry. Journal of Construction Engineering and Management, 132(2), pp. 125-133. Ahmed, S. M., Azhar, S., Castillo, M. & Kappagant, P., 2002. Construction Delays in Florida: An Empirical Study, Florida International University of Miami: Department of Construction Management. Alia, A., Emadelbeltagi, Ashraf, E. & Mahmoud, D., 2014. Causes and effects of change orders on construction projects in Kuwait. 2nd ed. Kuwait: s.n. Al-Momani, A., 2000. Construction delay: a quantitative analysis. International Journal of Project Management, 20(5), p. 1–9. Assaf, S. A. & Al-Hejji, S., 2006. Causes of delay in large construction projects. International Journal of Project Management, Volume 24, pp. 349-357. Assaf, S. A. & Sadiq, A.-. H., 2006. Causes of Delay in Large Construction Projects. International Journal of Project Management, Volume 24, pp. 349-357. Braimah, N., 2008. An investigation into the use of Construction Delay and Disruption Analysis Methodologies, s.l.: University of Wolverhampton. PhD. Thesis.. Bubshait, A. A. & Cunningham, M. J., 2004. Management of Concurrent Delay in Construction. Journal of Cost Engineering, 46(6), pp. 22-28. Chang, A. S., 2002. Reasons for cost and schedule increase for engineering design projects. Journal of Management and Engineering, 18(1), pp. 29-36. Ibironke, O. T., Oladinrin, T. O., Adeniyi, O. & Eboreime, I. V., 2013. Analysis of NonExcusable Delay Factors Influencing Contractors Performance in Lagos State, Nigeria. Journal of construction in Developing Countries, pp. 18(1), 53–72. Ibrahim, M., AmundBruland & NabiDmaidi, 2012. Causes of Delay in Road Construction Projects. Journal of Construction Engineering and Management, Volume 28, pp. 300310. Ijaola, L. A. & Iyagba, R. O., 2012. A comparative study of causes of change orders in Public Construction Projects in Nigeria and Oman. JETEMS, 3(5), pp. 495-5012. Kim, Y., Kim, K. & Shin, D., 2005. Delay Analysis Method Using Delay Section. Journal of Construction Engineering and Management, 131(11), pp. 1155-1164. Li, H., Love, P. E. & Drew, D. S., 2000. Effects of overtime work and additional resources on project cost and quality. Journal of Engineering, Construction Architecture and Management, 7(3), pp. 211-220. Odeh, A. M. & Battaineh, H. T., 2002. Cause of construction delay; traditional contracts. International Journal of Project Management, Volume 20, pp. 67-73. Sambasivan, M. & Soon, Y., 2007. Causes and effects of delay in Malaysian construction industry. International Journal of Project Management, Volume 25, pp. 517-526.
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