Professional Documents
Culture Documents
Final Report
Submitted to:
By:
and
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INTRODUCTION
General:
The Construction industry is large, volatile, and requires tremendous capital outlays.
Typically, the work offers low rates of return in relation to the amount of risk involved.
A unique element of risk in the industry is the manner in which disputes and claims are
woven through the fiber of the construction process. The type of contract used, is often
based on an overall attempt to allocate (often shifting) the risks of the work to the parties
involved. A certain amount of risk must always be recognized and accepted. Risk can
only be mitigated - it cannot be eliminated.
Delays on construction projects are a universal phenomenon. They are almost always
accompanied by cost and time overruns. Construction project delays have a debilitating
effect on parties (owner, contractor, consultant) to a contract in terms of a growth in
adversarial relationships, distrust, litigation, arbitration, cash-flow problems, and a
general feeling of apprehension towards each other.
Delays caused by the client such as late submission of drawings and specifications,
frequent change orders, and incorrect/inadequate site information generate claims from
both the main contractors and subcontractors which many times entail lengthy court
battles with huge financial repercussions. Delays caused by contractors can generally be
attributed to poor managerial skills. Lack of planning and a poor understanding of
accounting and financial principles have led to many a contractor’s downfall. Empirical
studies to determine the causes of delays in construction projects have been carried out in
the US.
The main objective of this study is to identify the major causes of delays in construction
projects in the Florida Construction Industry through a survey. The primary aim is to
identify the perceptions of the different parties regarding causes of delays, the allocation
of responsibilities and the types of delays.
The scope of this research project is limited to building projects in the Florida region
only. The data for this study has been gathered through detailed literature review and
questionnaire survey.
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Organization of the Report:
The report is logically organized into five (5) chapters and appendices:
Chapter two comprises of literature review, and quotes the various related works done in
this area of study.
Chapter three describes in detail the methodology followed in this research study.
Chapter four contains the analysis of the information gathered through the questionnaire
survey, identifies the critical causes of delay in the Florida Construction Industry, based
on the chance of occurrence.
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CHAPTER 1:
BACKGROUND
1.1. General
Delay is generally acknowledged as the most common, costly, complex and risky
problem encountered in construction projects. Because of the overriding importance of
time for both the Owner (in terms of performance) and the Contractor (in terms of
money), it is the source of frequent disputes and claims leading to lawsuits. To control
this situation, a contract is formulated to identify potential delay situations in advance and
to define and fix obligations to preclude such controversies. A substantial number of
General Conditions clauses address this subject in one way or another.
It is found in practice that not everything in the contract can be taken at face value and
applied in cookbook fashion. Circumstances play a great deal in determining which
clause(s) will be applied to a particular delay claim. Also, contract law encompasses
concepts of reasonableness and fair dealing, implied obligations and warranties,
constructive acceleration, etc. A good general understanding of the principles involved
and the operation of the applicable clauses are essential to help make appropriate
decisions and take the proper action in those delay situations.
In a large and complex project there will be a certain amount of give and take policy
among the parties competing for the same time and space. Time, energy, and money
must not be diverted in pursuing claims and disputes over minor delays, disruptions, and
interferences. Accordingly, the General Conditions in Owner issued contracts typically
contain clauses that the Contractor on notice can plan for certain events. Further delays
that occur due to these events can be termed as ‘non-excusable delays’.
Often contract clause will require that a delay claim be submitted in writing within a
stipulated number of days from the commencement of a delay. Further, within those
stipulated number of days, after the termination of any such delay, the Contractor is
required to file a written notice specifying the actual duration of the delay. Failure to
give either of the above notices shall provide sufficient ground for denial of an extension
of time. By giving notice, the Contractor warns the Owner in taking alternate action to
avoid or reduce the excess costs.
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However, delays do not always result from a single catastrophic event. They frequently
develop slowly during the course of work. Minor delays are generally overlooked until
their cumulative effect becomes financially apparent. By the time a Contractor
recognizes that there is a problem, many different parties and natural forces would have
contributed to the situation. Failure to comply with the notice requirements can
contribute to the situation which may or may not defeat the claim.
Delays can be grouped in the following four broad categories according to how they
operate contractually:
Non-excusable delays
Excusable non-compensable delays
Excusable compensable delays
Concurrent delays
Non-excusable delays are delays, which the Contractor either causes or assumes the risk
for. These delays might be the results of underestimates of productivity, inadequate
scheduling or mismanagement, construction mistakes, weather, equipment breakdowns,
staffing problems, or mere bad luck. Such delays are inherently the Contractor’s
responsibility and no relief is allowed. These delays are within the control of the
Contractor or are foreseeable; however, it is not necessary that they be both.
When a delay is caused by factors that are not foreseeable, beyond the Contractor’s
reasonable control and not attributable to the Contractor’s fault or negligence, it may be
“excusable”. This term has the implied meaning that neither party is at fault under the
terms of the contract and has agreed to share the risk and consequences when excusable
events occur. The Contractor will not receive compensation for the cost of delay, but he
will be entitled for an additional time to complete his work and is relieved from any
contractually imposed liquidated damages for the period of delay.
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1.1.3 Compensable Excusable Delays
In addition to the compensable delays that result from contract changes by Change
Notice, there are compensable delays that can arise in other ways. Such compensable
delays are excusable delays, suspensions, or interruptions to all or part of the work caused
by an act or failure to act by the Owner resulting from Owner’s breach of an obligation,
stated or implied, in the contract. If the delay is compensable, then the Contractor is
entitled not only to an extension of time but also to an adjustment for any increase in
costs caused by the delay.
Changes
Differing Site Conditions
Suspension
The changes clause in Owner-issued contracts provides that equitable adjustments may
be considered as follows:
1.1.3.1 Changes
With the help of a written Change Notice, the Owner may, without any notice to the
sureties (if any), unilaterally make any change, at any time in the Work within the general
scope of the Contract, including but not limited to changes:
In the drawings, designs or specifications
In the method, manner or sequence of Contractor’s work
In Customer or Owner furnished facilities, equipments, materials, services or
site(s)
Directing acceleration or deceleration in the performance of the work
Modifying the Contract Schedule or the Contract milestones
If at any time Contractor believes that acts or omissions of Customer or Owner constitute
a change to the Work not covered by a Change Notice, Contractor shall within ten (10)
calendar days of discovery of such act or omission, submit a written Change Notice
Request, explaining in detail the basis for the request. Owner may either issue a Change
Notice or deny the request in writing.
If any change under this clause causes directly or indirectly an increase or decrease in the
cost, or the time required for the performance of any part of the Work, whether or not
changed by any order, an equitable adjustment shall be made and the contract will be
modified accordingly.
The clause recognizes that changes in the work or changes in the method or manner of
performance may require changes in the schedule and schedule milestones and this could
further necessitate revisions in activity durations, sequence of work items, or
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interrelationships of various tasks. These changes may have a direct impact on the
schedule, as where a change in method requires a greater or lesser period of performance
or its effects may be subtler, as where the change merely rearranges priorities. In
addition to a time extension, the contract’s clause provides compensation for any delay
resulting from a contract change by allowing an equitable adjustment for the increased
cost of the performance of the work caused by the change.
The portion of the clause addressing cost or time adjustments for ‘differing site
conditions’ provides:
The differing site conditions clause must not be confused with the Site Conditions clause
in Owner issued contracts - the so-called “Exculpatory” clause. Its intent is to disallow
any claims for delays relating to conditions at the site, which the Contractor should have
anticipated. The exceptions are limited to those conditions defined in the Differing Site
Conditions clause.
Concurrent delays occur when both Owner and the Contractor are responsible for the
delay. Generally, if the delays are inextricably intertwined, neither the Contractor can be
held responsible for the delay (forced to accelerate, or be liable for liquidated damages)
nor can he recover the delay damages from the Owner.
Until the development of CPM schedule analysis, there was no reliable method to
differentiate the impact of Contractor caused delays from Owner-caused delays. With the
sophisticated computerized techniques now available, however, it has become possible to
segregate the impacts of apparently concurrent Owner and Contractor delays.
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1.2 Causes of delays:
There are two kinds of causes for delays in construction projects: external and internal
causes. Internal causes of delays include the causes, which come from four parties
involved in that project. These parties include the Owner, Designers, Contractors, and
Consultants. Other delays, which do not come from these four parties, are based on
external causes for instance from the government, material suppliers, or weather.
The followings are some of the possible causes of delays that the construction industry is
facing nowadays:
Time is an integral part of every plan a company develops for performing contract work.
There is a relationship between the schedule, the scope of work, and the project
conditions. Changes to any one or more of the above three can affect the time of
completion and compensation.
Delays can quickly consume the time in your schedule, and it is important to understand
the net effect of those delays.
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• Excusable: the construction company gets time, but no money
• Compensable: the construction company gets both time and money
To be able to evaluate which type of delay you may be experiencing, you first need to
read the full Contract. Usually a contract clause dealing with time, schedule, suspension
of the work, or default will list the events that will entitle you to an extension of time. A
typical clause allows extensions of time for unforeseeable events that are beyond the
company’s control and are not caused by the company’s fault or negligence. Clauses
often give a “laundry list” of examples, such as:
• Acts of God
• Acts of the public enemy
• Acts of the Owner or those under his control
• Acts of the Owner’s independent Contractors
• Fire
• Floods
• Epidemics
• Quarantine restrictions
• Strikes
• Freight embargoes
• Unusually severe weather
This type of clause sometimes called a “force majeure” clause, lists excusable delays.
Any other type of delay becomes Non-excusable.
A typical Non-excusable delay is one where the company or anyone for whom the
company is responsible (subcontractors or suppliers) has caused a delay by failing to:
Thus, the company must read the Full Contract carefully because occasionally it is found,
for example, that weather (not just abnormal or unusually severe weather) might be an
excusable delay, while strikes are not.
o Failure to provide access to all or part of the worksite when the company needs it.
o Failure to review shop drawings in a timely manner.
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o Failure to properly coordinate the work of his other Contractors on the site.
o Ordering changes in the company’s method or sequence for performing the work.
Other owner acts that stop or disrupt the company’s prosecution of its work.
The clause that lists excusable delays usually will not tell you if the delay is also
compensable. It may either say nothing about it or sometimes may even say that the
delay is not compensable, which is not necessarily so. The company may have to look at
other clauses in the contract to see if the company is entitled to compensation for one or
more of the types of excusable delays listed above.
There are clauses that may entitle the company for compensation for certain delays.
Other clauses to check are the “changes” clause and the “Differing Site Conditions”
clause, both of which will say that the company will be compensated for added costs
under the circumstances described in those clauses.
The need to give contractually required notices to the Owner is stressed. Virtually all
contract provisions that deal with excusable and compensable delays contain a
requirement for prompt written notice of the delay to the Owner. In addition, the next
schedule update submitted to the Owner should clearly show any delays the company has
experienced and the time extensions the company is entitled to (and has requested from
the owner), whether the Owner has approved it or not. The schedule update should be
accompanied by a narrative that describes the delay and its impact in the completion of
the project to the extent known at that time.
If the delay is non-excusable, notice to the Owner is generally not required. However,
even a non-excusable delay may have to be shown on the contractually required schedule
together with the actions the company will take to make up for the effects of the delay,
such as acceleration of the work.
With time being the essence in most of the construction contracts and with the project
duration clearly defined, it is also important to follow the next outline procedures when
delays occur:
Whenever the Contractor foresees any delays in the prosecution of the work, and in any
event immediately upon the occurrence of any delay which the Contractor regards as
unavoidable, the Contractor shall notify the Owner’s representative in writing of the
probability of occurrence of such delay and its cause in order that the Owner’s
representative may take immediate steps to prevent, if possible, the occurrence or
continuance of the delay or, if this cannot be done, may determine whether the delay is to
be considered avoidable or unavoidable, how long it continues, and to what extent the
prosecution and completion of the work are to be delayed. The Contractor shall make no
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claims that any delay not taken to the attention of the Owner at the time of its occurrence
has been an unavoidable delay.
The concepts of “liquidated damages” and “acceleration” are often opposite approaches
in solving the delay problem. When does a company have to pay liquidated damages?
What if the contract does not have liquidated damages clauses? When does the company
have to accelerate the job? When does the owner pay for the acceleration?
The word “liquidated” is a legal concept, which means the amount of money to be paid
for late-completion, if fixed.
A company seldom (if ever) signs a contract that does not have a specified completion
date. The combination of that specific date and time is of essence in the contract, which
means that if the company fails to complete the work on time – and that the causes of the
delay are due company’s fault the company is liable for all of the Owner’s damages that
occur because of that delay.
1.6.2 Acceleration:
Events may delay the job and shorten the Contractor’s time to accomplish his work. Or
the Owner may require the Contractor to finish his work sooner than initially scheduled.
Either of these cases may call for an acceleration of Contractor’s work – that is,
Contractor may need to make up time to avoid damages (liquidated or actual) payable to
the Owner for the late completion of the project. It is often carried by working overtime
and on weekends by adding manpower or even by placing extra shifts and equipment.
Project control consists of two components: one, accurate information about the schedule
status of a project, and the other, actions taken in response to the status reports. The
driving force for keeping a project “on schedule” is money. Typically, contracts include
liquidated damages for a project not being completed on time or bonus/penalty clauses
that provide an incentive to the Contractors to complete the project as soon as possible.
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Owner (or Agent) Responsible: Contractor will be granted time extension and
additional costs (indirect), where warranted.
Contractor (or subcontractor) Responsible: Contractor will not be granted time or
costs and may have to pay damages/penalties.
Neither Party (e.g., Act of God) Responsible: Contractor will receive additional
time to complete the project but no costs will be granted and no
damages/penalties assessed.
Both Parties Responsible: Contractor will receive additional time to complete the
project but no costs will be granted and no damages/penalties assessed.
In many cases it may only be in the “final analysis”, during the resolution of disputes,
that CPM is considered to be worth to use it to its fullest extent. It is at this point that the
CPM technique is particularly useful, because it provides a complete model of the
project. The model illustrates how the project was originally planned and how it changed
as the project progressed. By introducing changes into this model, it would be possible to
see how other portions of the model will be affected. It thereby furnishes a basis upon
which assessments of time and money awards can be made.
Disputes normally come down in assessing three aspects of delays: (1) whose was the
fault or who caused the delay, (2) how much delay occurred (project delay) and,
consequently, (3) what monetary awards should be made. The Critical Path Method is
primarily useful in addressing the second of these conditions and in some cases can be
used to assist in determining at least a portion of the monetary awards.
CPM enables anyone to evaluate the impacts of the action of any party (Owner,
Contractor, subcontractor, or other). Most importantly, the assessment can be considered
as being objective (unbiased) provided the model (network) used is valid.
There are numerous court cases in which the project duration has allegedly been
compromised by changed orders, differing site conditions, excusable delays, non-
excusable delays, suspensions of work, and others causes. Many of these cases concern
Contractors who felt that they have been delayed the project as a result of some
occurrence for which there was entitlement to additional time and/or money.
As-built schedules are similar to as-built drawings. Where as-built drawings are
corrections made on the original set of construction drawings to reflect the actual
locations of all construction features, as-built schedules reflect the actual time
occurrences for all major project activities. As-built schedules are not commonly
prepared in most projects. Note that an updated schedule merely shows the correct status
of the project activities beginning at a designated point in time. In the updated schedules,
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the actual occurrence time of past activities is not of primary interest. It is only when the
true representation of the entire project schedule is needed that an as-built schedule is
warranted. Since these take time to prepare, a decision must be it the effort is justified.
What is the purpose of as-built schedules? The most widely recognized use is in the area
of claims, especially delay claims, from a Contractor’s point of view, an as-built schedule
might be prepared to demonstrate how a particular Owner-caused delay or unforeseen
condition resulted in a significant project delay. This will often be difficult to show
without an as-built schedule. To make the impact of delay clear, comparisons must be
made against other schedules of the project, namely those that were prepared without the
anticipation of a delay.
The following is the list of the most likely causes for delays to happen related to building
code-related:
• Building Permits Approval Process
• Changes in Laws and Regulations
• Safety Rules
• OSHA Regulations
• Florida Building Code
• Building Regulations in Coastal Regions
• Coastal Construction Control Line Permit
• Florida Administrative Code
• National Flood Insurance Program
The United Florida Building Code (FBC) drives the Florida Building System.
A new Florida Building Code started applicable from March 1, 2002.
FBC describes the code of the general organization, its applicability, and major
exemptions, as well as major changes to the code relevant to high wind provisions
and means of egress.
The term "Occupational Safety and Health Standard" means a standard which requires
conditions, or the adoption or use of one or more practices, means, methods, operations,
or processes, reasonably necessary or appropriate to provide safe or healthful
employment and places of employment.
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1.12.3 Coastal Construction Control Line (CCCL) Program:
The purpose of the CCCL program is to preserve and protect Florida's coastal beach-dune
system from imprudent construction and still provide reasonable use of private property.
Construction can jeopardize the shoreline's stability, accelerate erosion, provide
inadequate protection to upland structures, endanger adjacent properties, or interfere with
lateral public beach access. Within the boundaries of the CCCL, no person, firm,
corporation, or governmental agency may construct any type of facility or building
without a CCCL permit, unless it is exempted. Regulated activities include everything
from large multifamily developments to dune walkover structures.
The NFIP began in 1968 as a nationwide system for obtaining flood insurance. The
program first helped in developing maps of all areas that have a 1% chance of serious
flooding each year. Local governments were also encouraged to adopt regulations to
reduce the impacts of future flooding. In exchange for these regulations property owners
within the community can obtain flood insurance. If a community does not adopt
regulations to reduce flood impacts, property owners in the community are not eligible
for federal flood insurance.
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CHAPTER 2.
LITERATURE REVIEW
2.1 General:
One of the most important problems in the Construction industry is delay. Delays occur
in every construction project and the magnitude of these delays varies considerably from
project to project. Some projects are only a few days behind the schedule; some are
delayed over a year. So it is essential to define the actual causes of delay in order to
minimize and avoid the delays in any construction project.
There is a wide range of views for the causes of time delays for engineering and
construction projects. Some are attributable to a single party, others can be ascribed to
several quarters and many relate more to systemic faults or deficiencies rather than to a
group or groups.
The successful execution of construction projects and keeping them within estimated cost
and prescribed schedules depend on a methodology that requires sound engineering
judgment [1].
Leishman [4] presented the legal consequences of delays in construction. Herbsman et al.
[5] studied the effect of delays on cost and quality. Yates [6] developed a decision
support system for construction delay analysis called (DAS). The main categories of
delays in DAS include engineering, equipment, external delays, labor, management,
material, owner, subcontractors, and weather.
Ogunlana et al. [7] studied the delays in building project in Thailand, as an example of
developing economies. They concluded that the problems of the construction industry in
developing economies could be nested in three layers: (1) problem of shortages or
inadequacies in industry infrastructure, mainly supply of resources; (2) problems caused
by clients and consultants; and (3) problems caused by incompetence of contractors.
Kumaraswamy et al. [8] surveyed the causes of construction delays in Hong Kong as
seen by clients, contractors and consultants, and examined the factors affecting
productivity. The survey revealed differences in perceptions of the relative significance
of factors between the three groups, indicative of their experiences, possible prejudices
and lack of effective communication. Mansfield et al [9] studied the causes of delay and
cost overrun in construction projects in Nigeria. The results showed that the most
important factors are financing and payment for completed works, poor contract
management, changes in site conditions, shortage of material, and improper planning.
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Assaf et al. [10] studied the causes of delay in large building construction projects in
Saudi Arabia. The most important causes of delay included approval of shop drawings,
delays in payments to contractors and the resulting cash-flow problems during
construction, design changes, conflicts in work schedules of subcontractors, slow
decision making and executive bureaucracy in the owners' organizations, design errors,
labor shortage and inadequate labor skills. Mezher et al. [11] conducted a survey of the
causes of delays in the construction industry in Lebanon from the viewpoint of owners,
contractors and architectural/engineering firms. It was found that owners had more
concerns with regard to financial issues, contractors regarded contractual relationships
the most important, while consultants considered project management issues to be the
most important causes of delays.
Battaineh [2] evaluated the progress reports of 164 building and 28 highway projects
constructed during the period 1996¯1999 in Jordan. The results indicate that delays are
extensive: the average ratio of actual completion time to the planned contract duration is
160.5% for road projects and 120.3% for building projects.
Hancher and Rowings, [1] for example, provide a concise summary of the methodologies
used by transportation agencies to establish the contract duration used for highway
construction projects, and also provides a schedule guide for field engineers during
construction. Similarly, Chalabi and Camp [13] conducted a review on project delays in
developing countries during planning and construction stages. In their study they found
that the delay and cost overruns of construction projects are dependent entirely on the
very early stages of the project. Fereig and Qaddumi [14] in their study on the
construction experience of the Arabian Gulf demonstrate the various components of the
planning, controlling and productivity on construction delay. Their primary purpose is to
alert the reader to the deviation from the project plans.
Wilson [15] examined the role of the owner and architect/engineer's roles in the
prevention and resolution of construction claims. Wilson also summarized the causes of
construction claims which include: extra work, project delays and acceleration, lack of
management, limited site access and change in work schedule.
Jonathan Jingsheng Shi [16] presented a paper on method for computing activity delays
and assessing their contributions to project delay. The method consisted of a set of
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equations, which could be easily coded into a computer program that would allow speedy
access to project delay information and activity contributions.
Sabah Alkass, Mark Mazerolle, Frank Harris [17] presented a paper which discusses
different delay analysis techniques that are currently used by practitioners in the
construction industry. It also discusses a proposed new delay analysis technique called
the Isolated Delay Type (IDT). These techniques were tested against a case example and
their strengths and weaknesses highlighted.
Empirically based time performance research measures either construction time (physical
building time) or contract time (performance measured against the date stipulated in
contracts). Bromilow [18] headed a CSIRO investigation of contract time performance
for 329 projects constructed between 1964 and 1969. One outcome of this study was the
development of an empirical relationship between total cost of construction and project
duration. The equation describing the average duration as a function of value is T = KCb,
where ‘T’ equals the construction period from possession of site to practical completion
in days, ‘C’ is the final adjusted project value, ‘K’ is a constant describing how time
performance is affected by size, and ‘b’ a constant indicative of the sensitivity of time
performance to cost level. This established the parameters of cost/time performance
predictability, although the performance of the individual projects varied significantly.
The relationship was re-tested by Bromilow [19] in collaboration with the Australian
Institute of Quantity Surveyors (AIQS) in two follow-up contract time performance
studies, in 1976 and 1988. The former study investigated 408 projects built between
1970 and 1976 and found that despite evidence of greater variation between the time
performance of projects of similar value, ‘the relationship between construction duration
and project cost uncovered in the 1960s still holds.’ The 1988 study investigated 408
projects built between 1976 and 1986. It found that the average contract time was about
32% for government contracts and 22% for private contracts (Bromilow, Hinds, &
Moody 1988).
Ireland [20] describes the relationship between time, cost, and quality as in the following
terms:
He studied the performance on twenty five high rise commercial projects in Sydney,
Australia. Amongst his finding is confirmation of the formula derived by Bromilow,
though with slightly different constants.
A detailed study by the NSW Royal Commission into Productivity in the Building
Industry (1992) of 20 commercial high-rise buildings with a total design and construct
value of over A$2.0 billion found 22 specific causes of time overrun. Weather, industrial
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disputation, client scope changes and variations, and consultant problems were some of
the ones occurring with the highest frequency.
Comparative time performance research has been conducted by Ireland in several studies;
a comparison of Australian contractors (1984), a comparison of US and UK projects with
Flanagan, Norman and Orerod (1986) and a comparison of best US and Australian
contractors (1987).
Ireland’s [21] study compared 14 office and hotel projects by a leading Australian
contractor with 22 similar projects by a similar US contractor and later compared them
with the performance of a leading UK contractor. One of the major findings of this study
was that if the US contractor takes 107 days, the UK takes 118 days and the average
Australian best takes 136 days. In sum, Australian projects take up to 20-30% longer
than in the US.
There has been a considerable and continued interest on the effects of construction
delays. The information available is diverse and widespread. Despite the necessity for
such research, little work has been described in the literature concerning public projects.
The previously proposed factors contributing to construction delay were frequently
observed in public projects. The actual frequency and magnitude of these factors is not
known, which has proven to be a serious and very expensive problem for the construction
industry.
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CHAPTER 3.
METHODOLOGY
3.1 General
The preliminary data for this research was collected through a literature review and the
use of a questionnaire survey targeted at Contractors in the State of Florida.
Questionnaire Survey
Florida’s
Construction Contractors
Analysis
The literature review was done through books, conference proceedings, the Internet, and
leading construction management and engineering journals. In this step, all the causes
for delays that may be encountered in a construction project were identified through a
detailed review of published technical papers, recent magazines, newspapers and via
Internet. The causes of delays are classified into six broad categories depending on their
nature and mode of occurrence. Based on the findings, the delays checklist is as follows:
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ACTS OF GOD Flood
Hurricane
Fire
Wind Damage
DESIGN - RELATED Design Development
Change Order
Decision during development stage
Changes in Drawings
Changes in Specifications
Shop Drawings Approval
Incomplete Documents
CONSTRUCTION-RELATED Inspections
Subsurface Soil Conditions
Material/Fabrication Delays
Material Procurement
Lack of Qualified Craftsmen
Poor Subcontractor Performance
Defective Work
Different Site Conditions
Labor Injuries
Damage to Structure
Construction Mistakes
Poor Supervision
Equipment Availability
FINANCIAL/ECONOMICAL Financial Process
Financial Difficulties
Delayed Payments
Economic Problems
MANAGEMENT/ADMINISTRATIVE Labor Dispute and Strike
Inadequate Planning
Inadequate Scheduling
Contract Modifications
Underestimation of Productivity
Staffing Problems
Lack of coordination on-site
Scheduling Mismanagement
Transportation Delays
Suspensions
Inadequate Review
Lack of High-Technology
Poor Managerial Skills
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CODE-RELATED Building Permits Approval Process
Changes in Laws and Regulations
Safety Rules
OSHA Regulations
Florida Building Code
Building Regulations in Coastal Regions
Coastal Construction Control Line Permit
Florida Administrative Code
National Flood Insurance Program
3.2 Questionnaire:
The questionnaire survey (Appendix A) was made available on the Internet and was
developed to identify:
• The type of delay:
A=Non-Excusable
B=Excusable Non-Compensable
C=Excusable Compensable
D=Concurrent
• Chance of occurrence:
1-Unlikely = 20 % probability to happen.
2-As likely as not = 40 %
3-Likely = 60 %
4-Almost certain = 80 %
5-Certain = 100 % probability to happen
• Responsibility
Own=Owner
Cont=Contractor
Cons=Consultant
Gov=Government
Shared=Shared
Upon the completion of the data analysis, conclusions and recommendations were
presented.
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CHAPTER 4.
ANALYSIS OF RESULTS
4.1 General:
This chapter deals with the analysis of the information gathered (Appendix B) from the
questionnaire survey and includes the identification of the critical causes of delays,
responsibilities and types of delays based on the delays checklist outlined in the
methodology section of the report.
A detailed questionnaire was prepared (appendix A) and sent to the different companies
specially General Contractors in the State of Florida by regular mail and also via Internet.
The survey was carried out over the period from October 2001 to March 2002, and the
response rate is as shown in the Table 4.1:
No. of Companies 23 12 35
Responding
The key causes of delays are presented in tables 4.1 – 4.5. Each table categorizes the
different causes of delays (Acts of God, Design-Related Delays, Construction-Related
Delays, Financial/Economical Delays, Management/Administrative Delays and Code-
Related Delays) based on the chance of occurrence. The chance of occurrence was rated
on a scale of 1 to 5 with 1 having the lowest frequency of occurrence and 5 the highest.
The number in the filled cells indicates the number of respondents who chose that option.
The last cell in each category shows the average of the responses while the far most right
column indicates the selection of the key causes of delays, which were selected as those
having a value of 2.5 or higher indication at least a 50% chance of occurrence.
22
1. Acts of God 1 2 3 4 5 Total Key Delay
Flood 20 4 3 0 0 1.37
Hurricane 5 10 9 1 0 2.24
Fire 11 11 3 0 0 1.68
Wind Damage 7 11 7 0 0 2.00
Total of Key Delay 0
2. Design-Related
3. Financial/Economical
23
4. Construction Related 1 2 3 4 5 Total Key
Delay
Inspections 0 4 12 4 5 3.40
Subsurface Soil Conditions 4 10 10 3 0 2.44
Material/Fabrication Delays 1 7 14 3 2 2.93
Material Procurement 1 13 6 5 1 2.69
Lack of Qualified Craftsmen 4 8 9 3 2 2.65
Poor Subcontractor Performance 2 9 8 5 2 2.85
Defective Work 5 11 6 3 1 2.38
Different Site Conditions 5 8 9 4 0 2.46
Labor Injuries 7 9 7 2 1 2.27
Damage to Structure 14 8 3 0 0 1.56
Construction Mistakes 5 9 6 2 3 2.56
Poor Supervision 5 9 8 2 1 2.40
Equipment Availability 9 8 6 2 0 2.04
Total of Key Delay 6
6. Code Related
24
Table 4.7 Key Delays - Code Related
After analyzing tables 4.2 through 4.7, based on their chance of occurrence the main key
delays ranked from the highest to the lowest in each category affecting the Florida
Construction Industry are shown as follows:
25
Construction Related Delays
4 Inspections
3.4
3.5
2.93 2.85 Material/Fabrication Delays
3 2.69 2.65 2.56
2.5 Poor Subcontractor
2 Performance
1.5 Material Procurement
1
Lack of Qualified Craftsmen
0.5
0 Construction Mistakes
Key Delays
Management/Administrative Delays
3.5
2.91
3
2.5
2
Contract Modifications
1.5
1
0.5
0
Key Delays
26
Financial/Economical Delays
3 2.7
2.5
0.5
0
Key Delays
Acts of God
1.2
0.8
0.6
0.4
0.2
0
Key Delays
27
4.4 Identification of Responsibility and the type of delay:
The identification was done based on the information gathered (Appendix B) from the
questionnaire and selecting the highest percentage in each item.
2. Design-Related
3. Financial/Economical
28
4. Construction Related Responsibility Type of Delay
6. Code Related
29
Figures 4.1 through 4.6 and Tables 4.8 through 4.13 are briefly explained below:
Acts of God:
There is no key delay in this category. The most likely to happen is a hurricane with a
44.8% (2.24 from table 4.1) chance of occurrence which is less than 50% to be
considered as a key delay. In the event a delay occurs due to Acts of God, the
responsibility is borne by the Owner and the type of delay is an excusable compensable.
Owner
Shared
(Owner & Contractor)
Design Related:
This is one of the most critical categories among the six because all of the causes were
identified as key delays, which means that a delay is most likely to happen due to a
design related problem. In fact there is a 76.2% chance (3.81 from table 4.2) that a delay
occurs due to a change order, which is very high in number. According to the survey,
Design-Related Delays are considered as excusable compensable delays.
Consultant
30
Construction Related:
Basically in construction stage, the contractor will always have the responsibility and the
construction company will get no time or money if a delay occurs. However, if a delay
occurs because of Subsurface Soil Conditions or Different Site Conditions, the
responsibility would be shared between the contractor and the owner and the type of
delay in this situation would be considered excusable compensable. Delays due to lack
of inspections with 68% (3.40 from table 4.3) are the most common in this stage.
Contractor Non-Excusable
Construction
One or the
Related other
Shared Excusable
(Owner & Contractor) Compensable
Financial/Economical:
Delayed payments (2.70) was selected as the only Key Delay. According to the results, it
seems that delays rarely occur because of Financial/Economical reasons. The owner of
the project will always have the responsibility, which means that the delay will be
excusable compensable.
Management/Administrative:
Similar to the above category (Financial/Economical), this also has just one key delay;
Contract Modifications (2.91). However there are two parties involved (Owner and
contractor) that have to carry the responsibility depending on the cause of the delay and
the type of delay is also depending on what caused the delay.
31
Contractor Non-Excusable
Owner Excusable
Compensable
Code Related:
This is the category that influences the most in delays, especially on projects built on the
coastal areas. Very often (77.7%), the government is responsible for it and in this case
they are excusable compensable delays. However, there is a chance of 22.3% that the
contractor be responsible for it in which the delays are Non-Compensable.
Government Excusable
Compensable
One or Excusable
Code Related the
other Non-Compensable
Contractor Non-Excusable
32
CHAPER 5
Project delays have been a topic of concern in the construction industry. Delays have
become a universal phenomenon and are almost always accompanied by cost and time
overruns. Construction project delays have a debilitating effect on parties (owner,
contractor, consultant) to a contract in terms of a growth in adversarial relationships,
distrust, litigation, arbitration, cash-flow problems, and a general feeling of apprehension
towards each other.
Delays can be minimized only when their causes are identified. Knowing the cause of
any particular delay in a construction project would help avoiding the same. This project
was therefore, aimed at identifying the major causes of delays in construction projects in
the Florida Construction Industry through a survey, and quantifies the perceptions of
different parties relating to causes, responsible party and types of delay. This research
project was limited to building projects in the Florida region only.
Based on the results of the questionnaire survey and information gathered from the
literature review, the following conclusions were drawn.
1. Code-Related Delays
2. Design-Related Delays
3. Construction-Related Delays
4. Financial/Economical Delays
5. Management/Administrative Delays
6. Acts of God
In general, the ten (10) most critical causes (across the six sub-headings given above) of
delays are:
33
9. Design Development (3.19)
10.Changes Laws - Regulations (3.04)
Based on the overall results, we can conclude that the following is the ranking of
responsibilities of the contractual from the most responsible (1) to the least (5):
1. Contractor = 44%
2. Owner = 24%
3. Government = 14%
4. Shared = 12%
5. Consultant = 6%
It can be said that the most common type of delay is Excusable Compensable at 48%,
followed by Non-Excusable delays with 44% and 8% for Excusable Non-Compensable
Delays.
In most of the cases, it is found that when the contractor has the responsibility, the type of
delay respectively is Non-Excusable; when the responsibility is the owner’s or the
consultant’s it is an Excusable Compensable Delay; and when the government is
responsible, the delay is considered an Excusable Compensable.
The consultants play a very important roll in Design-Related Delays because as they are
in charge of the design process in conjunction with the owner of the project. On the other
hand, the government plays the most important role in Code-Related Delays. The
contractor has the major responsibility for delays in Construction-Related Delays.
Based on the findings of this study, the authors would like to recommend that the
Buildings Permit Approval Process be streamlined as much as possible and changes in
Laws and Regulations be made keeping in mind the negative impact it causes in terms of
construction project cost and time. Design related issues such as changes in drawings,
incomplete and faulty specifications and change orders have a very damaging effect on
project completion times and invariably lead to cost escalations as well. These are issues
that can be controlled with proper design process management and timely decision-
making. It is a well know fact that decisions made early in the life of a project have the
most profound effect on the project’s objectives of delivering a safe, quality project
within the time and budget allocated.
34
REFERENCES
1. D.E. Hancher and I.E. Rowings, Setting highway construction contract duration.
Journal of Construction Engineering and Management, ASCE 107 2 (198 1), pp.
169¯179.
4. D.M. Leishman, Protecting engineer against construction delay claims: NDC. Journal
of Management in Engineering 7 3 (1991), pp. 319¯333.
5. Z.J. Herbsman, W.T. Chen and WC. Epstein, Time is money:innovative contracting
methods in highway construction. Journal of Construction Engineering and
Management, ASCE 121 3 (1995), pp. 273¯281.
9. N.R. Mansfield, O.O. Ugwu and T. Doran, Causes of delay and cost overruns in
Nigerian construction projects. International Journal of Project Management 12 4
(1994), pp. 254¯260.
10. S.A. Assaf, M. Al-Khalil and M. Al-Hazmi, Causes of delay in large building
construction projects. Journal of Management in Engineering. ASCE 11 2 (1995), pp.
45¯50.
11. TM Mezher and W. Tawil, Causes of delays in the construction industry in Lebanon.
Engineering Construction and Architectural Management Journal 5 3 (1998), pp.
251¯260.
12. S. Dowdy and S. Wearden, Statistics for research. (2nd Ed. ed.),, John Wiley & Sons,
New York (1985).
13. Chalabi FA, Camp D., “Causes of delay and overruns of construction projects in
developing countries”.
35
14. Fereig S, Qaddumi N. “Construction problems: The Arabian Gulf experience”, CIB
Proc, W-65 1984
17. Sabah Alkass, Mark Mazerolle, Frank Harris, “Construction delay analysis
techniques”, Construction Management & Economics-- Volume 14, Number 5/September
1, 1996
18. Bromilow, F. J. (1969). “Contract time performance: expectations and the reality.”
Building Forum, September, 70-80.
19. Bromilow, F. J., Hinds, M. F. & Moody, N. F. (1988). “The time and cost
performance of building contracts 1976-1988: a summary of a report on research carried
out by AIQS and CSIRO.” The Building Economist, September, 4-5.
20. Ireland, V. (1985). “The role of Managerial actions in cost, time and quality
performance of high-rise commercial building projects.” Construction Management and
Economics, Vol. 3, 59-87.
36
APPENDIX
37
Questionnaire STRICTLY CONFIDENTIAL
38
Introduction
Delays on construction projects are a universal phenomenon. They are almost always
accompanied by cost and time overruns. Construction project delays have a debilitating
effect on all parties (owner, contractor, consultant) to a contract in terms of a growth in
adversarial relationships, distrust, litigation, arbitration, cash-flow problems, and a
general feeling of apprehension towards each other.
Objectives
The objectives of this study would be to identify the major causes of delays in construction
projects in the Florida Construction Industry through a survey; and find the perception of the
different parties towards the problem, what their responsibilities are and how they carry them out.
It is expected that this study will provide some good empirical data on the extent and type of
delays in construction projects in Florida. The reasons for these delays will also be documented
with an overall aim to provide guidelines for future owners, builders, designers, and managers of
construction projects on the dos and don’ts for devising effective systems to deliver projects on
time, within budget, and to quality standards, which fully satisfy the clients as well as the
intended end-users.
Instructions
Please take a look at the following questionnaire and try to answer correctly and
accurately, as many questions as possible. All the information gathered here will be kept
strictly confidential and will be used only for research and analysis without mentioning
the person or company names. Thank you very much for your cooperation.
Please mail the answered questionnaire as soon as you can, as timely reply is very
crucial for our analysis. Upon completion of the study, the final report will be sent to
each survey participant.
THANK YOU VERY MUCH FOR YOUR KIND COOPERATION AND TIME
39
Question 1: Which of the following are most important delays associated with your
ongoing project(s)? Please rate the Chance of Occurrence, Responsibility
and Type of Delay by circling a suitable figure as indicated below:
* Please also provide other delay (s) (if you think it is important in Florida) and give
reason why? and rate in column C.
A B C D
Delays Causes Responsibility Chance Type of Delay
of
Occurren
ce
Acts of God
Design Related
40
Design Own Cont Cons Gov 1 2 3 4 A B C D
Development Shared 5
Construction Related
41
Shared 5
Financial/Economical
42
Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
Suspensions
Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
Code Related
Building Permits
Approval Process Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
Changes in Laws and
Regulations Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
43
Shared 5
Coastal Construction
Control Line Permit Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
Florida Administrative
Code Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
National Flood
Insurance Program Own Cont Cons Gov 1 2 3 4 A B C D
Shared 5
Question 2: Select the project your company has had the worst problem because of a
delays cause and answer the following questions.
44