Study on the Quantification of Delay Factors in Construction Industry

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International Journal of Emerging Technology and Advanced Engineering

Website: www.ijetae.com (ISSN 2250-2459, ISO 9001:2008 Certified Journal, Volume 4, Issue 1, January 2014)

105

Study on the Quantification of Delay Factors in Construction

Industry

K. L. Ravisankar

1

., Dr. S. AnandaKumar

2

M.E., Ph.D., V. Krishnamoorthy

3

M.com., M.B.A., M.Phil.

1

Student of Final Year- M.E (CE&M), 2Professor, Department of Civil Engineering, Kongu Engineering College, Perundurai,

Tamil Nadu.

3_{Assistant Professor, Department of management studies, Kongu Engineering College, Perundurai, Tamil Nadu.}

Abstract-The Construction industry of India is an important indicator of the development, as it creates investment opportunities across various related sectors. The construction industry has contributed an estimated 670,778 crores to the national gross domestic product (GDP) in 2011-12 (a share of around 8%). Delay in construction projects is considered one of the most common problems causing a multitude of negative effects on the construction projects. Construction delays can be minimized only when their cause are identified. The objective of this study was to identify the major causes of construction delays. A literature review was conducted to compile a list of delay causes in construction industry.

The data for this study will be gathering through a detailed questionnaire survey. The questionnaire consists of total factors of seventeen group were contributed to the causes of construction delay based on literature review. In that seventeen groups have been consist of total 50 factors for delay. The questionnaire form is forwarded to various construction industries through email and in personal. Based on the questionnaire survey the overall results indicated that the most important causes are: (1)Shortage of unskilled & skilled labor; (2)Design changes by owner or his agent during construction; (3)Fluctuation of prices; (4)High waiting time for availability of work teams; (5)Rework due to errors; these are all the top five delay factors which affect construction project.

Keywords - Construction delay, Delay causes, Mean score value, Quantification, Questionnaire survey, Ranking.

I. INTRODUCTION

Delays are one of the biggest problems in construction firm’s face. Delay can lead to many negative effects such as lawsuits between owners and contractors, increased costs, loss of productivity and revenue, and contract termination. According to the World Bank (2007), for many projects completed worldwide between 1999 - 2005, the overrun varied between 50% - 80%.

The construction companies in many countries around the world experience significant delay. In the past few years, the number of claims submitted to the American Arbitration Association (AAA) reached almost 25% of the 1.7 million claims submitted over the past 74 years.

In the United Kingdom (U.K), a 2001 report by the National Audit Office, entitled “Modernizing Construction”, revealed that 70% of the project undertaken by Government department and agencies were delivered late, and a recent research by Building Cost Information Service (BCIS) found that nearly 40% of all studied project had overrun the contract period. In India, a study conducted by the infrastructure and Project Monitoring Division of the Ministry of Statistics and Programmed Implementation in 2004 reported that out of 646 central sector projects costing about 2500Cr, approximately 40% are behind schedule, with delay ranging from 1-252 months. In the United Arab Emirates (UAE), where construction contributes 14% to the gross domestic product (GDP).

Delay could be defined as the time over run either beyond completion date specified in a contract or beyond the date that the parties agree upon for delivery of a project. It is a project slipping over its planned schedule and is considered as common problem in construction projects.

Delay in construction project is considered one of the most common problems causing a multitude a negative effect on the project and its participating parties. Therefore, it is essential to identify the actual causes of delay in order to minimize and avoid the delays and their corresponding expenses.

Delays in construction can cause a number of changes in a project such as late completion, lost productivity, acceleration, increased costs, and contract termination. The party experiencing damages and the parties responsible for them in order to recover time and cost.

II. PROBLEM STATEMENT

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It is generally said that the contract language is considered difficult to comprehend and they are therefore a major source of disputes.

III. AIM AND OBJECTIVES OF THE STUDY

In the current world, construction projects are becoming bigger with a lot of complications. Though we have a lot of method to make sure that we finish our project on schedule so that we improve our profit margins, still delay is inevitable, which ultimately results the reduction in profit margins.

So far lots of studies have been carried out by various researches to identifying the factors that affect the schedule and profitability of the project. Still there are a lot of projects which run behind schedule and suffer a heavy loss. Lot of study has been carried out by various researches to find out the factors that affect the schedule of the project, but the root cause of all these factors are the contract clauses which are the binding between the Employer and Contractor. This factor made us to identify the clauses that affect the schedule performance and project profitability of the construction project.

IV. NEED FOR STUDY

Construction is a dynamic, competitive, ever changing and challenging industry. This research was aimed at identifying the major causes of delay. To achieve the aims, objectives have been identified as following:

 To identify the main reasons of construction delay.  To identify the effect of construction delay.  To identify the methods of minimizing

Construction delay.

V. SCOPE OF WORK

The scope of the research is mainly focus on literature review and a questionnaire survey. The questionnaire survey would be designed based on the causes of construction delays, effects of construction delays and the methods of rectification of the construction delays.

VI. TYPES OF DELAY

There are four basic ways to categorize type of delays: A. Critical or noncritical

B. Excusable or non-excusable C. Compensable or non-compensable D. Concurrent or non-concurrent

In the process of determining the effect of a delay on the project, the analyst must determine whether the delay is critical or noncritical. The analyst must also assess if delay are concurrent. All delays that are identified in the analysis will be either excusable or non-excusable. Delay can be further categorized into compensable or non-compensable delays.

A.Critical Versus Non-Critical Delays

Delays that affect the project completion, or in some cases a milestone date, are considered as critical delays, and delays that do not affect the project completion, or a milestone date, are noncritical delays. If these activities are delayed, the project completion date or a milestone date will be delayed. The determining which activities truly control the project completion date depends on the following:

 The project itself

 The contractor’s plan and schedule (particularly the critical path)

 The requirement of the contract for sequence and phasing

 The physical constraint of the project, i.e. how to build the job from a practical perspective

B.Excusable versus Non-Excusable Delays

All delays are either excusable or non-excusable. An excusable delay is a delay that is due to an unforeseeable event beyond the contractor’s or the subcontractor’s control. Normally, based on common general provisions in public agency specifications, delays resulting from the following events would be considered excusable:

 General labor strikes  Fires

 Floods  Acts of God

 Owner-directed changes

 Errors and omissions in the plans and specifications  Differing site conditions or concealed conditions  Unusually severe weather

 Intervention by outside agencies

 Lack of action by government bodies, such as building inspection

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 Late performance of sub-contractors  Untimely performance by suppliers

 Faulty workmanship by the contractor or sub-contractors

 A project-specific labor strike caused by either the contractor’s unwillingness to meet with labor representative or by unfair labor practices

C.Compensable Delays versus Non-Compensable

Delays

A compensable delay is a delay where the contractor is entitled to a timeextension and to additional compensation. Relating back to the excusable and non-excusable delays, only excusable delays can be compensable. Non-compensable delays mean that although an excusable delay may have occurred, the contractor is not entitled to any added compensation resulting from the excusable delay. Thus, the question of whether a delay is compensable must beanswered.

Whether or not a delay is compensable depends primarily on the terms of the contract. In the most cases, a contract specifically notes the kinds of delays that are non-compensable, for which the contractor does not receive any additional money but may be allowed a time extension.

D.Concurrent Delays

The concept of concurrent delay has become a very common presentation as part of some analysis of construction delays. The concurrency argument is not just from the standpoint of determining the project’s critical delays but from the standpoint of assigning responsibility for damages associated with delays to the critical path. Owners will often cite concurrent delays by the contractor as a reason for issuing a time extension without additional compensation. Contractors will often cite concurrent delays by the owner as a reason why liquidated damages should not be assessed for its delays. Unfortunately, few contract specifications include a definition of concurrent delay and how concurrent delays affect a contractor’s entitlement to additional compensation for time extension or responsibility for liquidated damages.

In analysed concurrent delays, each delay is assessed separately and its impact on other activities and the project duration is calculated. There are some guidelines for concurrent delays classification. Firstly, if excusable and non-excusable delays occur concurrently, only a time extension is granted to the contractor. Next, if excusable with compensation and excusable without compensation delays occur concurrently, the contractor is entitled to time extension, but not to damages.

Lastly, if two excusable with compensation delays occur concurrently, the contractor is entitled to both time extension and damages.

In addition, although the guidelines are useful for the purpose of carrying out the delay analysis, it is in the best interest of all parties involved in a construction project to agree, at the beginning, the definitions of such delays and accommodate them throughout the contract language.

VII. GOVERNMENTAL REPORT ON PROJECT DELAY

[image:3.612.309.579.312.715.2]

Annual report of 2010-2011, Government of India, Ministry of statistics and programme implement, sardar patel bhavan, New Delhi.

TABLE 7.1

Extent of the time overrun in projects with respect to original Schedule S l .N o S ec to r N o . o f p ro je ct Ori g in a l co st A n ti ci p a te co st T im e o v er ru n p ro je ct R a n g e (mo n th s) 1 Atomic Energy

4 21982.9 24167.9 3 12-36

2 Civil

Aviation 8 4512.40 4812.40 2 3-5

3 Coal 44 25210.2 28547.29 19 3-64

4 Fertilizers 6 5317.41 5317.41 0 -

5 Mines 1 4091.51 4401.76 1 6-36

6 Steel 19 437803 65379.56 11 27-37

7 Petroleum 70 142330 155206 31 1-74

8 Power 83 179759 185289.3 41 1-83

9 Railways 147 68578.5 126174.4 26 3-225

10 Shipping & _ports 22 16082.2 16926.26 11 3-78

11 Telecomm

unication 42 20234.9 20696.79 38 3-58

12

Urban developme

nt

2 15071.0 30503.36 2

6-15

13 Water

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[image:4.612.50.288.244.390.2]

An analysis of the total 572 projects as on 30.11.2010 shows that 299 projects have contributed to time overrun w.r.t their original schedule. The time overrun accounted by these Projects ranges from 1-225 months. The overall cost overrun has resulted in 20.7% increase in original cost. The cost overrun for all projects together is 122516.89 crore. The chart below depicts the percentage of delayed projects during the last 18 years. This shows a decline in the delayed projects.

Fig 7.1 Trend of project running behind schedule w.r.t.original schedule

Time and Cost overrun in projects

Time and cost overruns have been a major problem affecting the implementation of Central Sector Projects. With the support of all the Ministries concerned, the time overrun in projects is coming down resulting in reduction in the cost overrun of the projects due to close monitoring, timely resolution of problems and systems improvement brought out by the Ministry of Statistics & Programme Implementation,. An analysis of the trend in the last 19 years shows that the cost overrun has come down from 61.6% in March, 1991 to 20.7% in November, 2010 resulting in savings. The Chart below depicts the trend of cost overrun during the last 19 years.

Fig 7.2 Trend Of Cost Overrun w.r.t.original Cost

VIII. METHIDOLOGY  Literature collection

 Reviewofliterature  Factorsidentification  Questionnairepreparation  Questionnairesurvey  DataCollection  Analysis of data

IX. CAUSES OF DELAY IN PREVIOUS STUDIES Aibinu et.al (2002) studied effects of delay in Nigerian construction sector and concluded time and cost overrun to be most frequent causes of delay, one of the primary causes of delay has been attributed to contractors.[3]

M. E. Abd El-Razek et.al (2008) in his study on the contraction sector in Egypt found that the delay are primarily caused by the delays in contractor’s payment by the owner, design changes by the owner or his agent during construction ,non utilization of professional and contractual labour used in construction management. [14]

B.Umasankar et al (2006) in his study on factor causing construction delays in large housing projects in India. According to that, slow decision making by the client, late release of interim payment, contractor’s low overall productivity, subcontractor’s delay and insufficient working capital late release of interim payments, late release of drawings/ details, contractor’s low overall productivity and poor resource allocation as the key factors resulting in construction delays are the major causes of delay. [7]

Tommy Y. Lo et al (2006), revealed that Natural ground conditions, poor Communication, Manpower problem, Insufficient knowledge on work are lead the delay in construction project in Hong Kong region. [20]

Jyh-Bin Yang et al (2010), who evaluated Delays, which have become universal phenomena, are almost always accompanied by cost and time overruns. Although schedule delays seem to be embedded in all projects, identifying the main causes and preventing these problems from occurring are better than resolving subsequent delay-related disputes. Most previous studies have focused on the construction phase; this study identified the most significant delay causes in the planning and design phases of construction projects using questionnaire results. [11]

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External factors such as inflation have also been seen to cause delay. Kaming et al(1997) studied influencing factors on 31 high-rise project in Indonesia and found that cost overrun occur more frequently and are perceived as more severe problems than time overruns. The study pointed out that the major factors influencing cost overrun are material cost increases due to inflation inaccurate material estimation and degree of complexity. [8]

Megha Desai & Rajiv Bhatt (2013) carried out a study to identify the main causes of delay in construction projects in Egypt from the point of view, in that financing by contractor during construction, delays in contractor’s payment by owner, design changes by owner or his agent during construction, partial payments during construction, and non-utilization of professional construction/contractual management are the major causes of delay. [15]

Hyun-Soo Lee et al (2005) has done a study on causes and effects of delays and disruptions in construction projects in Tanzania. In this he recommended that adequate construction budget, timely issuing of information, finalization of design and project management skills should be the main focus of the parties in project procurement process. [10]

Yasemin Nielsen et al (2013) studied the effects on delay on Turkey construction project and concluded that planning and scheduling, Fluctuation of prices, Rework due to errors, Late delivery of material, Owners demand, Poor site management, Complexity of project are all the major causes of delay. [13]

Wail Menesi (2007) identified two reason for causing of waste, i) Not listening and ii)Not speaking. Lack of proper communication leads to waste. These causes of wastes are due to poor communication between the client and the contractor. Not asking includes fear of asking top level managers for clarifications on how exactly the work is to be done. [22]

X. QUESTIONNAIRE DEVELOPMENT

The researcher has drawn the questionnaire from the previous works of Safer Ali Abbas Ali and Arun C [19], B Umasankar et al [7], Tommy Y Lo. et al [20], Jyh-Bin Yang And Pei-Rei Wei [11], Fran D.K, et al [9], M.E.Abd el-Razek et al [15], Yesemin Nielsen et al [23], Ajibade Ayodeji Aibinu and Henry Agboola Odeyinka [4], Sadi A.Assaf et al [18].

Table10.1

Causes for Delay in Construction Project

1 Non availability of bank loan

2 Fluctuation of prices

3 Delay in financial support by owner to the contractor (Stage by stage payment)

4 Shortages of materials on site or market

5 Late delivery of material

6 Poor material procurement planning

7 Receiving materials that do not fulfill project requirements

8 Lack of program on works

9 Accidents during construction

10 Underestimation of time of completion

11 Preparation and approval of shop drawings

12 Lack of data base in estimating activity duration and resources

13 Legal disputes

14 Lack of communication between parties

15 Equipment failure or breakdown

16 Unskilled equipment operators

17 Equipment allocation problem

18 Wrong selection of type /capacity of equipment

19 Inadequate modern equipment

20 Delays in obtaining approval from municipality

21 Discrepancy between design specification and building code

22 Shortage of unskilled & skilled labor

23 Personal conflicts among workers

24 Strike

25 High waiting time for availability of work teams

26 Complexity of project design

27 Design changes by owner or his agent during construction

28 Insufficient data collection and survey before design

29 Unclear and inadequate details in drawings

30 Delay in performing final inspection & certification by a third party

31 Changes in government regulations and laws

32 Bad weather conditions /Natural disasters (flood, earthquake)

33 Obsolete technology

34 Rework due to errors

35 Lack of experience of consultant in construction projects

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37 Lack of experience of owner in construction projects

38 Lack of incentives for contractor to finish ahead of schedule

39 Slowness in decision making

40 Project complexity

41 Geological problems on site

42 Lack of coordination among project-teams

43 Inaccurate bills of quantities

44 Design errors made by designers due to unfamiliarity with local _{conditions & environment}

45 Poor site management &Inaccurate site investigation

46 Imbalance in the risk allocation

47 Defective materials provided by client

48 Choice of wrong construction method

49 Application of quality control based on foreign specification

50 Application of safety aspect

The above mentioned fifty delay factors were grouped into seventeen major groups based on their category as shown below.

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XI. QUESTIONNAIRE DESIGN

A questionnaire was designed based on the objectives of the study, which are causes of construction delays. A questionnaire survey was developed to get the opinion and understanding from the experienced respondents regarding to the construction delays problem. The questionnaires are all classified into 3 sections:

 SECTION A: Company and respondent profile  SECTION B: Construction delay factors

 SECTION C: Respondent opinion about delay in construction

Based on the literatures and factors considered, a Questionnaire was designed as a measurement tool for delay in construction. The above mentioned seventeen factors were adapted to measure delay in construction project. The Questionnaire consists of 50 questions relating factors influencing delay. Also the respondents were asked to rate their level of argument according to 5 point scale.

XII. ANALYSIS OF DATA

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The survey data were analysed by using SPSS software, to find out the major causes of delay in construction industry. In that Mean score value (MSV) to be calculate, based on this Mean score value Ranking is to be assigned for the corresponding delay factors.

Table 12.1

Mean Score Value (MSV) & Ranking

Causes of Delay

Mean

Score

Rank

Shortage of unskilled & skilled labor 4.32 1

Design changes by owner or his agent during

construction 4.29 2

Fluctuation of prices 4.23 3

High waiting time for availability of work

teams 4.16 4

Rework due to errors 4.13 5

Delay in financial support by owner to the

contractor (Stage by stage payment) 4.10 6

Geological problems on site 4.06 7

Poor site management &Inaccurate site

investigation 4.06 7

Wrong selection of type /capacity of equipment 3.97 8

Bad weather conditions /Natural disasters

(flood, earthquake) 3.90 9

Design errors made by designers due to unfamiliarity with local conditions & environment

3.84 10

Equipment allocation problem 3.84 10

Inadequate modern equipment 3.81 11

Preparation and approval of shop drawings 3.71 12

Shortages of materials on site or market 3.68 13

Unclear and inadequate details in drawings 3.65 14

Non availability of bank loan 3.61 15

Slowness in decision making 3.61 15

Obsolete technology 3.58 16

Complexity of project design 3.55 17

Choice of wrong construction method 3.52 18

Project complexity 3.45 19

Unskilled equipment operators 3.39 20

Lack of data base in estimating activity

duration and resources 3.35 21

Application of safety aspect 3.32 22

Insufficient data collection and survey before

design 3.29 23

Imbalance in the risk allocation 3.29 23

Lack of coordination among project-teams 3.26 24

Application of quality control based on foreign

specification 3.26 24

Equipment failure or breakdown 3.19 25

Underestimation of time of completion 3.16 26

Poor material procurement planning 3.13 27

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Lack of experience of owner in construction

projects 3.10 28

Late delivery of material 3.06 29

Improper project feasibility study 3.03 30

Personal conflicts among workers 3.03 30

Lack of experience of consultant in

construction projects 3.03 30

Delay in performing final inspection &

certification by a third party 3.03 30

Receiving materials that do not fulfill project

requirements 2.94 31

Strike 2.94 31

Legal disputes 2.87 32

Lack of communication between parties 2.84 33

Discrepancy between design specification and

building code 2.68 34

Lack of incentives for contractor to finish

ahead of schedule 2.68 34

Inaccurate bills of quantities 2.65 35

Defective materials provided by client 2.55 36

Changes in government regulations and laws 2.55 36

Lack of program on works 2.55 36

Accidents during construction 1.68 37

XIII. CONCLUSION

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.

The objective of this research was to identify the main causes of delay in construction project. A literature review was conducted to identify the causes of delay stipulated in the literature.From the literature review, the various factors influencing construction delay were identified.

A detailed questionnaire is prepared based on the various factors influencing construction delay such as Financing, Material, Scheduling and controlling techniques, Planning, Contractual, Equipment, Governmental action, Labor, Design, External, Contractor, Consultant, Owner, Project, Engineer, Client, Operation factors are considered in this project.

The most important causes identified by the survey, and based on overall results, were: (1)Shortage of unskilled & skilled labor; (2)Design changes by owner or his agent during construction; (3)Fluctuation of prices; (4)High waiting time for availability of work teams; (5)Rework due to errors;(6) Delay in financial support by owner to the contractor (Stage by stage payment); (7)Geological problems on site; (8)Poor site management &Inaccurate site investigation; (9)Wrong selection of type /capacity of equipment; (10) Bad weather conditions /Natural disasters (flood, earthquake); these are all the top ten delay factors which affect construction project.

REFERENCES

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[10] Hyun-Soo Lee et al (2005), “Method For Calculating Schedule Delay Considering Lost Productivity” Journal Of Construction Engineering And Management, pp. 1147-1154.

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[12] Kang sik wei (2010), “Causes, effects and methods of minimizing Delays in construction projects” Journal Of Management In Engineering, pp. 312-332.

[13] Kikwasi, G.J (2012), “Causes and effects of delays and disruptions in construction projects in Tanzania”, Australasian Journal of Construction Economics and Building, Conference Series, pp. 52-59. [14] M. E. Abd El-Razek et al (2008), “Causes of Delay in Building Construction Projects in Egypt” Journal Of Construction Engineering And Management, pp. 831-841.

[15] Megha Desai & Rajiv Bhatt (2013), “Critical Causes of Delay in Residential Construction Projects: Case Study Of Central Gujarat Region Of India”, International Journal of Engineering Trends and Technology (IJETT) –Vol 4 Issue 4,pp. 762-768.

[16] Mohd rosazuwad bin mohamad (2010), “The Factors And Effect Of Delay In Government construction Project (Case Study In Kuantan)”, International Journal of Project Management, pp. 32-45. [17] Murali Sambasivan, Yau Wen Soon (2006), “ Causes and effects of delays in Malaysian construction industry”, Graduate School of Management, pp. 517-526.

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