“Delays are inevitable and there’s nothing much I can do about it! “, retorted my Project Manager. It was a tough day that started off with a typical Client meeting. They insisted on contractor adherence to the approved baseline completion, playing deaf ears to any logical explanation. According to the latest schedule update, the project had slipped by over 6 months with all the mitigative measures rendered ineffective. As a part of the team, I can vouch there was no dearth in efforts, either from the project team or the management who wholeheartedly backed the PM. The question arises, how did it happen?

It is important to have an introspection of the existing system to identify deficiencies from within. They later become valuable inputs to the lessons learned register. A detailed register thus becomes an invaluable part of the organizational process assets.

Now the question, why do most projects end up with irrecoverable time delays and cost overruns?  In an interesting data shared by McKinsey&Company in their work “The construction productivity imperative”, a whopping 98% of the projects were identified to have incurred budget overruns or delays! So, what are the root causes contributing to this abysmal performance?

There are a few which include delays, scope creep, variations, force majeure, differing site conditions et.al. The construction industry is reeling under the effects of COVID-19, as a result of which the prominence and importance of “Force Majeure” have increased multifold in recent months.

In this write-up, we’ll touch on the different types of delays and the importance of one of the most basic requirements often overlooked at the contractor level. The need for a well-defined communication plan!

The stakeholders are often caught in no man’s land without access to the right information at the right time. The project manager must ensure effective implementation of communication plan to bring all the stakeholders on a single page.  In other words, to facilitate effective project management.

In projects where every discipline is a profit-making cost center, implementation of a communication plan becomes challenging. The stakeholders are more aligned to meet their functional targets, which may not benefit the project overall. The document flow suffers due to red tapism, inadvertently causing delays and much more! The process should be introspected at regular intervals to identify and weed out redundant phases. Another latent issue is bureaucracy. Bureaucracy and red-tapism together suffocate the project manager, depriving him of the information required to carry-the project forward. This results in the creation of adhoc haphazard plans, which will prove detrimental in the long run. No projects are ideal, but setting up an effective communication plan plays a key role in identifying and averting risks.  Setting up an EDMS and a foolproof project controls and monitoring system is another way to implement effective project management measures. This helps the PM to be in a pro-active mode rather than a reactive one. 

So are delays inevitable?  From my experience, I’d have to concur with the project managers’ sentiment . Of the 15 projects I have been a part of over the past decade, just 1 project completed on schedule! A 7% success rate in this small sample set is not encouraging. There have even been instances with variations being issued on the date of contractual completion!

The secret here is how you make the most of delays and turn the tables around eventually reaping benefits. There are 4 types of delays generally seen in the industry

1. Excusable and Non-Compensable Delays

Delays caused by factors that are out of the owner/contractor realm.   The contractor is entitled to time extensions without any cost compensation. Delays caused by COVID 19 , weather etc. are examples.

2. Excusable and Compensable Delays

These are the delays caused by the owner/employer and the contractor is eligible to claim for both; Time extensions and cost. Any change in design initiated by the owner/employer after the completion of subject works on site is an example for this scenario.

3. Inexcusable Delays

Contractor / subcontractor / vendors / suppliers are the delay contributors. The contractor is ineligible to claim any time extension or cost . Infact, the owner can exercise LAD (Liquidated Ascertained Damages) on the contractor if defined in the contract.

4. Concurrent Delays

Two delays occurring at the same time having an impact on the project critical path.  The delay owners can either be the contractor or owner/ employer. Substantiation of such delays may require detailed analysis to make the gullible parties accountable.

The above forms the basis for commencing any delay analysis. There are myriad questions which the project management fraternity has been striving relentlessly to address.

 “Time is Money”. Contractors often find themselves running short on both, staring into an abyss of irrecoverable losses!