Delays in Construction: A Brief Study of the Florida Construction Industry

Introduction

The Construction industry is large, volatile, and requires tremendous capital outlays. 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.

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.

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 (D.E. Hancher and I.E. Rowings, 1981).

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. To avoid acceleration claims from contractors in delay situations, it is best to:

Literature Review

Many studies were carried to assess the causes of delays in construction projects. Ogunlana et al. (1996) studied the delays in building projects 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. (1998) 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. (1994) 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.

Assaf et al. (1995) 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. (1998) 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 (1999) 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.

Al-Momani (2000) conducted a quantitative analysis of construction delays by examining the records of 130 public building projects constructed in Jordan during the period of 1990_¯1997.  The researcher presented regression models of the relationship between actual and planned project duration for different types of building facilities.  The analysis also included the reported frequencies of time extensions for the different causes of delays.  The researcher concluded that the main causes of delay in construction projects relate to designers, user changes, weather, site conditions, late deliveries, economic conditions, and increase in quantities.

Jonathan J. Shi (2001) presented a paper on method for computing activity delays and assessing their contributions to project delay.  The method consisted of a set of 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 (1996) 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.

A detailed study by the New South Wales (NSW), Australia Royal Commission into Productivity in the Building Industry (1992) of 20 commercial high-rise buildings with a total design and construct value of over $2.0 billion found 22 specific causes of time overrun.  Weather, industrial disputation, client scope changes and variations, and consultant problems were some of the ones occurring with the highest frequency.

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.

Objective and Scope

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 a questionnaire survey.

Methodology

 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. The literature review was conducted 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.  The causes of delays are then classified into six broad categories (acts of God, design-related, construction-related, financial/economic, management/ administrative, code-related) depending on their nature and mode of occurrence. The data collected though questionnaire surveys are analyzed and recommendations are made to mitigate the delays.

Analysis of Results

The survey was carried out over the period from October 2001 to March 2002, and the response rate is shown in Table 1:

Table 1

 Response Rate

Identification of the Key Delays

The key causes of delays are analyzed based on the questionnaire survey. Depending on their chance of occurrence, the key delays are ranked from the highest to the lowest level in each of 6 categories as shown in Figures 1 through 5. It is important to note that the first category Acts of God has no further ranking of key delays and has therefore not been shown in the figures.

Identification of Responsibility and the Type of Delay

The identification of responsibilities as well as types of delays, as found from the questionnaire survey, is shown in Tables 2 through 7. Responsibility was rated among the parties that may be involved on a construction project starting from the Owner, Contractor, Consultant, and Government to Shared (Owner-Contractor, Owner-Consultant, etc).  The types of delays are classified as:

Table 2

Responsibility and Type of Delay – Acts of God

Table 3

Responsibility and Type of Delay – Design Related

Table 4

Responsibility and Type of Delay – Construction Related

Table 5

Responsibility and Type of Delay – Financial/Economical

Table 6

 Responsibility and Type of Delay – Management and Administrative

Table 7

Responsibility and Type of Delay – Code Related

Figures 1 through 6 and the Tables 2 through 7 are briefly explained below. Figure 7 is a model for the flow charts used in Figures 8 through 13.

Acts of God:

There is no key delay in this category.  From the results of survey, the most likely act to happen is a hurricane with a 44.8% (2.24) 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. Figure 8 classifies the delay based on the cause of delay. This is a result of analysis from Figure 1 and Table 2.

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) that a delay occurs due to a change order.  According to the survey, design-related delays are considered as excusable compensable delays. Figure 9 classifies the type and responsibility of design related delays. This is a result of analysis from Figure 2 and Table 3.            

Construction Related:

Basically in the 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) are the most common in this stage. Figure10 classifies the type and responsibility of construction related delay. This is a result of analysis from Figure 3 and Table 4. 

Financial/Economic:

Delayed payments (2.70) were selected as the only Key Delay.  According to the results, it seems that delays rarely occur because of Financial/Economic reasons.  The owner of the project will always have the responsibility, which means that the delay will be excusable compensable. Figure 11 classifies the type and responsibility of Financial/Economic related delay. This is a result of analysis from Figure 4 and Table 5.         

Management/Administrative:

Similar to the above category (Financial/Economic), this also has just one key delay; Contract Modifications (2.91).  However there are two parties involved (Owner and contractor) that have to bear the responsibility depending on the cause of the delay and the type of delay is also dependent on what caused the delay. Figure 12 classifies the type and responsibility of Management/Administrative related delay. This is a result of analysis from Figure 5 and Table 6.           

Code Related:

This is the category that influences the most in delays, especially on projects built on coastal areas.  Very often (77.7%), the government is responsible for it and in this case they are considered excusable compensable delays.  However, there is a 22.3% chance that the contractor will be responsible for it in which the delays are Non-Compensable. Figure 13 classifies the type and responsibility of Code related delay. This is a result of analysis from figure 6 and Table 7.   

Conclusions and Recommendations

Based on the results of the questionnaire survey and information gathered from the literature review, the following conclusions can be drawn.

 Code-related delay is ranked as the most critical category followed by design-related delays, construction-related delays, and so on, as shown below:

      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:

Based on the overall results, we can conclude that the following is the ranking of responsibilities of the contractual parties 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 as Excusable Compensable.

The consultants play a very important roll in design-related delays because 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.

Delays due to financial/economic causes as well as management/administrative causes share an intermediate position of importance, just presenting one key delay – Delayed Payments. These categories do not have the same negative impact on project completion times as other factors considered in this study such as code, design and construction related issues.

 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.

Acknowledgement

The authors would like to thank the Florida Department of Community Affairs for supporting this study through a research grant.  The authors also acknowledge and thank all the respondents to the questionnaire survey.

References

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