COST OF DELAY IN CONSTRUCTION

introduction

Did you know that a delay on your construction site can cost up to 20% more than the original estimated cost? For contractors, highrise buildings, liquidated damages usually range between USD 3,000 – 4,000 per day. In these tough economic times, an increase in a planned budget is something we all want to avoid, question is, how do we avoid these delays?

The effective use of time management is a vital element needed in construction to successfully meet the budget and allocated timeframe of completion of any development work. Ecoconcrete has a reliable team of professionals you can trust on your build, From the point of inquiry to value engineering, and on-time product delivery. No stories, No delays.

IMPORTANCE OF TIME MANAGEMENT IN CONSTRUCTION

One of the first questions anyone asks when considering having building work done is: “How long is it going to take?” As with all things, it is important not to take too long, or conversely, to allow too little time. There are consequences attached to both.

Time for completion is an important concept in contracts. When a time limit is attached to an obligation under a contract, failure to complete that obligation within the time prescribed is usually a “material” breach of contract and the other party may be entitled to damages. If no time obligation is added, then the default position is usually that the allowance must be reasonable, or in some cases, time is said to be “at large” and it is not considered relevant.

Since construction workers are paid by the hour or daily rate, effective time management is crucial for controlling salary costs. Delays or missed deadlines can quickly disrupt the projected budget, especially when one team must wait for another to complete a task before moving forward. Therefore, project stakeholders must carefully manage each phase to prevent delays and cost overruns.

Completing projects in a timely manner helps the reputation of the company performing the work. Companies that construct are often contracted, sometimes through bids and sometimes without bids. They often get new projects, based on their reputation of getting past projects finished accurately and in a timely manner.

The construction industry is a significant and positively contributing sector to socio-economic development both in developed and emerging economies. It provides essential structures, such as private and public infrastructures and housing, thus fulfilling human’s major requirements. The industry plays a key role in the improvement of income per capita, thereby, engaging a significant proportion of the active workforce by creating job opportunities.

IMPACTS OF DELAY IN CONSTRUCTION

Time plays a crucial role in every construction plan and directly impacts contractual obligations. Therefore, minimizing delays is essential to prevent time and cost overruns. Additionally, construction delays bring significant social and economic consequences, negatively affecting all three pillars of sustainability—social, environmental, and financial. Consequently, the following outlines the key effects of delays.

• Time overrun.
• Cost overrun.
• Reduction in profits for the contractor.
• Losses for the owner due to an extended construction phase.
• Distrust between the owner and contractor.
• Legal disputes between various parties.
• Abandonment of the project.
• Termination of a contract, arbitration, and litigation.
• Delay by the contractor/project owner in repayment of loans.
• Poor quality of work.

The quest to deal with the threat of a construction delay, coupled with its negative effects, has necessitated the need to solve this problem, which is predominantly directed towards identifying the factors responsible for this monumental problem.