4e Confrence spcialise en gnie des transports

de la Socit canadienne de gnie civil

4th Transportation Specialty Conference
of the Canadian Society for Civil Engineering
Montral, Qubec, Canada
5-8 juin 2002 / June 5-8, 2002

COST AND TIME OVERRUNS IN HIGHWAY CONSTRUCTION

S. M. VidalisA, F.T. NajafiB
A Graduate Student, Department of Civil and Coastal Engineering, University of Florida, U.S.A.
B Professor, Department of Civil and Coastal Engineering, University of Florida, U.S.A.
ABSTRACT: Cost and time overruns have been common problems in every construction project.
Numerous factors such as utility and weather damage delays can cause the costs of construction to
exceed the budget and extend project schedule. Understanding the specific causes of cost and time
overruns due to design or changed conditions can help control cost and time extension on projects.
They may be related to external or internal factors that may cause the construction of a project to delay.
The main objective of this paper is to present the current status on the causes of overruns in Florida
Department of Transportation highway projects. Literature review and personal contact have been
focused on completed projects from the department to determine the types of delays that have caused
cost and time overruns. Results from various Florida Department of Transportation highway projects
over the past two fiscal years indicated that cost and time overruns, expressed as a percentage of the
original contract amount are mostly caused by designs and changed conditions. The results of this study
will provide the parties involved in highway construction projects with a checklist that can assist highway
officials in their design, overall planning, scheduling, and project implementation prior to project start up.

1.

INTRODUCTION

Completing transportation projects on time and within budget has been a chronic problem for the
Florida Department of Transportation (FDOT). This is due to delays that cause time and cost overruns in
highway construction projects such as design error, poor coordination, inadequate scope, weather
damages, and other project changes. Delays can result in loss of time and money as well as
inconveniences to the public and they are caused externally or internally. External causes of delays are
originated outside of highway construction projects that are caused by various parties such as utility
companies, government, subcontractors, suppliers, weather, etc. Internal causes of delays are harder to
depict and are due to problems that may have been started by the designers, owners, or contractors
within the highway construction project. Another delay causing issue is construction cost and time
overruns. A cost overrun is defined as a percent difference in cost between the final cost of the project
and the contract award amount (Rowland 1981). A time overrun is simply the projects duration
difference between the projects original contract time before the bid and its overall actual contract time
at the end of construction. Overruns in highway construction contracts include change orders and claims.
Change orders are legal documents that are used to modify a contract. Claims represent intended
changes to the contract that are in the middle of being negotiated or litigated before they are executed
(Bramble 1987).
Performance measures in FDOT projects indicated that cost and time overruns have shown a
decrease from the past five fiscal years (FDOT 2001). Even though the FDOT and highway contractors
try to avoid delays in construction and try to minimize the time and costs associated with delays, they
often find it difficult to control the circumstances causing delays. To identify the reasons why FDOT has
experienced cost and time overruns in transportation projects, an examination of 708 recently completed
projects that had experienced cost and time overruns was conducted. Contract costs, time durations, and
the causes of delays were taken from these various projects from the FDOT within the fiscal years from
1999 to 2001. Highway construction projects from FDOT were focused on completed highway
construction projects such as roadway construction, roadway rehabilitation, bridge construction, etc. The
original contract amount for these projects over the two years exceeded $1.9 billion. The cost overrun
exceeded $200 million over the original contract amount. The original contract over the same period of
time were about 200 thousand days and the time overrun were 17% of the original contract time.
Furthermore, it was found that during year 1996/1997 about two-thirds of the overruns ($65 million of
$104 million) of FDOT projects were attributed from design errors and omissions (FDOT Report No. 9621). Design errors and omissions were found to be the leading cause of delay in cost and time overruns.
In addition, design errors and changed conditions were also influential external factors causing cost and
time overruns during two years period from 1999 to 2001. Furthermore, consultants shared more than
half of the delays in the FDOT highway construction projects compared to FDOT staff, and third parties
(FDOT Report No. 95-30). The FDOT highway construction data provided useful information on cost
and time overruns.
2.

LITERATURE REVIEW

Literature review indicated inconsistencies among researchers in identifying causes of cost and time
overruns.
Past data shows that the size of a project influences project cost and time overruns (Jahren
1990). However, Rowland indicated that the project complexity increased cost and time overruns due to
issuing many change orders (Rowland 1981). Ransolph found that change order rates were reduced on
larger projects (Randolph 1990). Tyrrel indicated that project type influenced cost and time overruns
(Tyrrell 1983).
Design errors and omissions were responsible in most FDOT projects cost and time overruns
(FDOT Report No. 95-30). However, it is essential to control cost and time overruns and avoid delay
during project prescheduling process.

3.

RESEARCH METHODOLOGY

Figure 1 shows a decline in both time and cost overruns over the past five years (FDOT 2001). The
reason behind such decline is the introduction of new and innovative techniques such as
incentive/disincentive, lane rental, and A + B contracting (FDOT 1999).

40.00%
35.00%

Percent

30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
1996/1997

1997/1998

1998/1999

1999/2000

2000/2001

Fiscal Year

Time Overrun

Cost Overrun

Figure 1. Florida Department of Transportation Performance Measures

However, it should be realized that alternative contracting techniques will still encounter cost and time
overruns (OPPAGA 2000). The study of over 700 recently FDOT reconstruction, resurfacing, and
widening projects revealed that the cost and time overrun were the main reasons causing projects delay.
These projects ranged from $40 thousand to $20 million. The total of 708 FDOT completed projects
over the past two years amounted to $1.91 billion. From this amount, more than $200 million or 11% of
the total cost was due to delays. Similarly, the total time overrun for these projects were more than 156
thousand days from which over 27 thousand days or 17% of the total time was due to project time
overrun.
4.

HIGHWAY CONSTRUCTION DELAYS

Delays are incidents that impact a projects progress and postpone project activities. Delay causing
incidents may include weather delays, unavailability of resources, design delays, etc. In general, project
delays occur as a result of project activities that have both external and internal cause and effect
relationship. When one-activity experiences a delay due to a late start or late finish, the proceeding
activities will also experience a late start and cause the project extra time and money. An activitys
delayed completion may cause delays in other succeeding activities, which in turn can cause a delay in
the project completion (Shi 2001).
There are four types of construction delays that can be encountered in highway construction projects
(Bramble 1987):
1.
2.
3.
4.

Excusable or non-excusable
Concurrent or non-concurrent
Compensable or non-compensable, and
Critical or non-critical delays.

The types of delays above have internal or external impacts on project process. Internal causes of delay
include causes that come from the owner, designers, contractors, and consultants. External causes of

delays are originated from outside of construction projects such as utility companies, government,
subcontractors, suppliers, labor unions, nature, etc. Figure 2 presents sequential relationships of various
categories of delays (Bramble 1987).
Excusable Delays

Non-Excusable Delays

Concurrent

Compensable

Non-Compensable

Critical

Non-Concurrent

Non-Critical

FIGURE 2. Sequential relationships of various categories of delays

Excusable delays are unforeseeable events beyond anyones control. They are broken down
further into compensable or non-compensable delays. If the delay is considered compensable, then the
contractor is entitled to additional financial compensation as well as extra project time. Under certain
circumstances where non-compensated excusable delays occur, the contractor receives extra time but
not extra money for the additional completed work (Bramble 1987).
Non-Excusable delays are foreseeable and are events that occur within the control of the
contractor. In such situation, the contractor is not able to receive any extra time or compensation for the
work. The owner and the designer are liable to make sure that the contract documents are made clear
and fully understandable on what is considered excusable and non-excusable delays prior to signing the
contract (Bramble 1987).
Excusable and non-excusable delays can occur concurrently, non-concurrently, or
simultaneously in a project. Concurrent delays occur at the same time or close to the same time. They
can also contain critical and non-critical delays. Critical delays are delay claims that affect the progress,
time, and compensation. Non-critical delays do not affect the completion date of the project. They affect
the succeeding activities that are not on the critical path of the schedule. This can set back activities if
they do not have a float in the schedule (Bramble 1987).
5.

CAUSES OF COST AND TIME OVERRUNS

There are complex and interrelated reasons why FDOT experiences cost and time overruns from delays
in constructing transportation projects. Figures 3 and 4 present cost and time overruns in more than 700
FDOT projects over the past two years (1999-2001).

Utility
Delays
1%

Invalid
Reason
5%

Claims
5%
Changed
Conditions
34%

Weather
Damages
5%
Minor
Changes
5%
CEI
Actions and
Inactions
6%

Plans and
Modifications
39%

FIGURE 3. Cost overruns on 708 highway projects within the Florida Department of
Transportation over the past two years (1999-2001)

Invalid
Utility Reason
4%
Weather Delays
Damages 5%
3%
Minor
Changes
8%

Changed
Conditions
34%

CEI
Actions and
Inactions
17%

Plans and
Modifications
29%

FIGURE 4. Time overruns on 708 highway projects within the Florida Department of
Transportation over the past two years (1999-2001)

It can be seen from Figure 3, that 39% of the delays were attributed from errors and omissions in
plans and modifications. Figure 4 presents that errors and omissions in plans and modifications are
responsible for 29% of time overruns. Plans and modifications include changes in construction
blueprints, changes in specifications, and changes in materials and quantities needed for the job after
design plans were completed (FDOT 1997). These issues also included plans that were not in the
contract, plans that required to be built different, adjustments in plans, and additions to plans.
Delays arise when design drawings are changed because of inadequate or unclear details
caused by inadequate data collection or survey prior to design. Design errors in highway construction
projects result in extra work such as earthwork, drainage, bridge pilings, road resurfacing, re-paving, and
widening. Design problems mostly occur when design plans are not carefully reviewed. These project
plans were developed by in-house staff and consultants in the FDOT (FDOT Report No. 96-21). They
have full responsibility if any plans and modification changes are needed.
It can also be seen in Figure 3 and Figure 4 that 34% of the cost overruns and time overruns are
due to changed conditions. For instance, changed conditions are caused from bad detectable boring
such as failing to detect bad soil, environmental problems, and prepared drawings are different from
actual site conditions. Some development problems that the FDOT faced were due to old aerial
photographs or from proposed changes in existing roads (Bourgsen 2001).
Construction Engineering Inspection (CEI) actions and inactions are issues involving the DOT
and contractors that may cause a cost or time overrun. An example of a CEI action is when the DOT
tells the contractor to freeze construction until the DOT orders the contractor to continue. A CEI inaction
is when the DOT does not get back with the contractor on a situation in a timely manner (Johnson 2001).
A delay can also occur when a contractor fails to give appropriate notice of a delay situation on the
project, fails to inspect, or fails to do proper work that can cause a chain of events leading to delays
(Bourgsen 2001). Figure 3 and Figure 4 also show that the CEI actions and inactions have caused 6% of
cost overruns and 17% of time overruns in FDOT projects. As mentioned above, these delays are
mainly due to unclear communication or poor coordination on the project between the FDOT and
contractors.
It can be seen in Figure 4 that claims, weather damages, minor changes, and invalid reasons
are accounted for 5% of the cost overruns. Contract claims is a written demand submitted to the
Department by the contractor in compliance with contract documents and seeking additional monetary
compensation, time, and/or other adjustments to the contract, the entitlement or impact of which is
disputed by the Department. Construction contract documents include provisions for altering plans
including additional work within the original scope, changed site conditions, and extending contract time
to address unanticipated conditions encountered in the field during construction. In the FDOT projects
claims (less than one percent) did not affect time extensions (FDOT 2001).
In the FDOT projects weather contributed about 3% of the time overruns. Weather damages are
due to extreme and unusually severe weather conditions such as tropical storms and hurricanes. The
high winds and water from these storms can damage materials and erode work at construction sites.
Such delays can add time to fix material and equipment damages. In addition, it can also become very
expensive replacing parts in equipment and machines once they are damaged. These problems are
beyond the control of the FDOT. However, the department pays the cost to repair such damages. For
example, in a road widening and resurfacing project, excessive rain washed out shoulder work
completed by the contractor. This cost the department an estimate of $371,000 for additional excavation
material (FDOT Report No. 96-21). These figures do not include weather days (days that projects were
extended to inclement weather) or suspensions (suspension of work due to holidays, vacations, or other
special events) (FDOT Report No. 96-21).
Figure 4 presents time delay of 8% due to minor changes occurred as a result of revisions in the
specification (providing clarification), typographical corrections, and arrangement improvements. These
problems are related to the projects scopes and objectives (FDOT Report No. 96-21).
Invalid reasons are issues that FDOT cannot trace or does not know what has caused a cost or
time overrun. This has contributed 4% of time overruns. Invalid reasons are unexplained and they are
usually contributed by internal or external members involved in the project.
Utility delays are still a problem but not as big compared to some other issues such as design
and changed conditions. It contributed an average of 1% of cost overruns and 5% of time overruns.
Inaccurate records of underground utility lines can cause delays. In addition, utility companies not

properly reviewing design plans or not paying the cost to move their utility lines may also result in delays.
This has been a problem in urban areas where utility lines have been installed many years ago. Not
keeping up or updating utility maps can cause severe overruns in the future (FDOT Report No. 96-21).
Some of the delay factors mentioned earlier are within the FDOTs control and are likely due in
part to the increased volume of construction. Effective project management can reduce delays due to
cost and time overruns. Notably, due to pressures to meet production schedules, FDOT staff do not
always carefully review design plans to identify and resolve errors and omissions before projects are let
for bid. Other cost increases reflect expenses to resolve unforeseen site conditions. FDOT likely would
have incurred these costs for many projects in any event. Some of these expenses probably could have
been lower if FDOT had detected these conditions before construction had
Begun (FDOT Report No. 96-21).
6.

PARTIES INVOLVED IN CAUSING DELAYS

External delays are easier to examine as compared to internal delays. Internal delays are difficult to
examine because of the amount of people involved in a project. The Florida Department of
Transportation has found that the responsibilities for cost overruns were shared among consultants,
departmental staff, and third parties. Figure 5 presents that consultants accounted 55% of cost overruns.
Studies show that consultants were liable for making design errors. Consultants tend to look at high
quality work that some time they differ from contractors. Some contractors favor cheap cost material
over high quality material, as long as they meet specifications. Another dilemma is the lack of
evaluation of consultants by the FDOT. The FDOT staff are to evaluate design consultants on project
management, timeliness, quality, and the constructability of their designs, these evaluation are frequently
not done. Without these grades, performance information is not known and mistakes continue to happen
(FDOT Report No. 96-21).
The third party includes utility companies, local governments, and permitting agencies and they
account for 32% of cost overruns (Figure 5). Utility companies accounts for the largest portion of third
parties cost overruns. In the past they have failed to move utility lines when it was required by the
FDOT. In addition, maps to underground utility sites were not well kept up or updated (FDOT Report No.
96-21).

Third Parties
32%
FDOT
Consultants
55%

FDOT Staff
13%

FIGURE 5. Cost overruns caused by consultants, staff, and third parties

7.

KEY FACTORS IN REDUCING DELAYS

There are many delay contributing factors that are beyond the owners and contractors control. Due to
variation in every highway construction project, there are no simple solutions to overcome delays.
However, there are some that can be controlled by both owners and contractors. Data and experience
from past projects have helped to depict some delay causes such as cost and time overruns. The
following sections detail these key delay causing factors.
7.1
Delays Related to Design Work
Based on the literature search, the following are some of the critical issues that contractors and the
FDOT should consider in minimizing design delays (FDOT Report No. 95-30):
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Develop goals before planning start to minimize delays.

Design plans should be reviewed carefully when there are increasing use of consultants.
Review design related problems from past projects.
Conduct additional preliminary research and investigations on-site before bidding.
Minimize construction conflict with involved parties by creating better communication and
coordination.
Develop innovative contracting methods.
Improve quality of design plans.
Make use of experienced staff and consultants.
Emphasize on meeting project completion date.
Perform constructability reviews that can examine whether projects can be built as designed.

7.2
Delays Related to Lack of Coordination
Prior to any project construction, the DOT should incorporate local government requirements into its
design plans to make sure that utility lines have been identified or moved before construction.
Everything has to be reviewed and approved between each party. Local governments do not always
have the experience needed to review design plans in order to identify conflicts prior to construction. It is
usually more difficult for the DOT to refuse the changes that the local government had made in the
design plans unless the cities and counties agree to pay the additional costs. That is why, it is so
important to communicate and set schedules for certain work to be done at a certain times (FDOT
Report No. 96-21).
7.3
Delays Related to Utilities
Utility companies are also responsible for reviewing design plans and paying their cost to move utility
lines. This could be a problem because utility companies often lack accurate records on precise locations
of underground utility lines. In this case they will not know if utility lines are required to be moved,
especially in urban areas where utility lines have been installed years ago.
Departments should take additional steps to locate underground utilities during site investigations by
using the ion Radar (GPR), the Tracer Tape, the Vacuum Excavation, or any other underground utility
detector (Ellis et. al 1996). Using any type of utility locater is costly to use but it would be even more
costly and time consuming if a utility line is detected in the process of construction. To minimize the
delays caused by utilities, the following questions should be asked prior to construction:
1. Did a site inspection take place and locate any utilities within and around the construction site?
2. If a site inspection did not take place and a utility is found, would it have a conflict with the
construction operation?
3. Does the utility have a permit? (It needs to have a permit for relocation purposes.)
4. Is the utility in the work schedule?
If a utility conflict is unanticipated, the problems should be studied with the Utility and Contractor to come
up with a best possible solution. The design should be revised and updated in order to expedite the
construction and minimize the delays. In addition, a review of the Utility Relocation Agreements and an
estimate of the effect that utility delays will have on contract duration should be done. A delay mostly
occurs if the prime contractor cannot work as a result of utility conflicts (Bourgsen 2001). That is why it is

important for the utility company and the contractor to establish good cooperation between them during
the actual construction of the project (Ellis et. al 1996).
7.4
Delays Caused by Changed Conditions
Delays from change conditions in work or work orders can be reduced if DOTs carefully defined the work
scope and predict changes in work scope prior to construction. This can be accomplished if all parties
involved are consulted in many organized pre-construction meetings, and obtain inspections regularly.
Research in past similar projects can provide hints in defining better work scope for future projects.
Moreover, any changes made in the DOT specifications must be shared with all DOT districts prior to
their project planning initiations.

8.

CONCLUSIONS

Factors causing cost and time overrun are plans modifications, changed conditions, lack of project
coordination, and design related problems. The overview of past highway construction projects in Florida
provide useful information on how to reduce delays in highway construction projects. From the analysis
of over 700 FDOT projects, it was found that the majority of cost and time overruns were due to design
factors, changed conditions, and designer errors and omissions by the consultants.
The study results indicate that contractors and DOTs should carefully examine each construction
contract carefully to minimize delays. Specific emphasis should be given to the design phase. Cost and
time overruns in construction projects cannot realistically be eliminated. However, DOTs could take
several steps such as reviewing design plans prior to construction. Furthermore, they should closely look
at contractors performance and conduct additional preliminary research and investigation on-site before
bidding. The implication of other innovative contracting techniques such incentive/decentive, lane rental,
and A + B contracting should reduce cost and time overruns.

9.

REFERENCES

Bramble, Barry B. and Callahan, Michael T. (1987) Construction Delay Claims, Wiley Law Publications,
2nd Edition, U.S.A.
Jahren, Charles T. and Ashe, Andrew M. (1990) Predictors of Cost-Overrun Rates, Journal of
Construction Engineering and Management, September, Vol. 116, No. 3, pp.547-552.
Rowland, H.J. (1981). The Causes and Effects of Change Orders on the Construction Process. Thesis.
Georgia Institute of Technology, Atlanta, Georgia, 1981.
Randolph, D.A., K. Rajandra, and J.J. Campfield (1990) Using Risk Management Techniques to Control
Construction Contract Costs. ASCE Journal of Construction Engineering and Management, Vol. 116,
No.3, Sept., pp. 548-552.
Tyrrell, A.P., L.M. Lake, and A.W. Parsons (1983) An Investigation of the Extra Costs Arising on
Highway Contracts. Report 814. Transport and Road Research Laboratory.
Florida Department of Transportation (November 27, 1996).Review of the Florida Department of
Transportations Performance in Controlling Construction Cost Overruns and Establishing
Accountability for These Problems, Report No. 96-21, Tallahassee, Florida.
Florida Department of Transportation (1996). Review of the Florida Department of Transportations
Performance in Controlling Cost Overruns and Delays When Building Roads and Bridges. Office of
Program Policy Analysis and Government Accountability. Report No. 95-30.
Florida Department of Transportation (1997). Follow-Up Report on the Florida Department of
Transportations Performance in Controlling Cost Overruns When Building Roads and Bridges. Report
No. 97-22, Florida Department of Transportation, December 1997.
Florida Department of Transportation (2001). FDOT Performance Measures. www.dot.state.fl.us.
Florida Department of Transportation (1999). Highway Construction and Engineering Program:
Enhancing Use of Alternative Construction Practices to Build Capacity. www.dot.state.fl.us.
Shi, Jonathan Jingsheng. Construction Delays Computation Method (2001) Journal of Construction and
Engineering Management, January/February, Vol. 127, No. 1, pp.60-65.

Bourgsen, Randal (2001) Construction Engineer in Tallahassee, Florida. Phone Interview. Florida
Department of Transportation.
Johnson, Jim (2001). Construction Engineer in Tallahassee, Florida. Phone Interview. Florida
Department of Transportation.
Ellis, Ralph, and Herbsman, Zohar J. (1996) Best Management Practices for Managing Utility Conflicts
on FDOT Construction Projects, Contract No. B-8348, Florida Department of Transportation.
OPPAGA (Office of Program Policy Analysis and Government Accountability) (2000). Justification
Review: Highway Construction and Engineering and Transportation System Maintenance Programs.
FDOT Report 99-29.

10